NEWS – WEEK ENDING FRIDAY 7TH FEBRUARY 2020
NEWS – WEEK ENDING FRIDAY 7TH FEBRUARY 2020
TAX NEWS – WEEK ENDING FRIDAY 7TH FEBRUARY 2020
Lords to probe effect of tax reforms on freelancers
The House of Lords’ Economic Affairs Committee will scrutinise the impact of planned changes to the IR35 regime before they come into force in April. The inquiry will consider the impact of the rule change, which will shift the responsibility of determining who is a genuine contractor and who is a full-time employee from the individual to the employer. Dave Chaplin of the Stop the Off-Payroll Tax campaign group has said the policy change is ill-conceived and destroying the freelance sector. And Julie Kermode of the Freelance and Contractor Services Association said: “The Treasury simply cannot deny the mounting evidence of the damage the off-payroll roll-out will do, with many contractors being laid off and with projects lost to other countries.”
Calls mount for business rates reform
Calls are growing for the Treasury to raise corporation tax in order to fund a significant reduction in business rates. An arm of the Retail Sector Council (RSC), which was set up by ministers two years ago, is considering a two percentage point increase to corporation tax, which currently stands at 19%. The move is expected to raise an extra £6bn, with rates cut by the same amount. It would mark a radical departure from the policies pursued by former Conservative chancellors George Osborne and Philip Hammond, who cut levels of corporation tax.
The Daily Telegraph, Business, Page: 1 City AM, Page: 9
Scotland freezes top and higher-income tax bands
The Scottish government said yesterday that the salary thresholds for paying the higher and top rates of income tax will be frozen in 2020/21. Delivering the Budget, the SNP’s Public Finance Minister Kate Forbes disclosed that freezing the higher rate threshold at £43,430, rather than increasing it by inflation, would generate an extra £51m from workers. Official forecasts suggest around 19,000 more taxpayers will now be dragged into paying higher rate tax when they receive their annual salary increases in April. In addition, the Scottish Fiscal Commission said 370,000 existing higher and top rate tax earners will see their bills increase by £149 each. Ms Forbes said Scotland remained the “fairest and most progressive tax system in the UK” and that 56% of taxpayers in Scotland would pay less income tax than in England, Wales or Northern Ireland. She added that she did not expect the cross-Border tax gap to grow when Chancellor Sajid Javid delivers his UK Budget next month. Business groups said that the Scottish government’s decision to freeze the top rate would make it more challenging for companies to hire skilled workers. Tracy Black, director of CBI Scotland, commented: “Further divergence with the rest of the UK on income tax risks making it more difficult for businesses to attract the people and skills that we need to grow the economy.”
Piketty sets out wealth tax case
The Times and the Telegraph look ahead to the publication of Thomas Piketty’s latest work, Capital and Ideology. The French economist, who advocates wealth and inheritance taxes of up to 90%, has criticised “the free circulation of capital with no common regulation and no common taxation.” He says: “We have a system where you have a sacred right to make money out of the public infrastructure and public education system of a country and then you just push a button and move your money elsewhere.”
The Daily Telegraph, Business, Page: 8 The Times, Page: 40
INDUSTRY NEWS – WEEK ENDING FRIDAY 7TH FEBRUARY 2020
Spouses to receive extra £20,000 if partners die without a will
Experts have warned that a £20,000 increase in the amount of money that a spouse will automatically inherit if their partner dies will not solve the financial “nightmare” of intestacy.
CORPORATE NEWS – WEEK ENDING FRIDAY 7TH FEBRUARY 2020
Autonomy founder arrested over US extradition
Mike Lynch, the founder of UK software firm Autonomy, has submitted himself for arrest as part of an extradition process brought by the US over charges of conspiracy and fraud. Dr Lynch sold Autonomy to US computer giant Hewlett Packard (HP) for $8.4bn in 2011. But he faces allegations that he fraudulently inflated the value of Autonomy before the sale. Dr Lynch’s lawyers said he “vigorously rejects all the allegations”. Chris Movillo and Reid Weingarten said Dr Lynch was “determined to continue to fight these charges”. They said the move to submit himself for arrest was a “formality” and he has been released on bail of £10m. Dr Lynch has been facing civil charges at the High Court in London, where HP is suing him for damages over the deal. But separately the US Department of Justice (DoJ) is pursuing criminal charges against him.
Bury’s winding-up petition dismissed
The High Court has dismissed a winding-up petition against financially-stricken Bury Football Club, which was expelled from the Football League in August. The club, which lost its place in League One last year when a takeover bid from C and N Sporting Risk collapsed, faced liquidation over an unpaid £4,000 tax bill – which the court heard has now been paid.
Daily Mail, Page: 79 Evening Standard
SMEs NEWS – WEEK ENDING FRIDAY 7TH FEBRUARY 2020
Battle to claw back business rates could take years
A new report warns that thousands of businesses could spend up to four years locked in a battle to claw back millions of pounds in ‘unfair’ business rates. Companies can appeal to the Valuation Office Agency (VOA) if they believe that their bill is too high. But a crippling backlog means there are now over 25,000 appeals against rates outstanding, according to analysis by Colliers International. At the current rate, some businesses will wait four more years to have their 2017 bills corrected.
Daily Mail, Page: 77 The Daily Telegraph, Business, Page: 3
EMPLOYMENT NEWS – WEEK ENDING FRIDAY 7TH FEBRUARY 2020
January sees surge in hiring
The number of people placed in permanent jobs in January rose at its quickest monthly rate in a year. The latest monthly Report on Jobs from KPMG and the Recruitment & Employment Confederation (REC) shows workers in the north of England benefited the most while in London appointments fell. Researchers said that their permanent placements index rose to 52.3 in January, from 51.9 the previous month and the highest level in 13 months. But temporary billings fell, with employers appearing anxious about upcoming IR35 tax legislation. James Stewart, vice chairman at KPMG, said: “Following the UK exit of the EU, there are promising signs that the UK jobs market is finally on the up.”
The Times, Page: 42 The Daily Telegraph, Business, Page: 8 City AM, Page: 3
David Hare, director for people advisory at Grant Thornton, explains that the use of apprenticeships can help businesses thrive. He says that since the introduction of the apprentice levy, Grant Thornton has been focusing on “broadening our talent pool, so that we have greater diversity of thought and are better able to serve our clients.”
City AM, Page: 24
TECHNOLOGY NEWS – WEEK ENDING FRIDAY 7TH FEBRUARY 2020
Receipt monitoring goes real time
Digital business banking platform Tide has unveiled a machine that lets users upload an image of a receipt and automatically match it to a transaction in real time. The receipt importer uses a machine-learning model; multiple receipts can be uploaded at a time as part of a weekly admin task and the product is also available via app.
ECONOMY NEWS – WEEK ENDING FRIDAY 7TH FEBRUARY 2020
UK services sector surged in January
A new survey has revealed that the UK services sector surged in January. The IHS Markit/Cips index of services activity hit 53.9 in January, its best reading since September 2018. It was well above an earlier estimate of 52.9 and far higher than the 50 registered in December. A score of above 50 indicates expansion, and January’s reading was the first time the sector had grown since August 2019. Meanwhile, the pace of job creation reached its strongest since July 2019 last month, meaning services firms have taken on employees for three months in a row.
Productivity gap not closing
Figures from the Office for National Statistics (ONS) have laid bare Britain’s regional productivity gap – with London 32% more productive than the UK average in 2018. The data also showed that the south-east pulled further away from the north-east and Yorkshire in 2018 – the most recent year for regional data.
City AM, page: 10
New year boost for high street sales
January was the best month for high street sales since January 2014, according to BDO‘s latest sales tracker. It shows that in-store like-for-like sales increased 5.7% in January compared with a year before as retail rallied following a challenging year.
The Times, Page: 42 The Sun, Page: 47 Daily Express, Page: 49 Daily Mail, Page; 79
OTHER NEWS – WEEK ENDING FRIDAY 7TH FEBRUARY 2020
Appeal against UK’s first ‘McMafia’ wealth order dismissed
Zamira Hajiyeva, the wife of an Azerbijani banker, who spent £16m at Harrods in a decade has lost a legal challenge against the UK’s first Unexplained Wealth Order (UWO), which was obtained by the National Crime Agency in 2018 against a property in Knightsbridge. She is the first person to be subject to an UWO, or so-called McMafia laws. Ed Smyth, a senior associate at law firm Kingsley Napley, said the court’s decision “provides a real boost to the NCA and other agencies in their fight against suspected illicit assets”.
HMRC leaks its own IR35 off-payroll guidance … then withdraws it
Earlier this week HMRC leaked its own guidance on off-payroll working in the private sector, only to then “un-publish” the advice moments later and replace it with a blank screen. A HMRC spokesman admitted that the ‘update’ was due to a “publishing error.” Belinda Johnson, boss of employment research firm Worklab reflected: “I guess someone [at HMRC] pressed the button too early! It’s a pity — there are some useful-looking headings.”
Rural-urban gap growing
New research from PwC suggests people living in urban areas are 48% more likely to feel Britain treats them fairly than those in rural areas.
Yorkshire Post, Business, Page: 1
ONS shows decline in Brits’ life satisfaction during Q3 2019
The third quarter of 2019 saw a 0.7 year-on-year decline in British people’s average satisfaction in regards to their personal and economic well-being for the first time since official records began in 2011, with people reporting that they became more pessimistic about their future job prospects. The figures come from the Office for National Statistics (ONS), which said: “People who are employed and are more concerned about their job security report worse levels of well-being than those who are less concerned”. However, companies and households have also reported rising confidence since the December General Election.
Contact Paul Southward.