Government to review IR35 rollout
The government is to review the rollout of the controversial IR35 tax plan, which is due to take effect in April 2020 to prevent workers from disguising themselves as freelance contractors as a way to pay less tax. The government said the review, to be concluded by mid-February, would engage with individuals and businesses on their experiences of the implementations of the reforms and that it would also launch a separate review to explore how it can better support the self-employed. Mike Cherry, chairman of the Federation of Small Businesses, called for a delay to the rollout of the new rules in the light of the review: “This important review presents an opportunity to reassess our flawed off-payroll legislation,” he said. His view was echoed by Tej Parikh, chief economist at the Institute of Directors, who added: “It’s not immediately clear how any new steps to smooth the process could take effect in time for April. Firms and contractors have already been impaired by the looming deadline and lack of clarity around the rules.”
Finance firms contribute record taxes
The financial services and banking industries paid a record £75.5bn in taxes last year, according to a report by the City Of London Corporation. The total was up on the previous year’s £75bn and comprised of £33.4bn in direct taxes, including corporation tax and business rates, and £42.1bn collected from employees and customers. Taxes from the sector made up 10.5% of the Treasury’s entire tax take. The report added that financial services firms employ 1.1m people across the country – around 3% of all UK employment.
Source: Daily Mail (07/01/2020) The Times (07/01/2020) The Independent (07/01/2020)
End of year tax return total climbs
Tax office data shows that almost 300,000 more people have sent in self-assessment tax returns compared to last year. HMRC said 6.3m people had filed their returns as of December 31, an increase of 270,971 on the number who had filed by the same date in 2018, leaving 5.4m people yet to submit their tax return ahead of the January 31 deadline. While last year saw 93% of taxpayers file on time, 731,186 missed the cut-off. Analysis shows that the number of people who send in paper returns has fallen 5.8% to 663,054.
Source: Sunday Express (05/01/2020)
Penalties for breaching minimum wage laws too soft
A report from the Resolution Foundation argues that national minimum wage legislation is not being enforced strongly enough after a rise in reports of non-compliance were recorded following a steady decline for 15 years. In 2016, one in five workers were being underpaid but the figure is now one in four. Researchers at the think tank pointed out that although HMRC can levy penalties worth up to 200% of wage arrears for noncompliance, the average in 2017-18 was about 90% – not enough to serve as a deterrent.
Source: The Times (08/01/2020) The Daily Telegraph (08/01/2020)
Britons could still be hit by stealth taxes this year
Hargreaves Lansdown personal finance analyst Sarah Coles has warned that workers could yet pay out more tax despite the Conservatives’ promise not to increase key tax rates. Ms Coles says with income tax thresholds being frozen until April 2021 and rises in council tax and price rises on fuel and alcohol, Britons could fork out £1,000 more in tax than they expect to this year. Ms Coles urged taxpayers to take advantage of allowances such as Isas and pension contributions.
Source: Daily Express (08/01/2020)
MEP: Small firms to thrive post-Brexit
Brexit Party MEP Rupert Lowe believes Brexit will boost British SMEs, arguing that EU regulations serve to protect the interests of large corporations and multinationals at the expense of small businesses. He said that while more than 90% of private sector firms in the UK are SMEs which do not export to the EU, they have to follow EU regulations, which adversely affects their profitability. Mr Lowe told the Express: “I think small businesses in Britain are thriving in spite of the European Union and our Government. So I don’t think they will suffer any negative effects [of Brexit].”
Source: Daily Express (03/01/2020)
SMEs look to improve their environmental impact
Research from the Bank of Scotland reveals that 69% of Scottish SMEs plan to improve their environmental impact, while 72% have already made efforts to make their businesses greener over the past 12 months. Of these, 28% have made their premises more energy efficient, while around 22% purchased low-carbon vehicles for business use. Almost a quarter said they had taken measures to improve their environmental impact in a bid to deliver long term savings. Some 13% said they were unable to make their businesses more environmentally sustainable in the past year due to the cost implications.
Source: The Scotsman (04/01/2020)
1,200 SMEs seek loans over Christmas
Data from loan firm Iwoca shows that more than 1,200 small business owners applied for a loan between Christmas and New Year’s Day, with almost 300 applications across Christmas Eve, Christmas Day and Boxing Day and 135 applications on New Year’s Day. Iwoca notes that applications between Christmas Eve and New Year’s Day were up 5% on the same period last year. It also revealed that in H1 2019, 55% of small businesses applied for finance out of hours, with a third of applications coming at weekends. Seema Desai, chief operating officer at the company, said that with SME owners facing “ever-increasing demands on their time,” demand for finance outside of traditional banking hours is climbing as firms “seek greater flexibility in how they access financial support.”
Source: Daily Express (06/01/2020) The I (06/01/2020)
Fake reviews hit small firms
Research from the Federation of Small Business (FSB) suggests small firms are being hit by fake reviews being posted online. Small businesses also warned that sudden changes to terms and conditions are hampering their online efforts. FSB boss Mike Cherry said: “Businesses are using the online opportunities being offered to grow their firms. But huge difficulties lie ahead. Crucial to small firms are websites like eBay, Amazon and Facebook which are central to advertising, sales and exporting aims. However, small businesses’ use of online platforms is not without problems and still too many encounter problems such as fake or malicious reviews, problems with intellectual property and sudden delisting of their products.”
Source: Daily Mail (06/01/2020) The Scotsman (06/01/2020) The Sun (06/01/2020)
‘Boris bounce’ boosts economy
Business confidence picked up following the general election, according to the IHS Markit/CIPS purchasing managers’ index (PMI) survey, which also suggested that the increased clarity over Brexit brought by Boris Johnson helped to boost the UK economy. The services industry recorded a PMI of 50 in December, up from 49.3 in November, a reading which although does not return the sector to growth did stop it from contracting. Employment too picked up, new orders increased and firms’ optimism for the future climbed in the month.
Savers piled into UK funds after Tory victory
British savers ploughed £153m into equity funds on the day the general election results were announced and a further £181m when markets opened the following Monday, according to Calastone. The firm said it was the biggest increase in investment since it started collecting data in 2015. Investors poured a net total of £1bn into UK-focused funds in December, more than double the previous largest monthly inflow in July 2015.
Source: The Daily Telegraph (08/01/2020)