Archive for October, 2013

December is a busy month for the Treasury

Thursday, October 31st, 2013

Wednesday 4th December 2013: Autumn Statement

It has been announced that George Osborne will be presenting his Autumn Statement to Parliament at 12.30pm, Wednesday 4th December. The Statement usually sets the tone of future changes to our tax legislation, particularly, those to be included in the Finance Bill 2014.

 Tuesday 10th December 2013: Draft clauses published

Six days later the Treasury have committed to publishing draft clauses to be included in the Finance Bill 2014. This “putting meat on the bones” approach will give tax professionals an opportunity to comment on proposed changes to the tax code.

The draft clauses will be augmented by the addition of the following information:

• Responses to policy consultations
• Explanatory notes, and
• Tax information and impact notes

This process, of publishing draft clauses, is to be welcomed as it provides a useful window of opportunity for meaningful consultation prior to the publication of the more formal Finance Bill next year.

Consultations on the draft legislation will remain open until 4th February 2014.

UK economic growth best since 2010

Tuesday, October 29th, 2013

Dare we hope?

In the third quarter of 2013 the UK’s Gross Domestic Product (GDP) grew by 0.8%. Don’t be dismayed by the small percentage. The key is it’s a positive number and the best growth indicator published since 2010.

Hidden within this increase are some pleasant surprises:

• A 2.5% surge in construction activity, bolstered in part by the Governments Help to Buy initiative.
• Production grew by 0.5%
• Manufacturing by 0.9%
• The UK’s manufacturing activity was the highest in the G7 group in September

Overall, in the last year Britain’s economy has grown by 1.9%.

Politicians will no doubt interpret these results in different ways. The Government will likely consider these results a vindication of their economic policy. A Treasury spokesperson said has already commented:

“Today’s GDP figures show that Britain’s hard work is paying off and the country is on the path to prosperity.

Many risks remain, but thanks to our economic plan the recovery now has real momentum.

All parts of the economy are growing, the deficit is falling and jobs are being created – and that’s the only sustainable way to raise living standards for hardworking families.”

No doubt the opposition parties would stress that whilst “All parts of the economy [may be] growing” wealth and living standards are rising fastest in London and the South-East.

Never-the-less the news has to be welcome. It is time to talk-up economic activity and start to see that we may indeed be over the worst.

Dare we hope? Yes, why not…

Post Office sell-off underpriced?

Thursday, October 24th, 2013

If you managed to acquire Post Office shares at 330p per share you will have been presently surprised by the opening price on the London Stock Exchange. At 8am on the first day of trading the shares stood at 430p rising to 450p in the first few minutes. At the end of the first days’ trade the price stood at 455p. A rise of nearly 38%.

And the price continued to increase giving rise to press speculation that the floatation was “under-sold”. No doubt the professional advisors will have to face a few difficult questions in the coming weeks?

In the meantime there continues to be strong demand for the shares in the face of confirmed industrial action. CWU General Secretary, David Ward said, before the ballot result was known, that:

"We will not accept people maximising individual profit on the back of minimising the value, terms and conditions of postal workers. We're determined this privatisation will not lead to the kind of job losses and downward pressure on pay and conditions we've seen in other industries and we're seeking a legally-binding agreement to protect jobs."

Be interesting to see how the intended interruption in services affects the share price?

NIC Employment Allowance April 2014

Tuesday, October 22nd, 2013

The Chancellor announced the creation of a NICs Employment Allowance in the 2013 Budget. This is planned to start on 6 April 2014 and moved a step closer to becoming law with the First Reading of the Bill on 14 October 2013.

HMRC have published the following background information about the scheme:

“In the March 2013 Budget, as part of its strategy to encourage business growth, the Government announced that it will introduce an employment allowance of £2,000 a year for all businesses, charities and CASCs to offset against their liability for Class 1 secondary NICs.

To keep the process as simple as possible for employers, the employment allowance will be delivered through standard payroll software and HMRC’s Real Time Information (RTI) system. HMRC will add a facility to the RTI Employer Payment Summary (EPS) referring to the employment allowance in the form of a “yes/no” indicator and payroll software providers will do the same. HMRC will amend its basic PAYE tools to have an EPS facility to help those employers who do not have such a facility on their software.

To claim the allowance, the employer will have to signify his intention to claim by completing the yes/no indicator just once. The employer will then offset the allowance against each monthly Class 1 secondary NICs payment that is due to be made to HMRC until the allowance is fully claimed or the tax year ends. The following tax year, the allowance will be available as an offset against a Class 1 secondary NICs liability as it arises during the tax year.

The employment allowance will apply per employer, regardless of how many PAYE schemes that employer chooses to operate, so each employer can only claim for one allowance. It will be up to the employer which PAYE scheme to claim it against.”


Monday, October 21st, 2013

You may have seen the recent announcement by Invesco Perpetual that Neil Woodford, the manager of both of the above funds, has decided to leave Invesco next April to pursue his own venture.

Neil has been a fund manager with Invesco for over 25 years and has a sterling reputation for consistent performance, second to none. He will undoubtedly be a loss to Invesco and the fund may suffer from outflows as a result.

We have been advised that management of the fund will be taken over by Mark Barnett, another experienced fund manager, who currently runs the £284m Invesco Perpetual UK Strategic Income fund and has built a strong track record in his own right.

Given that Invesco are already prepared for Neil’s departure with a replacement manager with strong credentials, we are happy that the fund remains a suitable investment choice for you and certainly, in the short term we are not proposing any changes.

The fund, together with the other investments in your portfolio, will continue to be periodically reviewed by our Investment Committee and we will let you know if any changes to your investments are required.

If you would like to know more on this subject please follow the attached link to Invesco’s website


Switch to our mobile site