News Roundup Wednesday 3rd July 2019

NEWS ROUNDUP

TAX NEWS

Hunt and Boris Johnson must ‘be honest’ over tax and spending plans

The chancellor has called on Jeremy Hunt and Boris Johnson to “be honest” about their tax and spending promises as the policies “greatly exceed” the Treasury’s coffers. Philip Hammond said the Treasury had “built up fiscal headroom to protect against the cost of a no-deal Brexit” and that money will only be available for extra spending if we leave with an orderly transition. The Institute for Fiscal Studies estimates that an incoming prime minister could probably spend about £15bn extra a year while keeping government debt falling. Mr Hunt’s spending plans so far could amount to about £29bn while Mr Johnson’s proposals would cost £25bn.

The Times The Times, Page: 7 The Times, Page: 6-7 Financial Times, Page: 2 The Sun, Page: 9 Daily Mirror, Page: 8 The Guardian, Page: 8 The Scotsman, Page: 6

New PM urged to suspend loan charge

Boris Johnson and Jeremy Hunt have both said they would be willing to look at the loan charge and launch an independent review if required. The All-Party Parliamentary Group on the Loan Charge (APPG) argues that the charge is retrospective and overrides taxpayer protections. The loan charge was introduced in response to Treasury concerns about “disguised remuneration schemes” which involved individuals being paid through loans. Now a group of MPs are lobbying for the next PM to agree to suspend the loan charge and to commission an independent review. In a statement, the APPG said: “The loan charge […] allows HMRC to go back and demand tax for arrangements that were legal at the time.”

Yorkshire Post, Business, Page: 1, 2

Johnson would introduce capital allowances for start-ups

Boris Johnson has promised to cut corporation tax and allow start-up businesses to offset capital against tax in an effort to boost their prospects. In a phone hustings with Tory members, Mr Johnson said: “Look at what Trump is doing. They’ve got growth running at 3.6%. He has been very clever in allowing businesses to offset capital investment in tax, with capital allowances. I think we should think about that sort of thing for start-ups, in addition to cutting corporation tax, which would also be effective.”

The Guardian, Page: 9 The Sun, Page: 3

Renew your tax credits by 31 July – it’s too important to forget

HMRC is reminding customers that they must renew their tax credits by 31 July – or their payments will stop. Tax credits help working families with targeted financial support. A new advertising campaign launched today is reminding customers to renew their tax credits on time, as this is too important to forget.

Press Release

REPORTING NEWS

Firms must report on climate change by 2022

Publicly listed companies and large asset owners will have to report on how climate change risk impacts on their activities by 2022, the City minister John Glen is set to announce. Speaking at a Green Finance Summit in London, Mr Glen will point out that the UK’s financial services sector must be at the heart of the country’s efforts to tackle climate change and meet a goal of net zero carbon emissions by 2050. Banks will be urged to play a bigger role to support the UK meeting its target by investing in sustainability and explaining their own exposure to the climate crisis while financial services firms will also be expected to disclose how climate change risk will hit their activities.

The Times, Page: 38 Financial Times, Page: 3 The Guardian, Page: 2 The I, Page: 40

SMEs NEWS

Political uncertainty hamstrings small businesses

Small firms are struggling to expand, hire and raise productivity as political uncertainty leaves them increasingly hamstrung, according to the latest report from the Federation of Small Businesses (FSB). Nearly three-quarters (72%) are not planning to increase capital investment in their businesses over the coming quarter – the highest level in two years – while just over a third (35%) are finding it difficult to find appropriately skilled staff. FSB national chairman Mike Cherry said: “It’s impossible for small business owners to invest for the future when we don’t know what the future holds. We urgently need to see both prime ministerial candidates spell out their plans for supporting small firms and securing a pro-business Brexit – one that includes a substantial transition period. Fast and loose talk about accepting a chaotic no-deal Brexit in four months’ time is not helpful.”

The Times, Page: 37 The Sun, Page: 43 Yorkshire Post, Business, Page: 8

SMEs under strain from late payment

Research by Xero, the accountancy software firm, and Paypal, the online payments service shows more than one in three owners of small businesses have considered closing their company because of cashflow issues caused by late payments.

The Times, Page: 37

Employee ownership model on the rise

Figures released by the Employee Ownership Association (EOA) show the number of businesses adopting the employee ownership model in Britain grew by 18.5% last year.

Yorkshire Post, Business, Page: 8

PROPERTY NEWS

Labour to remove relief for landlords

The Mail reports that Labour is considering ending mortgage interest tax relief for landlords who charge “excessive” rents and putting stricter controls on when tenants can be evicted. Labour is considering a range of policies outlined in the Land for the Many report it commissioned, including replacing inheritance tax with a lifetime gifts allowance of £125,000.

Daily Mail, Page: 10

OTHER NEWS

Adviser jailed after spending clients’ cash on call girls

A financial adviser who funnelled £4.5m of clients’ cash into his own account and spent it on prostitutes whilst on holiday has been jailed for eight years at Liverpool Crown Court after admitting 14 fraud charges. Neil Bartlett, who was voted one of the UK’s top 200 financial advisers by his customers, hooked up with the sex workers in New York, Russia and the Maldives.

Daily Star, Page: 10

ECONOMY NEWS

Factory output down to six-year low

Manufacturing output fell to a six-year low last month with the IHS Markit/Cips UK manufacturing purchasing managers’ index (PMI) falling from 49.4 in May to 48 in June. The contraction was blamed on the eurozone’s industrial slump, the US-China trade war and the after effects of the pre-Brexit stockpiling that took place earlier this year. Manufacturers in the eurozone fared even worse, clocking up a score of 47.6. Thomas Pugh, an economist at Capital Economics, said: “The sector is still suffering from a Brexit hangover. But it also seems unlikely that June’s fall can be entirely blamed on Brexit and a weaker global economy should take some of the blame.”

The Times, Page: 36 The Daily Telegraph, Business, Page: 1 The I, Page: 9 The Sun, Page: 43 Daily Express, Page: 51 Daily Mail, Page: 63 Daily Mirror, Page: 43 The Scotsman, Page: 35 Yorkshire Post, Business, Page: 1

Consumer credit growth grinds to five-year slump

Year-on-year unsecured consumer credit growth slowed to a five-year low in May, according to data from the Bank of England, which shows growth rose by 5.6% in the month, down from 5.9% in April to its lowest rate since April 2014. Howard Archer, chief economic advisor to the EY ITEM Club, said: “While consumers have clearly been less affected by Brexit uncertainties than businesses, the overall impression remains that they have become relatively careful in their borrowing amid concerns over the economic outlook while the very low household savings ratio discourages further dissaving (sic).”

City AM The Times

Contact Paul Southward.

Paul Southward