Business news 29 May 2024

Some of the business news that we thought would interest our members.

James Salmon, Operations Director.


Reeves: No additional tax rises under Labour
Shadow Chancellor Rachel Reeves says there will be “no additional tax rises” beyond those already outlined if Labour wins the election, insisting that the party’s policies will be “fully funded and fully costed – no ifs, no ands, no buts.” “There is nothing in our plans that requires any further increases in taxes,” Ms Reeves said, adding that Labour’s plan to restore stability to the economy would be “underpinned by robust fiscal rules.” The party has ruled out increases to income tax, National Insurance, corporation tax or any form of wealth tax. In an interview with GB News, Ms Reeves said: “Income tax and National Insurance won’t go up under a Labour government, the whole five years of the next parliament,” while telling Sky News: “We don’t need to increase VAT because we don’t need to increase any taxes.” Labour says it will raise £5bn a year by tackling tax avoidance and evasion, with a further £2.6bn coming from closing “loopholes” in the Government’s plans to abolish non-dom exemptions. It will also deliver a “proper windfall tax” on profits made by oil and gas companies, which will rise from 75% to 78%, and end the VAT exemption for private schools.

IFS says ‘triple lock plus’ will benefit 7.5m retirees
The Prime Minister’s new “triple lock plus” proposal for state pensions is expected to benefit 7.5m retirees, according to the Institute for Fiscal Studies (IFS). The plan would spare 750,000 pensioners from being taxed in the next five years and boost the incomes of two-thirds. The proposal aims to raise the income tax threshold for pensioners every year, while keeping it frozen for other taxpayers until at least 2028. The IFS said half of the giveaway from the £2.4bn pledge would come from the Government going back on its policy of frozen tax thresholds. IFS director Paul Johnson said: “Pensioners used to have a bigger personal allowance than people of working age – it was the Conservatives who got rid of it.” He told BBC Radio 4’s Today programme that the new policy “is one of many examples, actually, of tax policy that has been reversed by the same government.”

Freeze will hike tax burden, whoever is elected
The Times’ David Smith says that even if the election campaign sees pledges that rule out tax increases, the tax burden will still rise. The Office for Budget Responsibility (OBR) says taxes as a proportion of GDP are on course to rise from 36.1% in 2023/24 to 37.1% in 2028/29, the highest since 1948. He highlights the impact of the freeze on income tax allowances and thresholds that came into force in 2022 and is due to last until April 2028. The OBR estimates that by the end of the freeze, taxes will be £33.6bn a year higher than would otherwise be the case. Mr Smith says the freeze is “the biggest stealth tax increase in history,” pulling 3.7m more people into the income tax system, creating 2.7m more higher-rate taxpayers and putting 600,000 more people into the top 45% rate of tax.

Stride: Tory plan will cut taxes for pensioners
Work and Pensions Secretary Mel Stride says the Tories’ “triple lock plus” proposal would provide tax cuts worth hundreds of pounds for millions of pensioners over the next parliament, warning that leaving the current situation unchanged would result in millions of pensioners being forced to pay income tax. On the cost of the policy, Mr Stride told Times Radio: “£2.4bn is the cost at the end of the parliament. We can comfortably raise £6bn from clamping down on tax avoidance and evasion – The head of the National Audit Office has stated that that number is achievable.” Meanwhile, Laura Trott, the Chief Secretary to the Treasury, says that by not committing to match the Conservative’s pledge to increase personal tax thresholds for pensioners, Labour is “dragging thousands of pensioners into a new retirement tax.”

Super-rich flee to avoid taxes on overseas income
The UK’s super-rich are leaving the country to avoid taxes on their overseas income, following the announcement of the abolition of the non-domicile tax regime. Tax advisers have revealed that dozens of their non-domicile clients have already left, with hundreds more expected to follow. Tax advisers say clients are considering moving to countries which offer special tax incentives for the wealthy, like Italy, which offers a flat tax rate of €100,000 regardless of income. Data shows that the UK had 68,800 non-doms in 2021/22.

LTA uncertainty worries savers
Uncertainty over whether Labour will revive the pensions lifetime allowance (LTA), is causing concern among savers with larger pension pots. The LTA, which used to target those with pots over £1.8bn but was later reduced to £1,073,100, was scrapped by Chancellor Jeremy Hunt in last year’s Budget. However, Labour has pledged to restore the LTA but not confirmed if it will follow through if it wins the general election. Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, has called for greater clarity and said that the threat of a revived LTA is bringing unnecessary complexity to people’s long-term planning. Tom Selby, director of public policy at AJ Bell, described the LTA as a “brutal” tax that punishes savers for saving diligently.

Opinion: Tories must embrace tax-cutting instincts
A Telegraph editorial says that while the Tories claim to be the party of tax cuts, these instincts should be reflected in the election manifesto. It notes that Chancellor Jeremy Hunt has expressed dissatisfaction with the freeze on allowances which has pulled more people into higher tax bands, while also raising concern over the unfairness of inheritance tax.

Boardrooms still lack female representation
Nearly seven out of 10 of the most powerful jobs in UK business are still going to men and there remains “much more to do” to boost female representation in Britain’s boardrooms, the former boss of the FTSE Women Leaders Review has warned. Denise Wilson, who stepped down at the end of March after 13 years leading the government-sponsored review, said that while great strides have been made in increasing gender parity in UK boardrooms, women are still finding barriers to many of the top jobs. “With six to seven out of 10 (of these) roles going to men, there’s much more to do,” she warned. The latest report from the taskforce showed that women still make up less than a third (30%) of executive committees in FTSE 100 listed companies – with just 21 female chief executives in the wider FTSE 350. These are “the most powerful jobs in UK business,” Ms Wilson noted.

Most executives have no experience of higher interest rates
Only a quarter of senior financial executives have experience of elevated borrowing costs, with analysis from consultancy Baringa showing that just 27% were involved in decision-making before 2008, the last time interest rates were as high as they currently are. Nick Forest, a partner at Baringa, said: “For many of the people tasked with tackling higher interest costs, this is a new challenge.” He added: “They face the challenge of adapting to a new macroeconomic backdrop: the tools and techniques which got them through the last ten years are not the tools and techniques needed for the next ten months.”

FCA approves fewer than 1 in 7 crypto firms
Analysis shows that the Financial Conduct Authority (FCA) has approved fewer than one in seven cryptocurrency firms that tried to register with the regulator. Of 344 applications received by the FCA between January 2020 and April 2024, just 47 companies were successfully registered, while 233 were withdrawn and 48 rejected – with 16 still pending when the figures were compiled. A Treasury report said the FCA carried out “robust” assessments when firms first registered, which “identified significant weaknesses” in money laundering controls. This, it added, resulted in “a large number of companies withdrawing their applications or being rejected or refused by the FCA.”


Retail sales climb in May
Confederation of British Industry (CBI) data shows that retail sales have expanded at their quickest pace since December 2022. The CBI’s weighted balance of retail sales climbed to 8% in the year to May, up from minus 44% in April. Alpesh Paleja, lead economist at the CBI, said: “May’s increase in retail sales adds to the swathe of data pointing to an improvement in activity over the near-term.” He added: “Falling inflation, and continuing real wage growth will contribute to a healthier consumer outlook, in turn supporting the retail sector further.” The CBI said retailers expect sales to contract marginally over the next month. The report shows that employment in the retail sector fell in May and is expected to continue to do so in June.

No Budget until September if Labour wins
A Labour government will not deliver a Budget until September, shadow Chancellor Rachel Reeves has revealed, saying she would wait to receive a forecast from the Office for Budget Responsibility (OBR) before any fiscal statement. Ms Reeves noted that the OBR requires 10 weeks’ notice to provide an independent forecast ahead of a Budget.


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Appointment of Administrator – OSBORNE DEVELOPMENTS HOLDINGS LTD
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Appointment of Administrator – NORTHERN FABS (BRADFORD) LTD
Appointment of Liquidators – APEX IT LTD
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Appointment of Liquidators – LOGIK (UK) LIMITED
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Appointment of Liquidators – GSK FINANCE (NO.3) LIMITED
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Appointment of Liquidators – STARKWELL VALIDATION LIMITED
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Winding up Order (Companies) – TL MARSH ELECTRICAL LTD
Winding up Order (Companies) – MAANESTEN UK LIMITED
Winding up Order (Companies) – STAG INNS (EXMOUTH) LIMITED
Appointment of Liquidators – GUTHRIE & HOWE LIMITED
Petitions to wind up (Companies) – PRESENT COMPANY DRINKS LTD
Petitions to wind up (Companies) – FEWS LANE CONSORTIUM LTD
Petitions to wind up (Companies) – ASHFORD GROUP LIMITED
Petitions to wind up (Companies) – ANGUS CONSTRUCTION DEVELOPMENTS LTD
Petitions to wind up (Companies) – MARGO EYRE PROPERTY DEVELOPMENT LIMITED
Appointment of Liquidators – SIGN-TIFIK UK LTD
Appointment of Liquidators – A&S REES & COMPANY LTD
Petitions to wind up (Companies) – GREENBANK PLUS LTD
Petitions to wind up (Companies) – MAGMA PROPERTY LIMITED
Petitions to wind up (Companies) – NEW ROOMS EXTENSIONS LIMITED
Appointment of Liquidators – SENSATA TECHNOLOGIES LIMITED
Appointment of Liquidators – EOAH MANAGEMENT LTD
Appointment of Liquidators – RULES EXPERT LTD
Appointment of Liquidators – BAFRON LTD
Appointment of Liquidators – BERWOOD HOMES LIMITED
Appointment of Liquidators – NEBULAR CONSULTANCY LTD
Appointment of Liquidators – SAISYS IT LTD
Appointment of Liquidators – ETRUSCAN HOMES LTD
Appointment of Administrator – IOCONIC LTD
Appointment of Liquidators – WEST KENT EXTRA LIMITED

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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.