News Roundup Tuesday 23rd October 2018

NEWS ROUNDUP

TAX NEWS

Chancellor looking to budget for extra spending

With the Budget fast approaching and Theresa May signalling an end to austerity, speculation is mounting as to how Philip Hammond could raise revenues to pay for increased NHS spending and reverse planned cuts to services. The Resolution Foundation has said a freeze on income tax and IHT thresholds could raise billions of pounds for public services. The thinktank also said cutting a string of tax reliefs for employers would improve the chancellor’s warchest. Meanwhile, the IFS has said the “minimal definition” of ending austerity would require 1% to be added to VAT, income tax rates and NICs, although Anna Isaac in the Telegraph says such a move would be “politically explosive.” Ms Isaac compares Mr Hammond’s situation to Kenneth Clarke’s first Budget as chancellor in November 1993, which delivered some of the largest tax hikes since the aftermath of the Second World War, as well as the “surreptitious tax take”, of freezing the personal allowance for income tax. Els ewhere, the FT’s leader says Mr Hammond must be upfront about the fact that higher taxes will be needed to pay for increased spending. Lastly, the Telegraph’s editorial warns the chancellor against scrapping tax breaks for pensions, suggesting he would be “storing up trouble for decades to come.”

The Daily Telegraph The Daily Telegraph, Page: 17 Financial Times The Times, Page: 2 The Guardian, Page: 9

Corporate tax dodging costs £25m

A report by the Tax Justice Network (TJN) says the government is missing out on £25bn a year through corporate tax dodging. The black hole comes from multinational companies switching cash between countries to deprive public coffers and maximise profits, according to the report. The TJN also claims the Government could easily haul back a 10th of the total simply by demanding firms publish country-by-country financial data.

Daily Mirror, Page: 12

Patisserie Valerie’s problems put spotlight on Aim tax breaks

In light of the accounting problems at Patisserie Valerie, the FT’s Kate Burgess says the Government should examine whether Aim tax breaks draw the wrong type of investors.

Financial Times, Page: 19

SMEs NEWS

Town centres face crippling rates blow

An investigation by the Mirror has found that town centres will be among the worst hit by a new wave of business rate rises planned from next April. Libraries, pubs, post offices, banks and restaurants will all face another rise in their rates. The Mirror has called for the reform of rates in a campaign, while it also carries an editorial from Tesco CEO Dave Lewis who backs the crusade and recommends a 2% levy on goods sold online. He says this would raise £1.25bn – enough to pay for a 20% cut to business rates for shops all over the country.

Daily Mirror, Page: 12

More millennials in director roles

The number of millennials holding director roles at SMEs increased by 37% to 56,000 in the past year, according to research by Moore Stephens. The firm said the rise has been fuelled by graduates launching businesses after failing to get a job due to the credit crunch.

The Press and Journal, Page: 33 The Scotsman, Page: 34

ECONOMY NEWS

London’s future looks bright

A new European economic index from Lasalle Investment Management has found that London has the best economic prospects of any big European city despite the uncertainty caused by Brexit. Mahdi Mokrane, head of European research and strategy at Lasalle, said that London attracted talent “due to its unique mix of business-friendliness and strong human capital”.

The Times, Page: 43

OTHER NEWS

Chancellor urged to reduce tax to boost healthy living

Health experts have called on Philip Hammond to introduce tax breaks on gym memberships and home fitness equipment in the Budget in order to improve Brits’ activity levels. In a letter to the Chancellor, leading figures from the health sector warn that the UK is now one of the least active countries in the world. They recommend offering financial incentives to workers through a £145m-a-year Workout from Work scheme, which analysis shows could boost the economy by £2.60 for every £1 invested, in terms of improved health.

The Daily Telegraph, Page; 4

Contact Paul Southward if you have any queries.

Paul Southward