Business news 10 October 2024
Debt measurement change will boost spending. Workers rights bill & Infrastructure plan. House prices, tax, pensions, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Debt measurement change will boost spending
Chancellor Rachel Reeves is planning to change borrowing rules to free up cash ahead of the Budget on October 30. While the Chancellor has committed to seeing debt falling as a share of the economy in five years’ time, officials are looking to change how debt is measured so as to unlock funds for longer term investment. The Treasury is currently assessing the impact of these changes on the public finances with the Office for Budget Responsibility, whose forecast on the economic benefits will inform Ms Reeves’ final decision on how to change the rules. It is noted that any measures to change how debt is measured will not prevent the need for further tax rises in the Budget.
Workers rights bill & Infrastructure plan
There is a big day ahead in Westminster as the government sets out a 10-year infrastructure plan, where they are expected to loosen the purse strings to invest in the country’s future. Also the much discussed and anticipated workers’ rights bill will finally be revealed.
Workers are due to get an immediate entitlement to sick pay from the first day they are ill, rather than the fourth. And also an immediate right to claim parental leave, instead of having to wait a year. However many other changes will be delayed 2 years while consultation takes place.
As part of the plans, the existing two-year qualifying period for protections from unfair dismissal will be removed.However, workers will be subject to a proposed nine-month probation period when they can still be sacked without a full process.
House prices
UK House Prices are rising for the first time in two years as the market continues to pick up, surveyors have reported. A balance of 16% of professionals reported prices increasing in September, up from a flat 0% result in August and the first positive reading since October 2022. Demand, sales, and new listings all grew in September, the Royal Institution of Chartered Surveyors said.
Markets
US & Asian markets shrugged off geopolitical concerns to climb higher. Overnight in the US the S&P 500 rose 0.71% to 5792.04 and the NASDAQ climbed 0.6% to 18291.62. This morning on currencies, the pound is currently worth $1.307 and €1.196. On Commodities, Oil (Brent) is at $77.15 & Gold is at $2615. On the stock markets, the FTSE 100 is currently down 0.07% at 8237.5 and the Eurostoxx 50 is down 0.37% at 4964.
Attention now turns to US inflation data as markets continue to speculate on the US interest rate path.
UK’s richest pay £3bn in income tax
Analysis of HMRC data shows that 60 of the wealthiest people in the UK collectively contributed more than £3bn a year in income tax in 2021/22. These individuals, who each earned at least £50m in that financial year, paid 1.4% of the UK’s total income tax despite representing just 0.0002% of taxpayers. In 2021/22, the UK’s overall income tax receipt came in at £225bn, with contributions from 33m taxpayers. The Institute for Fiscal Studies (IFS) says the data shows how reliant the tax system is on a small number of individuals. This comes amid concern that potential tax hikes in the Budget could prompt the super-rich to leave the UK and take their wealth to low-tax jurisdictions. The IFS said the Treasury must be aware that a small number of this super-rich group leaving the UK would create a “relatively big hole in its finances.” The IFS argues that introducing an “exit tax” for those looking to take their wealth elsewhere could help dissuade wealthy individuals from leaving the UK.
Pensions – Reeves mulling £100k cap for tax-free lump sum
Chancellor Rachel Reeves is contemplating a significant reduction in the tax-free lump sum that savers can withdraw from their pensions, potentially capping it at £100,000. The move would be designed to bolster public finances and could impact one in five retirees, according to the Institute for Fiscal Studies (IFS). Currently, savers can withdraw 25% of their pension pot tax-free, up to £268,275. The Government is exploring recommendations from the IFS and Fabian Society to lower the cap, a move which could generate approximately £2bn in revenue. Hargreaves Lansdown’ head of retirement analysis, Helen Morrissey, said: “Changes to the tax-free lump sum would do irreparable damage to the pension system,” adding: This risks undermining confidence and impacting people’s retirement savings.” Sir Steve Webb, a former Pensions Minister, told BBC Radio 4’s Today programme: “If you brought in a change like this, you would have to have lots of complicated transitional rules and that in turn means you would not raise very much money for quite a long time.”
Reward downsizers with a tax break
Barclays has suggested that downsizers should be able to reclaim moving costs from taxes, suggesting that grants and vouchers should be offered to offset such expenses against stamp duty when purchasing a new home. The bank believes that financial incentives and simplified moving processes could encourage more families to relocate. However, critics argue that this proposal may benefit wealthier individuals rather than struggling families or first-time buyers, questioning the rationale behind incentivising those who have profited from rising house prices. Mark Arnold, head of mortgages and savings at Barclays, said: “A stronger, more holistic strategy is needed to tackle the immense issues faced by the housing market.”
Tribunal ruling could see rates cut for City stores
More than 1,500 shops in the City of London could see their tax bill cut after a tribunal ruled that a store was paying too much in business rates. The Valuation Tribunal for England ruled that the rateable value applied by the Valuation Office Agency had been set too high following a 2023 revaluation. An independent panel which hears business rates appeals ruled that the rateable value of the store should be reduced by 38% from £287,500 to £179,000. Analysis by Altus shows that there are 1,540 other similar shops in the City which could be impacted by the ruling, which could mean total savings of £33m for retailers.
GSK
The drug giant will pay up to $2.2 billion to settle 80,000, long-running US court cases regarding Zantac, a heartburn medication. The payout should remove some uncertainty for the pharma co.
Tritax.
Brookfield has gazumped property developer Segro. The Canadian investor will buy warehouse owner Tritax EuroBox for £557 million — an offer that came in 6% higher than Segro’s.
Natwest
The UK Government has sold off another chunk of shares in NatWest as a gradual wind-down of its stake in the lender continues. Just under 1% of the Treasury’s stake in the bank was sold, a filing showed on Wednesday, leaving the government’s holding slightly off 16%.
Netflix
Netflix said its UK arm has reported record revenue for last year after the streaming service moved to clamp down of password sharing among viewers. Revenue ticked up 8% to £1.67 billion over the year to December on the back of a 7% jump in subscribers, the company reported on Wednesday.
Rolls-Royce
Rolls-Royce said its mini nuclear reactor business has posted a £78 million loss for last year as news on government support for the industry is awaited. The small modular reactor business saw losses climb from £61 million a year earlier, as research and development spending grew from £78 million to £115 million.
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Why you should become a member of CPA!
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid, since 1914. We have supported our members through all sorts of difficult trading environments. With high interest rates and a struggling economy and elevated insolvencies, our services can help your business navigate these difficult waters.
Unlike other credit management and debt collection companies, we offer a range of services to our members that are all included as part of a fixed annual subscription, tailored to your needs.
Under your annual subscription you will have access to our main services:
- Our Creditcare credit reports provide credit ratings and limits along with a host of detailed information on your potential customers to enable you to trade with confidence and set appropriate credit policies for new customers.
- Our monitoring service will alert you to any significant changes in the status of those customers.
- Our Overdue account recovery service can be used to chase up payment on any invoices to those customers that have not been paid on time. Unlike other debt collection companies, this service directs your customer to pay direct to you and allows you to maintain your goodwill with them, rather than inserting ourselves into your relationship with you customer and insisting they pay CPA instead. Our Overdue account recovery service resolves over 80% of accounts referred to us.
All of the above services and other complimentary services such address verification, are included in your subscription!
And for the small minority of debts not resolved through our Overdue account recovery service, you can refer the debt to our collections department to escalate the late payment collections process.
CPA eases cash from tardy debtors – Efficiently, Effectively, Economically and Ethically. And we provide credit information so you can monitor and assess your key customers and be warned of any potential risks. CPA has been improving business cash flow for over 100 years, by tackling late payers and campaigning against the late payment culture in the UK.
Unlike other credit management companies, we offer our members a fixed annual subscription regardless of how high the value of their debts maybe!
Rather than to borrowing more money to improve your cashflow, CPA suggests that business owners tackle the problem at its source. If late payments are a strain on your cashflow, then talk to CPA about how we can help you reduce those late payments.
Just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email nsm@cpa.co.uk today.
When you see your money come in, you will be so glad you used CPA.
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
Do you have a commercial late payer that is causing you grief? Use CPA’s no-win, no-fee, commercial debt recovery service!
If you have a particular business customer who is late paying and causing you sleepless nights, why not offer it to CPA’s collection department for purchase on recourse?
CPA’s collection department will then pursue the debt. We will be liable for any costs incurred and then when we have recovered the debt, we will pay you the net principle debt recovered less our percentage.
Once you have enjoyed that success then you can consider the more cost effective membership which includes our Overdue Account Recovery service and Status/Credit reports as well as a range of other complimentary services.
Just call 020 8846 0000 and ask for Godfrey Nelson or Cris Shirley (business hours) or email debtpurchase@cpa.co.uk today.
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.
Get compensated for previous late payments
Have you been paid late by business customers in the last six years?
Maybe you no longer work with them. Under legislation, you are entitled to compensation you for those late payments you have suffered.
You put up with the PAIN – now claim the GAIN!
Claim late payment compensation (LPC) from former business customers who paid you late in the last six years!
CPA (LPC) Recoveries is using our bespoke software and decades of experience to do just that for our clients
Check our compensation calculator to see how much your business could be owed!
Discover NOW the potential value of late payment compensation hidden in your sales ledger!
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.