Business News 8th May 2017

French election

Emmanuel Macron was elected French president on Sunday with a business-friendly vision of European integration, defeating Marine Le Pen, a far-right nationalist who threatened to take France out of the European Union. With the vast bulk of votes counted, Macron had around 65.5% to Le Pen’s 34.5% – a gap wider than pre-election surveys had suggested. After winning the first round two weeks ago, Macron had been accused of behaving as if he was already president; on Sunday night, with victory finally sealed, he was much more solemn. “I know the divisions in our nation, which have led some to vote for the extremes. I respect them,” Macron said. “I know the anger, the anxiety, the doubts that very many of you have also expressed. It’s my responsibility to hear them,” he said. “I will work to recreate the link between Europe and its peoples, between Europe and citizens.”

Quarter of small firms are paid late

A report commissioned by Crossflow Payments reveals around a quarter of small businesses get paid late by suppliers. An estimated £266bn was paid late in 2016, according to the study.

Daily Mail, Page: 67

Quarter of banks struggle to ID online customers

Some 24 per cent of banks worldwide struggle with the identification of their customers when delivering digital and online banking services, according to a new survey from Kaspersky Lab

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Labour offers “personal tax guarantee” to 95% of earners

Labour is pledging not to raise income tax for those earning less than £80,000 if Jeremy Corbyn becomes prime minister, as well as ruling out rises in VAT and employee NI rates. Shadow chancellor John McDonnell will today pledge that if Labour wins power, 95% of taxpayers would see no rise in their overall tax burden until 2022. But he will say the top 5% of earners would pay more to fund public services. It is also thought he will decline to rule out increasing employers’ NI contributions. “The choice at this election is very clear on tax, as there is currently only one party which is committing not to raise taxes on middle and low earners – and that is the Labour Party,” Mr McDonnell will announce. The Conservatives, who have also ruled out a rise in VAT, say there is a £45bn black hole in Labour’s tax proposals. And the Lib Dems Susan Kramer, said: “John McDonnell has no credible plan for the future of our economy and no guarantee to employers that they won’t be hit with a jobs tax.”

The Sunday Telegraph, Page: 6-7 The Sunday Times, Page: 1-2 The Observer, Page: 1, 10-11 The Sun, Page: 2 Sunday Express, Page: 6 The Mail on Sunday, Page: 11 The Independent, Page: 7

Dividend ‘tax trap’ leads to late returns

The Sunday Times’ Richard Evans warns that the cut in the annual dividend allowance from £5,000 to £2,000, due next year, will lead to older people having to fill out a tax return for the first time. He advises readers to hold as much of their money as possible in tax shelters such as Isas and pensions in order to avoid having to navigate the self-assessment system.

The Sunday Times, Business and Money Page: 10

Pre-packs split opinion

The Sunday Telegraph looks at how a recent spate of pre-pack administrations has re-ignited criticism of the insolvency tool. Will Wright at KPMG insists that pre-packs are a “key tool in the restructuring toolkit that allows value to be preserved”, but critics say the process is used as a way of dumping big debts or burdensome pension schemes. Between November 2015 and December 2016 there were 752 pre-packs in the UK with 192 deals involving connected parties, including former owners, according to the Insolvency Service. Out of that, only 53 were referred to the Pre-Pack Pool, the agency that reviews deals in which companies are sold to connected parties. The Pool’s latest report defends the use of pre-packs as “they help rescue businesses and jobs and they are an effective means of generating the best possible return for creditors when a company becomes insolvent”. But it also says these positives “are often overshadowed by concerns about the transparency of the procedure.”

The Sunday Telegraph, Business and Money, Page: 11

UK investors look abroad

Small business investors are looking outside the UK and Europe amid the uncertainty of Brexit and the election, according to a study by BusinessesforSale. It found British investors’ interest in UK firms has dropped by 9.8% compared with last year, and interest for those in every European country has also fallen. Overall, interest in businesses in the UK and Europe is down by 10%. The biggest interest in the UK by the number of foreign investors came from the US, rising 12%. Australians were second, rising 79%. But interest from Europe was down – from France by 33% and from Germany and Ireland by 30%. A separate study by IW Capital surveyed 1,000 independent investors with £10,000-£250,000 in investments and found 6% planned to invest through tax-efficient investment schemes such as the EIS and SEIS this tax year.

The Mail on Sunday, Page: 84

Computer meltdown stalls business rates appeals

Thousands of firms have been unable to challenge their business rates bills after a computer crisis meant they were blocked from lodging an appeal. In the first month of the new system being in operation, fewer than 100 companies were able to lodge appeals because the system kept crashing. Around 4,000 business are said to have got only as far as registering their name and address. Mark Rigby, chief executive at business rates advisory group CVS, branded the computer problems a “scandal.”

The Mail on Sunday, Page: 79-80

Lib Dems vow to keep triple lock

The Liberal Democrats have promised to keep the pensions ‘triple lock’, in contrast to the Conservatives’ failure to guarantee it will be in the next Tory manifesto. Labour has also pledged to retain the guarantee which sees the state pension rise in line with wages, inflation or by 2.5%.

The Sunday Telegraph The Independent on Sunday, Page: 8

BoE could raise inflation forecast

The Bank of England is this week expected to raise its inflation forecast for 2017 to closer to 3%, from a current projection of 2.7%. But weaker growth and sterling’s recent strength means it could lower its inflation projection in the medium term, reducing pressure for an interest rate hike.

The Sunday Telegraph, Business and Money, Page: 6-7