Tory rivals back radical tax and spend policies
Philip Hammond’s warning about the risks of cutting taxes have been ignored by a raft of Tory leadership candidates who have backed a new report by Onward, a centre-Right think-tank, which recommended the Government should “turn on all the taps” to increase growth and help low earners. Onward said the reduction in the national debt should be slowed freeing up about £190bn over four years to be spent on tax cuts and higher spending on public services. The report also advocates a gradual reduction in corporation tax from 19% to 12.5%, in line with Ireland; proposes raising the National Insurance threshold to £13,000 for people with children and called for changes to the benefit system to increase incomes for low-wage working households by up to £4,300 a year. Meanwhile, the Home Secretary suggests he would be willing as Prime Minister to scrap the 45p rate of income tax entirely in a bid to inject more “dynamism” into the economy. Sajid Javid says his initial focus would be to cut the basic rate but if the evidence was there that a further cut in the additional rate can raise more taxable revenues that should be looked at.
Labour’s taxation plans questioned
Labour’s plans for a progressive property tax based on house prices would be “deeply damaging” for families and pensioners, housing minister James Brokenshire has said. The Conservative Party have calculated the average home would pay £374 a year more than they currently pay in council tax each year. A report led by George Monbiot, called Land for the Many, wants the tax liability to be assessed on the basis of land value, so those with larger gardens would almost certainly be especially penalised. The report also advocates for the state to be able to take over private property and reallocate it elsewhere. Jill Kirby says in the Telegraph that Monbiot and his co-authors “fall back on the old Left wing sentiments of envy and spite.” Labour would remove discounts for single people such as widows living alone and strip away landlord’s rights and effectively hand control of their property to the tenant leading to a collapse in the private rental market.
Source: The Daily Telegraph (05/06/2019)
Two million couples miss out on a tax break
Last year, the Treasury claimed three million out of four million eligible couples, who are married or in civil partnerships, were taking up the marriage allowance. However, HMRC now admits only two million make use of the tax break which allows non-taxpaying spouses to transfer 10% of their £12,500 personal allowance to their partners.
Source: Daily Mail (05/06/2019)
Breakthrough controls stop phone fraudsters spoofing HMRC
New defensive controls deployed by HMRC have put an end to fraudsters spoofing the tax authority’s most recognisable helpline numbers. The new controls, created in partnership with the telecommunications industry and Ofcom, will prevent spoofing of HMRC’s most used inbound helpline numbers and are the first to be used by a government department in the UK.
Source: The Times (01/06/2019) Daily Mail (01/06/2019)
SMEs struggle to see the upside
The latest Daily Telegraph Business Tracker indicates small business sentiment has improved for the first time since January with 56% of firms declaring themselves upbeat and 44% downbeat. Separate research by Robert Half shows SMEs fearful of falling profits and struggling to adapt and modernise. A further study by Hitachi Capital found the proportion of small business owners predicting growth for the next three months had fallen to one in three, the lowest level for two years. Sole traders were least confident in their business outlook, while companies with between ten and fifty staff were much less gloomy.
Source: The Daily Telegraph (30/05/2019) The Times (30/05/2019)
FSB calls for late-payment reforms
The Federation of Small Businesses has called on the Prime Minister to push through reforms to tackle the problem of late payments. In the Spring Statement the Government promised to make the audit committee of every large business responsible for its payment practices and strengthen the small business commissioner and PPC. These latest reforms need to be delivered, the FSB said.
Source: The I (31/05/2019)
Santander and eBay to launch loans app in UK
Santander’s fintech app Asto will start offering loans to the more than 200,000 SMEs that sell products through eBay in the UK later this year.
Source: Financial Times (04/06/2019)
Business growth grinds to a halt
The CBI’s latest growth indicator shows growth in business activity has virtually ground to a halt over the past three months. Based on a survey of nearly 500 companies, the business lobby group reports an overall output balance of a negative 1%. The survey found that manufacturing growth is steady, thanks to a boost from pre-Brexit stockpiling, although weakness across a range of service sectors, with the exception of retailing, is dragging down output.
Source: The Sunday Times (02/06/2019)