Weekly News Round-UP

Plan for over-50s to pay £300 extra NI to cover care
Damian Green has said that wealthy pensioners should forfeit the winter fuel allowance to help pay for free social care. In a report for the Centre for Policy Studies, the Tory MP said the rest of the funding could be found from imposing an additional national insurance rate of 1% on the over-50s. Under his proposals, everyone would receive a basic level of state-funded social care with improvements paid for from their savings or their housing wealth. But Labour have branded the plans, which would cost more than £300 per year for each over-50-year-old, a “tax on getting old”. Shadow chancellor John McDonnell said: “After nearly a decade of brutal cuts to social care, the Tories now want to make older people pay through increased taxes.” David Willetts, executive chairman of the Resolution Foundation, welcomes Green’s proposals saying it’s high time the debate was opened up again. Ending the triple lock on pensions and means testing the winter fuel allowance won’t come close to filling the funding gap – which is why “one has to conclude that taxes are going to have to rise” and it should not fall on the young people of today to shoulder this burden.
Source: The Times (29/04/2019) The Independent (29/04/2019) Daily Mail (29/04/2019) Daily Express (29/04/2019) The Daily Telegraph (29/04/2019) The Daily Telegraph (30/04/2019)

Stamp duty receipts fall by £1bn as attacks on landlords continue

Sam Meadows details in the Sunday Telegraph how stamp duty receipts have been decimated by a series of attacks on buy-to-let investors. Figures published last week by HMRC show the tax take from stamp duty fell to £11.9bn in 2018-19 from £12.9bn the previous year after a decade of almost constant increases. As a result of the squeeze on landlords, the number of mortgages taken out by buy-to-let investors has fallen by 7.7% year-on-year, according to figures from UK Finance, while David Smith of the Residential Landlords Association fears fatal damage to the private rented sector with tenants also suffering.
Source: The Sunday Telegraph (28/04/2019)

Bereaved families hit with bumper IHT bill

The taxman collected an extra £164m in inheritance tax (IHT) in the 2018-19 financial year, according to analysis of HMRC receipts by NFU Mutual, an increase of 3.1% and a total sum for the 12 months of £5.369bn. Sean McCann, chartered financial planner at NFU Mutual, said this marks the biggest surge since 2017, adding: “Recent changes have just added to the problem and in many instances the complexity of the rules means that families are missing out.”
Source: Daily Express (26/04/2019)

Small business funding will be boosted by fintech, says Carney

Mark Carney told the Innovate Finance global summit in London yesterday that financial technology has the potential to unlock finance for smaller enterprises. The Bank of England Governor said: “AI-enabled solutions are increasingly important in fraud detection, as well as automated threat intelligence and prevention. There is also significant potential in credit assessments, wholesale loan underwriting and trading.” Mr Carney’s comments kick off UK Fintech Week and coincide with new research which suggests lending to SMEs has stagnated in recent years. According to Oxford Economics, lending by banks to small businesses has fallen by 3% since 2015, while credit provision to large companies has increased by 43%. The research, commissioned by Funding Circle, found that small business lending accounted on average for 2% of big banks’ balance sheets.
Source: The Times (30/04/2019) City AM (30/04/2019) The Daily Telegraph (30/04/2019)

Banks shun small business lending
Research by Oxford Economics shows lending by banks to small businesses has fallen by 3% since 2015 while credit provision to large companies has increased by 43%. The study, commissioned by Funding Circle, found that small business lending accounted on average for 2% of big banks’ balance sheets, resulting in poorer terms and conditions for SMEs than for larger ones. Sam Moore, managing director of Oxford Economics, said the challenges facing smaller firms risked curbing future growth.
Source: The Times (30/04/2019)

£60bn in sales at risk from new fraud checks

The Federation of Small Businesses has joined the Institute of Directors and the British Retail Consortium in questioning the wisdom of new anti-fraud rules which industry groups fear will make it impossible to process online transactions. Purchases worth more than £30 will require “two-factor authentication” from mid-September but retailers fear £60bn of sales via cards online could be lost due to a lack of preparation for the change.
Source: The Daily Telegraph (26/04/2019)

UK top in Europe and third globally for foreign investment
Figures from the Organisation for Economic Cooperation and Development (OECD) show the UK remains the top destination in Europe for foreign investment despite a fall in new funds coming into the country. New investment fell from $100bn to $64bn, but the UK still had a £1,400bn stock of funds – more than Germany, Spain and Poland combined and only surpassed by the US and China. International Trade Secretary Liam Fox said: “The latest OECD figures show the UK remains one of the world’s most attractive destinations for foreign investment. International investors continue to recognise the fundamental strengths of our economy – everything from our predictable legal system to our world-leading financial services.”
Source: The Times (30/04/2019) City AM (30/04/2019) The Daily Telegraph (30/04/2019)

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