Amongst measures announced in the Review, which will cut £11.5bn from Whitehall departments, the Chancellor revealed he will apply a ‘temperature test’ to ex-pat pensioners, depriving many of their winter fuel allowance, and has reduced the local government department budget by 60 per cent.
However, Mr Osborne also announced £100bn of spending on the UK’s energy and transport infrastructure between 2015 and 2020, seeing it as the most effective engine for economic growth, which was welcomed by business leaders.
Director General of the CBI, John Cridland said that the Chancellor has “carefully walked a tightrope of protecting growth, while making sizeable savings to pay down the debt.”
Details of the infrastructure boost will be announced later today by Chief Secretary to the Treasury Danny Alexander, but the focus is expected to be on energy, although there will almost certainly be plans to build schools and affordable housing and more will be spent on scientific research.
Meanwhile, although the budget for HM Revenue & Customs (HMRC) has been cut by 5 per cent, the department has been instructed to raise an extra £1bn in revenue by targeting tax avoidance and evasion, fraud and debt.
HMRC’s target for extra tax revenue has increased from £23.5bn in 2014-15 to £24.5bn in 2015-16. According to Treasury estimates, the department should be able to deliver £130m of efficiency savings by 2015-16 through "improved productivity and further digital transformation, reducing inefficient manual processing and dealing with error".
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 590 )Several newspapers and magazines have picked up on the fact that the European Commission has delayed, if not entirely shelved, the implementation of its proposed financial transaction tax (FTT) until the middle of 2014.
Rather than make an announcement, the commission’s admission was merely included in an update to its web pages last week and the notice was slightly ambiguous, leaving commentators to wonder whether this is just a delay or a quiet axing of the controversial measure.
The wording on the site says: ‘Once agreed upon at European level, participating member states will have to transpose the directive into national legislation. If agreement is found before the end of 2013, and there is a speedy transposition into national law by the participating member states, this common framework for an FTT could still enter into force towards the middle of 2014.’
However, such has been the reaction to the proposed tax, which has been dubbed a ‘Robin Hood tax’, from the member states in recent months that it is unlikely for anything to be ‘speedy’ and EC tax commissioner Algirdas Semeta has had to deny reports that the tax would be scaled back for the original start date of January 2014.
There had been rumblings that the member states were unhappy with some of the proposals as far back as the end of May, when sources suggested that the tax on trading bonds and shares would drop from 01 per cent to 0.01 per cent and that only shares would be affected from the proposed start date.
Mr Semeta said that it is “premature” at the moment to say what the final outcome will be, as talks are still taking place, albeit in “a constructive mood”.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 586 )A recent survey has found that the majority of small and medium-sized enterprises (SMEs) have no key worker protection in place, despite the death of a business owner being cited as the most disruptive threat a business can face.
In the survey of 500 businesses, it was found that the death of a business owner came in as the top most disruptive scenario, at 43 per cent, as opposed to 23 per cent who specified fire damage and 14 per cent who cited critical illness.
In fact, the consequence of the death of the owners would be so serious that 12 per cent of those surveyed predicted that their business would cease trading immediately as a result of the death or critical illness of a key worker or business owner.
While a further 42 per cent thought that their business would cease trading in this situation but over a longer period of time. Of this cohort, a quarter felt that the business would cease trading within the first year of the deal, 6 per cent within the second years and 11 per cent after two years.
Given the results of the survey, it is surprising that small business owners either do not have key worker insurance in place or a continuance strategy in place that is communicated to the workforce.
Even firms with a number of workers need to think about planning for an unfortunate eventuality, particularly when chronic illness can wreak almost as much havoc as a sudden death, as grief can be equally disruptive, so professional help should be sought for guidance on what to do should the worst happen.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 591 )The latest survey on business optimism amongst small and medium-sized enterprises (SMEs) shows that over 80 per cent are currently upbeat about the general state of their business, with the majority expecting growth over the coming year.
This is a different picture from this time last year, when only 35 per cent of SMEs were optimistic about growth in the following six months, that figure has risen to 63 per cent.
In addition, 38 per cent believe they will make more profit this year than they did last year and a further 38 per cent believe profit levels will be similar, while the number who would bet their house on their company making a profit this year has risen by around a third, from 13 per cent to 17 per cent.
There has been a rise of around 25 per cent of those who think their personal earnings from the business will go up year on year, and perhaps swayed by recent good news for the economy, almost 60 per cent of UK SMEs believe 2014 will be an even better year than 2013.
The index looked in more detail at four broad sectors within the SME marketplace and, while the picture was again largely optimistic compared with last year, there are some marked differences between sectors.
The retail and distribution sector showed the highest levels and biggest rise in optimism about growth year on year. However, while building trades and industrial were still more optimistic year on year, they fell behind the other sectors in general levels of optimism around growth.
On a regional basis, SMEs in Scotland were the most optimistic at 88 per cent, which was 10 per cent above the average, while Wales was the least optimistic, although SMEs there were more likely to be planning on taking on new staff next year.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 479 )The Telegraph reported yesterday (June 20) on how the owner of a small firm has recouped thousands of pounds from late-paying customers and that an appeal court victory he won earlier this year could pave the way for more small firms to fight late payers.
Since 2007 James Morley has been using a little-known Act to challenge customers who pay late and has so far secured more than £40,000 in court victories and settlements.
The Late Payment of Commercial Debts (Interest) Act 1998 allows suppliers to charge interest of 8.5 per cent on late payments, but also compensation of £40, £70 or £100 depending on the size of the invoice in question.
While most business owners would be wary of taking their customers to court, Mr Morley has been determined not to take late payment lying down and his victory in the appeal court earlier this year could mean that other small business owners don’t have to either.
As his barrister said, the ruling is very significant, as it allows businesses to claim fixed compensation on every late invoice, and is binding on all lower courts in England, Wales and Northern Ireland, where the majority of late payment claims would be heard.
The barrister added that small firms have been taken advantage of for years by large businesses which ignore payment terms, and his words have been backed up by payment firm Bacs, which revealed that outstanding bills to businesses total more than £30bn, with very large companies typically being the worst offenders.
The Government has been so concerned about the effect late payment has on small businesses that it has been encouraging FTSE 100 and FTSE250 companies to sign up to the Prompt Payment Code, which promotes best practice between organisations and their suppliers.
According to analysis by Experian, current signatories to the Code represent over 60 per cent of the total UK supply chain, so the problem may be diminishing but, in the meantime, small business owners have the Act to rely on in the last resort.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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