* Raising income tax threshold won't help country says critic
Nick Clegg’s calls for the Chancellor to give working families a boost in the spring Budget by increasing the income tax threshold to £10,000 have come under fire.
Nigel Reynolds, senior partner at Reynolds & Co in Solihull, said the Deputy Prime Minister’s suggested solutions for easing the financial burden on taxpayers are not sustainable or effective enough to make a difference.
The tax-free allowance is currently £7,500 and rises by £630 to £8,100 on April 1.
It had been expected that it would rise by £630 each year until it reaches the coalition target of £10,000 in 2015. But Mr Clegg wants the process speeded up. He said: “I want the coalition to go further and faster in delivering the full £10,000 allowance, because the pressure on family finances is reaching boiling point.
Mr Clegg added that the public expected the Liberal Democrats to deliver “economic competence” and “compassion” in the coalition government.
But Mr Reynolds said he feels politicians should be offering start-up and micro businesses more support to help the economy prosper rather than seeking to raise the income tax threshold.
He said: “The UK economy will only start to move forward when unemployment starts to fall and people have confidence again. This can only happen when people have jobs and are confident that they will keep them.
‘‘A personal allowance of £10,000 before someone pays tax is no good to them when they are unemployed and businesses are unable to increase employment. Nick Clegg needs to focus on the problem and find a permanent, effective and sustainable solution rather than making suggestions which will have no impact.
“A starting point would be for the Government to reduce the tax burden on start-up businesses and small businesses in general.
‘‘Unfortunately, politicians seem to have a blinkered view when it comes to start-up businesses. They seem to have this attitude that they are not worth supporting because they are not perceived to help the economy.
“On the contrary micro businesses take their founders off the unemployment register and offer them the chance to grow and to employ other people. In short, they provide tax paying jobs to benefit the economy.
“Sir Richard Branson and Sir Alan Sugar both started their empires through small start-up businesses – the Government would do well to support these little acorns that could grow into great oak trees.”
* Yorkshire Bank appointment
Yorkshire Bank is strengthening its West Region team with the appointment of a new international trade partner.
Forty-three-year-old Simon Hayden brings 25 years of international and domestic experience to the role and will be based at Yorkshire Bank’s Financial Solutions Centre in Temple Row, Birmingham.
Mr Hayden has developed his international skills and detailed trade knowledge from holding similar roles in international trade at other banks over the last 15 years, latterly at HBoS, where he built up a wealth of knowledge in his specialist field.
He said: “British companies are seeking new international markets in which to sell their goods or start to import into the UK. During these times of diversification, it is critically important they receive bespoke trade advice to help ensure the greater risks of trade associated with overseas markets are mitigated.
“My job will involve structuring trade resolutions and advising commercial and corporate companies which are operating internationally so that they feel confident when entering into overseas transactions. It is our responsibility as professional bankers to provide the best possible advice and help to make sure that they trade safely and profitably both now and in the future.”
* Tax windfall
The Birmingham office of BDO LLP has been appointed audit and tax advisers to the Manufacturing Technology Centre.
The firm’s team will be led by Tom Lawton, Birmingham partner and national head of manufacturing at BDO, and tax partner David Pooler.
MTC, the new research centre based at Ansty Park near Coventry, received £40m investment from Advantage West Midlands and the East Midlands Development Agency.
Aimed at developing innovative ideas and converting them into commercial solutions for businesses, the MTC is looking to support some of the world’s most innovative and progressive organisations.
Mr Lawton said: “The Manufacturing Technology Centre is a superb facility, where industry and academia meet to develop the technologies and products that will help support the success of UK manufacturing in the future.
“MTC is a centre of excellence for high value manufacturing and puts the West Midlands firmly on the map, once again, for being the home of science, technology and innovation in the sector.
‘‘We are delighted to have been appointed as advisors by the management team and are excited to be working with them.”
MTC CEO Dr Clive Hickman, said: “We are driving forward our business strategy and are committed to making the MTC the place to be for manufacturing innovation.
‘‘BDO’s experience in the manufacturing sector is second to none and the firm’s knowledge and connections will help support our future success.”
* Inheritance recalculation
Far fewer people are liable to pay inheritance tax than is commonly thought, according to a report by a city firm of business and financial advisors.
Grant Thornton’s survey of 400 homeowners with properties valued at more than £250,000 found a high level of confusion about who pays the tax, with 62 per cent believing they are liable when in fact just three per cent of UK estates were subject to inheritance tax in 2010-11.
Grant Thornton is calling for a review of inheritance tax (IHT) to either scrap the current system or make significant changes to make it simpler and fairer.
The survey revealed a majority (86 per cent) supported introducing an exemption for the main residence and replacing IHT with ‘‘green taxes’’ was the most popular alternative option (41 per cent).
A combination of progressive rates that vary by relationships to the deceased and the size of the inheritance was also popular (29 per cent), while the least popular alternative to the current system (65 per cent of people opposed this) was a form of annual tax on wealth, mirroring the income tax regime.
Fifty-nine per cent of respondents disagreed with replacing IHT with capital gains tax on death, while 67 per cent were against increasing the basic rate of income tax by 1p to raise an estimated £3.9 billion.
Sue Knight, Birmingham-based director in Grant Thornton’s client team, said: “The results of our poll show that people are confused about the IHT system and as a result there is a real feeling of dissatisfaction.
“What started off in 1986 as a straightforward system has become a complex maze of traps for the unwary and therefore people resent it.
“If IHT is to be retained in some form, serious consideration should be given to introducing a main residence exemption. We would welcome a full review of the system by the Government and the Office of Tax Simplification.”
* Running with Wolves
Wolverhampton Wanderers’ financial director Rita Purewal has been awarded a national accolade which recognises her as ‘one to watch’ in her profession.
Ms Purewal has been awarded the prestigious Ones to Watch accolade following independent research carried out by Financial Director magazine.
Ones to Watch was launched by cost, purchase and supplier management experts Expense Reduction Analysts in association with the magazine.
The initiative recognises the UK’s top 20 highest achieving FDs in the UK and their increasing range of skills including leadership, sound financial planning, innovation, decisiveness, communication and operational improvement.
Ms Purewal has presided over the club’s unstable existence since 1994, and since 2003 has twice seen them relegated then promoted back to the Premier League.
“She was selected for the accolade due to her success in managing finances in a notoriously unpredictable business, as well as her efforts in building the club’s current solid foundation.
Robert Allison, managing director of Expense Reduction Analysts said: “Football is the very epitome of an unpredictable business.
“Millions are lost or gained on the kick of a ball every year and those outside the business must marvel at how football FDs do it. The unpredictability of the beautiful game and the financial challenges this brings, especially at a club such as Wolves, makes Purewal an FD to watch.”