News Roundup Wednesday 27th March 2019
News Roundup Wednesday 27th March 2019
Altmann hits out at ‘stealth ‘tax’
The Daily Mail looks at a Royal London report suggesting that over a million savers could see their pensions hit by taxes of up to 55%. The study, based on the Office for National Statistics Wealth and Assets Survey, says the lifetime allowance for pensions tax relief may have already had an impact on 290,000 workers and suggests a further 1.25m people could be hit before they retire. Ros Altmann, a former Pensions Minister, likened the issue to a stealth tax, saying: “This is simply punishing savers if their pension pot grows too quickly – and it is biting people who are not really that well off.” A Government spokesman has insisted that less than 1% of the highest earners “face an annual allowance charge as a result of this policy”.
Daily Mail: Page: 4
NHS chiefs hold talks over pensions tax
The NHS is facing a staffing crisis as consultants are turning down extra hours over concerns the additional pay could push them beyond pensions contribution allowances, resulting in large tax bills. The rules determine that those earning more than £110,000 a year can enter a ‘taper zone’ which triggers big tax bills and can reduce the annual allowance to £10,000 for those earning £210,000.
Daily Mail, Page: 4 Financial Times, Page: 2
A week to go before MTD
HMRC says more than 3,000 businesses a day are signing up for Making Tax Digital, which launches on April 1. Mel Stride, Financial Secretary to the Treasury, said the system will give businesses “more control over their finances, allowing them to spend their time focusing on innovation, growth and the creation of jobs.”
The Press and Journal, Page: 32 Press Release
Apprenticeship levy causing firms problems
The number of HMRC investigations launched into the underpayment of the apprenticeship levy has jumped to 84 this year, from 33 in 2017/18, analysis by UHY Hacker Young shows. Clive Gawthorpe, a partner at the firm, said: “The fiendishly complex apprenticeship levy is clearly causing problems for businesses.”
Yorkshire Post, Page: 17
Expert: Control over show led to Kelly’s tax win
The Daily Star considers details of TV presenter Lorraine Kelly’s recent court win against HMRC over a £1.2m tax bill, which saw the court agree she was a freelancer, not an ITV employee, meaning she can pay a lower amount of tax through her company. Tax barrister Patrick Cannon explains the ruling, saying it stems from Ms Kelly having a high degree of control over her show and the other entertainment activities she opts to get involved, saying: “Any actor or entertainer who is in day to day control of what they do is likely to benefit from the same favourable self-employed tax treatment. It’s not tax avoidance as such but simply the correct application of the tax rules.”
FINANCIAL SERVICES NEWS
Sector confidence declines
A report from PwC and the Confederation of British Industry (CBI) shows that confidence in the financial services industry is falling at its fastest rate since the 2008 crisis. Only 10% of the 84 City firms polled are more optimistic about the overall business situation compared with three months ago, while 53% were less optimistic, leaving a balance of -43% compared with -24% in Q4 2018. The analysis also shows that headcount has declined, with employment within the sector hitting a four year low in March, while expectations for orders in the next three months are at their lowest point since September 2008. Rain Newton-Smith, the CBI’s chief economist, said “alarm bells” on low confidence in the sector are a “deafening level” and declared Brexit a “national emergency”, while Andrew Kail of PwC said the sector needs political “clarity” and “certainty” if the UK is to retain its status as a key financial centre.
Mid-sized firms see profit growth shrink
Research by BDO reveals that profits among UK mid-sized companies grew by 4% last year, down from 19% in 2017. The 4% growth recorded in 2018 was outstripped by 37% profit growth among Spain’s mid-sized companies, as well as the 30% seen in German and 24% in Italy. The UK outdid these countries in regard to overall profit across firms with a turnover between £10m and £300m, generating £114bn a year compared to Germany’s £93bn, France’s £78bn, Italy’s £54bn and the £50bn generated in Spain. The report shows that mid-sized firms constitute 0.5% of UK companies but account for nearly a third of revenue generated.
Fall in bank loans to small firms
Bank lending to smaller companies has fallen in more than half of the country in the past year, according to research by Hadrian’s Wall Capital. The debt adviser found that 74 of 132 postal areas of Britain saw falls in the value of bank loans to SMEs.
Yorkshire Post, Page: 5
Reform fails to boost Scottish SMEs
A Federation of Small Businesses report reveals that only about one-fifth of Scotland’s £12bn procurement budget goes directly to small businesses – even though they account for 98% of firms. It also shows that despite reforms designed to improve small business success, Scottish Government figures show the proportion of contracts won by smaller firms is largely unchanged since 2011.
The Scotsman, Page: 33
Cyber-attacks target banks’ easy pickings
The FT’s Paul Murphy considers the scale of risks pose by cyber-attacks, with insight from Paul Taylor of KPMG and Deloitte’s Rob Wainwright.
Looking at learning
Writing in City AM, Liberal Democrat leader Sir Vince Cable and Rajay Naik, chair of the Lifelong Learning Commission, look at how adult education could boost the workforce and plug skills gaps. They cite a PwC estimate that a third of UK jobs could be put at risk through breakthroughs in AI over the next 15 years.
City AM, Page: 19
Treasury proves unwilling to face parliament
Lord Forsyth, Chair of the House of Lords Economic Affairs Committee, has voiced concern over Financial Secretary to the Treasury Mel Stride’s “willingness to speak to the press before parliament.”
Financial Times, Page: 20
Contact Paul Southward if you have any queries.