Published: 28 January 2022
Location: London, UK
UK businesses have called on the government to delay the national insurance tax hike in April to give firms more time to recover from Omicron restrictions. New figures from the British Chambers of Commerce (BCC) show 54% of the 700 British firms surveyed said that Treasury support for Plan B was inadequate in the short-term, and 59% said the government did not adequately assess the impact of Plan B measures on businesses. 38% of business to consumer (B2C) firms said their business suffered a loss of revenue due to the restrictions and 68% reported absences due to illness or self-isolation in the last month. Of those, 50% said they had to reduce output or activity as a result. “These figures lay bare the serious impact that Omicron and the Plan B restrictions have had on our economy,” said Shevaun Haviland, director general of the BCC. “Whilst the financial support offered by the Treasury was welcome it is clear that many firms still found it was not entirely sufficient.” “The government also needs to recognise that the events of December piled further pressure on businesses who were already drowning in increased costs,” he added. “They should also commit to levy no further up-front costs on businesses for the remainder of this parliament to give businesses the confidence they need to invest and grow for the future.”
Business Secretary Kwasi Kwarteng told the BBC yesterday there would be "no U-turn" on the planned National Insurance hike, despite warning from business leaders as above, MPs, and the Treasury Select Committee, which has warned it will contribute to a rise in inflation. "We're totally committed to funding the NHS, clearing the backlog of the NHS, and also funding social care and the way to do that is through this tax rise. That's how we're going to get the revenue to pay for the backlog and to pay for a sustainable social care system," he said. Under the plans, employees, employers and the self-employed will all pay 1.25p more in the pound for National Insurance (NI) from April 2022 for a year, when the extra tax will be collected as a new Health and Social Care Levy. The increase will see an employee on £20,000 a year pay an extra £130. Someone on £50,000 will pay £505 more.
Michael Gove, Secretary of State for Levelling Up, Housing and Communities, has called on the Financial Conduct Authority (FCA) to review the buildings insurance market, saying it is "failing" some leaseholders living in blocks of flats because their premiums had "increased dramatically," and sometimes doubled, following the Grenfell Tower tragedy, despite progress to remove dangerous cladding. Gove has asked the FCA to "shed light" on the rises in a letter to the regulator, in which he also said a lack of new policies being offered was forcing people to shop in a limited marketplace and, in many cases, “trapping people with their current provider". "It is clear to me that the insurance market is failing some leaseholders," he wrote.
As many as 1.3 million people who are eligible for universal credit (UC) could be missing out on payments worth £7,300 per year, according to data from the New Economics Foundation (NEF). The stigma around claiming benefits, administrative difficulties, lack of access to information, and lack of support navigating government systems are the factors behind it, the NEF says. The report said that making UC payments automatic, like the tax system, would boost annual incomes for 390,000 families by £7,300 on average. Moving everyone onto the UC system on a similar basis to how people are required to register for tax would lift 380,000 people out of poverty, including 140,000 children, the report said. Among the poorest 10% of families, it is estimated that 1 million people will live in households missing out on payments worth around £10,000 per year.
The Scottish government is to give local government an extra £120m next year in a bid to ward off big increases in council tax bills. Council bosses had warned rises were inevitable considering the financial settlement on offer from Holyrood. Finance Secretary Kate Forbes said she now had some "additional flexibility" due to funding from the UK government. She told MSPs that the extra cash was equivalent to a 4% rise in local taxes, meaning there was no need for hikes.
The Competition and Markets Authority (CMA) has launched a formal investigation into the UK's music streaming market. The probe will assess all aspects of the market, from creator to consumer, but will pay particular attention to the roles played by both record labels and music streaming services such as Spotify. The CMA will also consider if innovation is being stifled, and if any companies hold excessive power, alongside any potential harm to consumers. According to the trade body the BPI, streaming now accounts for 83% of music consumption in the UK. The probe is the latest in a number launched by the regulator into the use of technology, including Apple's Appstore and Facebook's use of ad data.
Reskilling staff members can create cost savings of up to £49,100 per employee, according to data from the Financial Services Skills Commission(FSSC) and PwC UK. Reskilling a financial services employee costs on average £31,800 compared to the redundancy and rehire approach, which carries an average cost of £80,900, the research concluded, meaning that over a four-year period, a company with 30,000 employees could potentially save between £75m and £115m by upskilling current employees into the roles they need filled.
Capita Plc is selling its IT services and solutions firm Trustmarque to private-equity firm One Equity Partners for £111m as it continues to focus on key divisions of Capita Public Service and Capita Experience in the wake of the coronavirus pandemic. Capita, which runs services including collecting the London congestion charge and the BBC licence fee, has been on a disposals spree in a bid to boost its coffers: the Trustmarque deal follows the recently completed sales of software businesses AMT Sybex and Secure Solutions and Services. It also means Capita has hit its £700m divestment target earlier than its previous forecast date of June 2022, said chief executive Jon Lewis.
British insurer First Central is reportedly considering a sale that could value the business at about £600m. According to Bloomberg, which cited people with knowledge of the matter, First Central is working with Evercore as it prepares to gauge interest from potential buyers. It was understood the firm could kick off a sale process as soon as the second quarter.
Eight passenger planes were infested by insects that forced take-offs to be abandoned at Heathrow airport last summer, the Telegraph reports. An investigation the Air Accidents Investigation Branch (AAIB) found that wasp and bee nests blocked speed-measuring pitot probes on six British Airwaysaircraft and one Virgin Atlantic jet over a three-week period. A wasp was also spotted inside a probe on another British Airways plane.
TSB Bank has announced a full-year profit, underpinned by record mortgage lending and an improved economic outlook. The bank swung to a statutory pre-tax profit of £157.5m from a loss of £204.6m in 2020. "This reflects an improved economic outlook, sustained balance sheet growth and focused cost efficiency," it said. Total customer lending rose 12.2% to £37.4bn, with growth driven by a record £9.2bn of gross mortgage lending. Meanwhile, customer deposits were up 4.6% to £36bn, reflecting a slower rate of growth compared to 2020 as consumer spending increased.
ITM Power has announced plans to build the world's largest electrolyser production facility in Sheffield as part of a £250m expansion programme. The hydrogen specialist’s £55m factory - its second in the city - is expected to create 300 jobs.
Aviation services group Air Partner’s shares surged 52% to 123p yesterday after it agreed to be bought by US private aviation company Wheels Up in a £84.8m deal. Under the terms of the acquisition, which is expected to close in the first quarter, Wheels will pay 125p per share in cash.
Abrdn has sold just under 40m shares in Phoenix Group in placing to institutional investors, raising gross proceeds of around £264m.
IG Group shares slumped more than 7% this morning after shareholder TCMIsold 15.5m shares in the online trading platform.
Denise Coates, head of gambling empire Bet365, was Britain’s biggest taxpayer last year, according to the Sunday Times Tax List. The Coates family paid an estimated £481.7m in tax, down from £573m in 2020, but still almost £200m more than that paid by hedge fund manager Chris Rokos, who in second place paid the exchequer £300m. The total tax paid by the top 50 taxpayers rose by £510m to £3.7bn. However, the IPPR thinktank, which is campaigning for a wealth tax, said the list provides “an insight into the UK’s broken tax system” which allows “the richest people in the country to pay little to no tax at all”. “Only one name from the top 10 of last year’s [Sunday Times] Rich List appear among those thought to be the top 10 taxpayers,” George Dibb, head of the IPPR’s centre for economic justice, said. He pointed out that of the top 10 richest people in the UK, only the Weston family (the 10th richest with £11bn) appear on the tax list. The richest person in the UK according to the Sunday Times’ rich list is Sir Len Blavatnik, a Ukrainian-born businessman who made his money from energy and aluminium groups in the former Soviet Union, with an estimated £23bn fortune. He is not included in the tax list.
China Unicom has become the latest Chinese telecoms giant to be banned from the US over "significant" national security and espionage concerns. The BBC says the Federal Communications Commission (FCC) said it had voted unanimously to revoke authorisation for the company's American unit to operate in the US. The firm must stop providing telecoms services in America within 60 days. The announcement comes after larger rival China Telecom had its licence to operate in the US revoked in October.
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