News Archive - July 2014
£100 billion paid in VAT - 28.7.2014
Statistics published by HM Revenue and Customs (HMRC) show that VAT now generates over £104.7 billion per year, a record figure.
VAT was raised from 17.5% to a high of 20% in 2011. Figures released show that the total tax collected in 2013/14 was £488.5 billion.
Jonathan Isaby, chief executive of campaign group Taxpayers’ Alliance, said: ‘The VAT hike was designed as an emergency measure but it’s looking more permanent by the day, with the Treasury enjoying the record benefits.
‘VAT impacts the poor twice as hard as the rich, pushing up the price of everyday items and making life harder for millions of people’.
This news comes along with proposals by local councils to tax big businesses more for operating in their areas. 20 councils, led by Derby City Council, put forward the idea of a ‘Tesco Tax’ – with the hope of raising up to £400 million per year.
Those submitting the proposal have said that the cost to businesses would be only a fraction of the costs that supermarkets were encumbered with when VAT was raised in 2011.
With VAT and other outgoings, many consumers are concerned that the economic environment could put pressure on retailers to raise their prices, which would have even more impact on consumers.
VAT was raised from 17.5% to a high of 20% in 2011. Figures released show that the total tax collected in 2013/14 was £488.5 billion.
Jonathan Isaby, chief executive of campaign group Taxpayers’ Alliance, said: ‘The VAT hike was designed as an emergency measure but it’s looking more permanent by the day, with the Treasury enjoying the record benefits.
‘VAT impacts the poor twice as hard as the rich, pushing up the price of everyday items and making life harder for millions of people’.
This news comes along with proposals by local councils to tax big businesses more for operating in their areas. 20 councils, led by Derby City Council, put forward the idea of a ‘Tesco Tax’ – with the hope of raising up to £400 million per year.
Those submitting the proposal have said that the cost to businesses would be only a fraction of the costs that supermarkets were encumbered with when VAT was raised in 2011.
With VAT and other outgoings, many consumers are concerned that the economic environment could put pressure on retailers to raise their prices, which would have even more impact on consumers.
Rates must rise soon, says Bank of England - 24.7.2014
Governor of the Bank of England (BoE), Mark Carney, has warned that if rates remain at their current historic low it could contribute to a housing bubble and ‘other risks’.
Speaking at a conference in Glasgow, ahead of the Commonwealth Games, Mr Carney made no definite plans but made it clear that interest rates must rise soon. He said: ‘The clearest indication of when rates will rise is when they rise’.
Rates have been at their 0.5% low since the financial crisis in 2009. Mr Carney added: ‘The Bank is well aware that a prolonged period of historically low interest rates could encourage other risks to develop. In the UK, the biggest risks are associated with the housing market. Echoing comments made in recent weeks, he repeated that household indebtedness was his main concern.
Finishing his speech Mr Carney referenced the ‘enormous pay-offs for hard work, dedication and perseverance’ of competitive runners, saying: ‘Winning the economic marathon will take similar determination’.
Speaking at a conference in Glasgow, ahead of the Commonwealth Games, Mr Carney made no definite plans but made it clear that interest rates must rise soon. He said: ‘The clearest indication of when rates will rise is when they rise’.
Rates have been at their 0.5% low since the financial crisis in 2009. Mr Carney added: ‘The Bank is well aware that a prolonged period of historically low interest rates could encourage other risks to develop. In the UK, the biggest risks are associated with the housing market. Echoing comments made in recent weeks, he repeated that household indebtedness was his main concern.
Finishing his speech Mr Carney referenced the ‘enormous pay-offs for hard work, dedication and perseverance’ of competitive runners, saying: ‘Winning the economic marathon will take similar determination’.
Manufacturing on the rise, says business group - 23.7.2014
The Confederation of British Industry (CBI) has released a survey showing that growth in the manufacturing sector had taken hold.
The quarterly Industrial Trends Survey showed the latest figures were even better than last month’s 19-year peak, with domestic orders up at their fastest since 1988.
Katja Hall, CBI Deputy Director-General, said: ‘The recovery in the manufacturing sector is keeping a good pace.
‘Industry is performing well as orders and hiring are on the up, and investment intentions for the year ahead are looking healthy across the board.
‘It is not all plain sailing however, and there are still risks to the recovery. These include increasing international political instability, and the recent rise in sterling, which could be weighing on exports. We need to continue to help manufacturers to export their products to high-growth markets across the globe, to give a healthy and sustainable boost to the UK’s recovery’.
481 firms took part in the survey, with 41% reporting an increase in total orders and 17% reporting a decrease. Overall this shows a 24% upward balance – a figure not seen since April 1995, when there was an increase of 27%.
43% of manufacturers expect total new orders to increase next month, with only 8% predicting a fall.
The full survey can be seen here.
The quarterly Industrial Trends Survey showed the latest figures were even better than last month’s 19-year peak, with domestic orders up at their fastest since 1988.
Katja Hall, CBI Deputy Director-General, said: ‘The recovery in the manufacturing sector is keeping a good pace.
‘Industry is performing well as orders and hiring are on the up, and investment intentions for the year ahead are looking healthy across the board.
‘It is not all plain sailing however, and there are still risks to the recovery. These include increasing international political instability, and the recent rise in sterling, which could be weighing on exports. We need to continue to help manufacturers to export their products to high-growth markets across the globe, to give a healthy and sustainable boost to the UK’s recovery’.
481 firms took part in the survey, with 41% reporting an increase in total orders and 17% reporting a decrease. Overall this shows a 24% upward balance – a figure not seen since April 1995, when there was an increase of 27%.
43% of manufacturers expect total new orders to increase next month, with only 8% predicting a fall.
The full survey can be seen here.
Energy price complaints reach all-time high - 14.7.2014
Independent ombudsmen have reported a massive increase in the number of people making complaints about energy bills this year.
In the first six months of 2014, the number of official complaints was greater than the whole of the previous year, reaching 22,671. Figures for 2013 showed the number of official complaints was 17,960 in total.
Lewis Shand Smith, chief energy ombudsman, said: ‘The spike in complaints is in part a result of the rising cost of living, but also as a result of consumers becoming more aware of their rights and feeling more empowered to act and fight for a fair deal. Addressing these concerns is crucial to restoring consumer confidence in this sector’.
Energy bill concerns formed 84% of all complaints received by the ombudsmen in the first six months of this year.
An Energy UK spokesman said: ‘The energy industry works hard to provide the best service for its customers but in an industry serving 27 million households sometimes things go wrong’.
In the first six months of 2014, the number of official complaints was greater than the whole of the previous year, reaching 22,671. Figures for 2013 showed the number of official complaints was 17,960 in total.
Lewis Shand Smith, chief energy ombudsman, said: ‘The spike in complaints is in part a result of the rising cost of living, but also as a result of consumers becoming more aware of their rights and feeling more empowered to act and fight for a fair deal. Addressing these concerns is crucial to restoring consumer confidence in this sector’.
Energy bill concerns formed 84% of all complaints received by the ombudsmen in the first six months of this year.
An Energy UK spokesman said: ‘The energy industry works hard to provide the best service for its customers but in an industry serving 27 million households sometimes things go wrong’.
SMEs 'prioritise administration over business growth - 11.7.2014
Research indicates that one in four business owners spend half of their day working on activities such as finance, HR and IT, and are neglecting business operations that could drive growth.
The researchers, Ingenious Britain, also discovered that some of the biggest challenges faced by SMEs are to do with expanding their business and obtaining new clients. Rather than freeing up time to channel into these more challenging tasks, the study found that owners are likely to be drawn into operational responsibilities. Some 70% of owners find it difficult to relinquish control of these jobs and choose to keep the tasks within the business, rather than outsourcing the work. With the more challenging aspects of business often falling to the wayside, experts warn that many SMEs are failing to achieve their maximum potential.
We can help you to manage your business processes effectively and maximise any potential growth opportunities – please contact us to discuss your particular circumstances.
The researchers, Ingenious Britain, also discovered that some of the biggest challenges faced by SMEs are to do with expanding their business and obtaining new clients. Rather than freeing up time to channel into these more challenging tasks, the study found that owners are likely to be drawn into operational responsibilities. Some 70% of owners find it difficult to relinquish control of these jobs and choose to keep the tasks within the business, rather than outsourcing the work. With the more challenging aspects of business often falling to the wayside, experts warn that many SMEs are failing to achieve their maximum potential.
We can help you to manage your business processes effectively and maximise any potential growth opportunities – please contact us to discuss your particular circumstances.
Banks 'ready for surge' as New ISAs come into - 2.7.2014
The British Bankers' Association (BBA), which represents the major banks, said that its members are ready if there was a customer "surge" following the changes to ISAs.
As from yesterday (Tuesday 1 July) all tax-free ISAs have become New ISAs (NISAs), with the amount that can be saved or invested in them increased to £15,000.
Since 6 April, individuals have been able to put a maximum of £11,880 into the tax-free account during the tax year, of which only half could be in cash. The new rules mean that the allowance can be held in cash, or stocks and shares, or any combination of the two. In addition, any money that is held in stocks and shares ISAs opened during any tax year can be transferred into a cash NISA (although some providers might not allow partial transfers).
There have been concerns that banks and building societies may not be ready for the changes. However, a BBA spokesman said: 'The BBA has been holding weekly calls with our members, fund managers, and other providers to prepare for these changes. Staff have received specific training and banks have put plans in place to make sure they are ready if there is a surge of customers wanting to move from stocks and shares products into cash - or vice versa.'
The changes also mean that:
As from yesterday (Tuesday 1 July) all tax-free ISAs have become New ISAs (NISAs), with the amount that can be saved or invested in them increased to £15,000.
Since 6 April, individuals have been able to put a maximum of £11,880 into the tax-free account during the tax year, of which only half could be in cash. The new rules mean that the allowance can be held in cash, or stocks and shares, or any combination of the two. In addition, any money that is held in stocks and shares ISAs opened during any tax year can be transferred into a cash NISA (although some providers might not allow partial transfers).
There have been concerns that banks and building societies may not be ready for the changes. However, a BBA spokesman said: 'The BBA has been holding weekly calls with our members, fund managers, and other providers to prepare for these changes. Staff have received specific training and banks have put plans in place to make sure they are ready if there is a surge of customers wanting to move from stocks and shares products into cash - or vice versa.'
The changes also mean that:
- ISA accounts open since the start of the tax year can be topped up to £15,000, but an additional one cannot be opened
- fixed-rate accounts can also be topped up, although different providers have different time periods when this is permitted
- transfers between cash and stocks and shares NISAs can be made as many times as an account holder wishes
- anyone aged between 16 and 18 can hold a cash NISA, but not a stocks and shares NISA
- Junior Isas limits have increased to £4,000 each tax year.
