Business News 1st June 2017

We hope you enjoy reading the business news compiled by the Credit Protection Association on Thursday 1st June 2017 for its members and visitors.

Record numbers paying highest rate of tax

Figures from HMRC show a record number of people are now paying the highest rate of income tax as a result of wage inflation and reductions in pension tax relief. By the end of this tax year, HMRC expects 364,000 workers to be paying 45% income tax, a 10% rise on the previous year and a 54% rise since the tax band was introduced seven years ago. Meanwhile, the number in lower tax bands has fallen or remained static. In addition, HMRC predicts that 600,000 low earners will be taken out of tax over the course of the last and the current tax year. Tom McPhail, head of policy at Hargreaves Lansdown, said: “High earners are already contributing a larger proportion of income tax than ever before and cuts to pensions have unfairly removed their opportunity for them to use tax efficient savings products to reduce their tax bill.”

The Daily Telegraph, Page: 1-2   The Sun, Page: 2

Labours tax plans ‘would damage the economy’

The Telegraph’s Serla Rusli argues that Labour’s tax policies could damage the economy. She says Labour’s plans to raise taxes on businesses will reduce private sector investment, and that the party’s plan to increase income taxes will mean high-income individuals will seek to reduce their taxable income. Meanwhile, the Telegraph’s Allister Heath suggests that Labour’s plan to introduce a Land Value Tax could hit homeowners with bills of up to £20,000 a year. Elsewhere, the Mail says Labour is planning to introduce a wealth tax on the middle classes and an inheritance tax raid that would affect 26,000 families a year.

The Daily Telegraph, Business, Page: 8   The Daily Telegraph, Page: 16   Daily Mail, Page: 6-7

Tribunal upholds tax ruling

Celebrities including David Beckham, Gary Lineker, and Ant and Dec have lost a court bid to overturn a £700m tax bill. They were among those who invested in the Ingenious film schemes, where tax relief was claimed on artificial losses from films. Tax tribunal judge Charles Hellier yesterday ruled they were not “allowable deductions”, upholding a 2016 decision to force the 1,400 members to pay up.

The Sun, Page: 2

Deliveroo tweaks pay policy

Deliveroo is offering its riders the option to be paid for each order they deliver, rather than per hour, in a move that will reinforce the riders’ status as self-employed contractors. George Bull, of RSM, commented: “From a tax point of view it would help create self-employed status because these would be a direct relationship between the volume of work done and the pay received.”

The Daily Telegraph, Business, Page: 1

Yorkshire professionals team up

A new body dubbed the Collaborative Professionals Network (CPN) has been created to encourage professionals to work together to promote Yorkshire as a place to live and work. The group was formed as a result of a partnership between The ICAEW, Leeds Law Society, The Institute of Directors, the CIOT and ATT, the Society of Trust and Estate Practitioners and West and North Yorkshire Chamber of Commerce.

Yorkshire Post, Page: 7

Skilled workers and cheap rent benefit finance companies

The FT’s Doing Business in Cardiff supplement highlights how the city’s financial services sector has boomed over the past 20 years, with Deloitte amongst the firms occupying large offices in the city.

Financial Times, Doing Business in Cardiff, Page: 2

‘Fear of funding’ deters SMEs

A report by Ultimate Finance suggests over a quarter of small business owners have avoided external finance due to a “fear of funding”. In a survey of attitudes towards borrowing, around half of founders revealed they were reluctant to grow their company through finance. Almost half of respondents believed external finance would result in a “loss of independence”, while 44% thought the added stresses of borrowing would only create more business worries. However, despite the general hesitation towards external borrowing, a majority (59%) of respondents believed they could receive the backing they needed if they applied. The report also looked at how borrowing can support business growth, and found that 27% of SMEs that do borrow attribute external funding as a key reason for their business growth.

Business Money   Business Advice

Mortgage approvals at seven-month low

Figures from the Bank of England reveal that April saw home loan approvals dip to their lowest level since September. There were 64,645 mortgage approvals for house purchases in April, down 2% on March’s 66,000. It is suggested that some of the decline may be due to a reduction in tax relief landlords can claim on mortgage payments which came into force on April 1st.

The Times, Page: 40   The Daily Telegraph   Financial Times  

Landlords warned of higher taxes

Anderson Anderson and Brown has warned private housing landlords to expect bigger tax bills following a shakeup of Scotland’s letting industry. Tax changes facing landlords include additional land and buildings transaction taxes and higher CGT rates.
The Press and Journal, Page: 37

Pension shortfall drop

The total shortfall in final salary pension schemes fell by £20bn to £510bn last month, according to PwC. The firm’s Steven Dicker said: “Despite continuing political uncertainty, equity markets are at an all-time high, which has helped to reduce the deficit.”

The Sun, Page: 43

IMF tells millennials to start saving

The IMF has urged millennials to start saving now for their old age, warning that traditional state pensions are unlikely to exist in their current form in the decades ahead.

The Daily Telegraph   Yorkshire Post, Page: 4

Britain falls to bottom of G7 growth table

The UK has fallen to the bottom of the growth league table of advanced economies after a particularly poor start to the year. Canada was the final member of the G7 to report its growth figures, which confirmed the UK as officially the joint worst performing G7 nation so far this year, level with Italy on growth of 0.2%.

The Times, Page: 37   The Guardian, Page: 21 

Britons carry on borrowing

Consumers borrowed £16.4bn on credit cards in April, a record high, according to Bank of England figures. After taking into account repayments, that added an extra £606m to households’ total credit card debts, which now amount to £130.3bn.

The Daily Telegraph, Business, Page: 1   Financial Times, Page: 2

Top overseas footballers seeking euro pay packets

Manchester United CFO Cliff Baty, speaking at the KPMG Football Benchmark event, has said foreign football signings are looking to get paid in euros rather than sterling in the aftermath of the Brexit vote.

Financial Times

Firms pay out more in privacy fines

Research by PwC shows the number of fines imposed on British companies last year for breaching UK data protection laws almost doubled to 35, worth a combined total of £3.2m.

The Independent, Page: 53   The Times, Page: 48

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