The Markit/CIPS Purchasing Managers' Index rose to 51.3 in May from an upwardly revised 50.2 in April, more than a full point higher than the consensus forecast. April's reading was originally below the 50 figure that divides growth from contraction.
In addition, the survey showed that both production and new orders had increased, with the domestic market driving demand for new business, while for the first time in four months there was an indication of job creation.
Meanwhile a run down of finished goods stocks suggests that output could rise even further in the months to come as firms replenish their warehouse stocks.
The survey result will undoubtedly have a bearing on the discussions between the members of the Bank of England’s Monetary Policy Committee (MPC) when they meet this Thursday (June 6th) to conclude their policy decisions for June.
The MCP is widely expected to refrain from further quantitative easing at the meeting, and a Markit economist commented that signs the sector is recovering would add further weight to the committee’s decision to wait and see before adding to its accommodative policy stance.
The fact that manufacturing is growing will also be a fillip to the economy generally, as although the sector only accounts for just over 10 per cent of the economy, it has a positive knock-on effect on services.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 476 )According to the latest figures from HM Revenue & Customs (HMRC), the number of taxpayers earning more than £1m a year has almost doubled in the past two years to 18,000, the highest number recorded.
The figures have prompted economists to claim that the highest-earning section of the population has bounced back from the financial crisis, as in 1999-2000 there were only 4,000 in this bracket, while the 2010-11 stats show that the number was 10,000.
However, the latest figures suggest that it is not only in the very high earning bracket where a rise has been recorded.
According to the latest date, there has been an increase of 5,000 people earning between £500,000 and £1m in 2012-13 than in 2010-11, while in the earnings bracket between £200,000 and £500,000 has seen an increase of 31,000 people..
The latest figures from HMRC are supported by findings from the Boston Consulting Group, which suggest that the UK is home to just over 1,000 ultra-high net worth households - people with more than £65m in private financial wealth, not including property.
The release of the figures has prompted the General Secretary of Unison, Dave Prentis, to call for a rethink on the Government's cut in the top rate of tax.
Previously, the Chancellor, George Osborne, has defended the reduction of the tax rate from 50p to 45p for those earning more than £150,000 on the basis that it made little money for the exchequer.
However, the union believes that the rise in the number of wealthy taxpayers suggests that a 50p tax rate could have benefited the Treasury by more than £4bn, if applied to the thousands now in the top salary brackets.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3.1 / 428 )The controversial financial transaction tax (FTT) debate may now take another turn, as the European countries pushing for the tax appear to be redesigning their plans in the face of international opposition.
The UK Government launched a legal challenge to the proposals as they stood in the European Court of Justice last month, and wants to stop the tax being applied on euro transactions in jurisdictions beyond the countries that have signed up for it, as well as in the City of London.
So far, 11 of the 27 EU member states have signed up for the plans, the main supporters of which are Germany and France, although even they appear to have had a recent ‘wobble’. The other supporters are Italy, Spain, Belgium, Greece, Austria, Portugal, Slovenia, Slovakia and Estonia.
Designed to discourage speculative trading by taxing transactions of shares, currencies and bonds, the FTT was originally designed as a 0.1 per cent annual levy on equity and debt transactions and a 0.01 per cent tax on derivatives. Its original start date was January next year.
However, the new proposal is that the tax would be rolled out more slowly, the annual levy reduced and derivatives possibly excluded completely, which would reduce the proposed income to a tenth of the original £30bn the EU had forecast.
An EU official told Reuters that the plan could not survive in its current form but could be introduced on a staggered basis, starting with the lowest, 0.01 per cent rate of tax, and then increased “bit by bit”.
However, Treasury officials believe that with the “ongoing debate” among the EU countries that have pushed for the tax, it is unlikely that there will be a decision for months.
While throwing his gravitas into the mix, former Chancellor Lord Lawson wrote that the proposed tax is "both perverse and unacceptable" and would "drive business away from London, to the benefit of New York".
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 613 )Nine more countries have signed up to an agreement to automatically exchange tax information, help foreign nations to clamp down on tax debtors and allow countries to conduct wide-ranging joint multiparty tax investigations.
The latest countries to join the more than 50 nations already on the list include Luxembourg, Singapore and Austria, which will allow the countries already signed up, such as the UK and the US, to access the names and tax details of individuals and businesses using offshore accounts to avoid paying tax.
The Organisation for Economic Co-operation and Development (OECD), which organised the tax convention where the leaders of the countries signed, hailed the signing ceremony as a “historic moment”.
Singapore’s Deputy Prime Minister and Minister for Finance, Tharman Shanmugaratnam said his country was committed to tax co-operation but called on other states to sign the agreement to make it work fully.
While Austria’s finance minister Maria Fekter called the signing of the agreement a “huge step forward” for her country, which has traditionally been very secretive over its banking arrangements.
Ms Fekter said that signing the OECD's multilateral convention on mutual administrative assistance on tax matters would increase Austria's ability to actively contribute to the current international effort to tackle tax base erosion and profit shifting.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 598 )As the taxman continues with its crackdown on tax evasion, it has been reported that the latest organisations to fall onto HMRC’s radar are small cricket clubs.
An article in the Telegraph yesterday (May 28th) featured the experience of 151-year-old Sawbridgeworth Cricket Club in Hertfordshire, which received a bill from the taxman for £14,403 to cover the untaxed earnings of bar staff, accommodation, ‘perks’ and other items dating back to 2008 after a visit from the authority.
Apparently this situation is being replicated across the country, as investigators visit small clubs and examine their books in the minutest of detail.
Meanwhile, local governing bodies are confirming that several clubs are under investigation. Surrey County Cricket Club said that at least one of the clubs under its jurisdiction has been served with a notice of investigation into its “payment structure”, while Hampshire Cricket Board has reported three clubs as being under scrutiny.
Although the taxman’s investigations into County clubs have now been concluded, there are apparently still questions about tax associated with image rights for Test players and the tax position of their agents.
As such, cricket’s governing body, the England & Wales Cricket Board, have issued guidance notes to clubs outlining what the taxman wants and advising clubs to seek advice.
In addition to targeting small cricket clubs, it has been reported that HMRC are also looking into direct sellers, to ensure that they pay the correct amount of tax on the commission they earn.
As such sellers are classed as self-employed, any profits they make should be declared and will be taxable, subject to the usual reliefs and allowances.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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