Chancellor says tax cuts now an option
Philip Hammond has said the improved state of Britain’s finances means the Government now has the economic flexibility to cut taxes but warned Tory leadership candidates not to wreck the party’s reputation for fiscal responsibility. Mr Hammond told MPs during Treasury questions in the Commons: “We can choose to support additional spending on public services. We can choose to reduce the deficit more quickly. We can choose to invest in Britain’s future. Or we can choose to cut taxes on ordinary working families,” he said. “Having the luxury of choice is something this country hasn’t seen for a decade.” The Chancellor’s comments come after Tory leadership hopeful Dominic Raab pledged to reduce the basic rate of income tax by 5p.
Source: The Daily Telegraph (22/05/2019) Financial Times (22/05/2019) The Times (22/05/2019)
Nearly half of SMEs value tech more than people
A survey by CYBG has found 46% of SMEs believe that technology is more important to their businesses than people. The study also indicates that technology may be the winning factor for SMEs trying to secure funding, with 36% of tech-led businesses across the UK finding it “easy” to access funding for growth, while only 19% of all other business types feel the same. Birmingham, London and Edinburgh were found to be the three cities investing the most in technology.
Source: Yorkshire Post (21/05/2019)
OTS recommends simplification of PAYE
The Office of Tax Simplification (OTS) says the PAYE system needs to be reviewed and has suggested HMRC offer better guidance for SMEs in regard to compliance with the tax system. OTS tax director Bill Dodwell said start-ups need advice on taxes, licences and pensions to beat red tape, commenting: “Many new businesses are formed without sufficient help and guidance. This can lead to mistakes being made, resulting in substantial costs or penalties.”
Source: The Daily Telegraph (17/05/2019)
Small business owners lack basic digital skills
The Federation of Small Businesses (FSB) has teamed up with Facebook to help address the digital skills deficit in the UK’s small businesses. According to research by the FSB, 26% of small business owners lack confidence in basic digital skills. FSB policy and advocacy chairman Martin McTague said: “Digital innovation provides enormous potential both for individual businesses and for improving UK productivity. But these benefits can only be realised if small business owners are able and confident to take advantage.”
Source: The Press and Journal (20/05/2019)
City minister rules out Brexit dividend from looser regulation
City minister John Glen has claimed adopting a looser regulatory environment after Brexit will not deliver an “enormous economic dividend” and that the majority of Square Mile firms want instead a “reliable ecosystem” with clarity over the future relationship with the EU. Speaking at the Guildhall, underlining four key areas of activity for the financial sector – green finance, fintech, India and China – Glen said he recognised that people in the City are “frustrated and in despair” at the state of the Brexit talks, but stressed: “We want a fair settlement in terms of us leaving the EU but knowing what the dynamics of that future co-operation will look like.”
Source: City AM (21/05/2019)
Study calls for SME tax rethink
Andy Street, Mayor of the West Midlands, has called on the Government to cut taxes on small businesses, saying a low and simple flat tax could boost the economy. A study by Nick King, head of business at the Centre for Policy Studies, suggests that many people believe the Government is not on the side of small businesses, with 62% of small firms’ bosses saying this is the case. The report suggests small firms with turnover of less than £1m should be able to choose to pay a flat tax on their turnover, opting out of corporation tax, employers’ national insurance, VAT and business rates. Mr Street said the plan serves as “a significant simplification of the tax landscape for small firms, and a dramatic reduction in their reporting and administration burden”. Home Secretary Sajid Javid will launch the report, saying it “shows how bureaucracy and paperwork are stifling the growth of our small businesses.”
Source: The Times (17/05/2019)
Over-60s at risk of complex IHT rules
A HMRC report published last week indicates that more than a million over-60s are at risk of falling into the inheritance tax net but 54% of those have little understanding of IHT rules. NFU Mutual’s Sean McCann said IHT rules were “fiendishly complex, feared by many and understood by few”, and that this lack of knowledge could lead to needless tax bills running into the tens of thousands of pounds. Elsewhere, investment platform AJ Bell says almost half of people who gift money are unaware of inheritance tax rules that could see their estate taxed at 40% if they die within three years. Up to £3,000 can be given away each year tax-free, but 12% of people over the age of 70 are handing out gifts of £20,000 or more. Tax is not paid on larger gifts if you survive for longer than seven years, but just 45% say they understood these rules.
Source: The Daily Telegraph (22/05/2019) Daily Mail (22/05/2019)