Accountants support climate reporting
The UK’s top accounting bodies have backed a declaration organised by the Accounting for Sustainability Project (A4S) network urging the world’s accountants to put environmental sustainability at the forefront of their work. The ICAEW, the AAT and the ACCA have all signed up to the declaration, which comes just days after the Financial Reporting Council launched a sweeping review of corporate climate risk disclosures and auditing processes. Michael Izza, the chief executive of the ICAEW, said: “Chartered accountants bring practical skills like measurement and management to the table, and can work with business to build green policies into their working practices. We need to make this a decade of transition for business; failure to make this move will make the inevitable adjustments required much more difficult.”
Source: Business Green (25/02/2020) The Guardian (25/02/2020)
Rishi Sunak bows to pressure on IR35 tax changes
Rishi Sunak has said that tax officials will not be “heavy handed” in enforcing the changes to the off-payroll working rules, known as IR35, for the first year. He did however defend the government’s decision to implement the changes, as some employees were being taxed as if they were self-employed. From April 2020, every medium and large private sector business in the UK will become responsible for setting the tax status of any contract worker they use. But many freelancers complain the rule change has triggered employers to drop them and the uncertainty has left them with mental health issues; moreover, 75% of freelance contractors say they have left or intend to leave their clients by April, leaving companies facing a £2.2bn productivity black hole.
Sunak scraps plans to cut pension tax relief
Rishi Sunak is expected to discard plans to scrap pension tax relief for higher earners following widespread criticism of the proposals, which would have raised £10bn a year. The former Brexit secretary, David Davis, said it would be a “moral disgrace” and “an economic farce” to cut the 40% tax relief offered to higher earners on their pension contributions to the 20p rate offered to basic-rate taxpayers. Separately, Mr Sunak is still considering whether to raise fuel duty and loosen fiscal rules in order to generate more spending power. Fuel duty hikes have also been criticised, however, with Tory MPs arguing that putting up the tax would hurt the blue-collar workers the party is trying to help.
Hays study reveals Scots firms not ready for IR35 reforms
Research from Hays Salary Guide 2020 reveals that 33% of private sector organisations in Scotland that engage temporary workers are unaware of IR35 reforms intended to fight perceived tax avoidance. Hays’ managing director in Scotland, Akash Marwaha, remarked: “The timeframe between the review and the reforms coming into effect is very short, so it’s important for employers to act now to ensure they are aware of how these changes will affect their business.” He went on: “Our research in Scotland showed that 83% of employers see the biggest risk of IR35 to be potential cost increases, however, the loss of key talent is also a big concern.”
Source: The Scotsman (20/02/2020)
Coronavirus impact spreads down the supply chain
The Times considers how some of the UK’s retailers are bracing themselves for stock shortages due to factory shutdowns in China as a result of the coronavirus. Small businesses reliant on Chinese production believe they will have to close if supply problems aren’t resolved soon. Martin McTague of the Federation of Small Businesses said. “The longer the situation goes on, the greater impact it will have further down supply chains here in the UK.”
Source: The Times (24/02/2020)
Small businesses upbeat about the year ahead
Barclaycard’s inaugural Small Business Barometer has found SMEs across the UK are optimistic about the year ahead, forecasting a 6.3% rise in revenue over the next 12 months. Businesses in the North East, Yorkshire and The Humber were the most upbeat – forecasting quarterly revenue growth of 5.3%, and an annual uplift of 7.9%. Additionally, 10% of those surveyed said they intended to start trading internationally in 2020.
Source: The Sun (25/02/2020) City AM (25/02/2020)
Stamp price rise another burden for small businesses
The Federation of Small Businesses has warned that the increase in the cost of stamps announced by the Post Office will undermine efforts to support small businesses. National chairman Mike Cherry said: “This latest rise in stamp costs for letters and for parcels is just another expense that small businesses will be forced to carry.” The price of a first-class stamp will increase by 6p to 76p next month while a second-class stamp will rise 4p to 65p.
Source: Daily Mail (21/02/2020) The Times (21/02/2020) Daily Express (21/02/2020)
Unaffordable flood cover punishing small firms
The cost of insurance to cover flooding is forcing small businesses to close down, the Sunday Times reports. Some brokers are said to be demanding more than £100,000 for cover in new policies following successive storms this month. The Federation of Small Businesses (FSB) is calling for small companies to be permitted to join Flood Re, a government-backed initiative to make flood cover more affordable. The FSB warned that up to 75,000 companies would not be able to find the money for flood insurance, costing the economy over £1bn.
Source: The Sunday Times (23/02/2020)
Business surveys paint positive picture for Q1
The latest IHS Markit purchasing managers’ index indicates that the services, manufacturing and construction sectors are all now expanding with a flash estimate putting the index at 53.3 – any score above 50 indicates growth. The figure is the joint-highest reading since September 2018 and above the 52.8 forecast by analysts. Tim Moore, associate director at IHS Markit, said: “The recent return to growth provides a clear indication that the UK economy is no longer flat on its back.”