Legal providers must do more to help small businesses, says regulator

The Competition and Markets Authority (CMA) has called for legal service providers to provide greater transparency so that consumers and small businesses can more easily shop around for better deals.

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Following a year-long study, the CMA has concluded that competition in legal services is not working well and that there is not enough information available on price, quality and service to help those who need legal support in choosing the best option.

The regulator has set out a package of measures, including:

  • a requirement on providers to display information on price, service, redress and regulatory status to help potential customers. This would include publishing pricing information for particular services online
  • revamping and promoting the existing Legal Choices website to serve as a starting point for customers needing help, information and guidance on how to navigate the market and purchase services; and
  • facilitating the development of comparison sites and other intermediaries to allow customers to compare providers in one place by making data already collected by regulators available.

Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), welcomed the report, saying: ‘Many small businesses could benefit from greater use of legal services, but currently the market is complex and difficult to navigate.

‘Smaller firms can often fail to recognise a problem as a legal issue, or assume a legal resolution to be too expensive, time consuming or risky to pursue. Greater transparency on price and quality of legal services will encourage more small businesses to seek expert advice when necessary.

‘We’re pleased the CMA is now looking to close the gaps in the market we identified, by demanding greater transparency from legal service providers.’

Wales set to receive income tax powers in 2019

In a devolutionary deal similar to the one granted to the Scottish government, the Welsh government has been given new powers to set its own rates of income tax from April 2019, as part of an arrangement with the UK Treasury.

The amount of capital borrowing available to the Welsh government will also double to total £1 billion.

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The Welsh government has already been given stamp duty powers: it will replace the stamp duty land tax (SDLT) currently charged in the rest of England with its own land transaction tax (LTT) and landfill tax from April 2018.

The Welsh government’s Cabinet Secretary for Finance and Local Government, Mark Drakeford, commented: ‘This is an agreement which is fair to Wales and the rest of the UK.

‘It ensures fair funding for Wales for the long-term, something we have consistently made the case for.

‘But crucially it protects our budget from the range of undue risks that could arise following the devolution of tax powers from 2018 and provides additional flexibility to manage our resources.’

Meanwhile, David Gauke, Chief Secretary to the Treasury, stated: ‘We are delivering on our commitments and the Welsh government can now decide how to use their greater powers and responsibilities to grow and support the Welsh economy.’

Chancellor announces Spring Budget date

The Chancellor of the Exchequer, Philip Hammond, has announced that he will deliver the 2017 Spring Budget on Wednesday 8 March.

The Spring Budget speech will be Mr Hammond’s first, and will set out the government’s plans for the UK economy, based on the latest forecasts from the Office for Budget Responsibility (OBR).

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It will also be the last Spring Budget – during the 2016 Autumn Statement, the Chancellor announced a significant change to the way in which fiscal events are scheduled.

Following the 2017 Spring Budget and Finance Bill, Budgets will, in future, be delivered in the Autumn, with the first one taking place in Autumn 2017.

Therefore, 2017 will have two full Budgets in both the Spring and the Autumn.

The OBR will produce a Spring forecast from 2018, and the Chancellor will make a new Spring Statement responding to that forecast in the same year.

Businesses in the UK owe £1.8 billion in late corporation tax, research reveals

UK businesses owe HM Revenue & Customs (HMRC) a total of £1.8 billion in late corporation tax payments, research from financial supermarket Funding Options has revealed.

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The value of corporation tax payments in arrears has risen from £1.59 billion to £1.82 billion, according to Funding Options’ research. This represents an increase of 15% over the past year.

The online business finance supermarket also warned that HMRC is using ‘increasingly aggressive methods’ to recover overdue tax.

These methods include issuing late payment penalties, sending debt collectors to business premises and seizing assets. Funding Options warns that such measures may have ‘serious negative repercussions’ for businesses.

Conrad Ford, CEO of Funding Options, commented: ‘These figures demonstrate the growing pressure on cashflow for companies, which could get worse following the outcome of the EU referendum. Companies might want to explore in detail alternative finance options available to them before HMRC comes knocking on their door.

‘Businesses need to make sure they have the adequate funding to pay tax bills on time, without taking capital from other areas of the business.’

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Significant rise in amount generated by parking fines and charges, research suggests

The amount of money councils generated from parking fines and charges has risen by more than £60 million over the past year, research published by the RAC Foundation has revealed.

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The Foundation found that local authorities made a surplus of £756 million during the 2015/16 financial year. This amount is 9% higher than 2014/15’s total.

The figure was calculated by taking the income councils received from parking charges and penalty notices, and then deducting any running costs.

Ministers have warned that parking should not be used as a method of increasing revenue.

However, the Local Government Association (LGA) stated that ‘councils do not make a profit from parking’.

Judith Blake, transport spokesperson for the LGA, commented: ‘Income from on-street parking charges is spent on running parking services, and surpluses are spent on essential transport projects, such as tackling the £12 billion roads repair backlog, creating new parking spaces and providing subsidised bus travel for children or elderly residents.’

Finance Secretary uses Scottish Budget to outline tax changes

Derek Mackay, Finance Secretary for Scotland, has delivered Scotland’s draft Budget, outlining a range of changes to both taxation and finance.

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Marking the first Scottish Budget since Holyrood gained a series of new tax powers from Westminster, Mr Mackay revealed that the basic rate of income tax will be frozen, whilst the 40% higher rate of income tax will start at £43,430.

This differentiates the Scottish rate from Britain’s higher rate: in the rest of the UK, the higher rate threshold will rise to £45,000 from 6 April 2017.

Commenting on the change, he stated: ‘This government is committed to a principles-based approach to taxation, particularly that tax should be proportionate to the ability to pay.’

In other announcements, the Finance Secretary outlined the expansion of the Small Business Bonus Scheme, which will be achieved by raising the eligibility threshold for 100% relief to a rateable value of £15,000.

In addition, £3 million will be invested in minimising rail fare increases, whilst £60 million will be spent as part of a plan to expand childcare and early learning to 1,140 hours.

Commission calls for government to act now on 5G networks

The National Infrastructure Commission (NIC) has published its final report into 5G and telecommunication technology, in which it calls for the government to take immediate action to ensure that the country is ready for the implementation of 5G mobile networks.

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Commenting on the report, Chair of the NIC, Lord Adonis, said: ‘5G is the future – ultra-fast and ultra-reliable, it has the potential to change our lives and our economy in ways we cannot even imagine today. But the UK is currently languishing in the digital slow lane.

‘Our roads and railways can feel like digital deserts and even our city centres are plagued by not spots where connectivity is impossible. That isn’t just frustrating, it is increasingly holding British business back as more and more of our economy requires a connected workforce.’

The report revealed that the UK is 54th in the world for 4G coverage, with users only being able to access 4G half of the time. It also suggested that 4G in the UK is worse than the 4G networks in Romania and Peru.

The NIC argues that the government and Ofcom must ensure that essential outdoor mobile services are available throughout the country, and in particular on rail networks and motorways. It also recommends that local authorities should work together and with Local Enterprise Partnerships (LEPs) to develop coordinated local mobile connectivity delivery plans.

A spokesperson for the Treasury told the BBC that the Chancellor had already committed £1 billion to support 5G trials, as well as fibre broadband.

The spokesperson said: ‘We want the UK to become a world leader in 5G, which is why we asked NIC to carry out this study. We will consider their recommendations carefully and respond at Budget 2017.’

The full report, called ‘Connected Future’ can be found here: www.gov.uk/government/publications/connected-future.