START-UPS

Pressure mounts on Bailey over RBS report

Pressure is growing on FCA chief executive Andrew Bailey to account for his handling of the report into RBS’s mistreatment of struggling small businesses. MPs from across the political divide say Mr Bailey has “serious questions” to answer over the regulator’s failure to publish its investigation into the bank’s Global Restructuring Group (GRG). Elsewhere, the Sunday Telegraph’s Iain Withers considers the lessons to be learned from RBS’s mistreatment of small firms. He says the Treasury committee has launched an inquiry to assess concerns about the broader SME finance industry, and the FCA is consulting on proposals to beef up its Financial Ombudsman Service. MPs and GRG victims’ groups have expressed a preference for an independent tribunal system, which would need to be put in place by government.

The Sunday Telegraph The Sunday Telegraph

FUNDING

City grandees back company targeting high-growth SMEs

A trio of City grandees is backing a new company which plans to raise an initial £150m to fund promising entrepreneurs. The business, Ansor Ltd, has signed up Martin Morgan, the former chief of Daily Mail and General Trust, David Weaver, ex-chairman of Jefferies, and Tom Boardman, the chairman of Swedish investment company Kinnevik as non-executive directors. Akta Raja, co-founder and executive director of Ansor, commented: “The UK has countless small entrepreneurial businesses that are profitable and growing fast… As entrepreneurs who have built a number of small businesses, we know what life is like for them. We bring the operational know how and will share the risk to enable owners to focus on doing what they do best: be great entrepreneurs.”

The Daily Telegraph

Crowdfunding criticism

The crowdfunding sector is facing criticism for failing to make investors fully aware of the level of risk they face. It follows the collapse of restaurant company Square Pie, which threatens to leave hundreds of “mini bond” holders out of pocket. Rob Murray Brown, founder of the crowdfunding consultancy ECF Solutions, accused Crowdcube of not doing enough to vet companies that pitch to investors, as well as failing to explain the dangers involved. Julia Groves, co-founder of the UK Crowdfunding Association, said some platforms were not up front about their fees and any problems with the companies they feature.

The Sunday Times

ENTREPRENEURS

Keeping it in the family

The Sunday Times looks at the challenges faced by family-owned businesses when it comes to succession planning and business disagreements. Rupert Phelps, a partner in the family office at Smith & Williamson, says “there is increasing acceptance among family businesses that having some form of constitution or council is beneficial.” According to the Institute of Family Business, the number of family-owned firms in Britain increased by 31% to 4.7m from 2010 to 2015. Those companies employ 12.2m people and add £460bn to the economy each year.

The Sunday Times

TAX

Contractors fear a tax blow after BBC case

The Telegraph’s Sam Meadows says HM Revenue &Customs’ crackdown on people who pay themselves via a personal service company is likely to hit thousands in the private sector. It comes after former BBC presenter Christa Ackroyd was ordered to pay back £419,151 in tax after a tribunal ruled in favour of the Revenue. Ms Ackroyd blamed the BBC for advising her to claim her salary via a personal service company. Since April 2017 the corporation, along with all public sector organisations, is responsible for determining the tax status of its contractors. Following the tribunal verdict, the contractor community has raised fears that the rules will be extended to envelope private companies.

The Daily Telegraph The Daily Telegraph Financial Times

New system sees business rates appeals plummet

Appeals over business rates have fallen by more than 99% since a new system was introduced last year. Between April 1 2017, when the new system for appealing business rates was introduced, and December 31, just 1,210 valuations were challenged in England, a 99.3% fall compared to the same period after the last system change in 2010. The new appeal system places the burden of proof on companies themselves, while new regulations are also being introduced which will issue £500 fines if businesses appeal wrongly. As a result, industry bodies said, thousands of businesses are not bothering to appeal their business rates, and could be paying far more than they should be.

The Daily Telegraph Yorkshire Post

Tax crackdown could hit start-ups for £400m

A crackdown on the abuse of a tax break designed to encourage high earners to invest in risky companies could deprive start-ups of as much as £400m next year. The Treasury is tightening rules surrounding the Enterprise Investment Scheme (EIS), which offers tax relief of 30%. From April, the sweetener will be worth up to £600,000 a year for investors in “knowledge-intensive” companies. The new eligibility rules are intended to prevent investors using the scheme as a means of capital preservation by backing low-risk companies. The EIS Association says investment funds could pull as much as £400m out in the first year in response to the changes, although it expects investment to bounce back after that.

The Sunday Times

Tax compliance process weighing down SMEs

The Federation of Small Businesses is calling for simplification of the tax compliance process after research revealed that the average business owner spends £5,000 and three working weeks every year on tax compliance. Almost half of respondents to a survey of more than 1,000 companies said that business rates had made expanding their organisation more difficult. The same proportion said that corporation tax had hampered growth, with similar numbers stating that development had been hit by Employer NICs. One in seven said that VAT had halted expansion. Mike Cherry, national chairman of the FSB, said the “rollout of Making Tax Digital needs to be seen as an opportunity to radically improve the small business user experience of Revenue & Customs.”

The Times City AM

TRADE

Survey shows business backs customs union

A Harvard survey conducted by former shadow chancellor Ed Balls shows that British businesses want to remain in the customs union and the single market after Britain leaves the EU. Mr Balls interviewed 80 small and medium-sized businesses in Britain about the type of Brexit deal they favour, publishing the results in a report from the Harvard Kennedy School. The report noted: “It is no surprise that the businesses we have spoken to view Brexit with increasing concern. They currently face the double uncertainty of not knowing what the endpoint is likely to be, nor how it will be reached. They are clear Britain must stay in a customs union, and if possible, they want to maintain full access to the single market.”

The Times

IoD proposes customs arrangement

The Institute of Directors (IoD) has proposed a bespoke Brexit solution that it believes will protect manufacturers from customs chaos but also allow the UK to strike independent trade deals. The proposed customs arrangement, which is largely modelled on the UK’s customs relationship with Turkey, would allow for easy trade in industrial products and some processed foods. The IoD’s head of Europe and trade policy Allie Renison said: “A new but narrowed customs union would facilitate the continued flow of goods across borders.” She added that such a move would reduce the administrative costs of Brexit.

The Daily Telegraph The Times

Exporters yet to review trading strategy

A survey by Lloyds Bank has found that one in four exporters have not yet reviewed their trading strategy after the UK’s decision to leave the EU. Of those to have reviewed their strategies, 53% said they have decided to focus more on UK opportunities. Meanwhile, the latest Business in Britain report from Bank of Scotland shows the percentage of business across the UK which are exporting fell four percentage points to 40%. The proportion of Scottish businesses exporting has dipped to less than a third.

The Times The Scotsman The Herald

REGULATION

Data laws likely to favour large firms

The new EU General Data Protection Regulations could hand an advantage to big technology companies, experts say. The regime, which comes into force on May 25^th, will require organisations to obtain the consent of consumers to use their data, as well as giving people the right to see what data is being collected on them. Tobin Ireland, founder of the customer data intelligence company Smartpipe, says the American technology giants could be early beneficiaries of the new rules as they rely on their own systems and platforms rather than other partners’, making it easier to gain consent. Smaller European companies, by contrast, will find obtaining user consent a more cumbersome and time-consuming process.

The Times

EMPLOYMENT

Employers ‘living in the dark ages’ about women’s rights

A YouGov survey for the UK’s Equality and Human Rights Commission (EHRC) has found many companies are still discriminating against women in the workplace. A poll of 1,106 male and female decision-makers showed 36% of employers thought it reasonable to ask women about plans to have children during the recruitment process while 41% agreed that pregnancy in the workplace puts “an unnecessary cost burden” on a business. EHRC chief executive Rebecca Hilsenrath said: “It is a depressing reality that, when it comes the rights of pregnant woman and new mothers in the workplace, we are still living in the dark ages.” TUC general secretary Frances O’Grady commented: “Employers are getting away with breaking the law on an industrial scale.”

BBC News Financial Times The Guardian The Independent

Britons work longer hours than anyone in Europe

A study by Eurostat, the EU’s statistics agency, has found that Britons work more hours than anyone else in Europe. Britons spend an average of 42 hours and 18 minutes a week at work, compared to 40 hours and 24 minutes in Germany, and 39 hours in France. The country with the shortest working week is Denmark, where full-time employees put in 37 hours and 48 minutes. Eurostat found that the average European works 40.3 hours a week, with men on average working 41 hours, compared to 39.3 hours for women. Economist Ruth Lea of the Arbuthnot Banking Group said: “Britain has a very flexible labour market, with a very good record of finding ways for people to work part-time. The hours that people work are almost entirely voluntary, and for the most part people do the hours they want to.”

Daily Mail

Recruitment challenges continue

The Sunday Times says that businesses are likely to face recruitment challenges for the foreseeable future. There are currently a record 810,000 vacancies in the jobs market, according to the latest figures from the Office for National Statistics, and there has also been a slowdown in the number of EU migrants coming to work in Britain. Although firms may soon begin offering higher wages, Heather Rolfe of the National Institute of Economic and Social Research says there is evidence across many sectors that better wages have failed to address longstanding recruitment difficulties.

The Sunday Times The Sunday Times

ECONOMY

UK must boost productivity to weather Brexit, says IMF

The IMF has warned the UK it must focus on improving productivity and international competitiveness in order to weather the shock of Brexit. The organisation’s latest country report says Britain must make sweeping reforms to pensions, the planning system, infrastructure, education and training, and research and development if it wants to boost economic growth in the years to come. The IMF expects the economy to expand by 1.6% this year, and forecasts that growth for last year will come in at 1.8%. The UK economy grew by 1.9% in 2016, 2.3% in 2015 and 3.1% in 2014.

The Daily Telegraph The Independent

UK inflation steady at 3%

UK consumer price inflation remained at 3% in January, according to the Office for National Statistics (ONS), the same level as in December and higher than the 2.9% predicted by economists. The ONS said the pace of overall goods inflation dropped to 3.2% in January, compared with 3.4% in December. However, the rate for services rose to 2.8% last month, compared with 2.5% the month before.

BBC News The Times Financial Times The Daily Telegraph