Jeremy Hunt is reportedly considering cutting...
In this week's In the Sheets:
Jeremy Hunt is reportedly considering cutting National Insurance rather than income tax in next week’s Budget.
Higher energy bills and borrowing costs are set to be the biggest challenges for British businesses in the coming months, according to a survey by BDO.
Steve Hare, CEO of Sage, predicts that artificial intelligence will revolutionise the accountancy industry, leading to fewer but more productive jobs.
Tax News
Hunt considers NI cuts as Budget nears
BBC News | The Independent
Jeremy Hunt is reportedly considering cutting National Insurance rather than income tax in next week’s Budget. The Chancellor already reduced National Insurance in last year's Autumn Statement, taking the main rate down from 12% to 10%. Analysis shows that a further 1% cut would cost ￡4.5bn per year. With Mr Hunt looking to finalise his Budget plans this week, the Institute for Fiscal Studies (IFS) has warned that he should not cut taxes unless he can detail how the government will afford them. The IFS said there is “only a weak economic case for another sizeable net tax cut.” Speaking to the BBC's Today programme, IFS deputy director Carl Emmerson said that while tax cuts can help to boost growth in the economy, it “doesn't mean the tax cuts will pay for themselves.” The Office for Budget Responsibility last week informed the government that it would have about ￡13bn of fiscal headroom, with Mr Hunt expected to leave about ￡6bn in reserve. The Chancellor's room for manoeuvre has been impacted by inflation falling faster than expected, resulting in lower tax revenues, and increased borrowing costs.
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SME News
140k small business accounts debanked last year
Financial Times?|?The Times?|?City A.M.
High street banks shut over 140,000 accounts held by small businesses last year. The closures accounted for 2.7% of the 5.3m business accounts provided by the lenders to SMEs. Eight banks - Barclays, HSBC, Lloyds Banking Group, NatWest, Santander, Metro Bank, TSB, and Handelsbanken - disclosed account closure data to the Commons Treasury Committee after requests for information from MPs. Reasons for closure included failure to provide regulatory information and dormant accounts. UK Finance has noted that a small proportion of accounts are closed due to financial crime, fraud concerns, customer due diligence, or account dormancy. A recent report by the All-Party Parliamentary Group on Fair Business Banking found that thousands of customers were being debanked or having facilities refused every month. A Treasury spokesperson said: “We are taking action on debanking and remain committed to legislation – forcing banks to explain and delay any decision to close an account under new rules, protecting freedom of expression." It is noted that the Financial Conduct Authority is reviewing the issue of account access.
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