News Roundup Tuesday 30th April 2019

NEWS ROUNDUP

TAX NEWS

Plan for over-50s to pay £300 extra NI to cover care

Damian Green has said that wealthy pensioners should forfeit the winter fuel allowance to help pay for free social care. In a report for the Centre for Policy Studies, the Tory MP said the rest of the funding could be found from imposing an additional national insurance rate of 1% on the over-50s. Under his proposals, everyone would receive a basic level of state-funded social care with improvements paid for from their savings or their housing wealth. But Labour have branded the plans, which would cost more than £300 per year for each over-50-year-old, a “tax on getting old”. Shadow chancellor John McDonnell said: “After nearly a decade of brutal cuts to social care, the Tories now want to make older people pay through increased taxes.”

The Times, Page: 6 The Independent, Page: 4 The Sun, Page: 4 Daily Mail, Page: 2 Daily Express, Page: 1, 4-5 The Daily Telegraph, Page: 6

HMRC quadruples spending on private debt collectors

HM Revenue & Customs spent £26.3m on private debt collectors in 2018, quadrupling the £6.2m it spent in 2014, according to figures compiled by UHY Hacker Young. It was given the power to use private debt collectors in 2009 and has spent an estimated £140m on ten agencies so far. Mark Giddens, head of private client services at the firm, said HMRC had come under pressure to maximise tax revenues in recent years, leading to an increasingly “aggressive approach” to collecting unpaid tax. He added: “HMRC needs to ensure that external debt collectors are used as a last resort only. The majority of taxpayers who owe tax are in that situation because they simply can’t afford to pay. Workable debt restructuring options are more effective than relentless pressure from debt collectors.”

Financial Times, Page: 3 The Times, Page: 20 City AM, Page: 6

Creditors cry foul over HMRC’s move up the insolvency ladder

Restructuring trade body R3 has complained that new rules pushing HMRC up the list of creditors when a company goes bust will make banks less willing to lend to SMEs and raise borrowing costs.

Financial Times, Page: 11

SMEs NEWS

Start-ups facing delay for funding

The Enterprise Investment Scheme Association (EISA), which helps funnel early-stage capital to small UK companies by linking them directly with investors, has warned that start-ups are being forced to wait three times longer than promised to access for funding from a government programme. EISA said it has recorded a growing delay in the time taken for the Government to approve firms that qualify. Small firms are now waiting an average of 56 working days for their funding to be processed, rather than the 15 pledged by the Government back in 2017.

The Daily Telegraph, Business, Page: 1

PERSONAL FINANCE NEWS

Banks let cash move into scam accounts despite warnings

The Mail reports on evidence that banks including NatWest and HSBC are failing to block payments into the accounts of fraudsters pretending to be HMRC officials up to two months after being alerted to them by previous victims. Criminals have been impersonating HMRC officials to demand repayment of tax debts or face arrest but tests by the paper found that although some banks had blocked the accounts, payments could still be made from others. Gareth Shaw, head of money at consumer group Which?, said: “It’s alarming that banks have neglected to do even the bare minimum by failing to stop payments to accounts used by scammers months after victims reported them as fraudulent.”

Daily Mail, Page: 18

EMPLOYMENT NEWS

Productivity won’t rise if employers fail to engage workers

Research by Deloitte suggests employers need to engage and train their staff better to help to solve the nation’s chronic productivity problems and prepare their companies for the future. Deloitte’s Global Human Capital Trends report found 69% of the UK workforce were given “no incentive to learn new skills” and only 50% said that their companies were effective at creating a positive work environment. Just 36% believed that employers successfully engaged staff in career advancement opportunities. Partner Will Gosling commented: “Employers are already facing huge disruption challenges, from technology advances to demographic changes, and an unproductive and unengaged workforce simply should not be one of them.”

The Times, Page: 38

ECONOMY NEWS

Brexit uncertainty will slow UK economy for rest of 2019

The EY Item Club has downgraded its growth projections for the UK to 1.3% for 2019 and 1.5% for 2020, warning that ongoing Brexit uncertainty would drag on growth for the rest of the year. GDP growth had been artificially high at the start of 2019 due to stockpiling, but firms could now choose to run down their stock weakening future growth. The forecasting group believes the situation will prevent the Bank of England from raising interest rates on Thursday. Howard Archer, the EY Item Club’s chief economic adviser, said: “Delays to Brexit, a difficult domestic economic and political backdrop and slower global economic activity have resulted in a weaker outlook for UK GDP growth this year.”

The Guardian, Page: 28 City AM, Page: 12

Contact Paul Southward.

Paul Southward