UK companies optimistic on 2016, New Year blues at HMRC, and Tinie Tempah would rather be an accountant!
Small firms petition against quarterly reporting – More than 100,000 small business owners and self-employed workers have signalled their opposition to a Government proposal that would force them to file tax returns on a quarterly rather than an annual basis. An online petition created by small business owner Paul Johnson on the Government’s own portal has now passed 100,000 signatures, the point at which Parliament is expected to debate the issue. According to the Telegraph, complying with the new rules would cost small companies and individuals between 20% and 150% more in accountants’ fees.
Landlords’ £50k crowdsourced tax fund – Two landlords looking to fight the Government over changes to mortgage interest tax relief on buy-to-let properties have raised £50,000 through crowdfunding in just nine days. Chris Cooper and Steve Bolton have so far received backing from more than 700 donors in support of their bid to secure a judicial review of specific clauses of the Finance Act 2015.
Morale low at HMRC – The Sun reports that an annual “People Survey” at HMRC reveals 49% of the 42,458 respondents believe the organisation is managed badly. Furthermore, 24% of workers said they want to leave now or “within the year”.
Two more banks pay no tax – Citigroup and Credit Suisse are the latest investment banks to confirm that their main British subsidiaries paid no corporate income tax in 2014. It means there are now seven foreign investment banks in London paying no corporation tax. In addition, a Reuters analysis last month showed seven more banks had paid a total of just £21m in UK corporation tax in 2014 despite generating UK profits of £3.6bn. “These damning findings make a real mockery of the government’s approach to taxation of the financial sector,” said shadow chancellor John McDonnell.
FPB doubts quarterly returns will be easy – The Forum of Private Business (FPB) believes the UK is still years away from being able to cope with proposed quarterly tax returns from its 5.4m firms. The FPB warned the cost for businesses will be enormous, even if the reporting is fairly simple. “Anything more complex will see significant costs to all businesses and not just non-employers and micro businesses,” it added.
Small business and the enterprise economy
Crowdfunding failures raise questions – Crowdfunding investors could lose more than £100,000 after the collapse of fashion business Crumpet Cashmere Limited. The firm entered liquidation in December, only 18 months after it raised more than £160,000 from 112 investors using Crowdcube. An earlier business, Crumpet England, also run by the same management, went through a “pre-pack” administration prior to the Crowdcube fundraising, with debts of almost £765,000. Investors were informed about the collapse of Crumpet Cashmere in December. Elsewhere, the Telegraph examines how several high-profile failures by firms looking to raise finance via Kickstarter has flagged up the risks of the crowdfunding path for start-ups.
UK economy and markets
Rise in consumer borrowing fastest since pre-crisis – Consumer borrowing on credit cards, loans and overdrafts is growing, according to new data from the Bank of England. Unsecured consumer credit was up by 8.3% in the 12 months to November 2015, with consumers borrowing an additional £1.5bn in November compared to an average increase of £1.2bn over the previous six months. Borrowing on credit cards rose by £411m, up from £271m in October, while debt on personal loans and overdrafts increased by £1.1bn over the month. BoE figures for mortgage borrowing showed lending was up by £3.9bn in November, compared to an average increase of £3.1bn over the previous six months. The BoE figures show the annual increase in consumer credit is at its highest level since February 2006, before the financial crisis began.
Soc Gen: 50% risk of Brexit – Societe Generale has warned that there is a near 50% chance Britain will vote to leave the EU this year, a decision, it claims, that could inflict significant damage on the UK economy over the next decade. Analysts at the bank are placing 45% probability on ‘Leave’ winning out in a referendum on Britain’s EU membership – a decision that could condemn the economy to at least ten years of lower growth, said the bank.
UK businesses most optimistic – British businesses are more optimistic heading into 2016 than those in almost any other country, according to research by Grant Thornton. A survey of more than 10,000 global companies by the firm found that nearly three quarters of UK-based businesses were hopeful of rising profits and job creation for the coming year, a figure only trumped in Europe by Ireland. The proportion of companies saying that they expected their profits to rise jumped 23 percentage points to 63%. The CBI’s end of year survey echoed the Grant Thornton report. It also reported that a balance of 20% of the 766 companies interviewed had recorded an increase in output in the final quarter. However, the Independent reports that the latest Business in Britain survey by Lloyds Bank indicates that every sector of UK business is less confident for the year ahead, apart from retail and wholesalers.
Fewer companies on AIM – The number of companies listed on AIM dropped by 52 in 2015, with financial stress contributing to a number of delistings. Research by UHY Hacker Young reveals only 39 companies listed, marking the lowest level since 2009. In addition, the average money raised in 2015 for an IPO on AIM was £13.6m.
Storm damage estimates increase – Insurers are facing bills totalling hundreds of millions of pounds following the winter floods, according to analysts. Storms Desmond, Eva and Frank caused an estimated £1.5bn of damage to homes and businesses in the North of England and Scotland over Christmas, and KPMG predicts this could run up to £6bn when longer term costs are considered. Meanwhile, PwC raised its estimates for the third time in a week yesterday saying the storms could incur insured losses of up to £1.4bn.
Rapper dreams of accountancy – Rapper Tinie Tempah has revealed that he would rather be an accountant. He told the Telegraph: “Even my accountant doesn’t want to be an accountant. He wants to be a rapper. But I always wanted to be accountant.” The musician is an ambassador for LifeSkills, a project sponsored by Barclays, which goes into schools and youth clubs to teach children some of the basics about getting on the job ladder, such as writing a CV and securing work experience.
Christian Elmes, Partner
Christian Elmes trained at PwC and qualified as a chartered accountant in 1999, before moving to Morgan Stanley (2000-2002) as Associate in the Investment Banking Division (IBD).
He was appointed Director of Finance, Teather & Greenwood Investment Management in 2002 and moved with the Tax Efficient Solutions team to Smith & Williamson in 2004, becoming Deputy head of the department. He left to co-found Enterprise in 2011.
Over the last ten years, Christian has been responsible for developing a number of tax efficient products, particularly Enterprise Investment Schemes. He is able to lead on tax efficient product development from inception through to completion, because of his financial and tax background and commercial experience.
Christian is competent across a broad range of sectors including, leisure and hospitality, media, property and renewable energy.
Christian is a non-executive board member to a number of leisure and hospitality companies, Casper & Cole Ltd, Wright & Bell Ltd, Albion & East Ltd, Camm & Hooper Ltd and Darwin & Wallace Ltd.