Government urged to simplify tax policy
Industry bodies are calling on the government to simplify tax policy and revert to a single budget speech each year. The Institute for Government, the IFS and the CIOT have written to Philip Hammond with a list of recommendations to improve Britain's tax system. They urge the Chancellor to start the consultation process for tax changes earlier to avoid errors and to give greater clarity over the direction of tax policy. They also say that returning to a single annual fiscal event would prevent the Autumn Statement from becoming a second Budget, which the groups argue leads to an excess of measures and overly long finance Bills. "The current system for tax policymaking is not fit for purpose," said Paul Johnson, director of the IFS. Bill Dodwell, president of the CIOT, added: "Good tax policy comes from an open, consultative process in which all those affected have a voice, and consultation starts at an early enough stage of the policy development process to be meaningful."
Reported in Financial Times,The Guardian, Daily Express, Independent i Yorkshire Post
Concern over HMRC pay-as-you-go tax plan
Business groups have raised concerns that HMRC’s new voluntary pay-as-you-go digital tax system, designed as a budgeting tool to help businesses and the self-employed, could lead to incorrect tax payments. Experts have voiced doubts over the ability of HMRC's administrative and IT systems to handle problems caused by people attempting to do their own taxes digitally. IPSE’s Andy Chamberlain said there “is generally no reason to pay tax in advance,” and that the system is more likely to benefit HMRC than self-employed workers. However, in a statement HMRC mentioned that its research and earlier informal consultation exercise states that “businesses have a real appetite for more flexible payment options”.
Reported in Financial Times, FabNewz
SMEs anticipate growth despite Brexit
According to a new study by Amazon and Capital Economics, UK small businesses are braced for the economy to slow down in the next year but anticipate their own trade will boom. Export revenue growth is forecast to double from 0.4% this year to 0.8% next year, while employment growth will improve more modestly to 0.7% in the next 12 months, SMEs expect. Sales climbed by 1.2% in the last year at the average SME, but is expected to accelerate to 1.5% in the next year. The positive sentiment has spread across several industries, with companies in manufacturing, financial services, retail and construction particularly upbeat. Those in hospitality, healthcare and professional services anticipate below-average rates of growth, however.
Reported in: The Sunday Telegraph, The Sunday Times,Sunday Express The Independent, The Mail on Sunday, The Observer
Theresa May pledges a fairer Britain
Theresa May told the Conservative party conference yesterday that the Government will be put “at the service of ordinary working-class people” and that it would go after tax avoiding companies and irresponsible capitalists who take out “massive dividends while knowing the company pension is about to go bust”. Mrs May pledged to fix “dysfunctional” financial markets and crack down on financial advisers who helped clients to dodge tax. She added that the Bank of England’s QE programme should end, citing undesirable side effects – asset holders getting richer while those without them suffered. Mrs May barely disguised those she intends to tackle when she stated: “So if you’re a boss who earns a fortune but doesn’t look after your staff in an international company that treats tax laws as an optional extra, a household name that refuses to work with the authorities even to fight terrorism, a director who takes out massive dividends while knowing that the company pension is about to go bust — I’m putting you on warning. This can’t go on any more.” However, some business leaders expressed alarm at the PM’s tone. James Sproule, chief economist at the Institute of Directors, warned that business leaders should not be treated as “pantomime villains” while Adam Marshall, acting director-general of the British Chambers of Commerce said: “We need government to act in partnership with business communities, not dictate to them.”
Reported in: Financial Times, BBC News, The Daily Telegraph, The Times, Daily Mail, The Independent, The Times
May orders review of employment practices
Theresa May has launched an investigation into employment rights to ensure workers are not exploited by bosses. The prime minister has ordered a full-scale review of business practices, declaring that the self-employed and those on temporary and zero-hours contracts needed job security and proper protection. Seamus Nevin, of the Institute of Directors, said: “It is important that the government works to ensure our employment regulations and definitions are flexible, so that we protect workers and give them access to training and development, while still enabling innovation and enterprise to prosper.” Meanwhile, business secretary Greg Clark has confirmed that work has begun on making big businesses more accountable by putting employees on company boards.
Reported in: Daily Mail, The Sun, The Times, The Guardian
Lack of trade agreement threatens 70,000 City jobs
Up to 70,000 financial jobs could be lost if Britain leaves the EU without a new relationship in place for the City of London. Research commissioned by TheCityUK is expected to claim next week that if the UK fails to secure a trade deal beyond the standard World Trade Organisation terms, tens of thousands of posts would be put at risk by financial businesses leaving the country.
Reported in: The Daily Telegraph
SMEs hold 57% of funds in savings accounts
Research by Hampshire Trust Bank has found SMEs have on average £556,000 in business savings accounts, equating to 57% of an SME’s total funds, and £423,000 in current accounts. The survey of 500 businesses also found many SMEs were holding onto cash reserves as a buffer to hedge against the UK’s economic outlook following the EU referendum. Stuart Hulme, director of Savings at Hampshire Trust Bank, said: “The benefit of making use of savings accounts is not only the interest rate return you get as a business, but also the knowledge that the money is being lent on to SMEs looking to grow, delivering double value and supporting investment in the UK.”
Reported in: ChannelBiz, Business Matters
Nissan demands protection from Brexit tariffs
Nissan has warned Theresa May that it will scrap its UK investment plans unless the government guarantees it compensation for a hard Brexit. The firm, whose cars account for about 3% of the UK's entire manufacturing export base, issued a stark threat to pull out of a transformation of its Sunderland plant unless the government would compensate it for any tariffs imposed on its vehicles exported into the EU as a result of Britain leaving the union.
Reported in: The Times, Financial Times, The Daily Telegraph
SMEs in north leading way in boosting revenues from exports
Yorkshire SMEs are exporting three times more than the UK average, according to a report from the Centre for Economics & Business Research (CEBR), putting them in second place behind SMEs in the North West for value gained from exporting. The study found that the UK average for the boost in revenue for a typical SME exporting goods and services was £287,000. In Yorkshire it was £879,321 a year and the North West £1m. However, only 5% of UK SMEs are considering exporting over the next few years, leading to calls for increased support for SMEs to grab growth opportunities.
Reported in: Yorkshire Post
SME lending drops
Figures from the Bank of England show that the number of mortgage approvals in August sank to its lowest level in 21 months in the wake of the Brexit vote, and net lending to small businesses contracted for the first time since late 2015. Mortgage approvals slipped to 60,058 in August, the lowest since November 2014. Net lending to small firms fell by £300m, breaking a run of seven months of growth. However, consumer credit rose by £1.6bn, taking the annual growth rate back up to 10.3%, the joint highest since October 2005. There was a £400m increase in credit card borrowing and £1.2bn in other loans.
Reported in: The Times, The Times, The Independent, Daily Express, The Guardian, Daily Mail, The Sun, Yorkshire Post, The Scotsman
ING to cut workforce in tech drive
ING plans to eliminate about 5,800 jobs as the largest Dutch lender seeks to cut costs and accelerate its digital transformation. The company said it will invest about £699m in digital technology. Chief executive officer Ralph Hamers is investing in financial technology to reduce personnel and branch costs, while seeking to expand lending to consumers and companies outside its home market.
Reported in: Bloomberg, The Independent
British Steel back in profit
Roland Junck, executive chairman of British Steel, has announced the manufacturer’s return to profitability. Mr Junck said the company had seen month-on-month revenue improvement this financial year and that it is on track to return to profit by the time it releases its annual results on March 31 2017. However, he warned that the vote to leave the EU could threaten British Steel's revival, and said that the plant was being held back by government policies. “There are differences compared to European rivals in terms of business rates, energy prices. If I had this plant in Germany we would be in a much better condition,” Mr Junck said.
Reported in: The Daily Telegraph, Yorkshire Post
Construction sector bounces back
Britain’s construction industry unexpectedly returned to growth in September, according to a survey. The Markit/CIPS UK Construction PMI rose to 52.3 from 49.2 in August, beating all forecasts in a Reuters poll and rising above the 50 mark that divides growth from contraction for the first time since May. Housebuilding recovered and new orders picked up, pushing the headline index to a six-month high, although it was still well below the average over the last three years of around 60. “Construction firms appear reasonably optimistic about the near-term outlook, with confidence linked to the fastest rise in new orders since March,” said Tim Moore, economist at survey compiler IHS Markit.
Reported in: The Guardian, The Daily Telegraph, Financial Times, The Independent
Nationwide: UK house price growth slows
Growth in UK house prices slowed in September, according to the latest Nationwide index. Average prices increased by 0.3% to £206,015, following a 0.6% rise in August. It brought the annual pace of growth down to 5.3% in September from 5.6% a month earlier. Growth was strongest in the London commuter belt, with annual prices up 9.6% in the third quarter. The market was weakest in Wales, with prices down 0.5%. Prices in Scotland are rising at an annual rate of 2%, while in Northern Ireland, values were up by 2.4% annually. Mr Gardner added that while new home building was rising, the rate of growth was too slow to meet the needs of a swelling population.
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The UK’s Entrepreneurs
The FT carries a supplement on the UK’s entrepreneurs, covering issues such as access to funding and the rise of Ambarish Mitra, founder and chief executive of tech company Blippar, who has been named the UK's top entrepreneur. Red’s True Barbecue, Cheeky Chompers and Crowdcube are also profiled.
Reported in: Financial Times Financial Times Financial Times
GDP growth beats estimates
The UK services sector grew 0.4% in July, much more strongly than expected in the wake of the vote to leave the EU. Other figures from the ONS show economic growth accelerated faster than thought in the run-up to the referendum. GDP grew by 0.7% in the three months to the end of June, up from the 0.6% first estimated. The second-quarter figures were well up from the 0.4% growth of the previous quarter.
Reported in: The Times, Financial Times, Daily Express, The Sun
OIL & GAS
First offshore decommissioning Masters degree
A Masters degree in decommissioning offshore installations - believed to be the first of its kind in the world - is being launched by the University of Aberdeen. The first students are expected to begin the course - in conjunction with Robert Gordon University - next year. Over the next 25 years, the process of retiring North Sea oil and gas facilities could cost tens of billions of pounds, meaning hundreds of new jobs requiring a new kind of expertise.
Reported in: BBC News