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9am Lowdown
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9am Lowdown: Former Deloitte boss targets small business clients

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24th Oct 2016
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Good morning and welcome to this morning’s 9am Lowdown. Practice Excellence Live has finally arrived. The week-long live webinar kicks off this morning with two sessions examining the Making Tax Digital implications. Register now for these events, if you haven’t already.

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Former Deloitte boss targets small business clients

John Connolly, the former boss of Deloitte, has brushed aside rumours that his new venture Cogital will challenge the Big Four.

“We are not trying to deal with clients at that level,” Connolly told City A.M. “Our focus is primarily providing advice to smaller firms.”

He continues: “We will provide some outsourcing for companies but not the kind of companies that Deloitte or PwC deal with. We have no plans to be become a big audit firm.”

Connolly explains that Cogital will be “quite large and international” but will focus on smaller businesses and entrepreneurial businesses. “You look at your adviser and want someone you can be in contact with. You always want to have that principal relationship with that partner or director,” he said.

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CT could be halved in Brexit negotations

The government ministers are considering reducing corporation tax to 10% if the EU member states “start getting difficult” during the Brexit negotiations, an unnamed source told the Sunday Times.  

According to the Independent, the UK aims to attract investment through lowering the corporation tax rate. “People say we have not got any cards,” said the unnamed source. “We have some quite good cards we can play if they start getting difficult with us. If they’re saying no passporting and high trade tariffs we can cut corporation tax to 10 per cent."

However, shadow chancellor John McDonnell said: “This is the last thing the Tories should be calling for after six years of failure to meet their own deficit targets and their under investment in our country, which has resulted in our economy being now so vulnerable to Brexit."

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Tax experts criticise tax gap

Despite HMRC announcing a shrinking tax gap, tax experts have dismissed the figure because it does not take in to account tax losses caused by multinational corporations, writes the Guardian.  

“HMRC’s measure of the tax gap is not credible as it excludes profit-shifting techniques used by Google, Microsoft, Apple and others,” Prem Sikka, professor of accounting at University of Essex, said.

Because of this, Richard Murphy, a tax gap critic, believes the figure could have reached as much as £119bn in recent years.   

AccountingWEB readers have also criticised HMRC’s tax gap figures. AccountingWEB member Gordo thinks it is “wonderful” HMRC released these figures showing a downward trend before appearing in front of the Public Accounts Committee (PAC). “This years’ figures appear to show the increase in 'error' and 'failure to take reasonable care',” writes Gordo, “which proves that we must need MTD in order to do the right thing by the taxpayer and help them to get it right, again we will be able to explain that to PAC.”

 

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