THE HOT STORY
Javid considers scrapping IHT
Chancellor Sajid Javid could be considering scrapping inheritance tax, telling a fringe event at the Conservative party conference that that levy is a “real issue” and saying that changes were “on my mind” when it comes to IHT. Asked if he would consider axing the tax, Mr Javid replied: “We have already made some sensible reforms in that tax … I shouldn’t say too much now but I understand the arguments against that tax.” He added: “I do think when people have paid taxes already through work or through investments and capital gains and other taxes there is a real issue with then asking them on that income to pay taxes all over again.” This comes after the Brexit Party said it would abolish the tax, with party chairman Richard Tice last week describing IHT as “the most hated, the most unpopular tax in this country”, adding: “We’ll just get rid of it”.
Source: The Daily Telegraph (02/10/2019) Daily Mail (02/10/2019) The Independent (02/10/2019) The I (02/10/2019) The Sun (02/10/2019) Daily Express (02/10/2019)
PM’s tax cuts will cost £26bn a year, IFS claims
The Institute for Fiscal Studies (IFS) has challenged Boris Johnson’s flagship policy to lift the thresholds for both higher rate income tax and National Insurance, claiming the giveaway “risks putting the public finances on an unsustainable path”. Mr Johnson pledged to raise the threshold for paying higher rate income tax from £50,000 to £80,000. The IFS said the PM’s proposed tax cut would cost the Treasury up to £9bn a year if introduced immediately and would take 2.5m people out of paying 40% higher rate tax. About three-quarters of the tax benefit would go to the highest-income 10% of households. Increasing all the National Insurance thresholds to £12,500 in line with the personal allowance for income tax would cost £17bn a year, the IFS said.
Source: The Times (27/09/2019) The Guardian (30/092019) The Daily Telegraph (27/09/19)
Going Concern audit standard strengthened by FRC
The Financial Reporting Council (FRC) has issued a revised going concern standard in response to recent enforcement cases and well-publicised corporate failures where the auditor’s report failed to highlight concerns about the prospects of entities which collapsed shortly after. The revised standard (ISA UK 570 Going Concern) follows concerns about the quality and rigour of audit and increases the work auditors are required to do when assessing whether an entity is a going concern. It means UK auditors will follow significantly stronger requirements than those required by current international standards. The enhanced standards will apply to listed and large private companies. Currently, directors of companies provide an assessment of whether their business is able to keep trading, and auditors do not have to provide any explanation of evidence they have gathered to support their case. Auditors will now to have to show they have “robustly” challenged “management’s assessment of going concern”.
Source: The Times (01/10/2019) City AM (01/10/2019) Daily Mail (01/10/2019) The Daily Telegraph (01/10/2019) The Sun (01/10/2019) Daily Express (01/10/2019) The I (01/10/2019) Yorkshire Post (01/10/2019)
Sage acquires Dublin start-up AutoEntry
Following a two-year partnership with Sage, Dublin-based AutoEntry has been bought by the enterprise software company. AutoEntry automates data entry for accountants, bookkeepers and businesses. The automation solution is currently used by more than 3,000 accounting and bookkeeping practices, and it services in excess of 150,000 businesses. According to Sage, AutoEntry will be offered to its customers worldwide in the coming months.
Source: Silicon Republic (29/09/2019)
FSB: Firms would like 10 years to deliver wage increase
The Federation of Small Businesses (FSB) says many of its members would like a decade to implement Chancellor Sajid Javid’s plans to significantly increase the national minimum wage. The FSB’s employment policy chief Michael Mealing said: “Small businesses are agile and can adjust to change but they’re also fragile and need the maximum amount of time so that they can plan and change very much their cost base,” saying that while five years was reasonable, “I think many small businesses would consider ten years would have been better.” He also warned that for low-pay sectors “the advent of a very much higher national living wage, will make the problem in those sectors significantly worse”. Meanwhile, Craig Beaumont, the FSB’s advocacy director, has said the Chancellor did not consult business groups on his plan to raise the national living wage. He said: “Government would normally reach out on something like this, to understand the impact of £16bn being shouldered by small businesses that they know are struggling with employment costs.”
Source: The Times (02/10/2019) City AM (02/10/2019)
Nearly 40% of SMEs believe no-deal will hurt
A UK-wide survey of small businesses by the Federation of Small Businesses (FSB) has found that almost 40% of small companies would be negatively affected by a no-deal departure – and of those only one in five has planned or prepared for disruption. Nearly two-thirds said they felt unable to plan because they were unsure about what to plan for. The FSB’s Mike Cherry said: “Ongoing uncertainty is to blame for preparations hitting the skids with the picture still not clear as to how the UK will leave the EU.” The FT notes that Liverpool Council is establishing a £15m loan fund to aid small businesses in a no-deal scenario.
Source: The I (28/09/2019) Yorkshire Post (28/09/2019)
HSBC launches £14bn fund to help SMEs navigate Brexit
HSBC has launched a £14bn package for SMEs across the UK to help them navigate Brexit. The fund includes ring-fenced pots for international businesses and the agriculture sector. Meanwhile, Barclays is to hold dozens of so-called 100 Brexit clinics to give support to its customers north of the border. It also launched its own £14bn lending fund earlier this year.
Source: The Times (27/09/2019)
Economy beats expectations, credit growth slows
The economy beat expectations in the first quarter of the year, according to Office for National Statistics (ONS) figures, with UK GDP up 1.3% in the year to the second quarter of 2019, 0.1 percentage point above economists’ predictions. The April to June period however saw the biggest fall in production output since 2012 as Brexit stockpiling was relaxed – a downwardly-revised fall of 1.8%. Separately, figures from the Bank of England show consumers increased their borrowing at the slowest rate since 2014 in August – down to 5.4% from its peak of 10.9% in November 2016. Britons also borrowed less to buy houses, the BoE noted, with net mortgage borrowing by households weakening to £3.9bn in August.
City AM (01/10/2019) The Times (01/10/2019)