Tax burden at 30 year high
Figures from the Organisation for Economic Co-operation and Development (OECD) show that Britain collected more than £700bn in tax for the first time last year. Tax receipts rose by £28.5bn to £710bn in 2018, equivalent to 33.5% of GDP – the highest proportion since 1988. The OECD ranked Britain 20th out of 36 countries on tax-to-GDP, with the average at 34.3%. France is the highest-taxed country, at 46% of GDP. Considering the figures, Tax Justice UK executive director Robert Palmer said: “The table shows that there is plenty of scope for higher levels of tax as a proportion of GDP.” The Times’ Philip Aldrick notes Conservative and Labour tax plans, with the Tories looking to lower national insurance contributions, with this offset by scrapping a scheduled reduction in corporation tax to 17%. Labour, meanwhile, plans to raise £83bn, taking tax receipts to levels not seen since the Second World War at 37% of GDP.
Source: The Times (06/12/2019)
Labour would force millionaires to publish tax returns
The Sunday Times reports that Labour intends to force people earning £1m and above to publish their tax returns, in a move that would affect 21,000 Britons, according to calculations by the Institute for Fiscal Studies (IFS). The initiative, detailed in Labour’s Fair Tax Programme, states: “The public has lost faith that our tax system is a level playing field, with multinationals dodging tax and the wealthy getting away with contributing very little. Labour will erode this secrecy by making the tax returns of wealthy individuals publicly available.” A Labour spokesperson said the £1m threshold would include “all relevant contributions to earnings”, adding: “If the super-rich have nothing to hide, they have nothing to fear.” Separately, Robert Watts in the Sunday Times predicts that a Labour victory in tomorrow’s general election would spark a City exodus and massive capital flight. He says this would be triggered by party policies including a financial transactions tax designed to raise £8bn, and marginal tax rates of up to 67%.
Source: The Sunday Times (08/12/2019) The Sunday Times (08/12/2019)
Freelancers miss out on £24m in tax cuts
Analysis shows that freelancers are missing out on at least £24m a year in tax breaks, with the majority of the 5m self-employed people allowed to deduct certain work-related costs from profits before paying income tax failing to take advantage of the benefits. The study, by accounting software firm Freeagent, shows that almost 80% do not claim business expenses that could be refunded. Around two in three freelancers do not claim back expenses of less than £10, while a third do not deduct the cost of food when travelling for work and nearly a fifth fail to declare money spent on accommodation. Ed Molyneux of Freeagent advises that small purchases can soon add up, calculating that if a self-employed person buys a coffee a day when visiting clients it equals an unclaimed £49 a month, adding “all of a sudden you have lost out on £585 in one year.”
Source: The Daily Telegraph (07/12/2019)
Firms waiting twice as long for payment
A survey by Market Finance has found that SMEs had to wait an average of 23 days to receive their money in 2019, up from 12 days in 2018. However, there was a slight improvement in the number of invoices paid on time, with 39% of invoices paid late in 2019, up from 43% in 2018. Bilal Mahmood, external relations director at Market Finance, said: “It’s great to see that fewer invoices were paid late in 2019 but worryingly, those that were paid late took twice as long.” He added: “Late payment practices harm business cash flow, hampers investment and, in extreme cases, can risk business solvency.”
Source: City AM (10/12/2019)
Labour vows SME support
Labour says it will create a state-run business support agency if elected, vowing a number of policies designed to help SMEs that include creating two state banks, scrapping quarterly reporting for businesses under £85,000 and “stamping down” on late payments. The mooted Business Development Agency would help smaller firms to access business advice, finance and large scale government contracts. Shadow Business Secretary Rebecca Long-Bailey said: “Small businesses, the lifeblood of our economy and our communities, are being stretched to breaking point by global corporations which evade their taxes and fail to pay their suppliers on time. This inequality scars our country.”
Source: City AM (06/12/2019)
Directors working past retirement age
Small business owners are working well into their sixties with one in five aged 66 or over, according to new research. The study also shows that individuals are becoming less likely to stay in one job for long periods of time, with the average worker changing their job every five years.
Source: Daily Express (09/12/2019)
Four in ten small business owners suffering “most turbulent” period ever
A poll of 500 small business owners found one in four think their operations will not exist in five years due to late payments, cyber-attacks and tax rates, the Sun reports. Four in ten say they are enduring the “most turbulent” period they’ve ever experienced.
Source: The Sun (08/12/2019)
UK economy stagnates ahead of general election
The economy suffered its weakest three months since early 2009 with ONS data showing growth flat in October after two months of declines. The ONS said: “Increases across the services sector [were] offset by falls in manufacturing with factories continuing the weak performance seen since April. Construction also declined across the last three months with a notable drop in house building and infrastructure in October.”
Source: The Daily Telegraph (11/12/2019)
Grandparents dip into pensions to offer property help
Figures from the Financial Conduct Authority show that over-75s withdrew £247.5m from their pension savings in the year to April 2019, compared with £158.7m the previous year, an increase of 56%. Analysts suggest that people dipping into their pots to help their children and grandchildren to buy property has contributed, with a study from insurer Legal & General saying more than 27,200 homes were bought with help from grandparents last year.
Source: The Times (07/12/2019)