Business news 20 December 2022
James Salmon, Operations Director.
Early retirement driving inflation and harming growth. Manufacturing output falls at its fastest since pandemic. Retailers may see just a modest rise in sales this month. FRC audit inspections will focus on fraud and going concern. UK digital income tax overhaul delayed for two more years . And more business news.
Early retirement driving inflation and harming growth
Early retirement is stoking inflation and damaging growth while adding pressure to already strained public services, according to a report by the House of Lords economic affairs committee. Its inquiry into the 565,000 workers who left the jobs market since the start of the pandemic found that early retirement among those aged between 50 and 64 was the main driver of the trend. Although the number of people who are out of work owing to long-term illness is at a record high, much of the rise has been among people who were already neither working nor looking for work. The evidence suggests that it is an increase in the number of people retiring earlier as a lifestyle choice after the pandemic that is squeezing the supply of labour. “It is possible that people got used to different habits and ways of working during the COVID-19 pandemic, which prompted them to reflect on their careers,” said the report.
Manufacturing output falls at its fastest since pandemic
A new survey of manufacturing businesses by the CBI reveals that output over the three months to December fell at its fastest pace since the start of the pandemic. The decline was mainly driven by a fall in production of food, drink, tobacco, paper and the mechanical engineering sectors. Anna Leach, deputy chief economist at the CBI, said: “The corrosive effect of higher inflation on demand is increasingly clear, as manufacturing output contracted at the fastest pace in two years over the last quarter. While some global price pressures have eased in recent months, cost and price inflation will likely remain very high in the near term, with rising energy bills a key concern for manufacturers.”
Retailers may see just a modest rise in sales this month
Analysts expect retailers will see just a modest rise in sales in the final run-up to Christmas after consecutive monthly declines from September to November. British Retail Consortium chief executive Helen Dickinson said “the cost-of-living crisis means many families might dial back their festive plans.” Paul Martin, UK head of retail at KPMG, commented: “Given the economic headwinds for the year ahead, with consumer behaviour expected to evolve further as shoppers look to trade down and purchase less, understanding and meeting customer needs will be mission critical for retailers, and it’s a job that keeps getting harder.”
FRC audit inspections will focus on fraud and going concern
The Financial Reporting Council (FRC) will focus on going concern, fraud risks and climate related issues in the next cycle of audit inspections, the regulator has said. These sectors are considered by the FRC to be higher risk, for corporate reporting and audit, by virtue of economic or other pressures.
New powers could allow UK to seize £1bn of dirty money
British prosecutors would be able to seize £1bn of suspect assets from oligarchs and kleptocrats under new anti-mafia laws such as those employed by Italian authorities to destroy organised crime networks. Researchers at the Royal United Services Institute (RUSI) say adopting such a law would allow investigators to confiscate property and other assets if they can show that oligarchs and kleptocrats are a national security threat because of their association with corrupt governments and individuals. Maria Nizzero, a RUSI fellow and financial crime expert, said changing the law this way would solve the Government’s dilemma about what to do with the assets seized from Russian oligarchs since Vladimir Putin’s invasion of Ukraine.
UK digital income tax overhaul delayed for two more years
The Treasury announced on Monday that compulsory use of HMRC’s Making Tax Digital (MTD) scheme for Income Tax Self-Assessment (ITSA) will be delayed by two years to April 2026. It had already been postponed from next year to April 2024 because the technology was not ready. “A phased approach to mandating MTD for Income Tax will allow us to work together with our partners to make sure that our self-employed and landlord customers can make the most of the opportunities this will bring,” HMRC chief Jim Harra said. The Government also changed the annual income threshold for MTD to £50,000 from April 2026, up from its initial proposal of £10,000, because of fears that the lower limit would impose too great a burden on small businesses. The threshold will be reduced to £30,000 from April 2027.
Jeremy Hunt to deliver next UK Budget in March
The Chancellor will deliver the first official UK Budget since 2021 on March 15th next year. Jeremy Hunt yesterday asked the Office for Budget Responsibility to prepare forecasts for a Budget on that date.
Civil servants suffer pandemic retirement regret
Figures from the Office for National Statistics show half of former civil service and local government workers aged between 50 and 65 who are thinking about returning to work retired during the pandemic. Despite many enjoying gold-plated civil service pensions, the data indicate many are finding their incomes are not enough to fund their retirement. By comparison, 37% of health workers said they were thinking about coming out of retirement while for IT workers the figure was 36%.
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.