Business News – 3rd May 2017

TAX

Corbyn victory would bring £45bn of tax rises and debt, Tories say

If Jeremy Corbyn wins the general election every taxpayer will face an extra £1,667 tax bill, the Conservatives will claim today as they unveil the party’s first election poster, the strapline of which says: “Corbyn: No bombs for our Army, one big bombshell for your family.” The Tories will say there is a £45bn black hole in Labour’s tax and spending plans. Meanwhile, Diane Abbot’s embarrassing interview with LBC Radio’s Nick Ferrari on paying for 10,000 extra police officers with a reversal to CGT cuts has been widely reported. The shadow home secretary repeatedly failed to present the costings, at one point alleging the policy would cost £300,000, giving each new officer a salary of just £30. Labour plans to reverse the government’s cut in the higher and basic rates of CGT from 28 and 18% to 20 and 10% on gains other than home sales, which it says will save £2.7bn. Separately, the Mail’s Dan Hyde says there are rumours in the City that the Conservatives are planning to slash corporation tax from 19% to just 12% if they win the election. Chancellor Philip Hammond believes the move would boost investment, claims Mr Hyde.

The Daily Telegraph, Page: 4 Daily Express, Page: 4-5 Daily Mail, Page: 12, 46 Independent i, Page: 9 The Times, Page: 10 The Daily Telegraph, Page: 6 The Sun, Page: 8 Yorkshire Post, Page: 4

Hammond faces £15bn deficit problem

The Chancellor will need to raise taxes or cut spending by an extra £15bn to eliminate the budget deficit by the time of the 2022 election, the IFS has said. The deficit is roughly back to pre-crisis levels, the IFS said, but sluggish economic growth has meant that, despite seven years of austerity, spending remains higher than income. The total net debt on the IFS’s measure now amounts to 80.7% of GDP, making the UK the sixth most indebted advanced economy.

The Daily Telegraph The Guardian, Page: 18 Evening Standard, Page: 9 Daily Mail, Page: 14 Independent i, Page: 7

Complaints about HMRC are taking up to a year to resolve

Due to huge backlogs at the Adjudicator’s Office, taxpayers who submit disputes about their tax bills are having to wait up to a year for a resolution. The Office settled just 970 in 2015-16 – half the 1,850 that were dealt with the year before, the Mail reports. The adjudicator said that while more than half of cases were dealt with in six months, and most within a year, 66 waited for more than a year.

Daily Mail, Page: 44

HMRC crackdown may hit Irish workers

The Independent i claims HMRC posted letters earlier this year to 500,000 taxpayers in Ireland who file annual returns warning them of an impending crackdown on offshore tax liabilities. However, no letters were sent to PAYE workers leaving them potentially unaware and assuming the issue does not affect them.

Independent i, Page: 39

INDUSTRY

Avocet Mining shares suspended after accounts delay

The London-listed gold miner Avocet has failed to meet a deadline to publish its annual accounts leading to its shares being suspended. The company said its accountants Grant Thornton needed more time to complete their audit.

Financial Times, Page: 18 The Times, Page: 51 The Daily Telegraph, Business, Page: 5 Daily Mail, Page: 64

Sparacio now permanent at Entertainment One

Peppa Pig owner Entertainment One said interim finance chief Joe Sparacio has taken the job permanently. Mr Sparacio joined in November having worked for Imax Corporation.

Daily Mail, Page: 61

FIRMS

BHP to merge with Atkinson Consulting

BHP has announced a merger with York-based Atkinson Consulting. Atkinsons specialises in cloud accounting in the North of England and is recognised by leading software company Xero as a gold partner for its expertise.

Yorkshire Post, Business, Page: 19

Brave is the auditor that takes on Toshiba’s accounts

The FT says it will be a brave auditor that takes on Toshiba’s accounts after PwC refused to sign them off. PwC took them on after EY was accused of failing to detect inflated profits.

Financial Times, Page: 14

Pre-pack deal saves oil and gas jobs

Arbroath-based oil and gas services firm Mountwest Petroleum Engineering has been bought out of administration in a pre-pack deal saving 18 jobs. Johnston Carmichael’s Richard Bathgate oversaw the restructuring.

The Scotsman, Page: 34

Appointments

Ross Stupart has joined RSM as a corporate tax partner in its Edinburgh office. Stupart joins RSM from big four firm KPMG, where he was a director in the tax team. Elsewhere, cyber security firm ECSC Group has appointed former Grant Thornton and PwC corporate financier Stephen Hammell as CFO with immediate effect.

Insider Yorkshire Post, Business, Page: 19

SMEs

Banks falling behind in loan race

The Times’ James Hurley talks to business owners who have struggled to obtain credit from traditional lenders. He meets Shami Kalra, the founder of watch designer Omologato, who says he accepted an offer of credit from Paypal after his bank took a week to tell him it would not provide him with a £5,000 overdraft. The financing, called Paypal Working Capital, is not technically a loan but a “cash advance”, a form of unregulated factoring, says Mr Hurley, with repayments deducted automatically from revenues. Amazon and Alibaba have similar offerings. The platforms have an advantage over banks he adds, because as they have already recorded every facet of a company’s trading performance, they do not need projections or accounts to make rapid credit decisions.

The Times, Page: 49

PENSIONS

Pension deficits edge down

Aggregate UK pension deficits have reduced over the last 12 months, according to data prepared by actuarial specialists JLT Employee Benefits. The aggregate deficit of the UK private sector pension schemes stood at £182bn at the end of April, compared with a deficit of £183bn on 30 April 2016. “Markets have been surprisingly stable at a time of political uncertainty in the UK and across Europe,” explained JLT Employee Benefits director Charles Cowling.

The Guardian

ECONOMY

UK manufacturing growth at three-year high

Activity in the UK’s manufacturing sector grew at its fastest pace for three years in April, according to a closely watched survey. The Markit/CIPS UK manufacturing PMI rose to 57.3 from 54.2 in March, well above economists’ expectations. The survey found the main source of new work came from the domestic market, but there was a “solid increase in new export business” due to a combination of better global economic conditions and the weakening of the pound. Stephen Cooper, head of industrial manufacturing at KPMG, said: “This is a real boon for UK manufacturers…The PMI for the eurozone reflected a similar story, with all but one of the eight nations recording highs, showing the quickest rate of growth for six years.”

BBC News The Independent, Page: 38 The Guardian, Page: 18 The Daily Telegraph, Business, Page: 4 Financial Times The Times The Scotsman, Page: 36

OTHER

Top 1% don’t feel very rich

Research by the London School of Economics has found the top 1% of Britons do not feel particularly rich. The top 1% are defined as those earning more than £140,000 before tax and the average income for those in the group in 2010 was approximately £267,000 a year before tax. However, with many mixing with people sitting on £100m fortunes many say earning a few hundred thousand “does not feel that great”. According to the report, by Katharina Hecht, members of the top 1% are often working for the 0.1%: “While recognising their advantage compared to the general population, they experience disadvantage when ‘looking up’,” she says.

The Guardian, Page; 13