Court victory for HMRC spells more woe for contractors
HMRC won a case against payroll services firm Costelloe Business Services in March prompting the taxman to send out letters to contractors it believes may have used similar companies. Healthcare contractors used Costelloe to bill their clients and process payments, usually as dividends, reducing their tax and NI liability. HMRC argued this structure was in breach of legislation governing “managed service companies” (MSC) and that the income should be taxable as normal. The move comes ahead of a change to IR35 rules which will, from April 2020, shift the responsibility for determining status from the contractor themselves to the hiring organisation. A spokesman for the tax office said: “The intention of the IR35 rules is to ensure that individuals who work like employees pay broadly the same income tax and National Insurance contributions as employees, regardless of the structure they work through. The rules do not affect the genuinely self-employed.”
Source: The Daily Telegraph (11/05/2019)
Online sales tax idea rejected in favour of rates reform
Liz Truss has rejected calls from Tesco chief Dave Lewis for a 2% sales tax on internet retailers arguing the move would be a “tax on families”. Mr Lewis said the levy would pay for a 20% cut to business rates for high street stores. However, the Chief Secretary to the Treasury did say she would back business rate reforms suggesting a “simpler, flatter tax system” paid for from cuts to subsidies to businesses. Helen Dickinson, chief executive of the British Retail Consortium, backed Ms Truss saying an “online sales tax would punish modern shopping habits” and agreed business rates reform was the solution. Marks & Spencer and Sainsbury’s also said rates reform was the best way forward.
Source: Daily Mail (14/05/2019)
Britain’s 1,000 richest must publish tax returns, says Corbyn
Just as the Sunday Times published its annual Rich List, the leader of the Labour party, Jeremy Corbyn has demanded that Britain’s wealthiest people publish where and how much taxes they’ve paid. Mr Corbyn said: “Year on year, we see the rich getting richer, while pay for the majority hasn’t risen in a decade and household debt rises. In the interest of transparency, everyone on the list should publish where they are registered to pay tax and how much tax they have paid. Labour will reprogram our economy, so it stops just supporting a tiny few at the top, and starts to reward the many, who do the work, create the wealth, and pay their taxes.”
Source: The I (13/05/2019) Mirror (13/05/2019)
New guide to help smaller listed companies improve financial reporting
The ICAEW and the Financial Reporting Council have published a new guide designed to help smaller listed and AIM quoted companies improve their financial reporting. The guide provides practical tips and questions for audit committees to consider. Paul George, The FRC’s Executive Director of Corporate Governance & Reporting said: “Smaller quoted companies are critical to generating future jobs and growth in the economy and need access to capital to invest and grow. The availability of capital though can be affected by the quality of reporting, so audit committees have a vital role to play in ensuring that the quality of reporting meets the needs of stakeholders and those companies’ growth aspirations.”
Source: ICAEW (15/5/2019) IAS Plus (15/5/2019) Financial Reporting Council (15/5/2019)
UK fintech start-ups rake in £4.5bn
A new report by start-up body Tech Nation reveals that Britain is the world’s top fintech hub, with high-growth companies attracting over £4.5bn in investment over three years. London and Cambridge lead the country in attracting high-growth tech investment, with the former receiving £9bn between 2015 and 2018, and the latter £583m. Eileen Burbidge, chair of Tech Nation, remarked: “The UK has an incredibly pivotal role in the global tech scene. Nowhere is this more evident than in the Fintech sector where the UK is ranked number one in the world, an enviable position that has been established with decades of hard work, entrepreneurial talent, innovation and supportive policymakers.”
Source: City AM (15/05/2019)
UK exports at record high
UK exports reached a record high of £640bn in the last financial year, up by £18.5bn on the previous year. The ONS figures showed UK firms sold more overseas in the last financial year than at any time since records began. UK exports also grew faster than those of Germany, France and Italy between 2016 and 2018, according to the Organisation for Economic Co-operation. Britain’s 13.8% rate also outstripped the EU’s overall rate of 11.9%. However the total UK trade deficit has widened to 3.4%. International Trade Secretary Liam Fox said: “These new numbers highlight the quality and innovation of British goods and services and how much they are valued across the globe.”
Source: Sunday Express (12/05/2019) The Sun on Sunday (12/05/2019) The Mail on Sunday (12/05/2019)
Unemployment at 40-year low
Britain’s unemployment has hit a 40-year low as the number of people in employment soars to 32.7m. The unemployment rate fell to a record 3.8% in Q1- the lowest since 1974. However, pay growth fell to 3.3% in the same period. Moreover, productivity fell for the third consecutive quarter reflecting a lack of investment, which analysts have put down to Brexit uncertainty.
Source: The Daily Telegraph (15/05/2019) The Independent (15/05/2019) The Sun (15/05/2019) The Guardian (15/05/2019)
Labour plans to extend minimum wage to under-18s
Jeremy Corbyn has announced plans to extend Labour’s proposed £10-an-hour national minimum wage to workers under 18 “to end discrimination” against young people. Currently, under-18s are entitled to a minimum wage of £4.35 per hour, compared with £8.21 for over-25s. Paul Johnson, director of the Institute for Fiscal Studies, said the plans were “dramatic” and that they could risk reducing the number of 16 and 17-year-olds in work. Elsewhere, the Institute of Directors warned: “Politicians directly setting rates will always risk not taking full account of the implications for employers and jobs.”
Source: Financial Times (12/5/2019) BBC News (12/5/2019)