Tories clash over tax cut pledges
Conservative leadership candidate Boris Johnson has faced criticism over plans to cut taxes, with it claimed his proposed reforms mostly benefit the highest earners. Michael Gove, in an attack on the plan to raise the 40p tax threshold, said: “One thing I will never do as Prime Minister is to use our tax and benefits system to give the already wealthy another tax cut. The poor must come first.” Security Minister Ben Wallace backed Mr Johnson, arguing that the tax cut would benefit people who had been “dragged” into paying the higher rate by Labour’s “trick” of freezing the threshold. A YouGov poll suggests 40% of people are against Mr Johnson’s plan while 36% back it. Mr Johnson has been joined in his pledge to cut taxes by fellow candidate Dominic Raab, who has proposed cutting National Insurance contributions, saving workers £462 annually by raising the employee contribution threshold to £12,500 a year. Meanwhile, former Welsh Secretary Stephen Crabb has said that hopefuls in the leadership race should not be competing over pledges to make tax cuts, saying the contest is “not the forum for crafting a sensible tax/spend strategy”.
Source: The Daily Telegraph (11/06/2019) The Daily Telegraph (11/06/2019) Financial Times (11/06/2019) The Times (11/06/2019) The Guardian (11/06/2019) Daily Mail (11/06/2019) The Independent (11/06/2019) The Sun (11/06/2019) Daily Express (11/06/2019)
G20 target tech firms with tax
Proposals set out by G20 finance ministers will see an overhaul of corporate tax rules that will result in large technology firms paying more. The crackdown on corporate tax loopholes, due to be rolled out in 2020, will see firms pay more in countries despite the lack of a physical presence and profit in those regions, with companies that book profits in offshore tax havens subject to a global minimum tax rate. A communique issued at a meeting between ministers in Fukuoka, Japan, says: “We welcome the recent progress on addressing the tax challenges arising from digitisation and endorse the ambitious program that consists of a two-pillar approach.”
IFS: Higher taxes needed to fund social care
Paul Johnson, director of the Institute for Fiscal Studies, has warned that there is a need for higher taxes or radical reforms to care for the ageing population, warning that the care system leaves people facing the “catastrophic risk” of losing their assets.
Source: The Independent (07/06/2019)
FSB: 45% of small firms expect growth this year
A record low number of small business are expecting to grow over the next 12 months, according to the Federation of Small Businesses (FSB), with just 45% saying they are likely to see expansion in the coming year. The FSB’s quarterly confidence index measure, which is based on a survey of 982 companies, stood at -8.8 in Q2, with this down 22 points on a year ago and marking the fourth consecutive negative reading. The poll saw 72% of small firms say that the cost of running their business was increasing, with 48% identifying labour costs as the main reason and 34% saying regulation. It was also shown that 42% saw profits dip in Q2. Mike Cherry, national chairman of the FSB, looks at the climate for SMEs in the Telegraph, pointing to a “regulatory offensive that accompanied the start of the current tax year.” He highlights Making Tax Digital, the requirement for firms to submit quarterly online VAT returns via HMRC-approved software. Mr Cherry urges the next Prime Minister to “remember that giving small businesses the freedom to compete is no game,” adding that it is “key to keeping our economy on track”.
Source: The Times (10/06/2019) The Daily Telegraph (10/06/2019) City AM (10/06/2019)
Square up to small business challenge?
Twitter chief executive Jack Dorsey says he is “absolutely willing” to support small British businesses struggling due to competition from online rivals, saying financial payments technology could help save small businesses. Speaking as he unveiled plans to put technology from his payments company Square in the hands of Britain’s microbusinesses, he said: “There are lots of businesses that won’t be served by Amazon. In the worst case this will push some businesses to be a lot more creative.” Research by Square, which aims to help small businesses with fewer than 10 employees to offer card payments, shows that 47% of shoppers prefer paying by card – yet more than half of small businesses still do not accept card payments.
Source: The Daily Telegraph (11/06/2019)
Bank to offer digital expertise to SMEs
TSB has launched a nationwide programme to improve the digital expertise of small business owners. The scheme, which will offer advice through digital experts in branches around the UK, follows a pilot started by the bank with Enterprise Nation last year.
Source: The I (12/06/2019) Yorkshire Post (12/06/2019)
Wages up amid record low unemployment
The UK unemployment rate held its near-record low of 3.8% in the three months to April, according to statistics from the Office for National Statistics, as the jobs market brushed off the continuing Brexit uncertainty. Wages rose 3.4% in the quarter and Britain’s unemployment rate has not been lower since the end of 1974. ONS deputy head of labour market statistics Matt Hughes said: “With employment growth among women coming from full-timers, the overall gap between men and women in hours worked is now the lowest ever.”
UK economy shrank in April
The UK economy contracted by 0.4% between March and April, according to the latest data from the ONS, which indicates that British GDP grew by just 0.3% in the three months to April compared to 0.5% from January to March. UK car manufacturing fell by 24% in April, as firms planned shutdowns around the original Brexit departure date of March 29 and manufacturers’ stockpiling boost unravelled.