TheBriefing
HORIZON SCANDAL
Shortfalls remain with Post Office IT system
Cash discrepancies are still occurring in the Post Office’s Horizon IT system, according to sub-postmasters.
Almost 70% have experienced an unexplained shortfall since January 2020, a survey by YouGov revealed.
The findings indicate that faults could remain in newer versions of the accountancy system, which is still used by the Post Office.
Between 1999 and 2015, more than 900 sub-postmasters were wrongly prosecuted after the Horizon system made it appear as though cash was missing from Post Office branch accounts.
Nearly half of the sub-postmasters surveyed were “dissatisfied” with how the system currently operates, compared with 25% who were happy with it. Some 92% experienced some form of issue with the system in the last 12 months.
One sub-postmaster said: “Horizon is still flawed. I regularly have unexplained discrepancies, often altering daily or manifesting at balance.”
EXPERTS’ VIEWS ON...
Tax policy
“It is perfectly coherent to think that the UK government should invest more, but that this should not be paid for through higher levels of borrowing.”
Paul Johnson, director, Institute for Fiscal Studies
“It is self-limiting if you load all your growth onto one sector or one geographical location, so we need to rebalance.”
Alison McGovern MP, minister for employment
“If Labour does want to see more people in work, it should focus on reducing the tax gap and give HMRC the funding it needs, rather than putting more pressure on business.”
Neil Insull, partner, Blick Rothenberg
Images: Getty/iStock
ARTIFICIAL INTELLIGENCE
Finance teams make AI switch
Large businesses’ finance departments have largely closed their artificial intelligence (AI) adoption gap with other corporate functions, according to a survey.
Around 58% of the 121 finance teams surveyed by technology consultants Gartner said they had adopted some form of AI in 2024, a rise of 21 percentage points from 2023.
Four main uses emerged from the survey: intelligent process automation, anomaly and error detection, analytics, and operational assistance and augmentation.
Marco Steecker, senior director with Gartner’s finance research practice, said: “In this survey last year, other administrative functions (such as HR, legal, and procurement) were twice as likely to be using or scaling out AI solutions. This year the gap is almost nonexistent.”
News in numbers
The proportion of UK power generated by renewables in the first half of 2024.
Source: BBC
The amount of invoices paid late in the UK from June 2023 to June 2024.
Source: FreeAgent
The number of people expected to pay dividend tax in 2024/25.
Source: AJ Bell
Recruitment and HR managers who support a ban on zero-hours contracts.
Source: Indeed Flex
Fine imposed on PwC for failing to flag suspected fraud at London Capital & Finance.
Source: FCA
Of UK freelancers say government tax policy has negative impact on their business.
Source: IPSE
BUSINESS TAXATION
R&D tax relief claims fall by a fifth
The number of provisional claims by businesses for research and development (R&D) tax relief dropped by 21% in 2022/23, according to HMRC figures.
However, the estimated amount of total R&D tax relief claimed for 2022/23 was £7.5bn, up 1% from the previous year.
The figures show there was an above-average drop in the number of smaller claims (up to £15,000) but an increase in the number of claims above £250,000, resulting in a 28% rise in average claims value.
Carrie Rutland, head of innovations incentives policy at BDO, said the fall in claims reflects the impact of greater scrutiny by HMRC. She said: “Reports that 11 people have been arrested on suspicion of R&D tax relief fraud suggest that the tax authority is continuing with its tougher approach to stamping out incorrect or fraudulent claims.”
But Kay Oldham, R&D tax director at accountancy firm JS, said: “It’s concerning that genuine claimants are being put off. R&D tax relief is critical to the success of start-ups.”
Indices
UK GDP growth
Between April and June 2024
UK unemployment
Between May and July 2024
Employment rate
Between May and July 2024
Consumer prices index
As of August 2024
House price index
In August 2024
House prices
In August 2024
