Business news 4 June 2024
Some of the business news that we thought would interest our members.
James Salmon, Operations Director.
TAX
Taxpayers with overseas assets face growing scrutiny
Data obtained by Price Bailey shows HMRC made 2,388 requests for information about taxpayers with overseas assets in 2023-24 – the highest level in at least seven years. The number of requests made to foreign tax authorities was double that of 2018-19 and the tax office sent out 23,500 “nudge letters” to those suspected of having an undisclosed liability. The tax clawed back by HMRC leapt up in that period from £19.6m to £57.2m. Andrew Park of Price Bailey said: “HMRC began issuing nudge letters in 2023-24 to wealthy people named in the Pandora Papers. It cannot be a coincidence that the amount generated from offshore nudge letters trebled to nearly £60m as these taxpayers came under HMRC’s spotlight.” Separately, the FT reports that 68 estates, all with business assets worth more than £5m, collectively benefited from IHT relief on £1.8bn of their assets.
Tories call for IHT to be scrapped
Rishi Sunak is being urged by senior Conservative MPs to make a manifesto pledge to abolish inheritance tax in order to differentiate himself from Labour leader Sir Keir Starmer. Inheritance tax thresholds have been frozen since 2010, and many consider it unfair as it penalises savers who have already paid tax on their income. Nadhim Zahawi, a former chancellor, described the tax as having “catastrophic results” for families and the economy. The move is supported by Liz Truss, Rishi Sunak’s predecessor, and Dame Priti Patel, a former home secretary. Labour politicians have indicated their opposition to any cuts to inheritance tax. A poll found that over half of the country supports the abolition of inheritance tax. The Institute for Fiscal Studies estimates that one in eight people will face an inheritance tax bill in the next decade.
Stealth tax raid to cost workers thousands
Analysis by AJ Bell shows frozen tax thresholds will leave a worker earning £50,000 in 2021 paying an extra £14,000 in tax up to 2028, assuming their pay rose in line with inflation. The Office for Budget Responsibility has estimated that frozen thresholds will mean an extra 4m people start paying tax over the period with the Treasury raking in an extra £40bn compared to if the thresholds had risen in line with inflation. “The Conservatives are effectively giving with one hand by lowering NI and taking away with the other through the stealth tax of frozen thresholds,” Tom Selby, director of public policy at AJ Bell, commented.
EMPLOYMENT
Seasonal businesses worry about zero-hours clampdown
Hospitality and leisure bosses have warned that Labour’s plans to clampdown on zero-hours contracts would make it harder for seasonal businesses to attract staff. Kate Nicholls, chief executive of UK Hospitality, which represents pubs, restaurants and nightclubs, said: “The key will be to make sure that the detail of the policy is right. Nobody wants to impose burdens on businesses that would cut across good employment practices.” A Labour spokesman said: “Businesses will still be able hire seasonally and workers will be free to stay on a variable contract if that’s what works best for them – but we won’t put up with one-sided flexibility.”
FIRMS
Mazars joins with Forvis to create £4bn global network
Professional services firms Mazars and Forvis have joined forces to launch a £3.9bn global network, known as Forvis Mazars. The network, which is the largest new entrant in global rankings in decades, comprises two members: Forvis Mazars LLP in the US and Forvis Mazars Group, an internationally integrated partnership operating in over 100 countries. The partnership was established to provide a stronger global reach and support clients’ needs. The head office of Forvis Mazars will be based in London, serving as a gateway to Europe and a collaboration hub. Former CEO of Mazars, Hervé Hélias, will serve as the first chair of the Global Network Board. Mazars reported a 13% increase in revenue in 2022, reaching €2.8bn in fee income, while Forvis’ recent revenue was €1.6bn. “Mazars and Forvis have worked together for over 20 years and share a commitment to delivering an outstanding client experience. We are well positioned to deliver excellence, everywhere, under a single global brand,” said Hélias.
City AM
INSURANCE
Labour vows to crack down on ‘out of control’ car insurance
Labour’s Shadow Transport Secretary, Louise Haigh, has called for an investigation into the rising cost of car insurance. Haigh argues that the Financial Conduct Authority and the Competition and Markets Authority should probe the sector, which she describes as “out of control”. The average quoted price of car insurance has increased by 56.4% in the year to February, according to Consumer Intelligence. Some insurers, such as Admiral and Aviva, have seen profits rise despite the challenging market conditions. The Association of British Insurers highlights rising repair costs as a key factor contributing to the industry’s challenges.
POLICY
CBI urges next government to prioritise pro-investment reforms
Improvements to planning and skills must be a priority to revitalise ‘Brand Britain’, according to businesses. The next government, regardless of party, is urged to set out pro-investment reforms in tax, planning, and skills within its first 100 days in power. Rain Newton-Smith, CEO of the CBI, stressed the need for a credible plan to address poor productivity and weak growth. The CBI called for a roadmap for long-run business tax plans, a faster planning system, and measures to address labour shortages and boost productivity. The input of over 400 business leaders and 70 trade associations shaped the CBI’s recommendations.
REGULATION
UK Finance calls for champion to tackle over-regulation
UK Finance has recommended the creation of a dedicated “competitiveness champion” to review and tackle financial regulation that hinders the international competitiveness of the UK financial services sector. The champion would produce an annual report to parliament on regulatory burdens and barriers to growth. UK Finance also called for a holistic review of the regulatory regime for non-systemic firms and for overall tax rates for financial firms to be aligned with other financial centres. The proposals come as some firms argue against over-regulation from financial watchdogs that could harm profitability and competitiveness.
RETAIL
Cost pressures and poor weather stifle retail sales
Retail sales remained sluggish last month as wet weather and rising household bills kept consumers cautious. According to the British Retail Consortium (BRC) and KPMG, total retail sales rose by just 0.7% over the year to May, below the 12-month average increase of 2%. Helen Dickinson, chief executive of the British Retail Consortium, said: “Despite a strong bank holiday weekend for retailers, minimal improvement to weather across most of May meant only a modest rebound in retail sales last month.” Retailers hope, however, that a string of sporting and entertainment events this summer and more settled, warmer weather will stimulate demand among consumers.
LEISURE & HOSPITALITY
Cost pressures squeeze hotel operators’ profits
Despite a rise in room prices, UK hotels are experiencing squeezed profits due to cost pressures, including the increase in the minimum wage, according to RSM. Labour costs per available room increased to £16.62 in April, up from £15.32 in March. However, operating profits as a percentage of overall turnover remained stagnant, indicating the direct impact of the minimum wage hike.
ECONOMY
Consumer spending growth at weakest in over three years
Consumer spending growth is at its weakest in more than three years, according to a report by Barclays. Despite falling inflation, the report found that higher council tax bills and the rising cost of broadband and mobile phones are eating into household budgets. In May, card spending was just 1% higher than the same month a year earlier, recording the lowest spending growth since February 2021. A survey conducted for Barclays showed that 87% of consumers are concerned about the impact of rising household bills on their personal finances. However, Barclays expects the fall in inflation to eventually boost activity.
Why should you become a CPA member!
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid, since 1914. We have seen many financial crises, this last one was particularly deadly for suppliers fand we are still seeing elevated insolvencies as businesses struggle.
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.
Unlike other credit management companies, we offer our members a fixed annual subscription regardless of how high the debt value maybe!
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 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.