Finance
Businesses are braced for UAE tax introduction
Midlands companies with operations or business interests in the UAE and other countries in the Gulf are being urged to be ready for the introduction of VAT in January. Accountancy firm Moore Stephens is advising
clients across the region on the potential implications of the introduction of VAT in the Gulf Cooperation Council (GCC). VAT is expected to be introduced with effect from 1
January 2018, meaning businesses trading within the GCC have less than 10 months to prepare for the changes. Terri Bruce, tax director at
Moore Stephens in Birmingham, said: “It has been announced that the UAE will introduce VAT at five per cent in 2018, and the UAE and other countries across the GCC are expected to ratify treaties imminently. “The new rules have crept up
“This extends to charging VAT on supplies at the
correct rate; calculating the overall net amount of VAT to pay or refund, along with submitting VAT returns, showing the required information. “It is expected that there will be a penalty regime applicable in cases of errors made, so it is vital businesses have the right systems and procedures in place and to seek professional advice if in any doubt.”
‘The new rules have crept up on a lot companies and will be in force before we know it’
on a lot companies and will be in force before we know it, and it’s important to be prepared as soon as possible.” Each member state in the GCC is expected to issue
its own national VAT and exercise tax legislation. Businesses will then be required to charge, collect
and pay the tax over to the authorities. Terri added: “While VAT is charged and collected by
businesses on behalf of the Government and as such should not be considered as a cost, there will be an additional burden in terms of administration and compliance with the new legislation. “Businesses will need to amend systems,
processes and procedures and will need to ensure they comply with the new requirements.
VAT’s going on: Terri Bruce
SRK find a home in Birmingham
Award-winning accountants SRK Accounting has expanded by opening a new office in Birmingham. Founded in 2011, SRK Accounting
offers bespoke packages to owner- managed businesses - ranging from start-ups to those with turnovers of £10m - as well as specialised packages for contractors, freelancers and property investors. SRK’s Accounting’s founder and managing director Simon Kallu said: “Birmingham was the natural choice for expansion. “We are proud to be members of
this entrepreneurial community and are enthusiastic to support as many local startups and small businesses as possible. “Our vision is to become the
market leader in providing clarity and growth to SMEs, so that they can achieve constant improvement and success on their terms. “Our whole purpose of business
is to empower business owners by taking their financial responsibilities
Natural choice: Simon Kallu (centre) with his staff
away so that they can focus on the tasks that matter to them and make their organisation standout in their marketplace. “I’m massively passionate about supporting Birmingham businesses, outside London, Birmingham has the highest rate of startups but it
has the highest failure rate. “I believe this is due to poor cash
flow management, planning, strategy and accounting practices. It’s my personal mission to try to improve these stats by providing advice, support and resources to increase startup success.”
Sector Focus
Household spending is set to take a hit
Consumer spending growth is expected to fall to a four-year low in 2017, according to a special report from EY’s ITEM Club.
Household spending power
will be hit by a sharp deceleration in real income growth as a result of a triple- whammy of rising inflation off the back of sterling’s drop in 2016, stagnation in the jobs market and the impact of cuts in welfare spending on non- work incomes. Lower earners are likely to be hit disproportionately hard.
‘This year retailers are facing the perfect storm’
CPI inflation is expected to
average 2.8 per cent this year, a five-year high, and the EY ITEM Club is pessimistic about the prospects of a pickup in wage growth to compensate. The silver lining, according to
the report, is that non-income drivers of spending are looking relatively buoyant. In the third quarter of 2016, households’ net financial wealth was up by 12.5 per cent on the previous year, largely due to rising equity prices. This represented almost four times the average household’s income. EY ITEM Club says that this
will provide a ‘prop’ to spending, ensuring that the slowdown in spending growth is less abrupt than the weakening in real incomes. Differences in spending
patterns between income groups mean that while inflationary trends have worked in favour of lower income households in recent years, they are now set to hit this part of the population hardest. Sara Fowler, senior partner at
EY in the Midlands, said: “This year retailers are facing the perfect storm of keeping pace in a rapidly changing industry combined with the increasingly tough economic backdrop. “In order to thrive, retailers
in the Midlands need to look at how they can evolve and shape the future rather than react to short-term customer demands. “To remain competitive,
many retailers will need a level of risk taking that was not necessary in the past.”
May 2017 CHAMBERLINK 51
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