Category Archives: Letchworth

Updated Key Guides published 23rd August 2018


Updated Key Guides published 23rd August 2018

UPDATED KEY GUIDES

Whilst most of us bask in the hottest summer for over half a century, the government is busy running consultations and trying to prepare for what Brexit will eventually mean. But that is no reason for us not to be busy, whilst we await the announcements of the Budget, and the result of the negotiations.

The latest update for our Key Guides series brings you fully revised guides giving you essential explanations of key topics across business, tax and retirement planning. We understand how confusing it can be to get a clear understanding of how complex rules and reliefs affect you, so our guides will give you everything you need to get started in one place.

Our current update includes new examples, tables, graphics and case studies throughout, to make each topic as accessible and easy to get to grips with as possible. The new range will give you real world examples of complex rules and calculations, including fresh advice on inheritance planning and gifts.

Investing tax-efficiently

  •  New example on timing of CGT gains and losses
  •  Added reference to the OTS review of savings and investment income tax

 Making Tax Digital

  • Updates on latest timetable announcements from HMRC
  • Updated section on MTD pilot schemes
  • Restructured to focus on VAT and preparing for MTD

Pensions tax planning for high earners

  • New clarification and example on tax on pension withdrawals
  • New example on SIPP borrowing for property investment
  • Clarification on income tax relief on contributions in Scotland

Starting and selling a business

  • New tables covering:
  • Business financing options
  • Advantages and disadvantages to limited company structure
  • Payment options on sale of a business
  • Loan notes
  • VAT treatment of going concerns

Strategies for a high-tax environment

  • New example highlighting differing CGT rates between residential property and other assets
  • New graphic on maximum tax-free income allowances
  • Updated OBR forecasts

Working through personal service companies

  • New table summarising tax deadlines for deemed salary under IR35 rules
  • Restructuring of ‘Tax planning and pitfalls’ section
  • Summaries of recent IR35 rulings
  • New section on consultation on IR35 rules in the private sector

Estate planning

  • New example on the application of lifetime gifts and gifts from normal income

The latest Key Guides can be downloaded here:-

Tax Planning for High Earners

Tax Planning for High Earners

Estate Planning

Estate Planning

Making the most of Fringe Benefits

Making the most of Fringe Benefits

Strategies for a High Tax Environment

Strategies for a High Tax Environment

Investing Tax Efficiently

Investing Tax Efficiently

Making Tax Digital

Making Tax Digital

Personal Service Companies

Personal Service Companies

Starting and Selling a Business

Starting and Selling a Business

For more information contact Paul Southward or your usual KSK contact.

Paul Southward


News Roundup Monday 14th May 2018


News Roundup Monday 14th May 2018

NEWS ROUNDUP

TAX NEWS

Social care funding – Older workers may have to start paying NI

The Government is considering plans to introduce national insurance (NI) payments for those working beyond the state pension age as a means to support the social care system. Currently, nearly 1.3m “silver strivers” are exempt from paying NI, but under a proposed “care tax”, the 12% charge would continue to be levied, raising about £2bn a year. The measure will be included in a Green Paper to be published by Health Secretary Jeremy Hunt next month and has the support of the Intergenerational Commission, which will release a report this week warning against burdening the young with the cost of social care. A Sunday Times editorial says hitting older workers with a large tax hike would be “like a kick in the teeth,” as many older people carry on working because they have to, as they cannot afford the cliff-edge drop in income that comes with retirement because of diminished pension expectations. A fair er policy would be to spread the burden “across all older people, working or not, including those on generous pensions.”

The Sunday Times, Business, Page: 1, 2 The Sunday Times, Page: 22 The Mail on Sunday, Page: 48

EMI blunder leaves start-ups wondering about Government support

Peter Evans reports on the fury expressed by UK start-ups following the Government’s announcement that they had to scrap the enterprise management incentive (EMI) scheme, a tax break used by start-ups to attract new recruits by giving them share options worth up to £250,000 over three years. HMRC last month said that EU state aid approval for the scheme would expire, but has so far failed to provide an explanation for the lapse in state aid approval. Tim Stovold at Kingston Smith said the EMI issue has meant start-ups “are suffering from being unable to move forward with key recruitment” while Matt Smith, director of the Centre for Entrepreneurs think-tank, said the blunder is indicative of a Government that appears to be more muted in its cheerleading of entrepreneurs.

The Sunday Times, Business, Page: 9

PENSIONS NEWS

HMRC gains from allowance breaches

HMRC collected an extra £70m from people breaching the lifetime pension allowance last year, the Times reports. When the £1.03m cap is breached a 55% tax is charged on lump sums and 25% if the pension is taken as income. The tax take has almost trebled in two years as the cuts to relief bite. Data from Retirement Advantage show the tax collected rose from £40m to £110m between 2014-15 and 2016-17 while Salisbury House Wealth says there has been a 24% increase in the amount collected through the 55% tax rate, from £33m in 2015-16 to £41m in 2016-17. The Times notes that HMRC had to repay £22m in the first quarter of this year after charging savers too much for withdrawals.

The Times, Page: 57 Financial Times, Money, Page: 2

Reform pensions tax relief to encourage saving

The Guardian’s Patrick Collinson argues for the closure of the loophole that allows those on final salary pension schemes to enjoy preferential tax treatment regarding the lifetime allowance. Collinson adds that the lifetime allowance in general is discouraging wise investors – the £1.03m limit is not difficult to reach and only brings £25,000-£26,000 a year of guaranteed income. People bumping up against it are being advised to stop paying in to avoid the 55% tax on amounts over the cap. He also calls for the removal of the 40% and 20% relief for high and low earners respectively, suggesting a 30% rate for both would be fairer and would “encourage pension saving for all without being a giveaway to the rich.”

The Guardian, Page: 48

INDUSTRY NEWS

CVA the best prospect of saving a business

Richard Fleming outlines the advantages of a CVA in the Sunday Telegraph, stating that the arrangement is perfectly suited to retailers and although it is not a panacea, it is a “life raft for businesses that are holed beneath the waterline”. Fleming, head of European restructuring at Alvarez & Marsal, says, “a CVA can, indeed often does, prefigure the ultimate failure of the business. But in the case of most distressed retailers it is the least-worst option, because it offers the best prospect of saving a business, the jobs and economic value embodied within it.”

The Sunday Telegraph, Business, Page: 5

Poorer graduates helped up with algorithms

Greg Hurst considers the use of algorithms to help City firms choose candidates from less advantaged backgrounds for jobs. Mike Buchanan, the headmaster of Ashford School in Kent and vice-chairman of the Headmasters’ and Headmistresses’ Conference of leading independent schools, says the use of “contextual data” means employers are missing out on people “who have got wider talents and skills and intelligences than merely the data might reflect”. But Emma Codd, managing partner for talent at Deloitte, defended the use of the data, arguing it “gives us the ability to consider attainment within the context that it was gained” allowing us to “continue to make sure that the people joining us at entry level are of the highest potential, and diverse.”

The Times, Page: 11

When an investor needs to hold their nerve

John Lee has questioned the legal basis that allows administrators of failed stockbroking firms to levy charges on clients’ assets held by those firms, in light of PwC’s estimated £100m administration fees for work on Beaufort’s collapse.

Financial Times, Money, Page: 7

National Grid’s CFO quits for Caterpillar

Andrew Bonfield, National Grid’s CFO, has quit to take up the same position at American machinery company Caterpillar.

The Times, Page: 54

WEALTH MANAGEMENT NEWS

Wealth manager slams FRC’s response to reporting complaint

Investment manager Alan Miller, husband of anti-Brexit campaigner Gina Miller, has written to the Financial Reporting Council’s chairman, Sir Win Bischoff, and CEO Stephen Haddrill arguing that they had failed to properly investigate his complaint regarding the way asset managers report their performance figures. Mr Miller, who runs SCM Direct with his wife, accused the regulator of making “intellectually bankrupt and morally indefensible” points that would not have been reached had his complaint been investigated by five or more specialists rather than one individual. Mr Miller had demanded a probe into how his complaint was handled but the FRC said it had found no wrongdoing. Mr Miller added in messages seen by the Sunday Telegraph: “I reserve my right to have this matter reviewed by a court of law.”

The Sunday Telegraph, Business, Page: 3

SMEs NEWS

Suppliers call for end to “unethical” late payments culture

A report to be published this week by YouGov and the payments business Basware shows 61% of British SMEs support new legislation that would force companies to pay suppliers within 45 days. Just 11% would oppose legislation. The Federation of Small Businesses (FSB) estimates that 50,000 companies close each year as a result of late payments, costing the UK about £2.4bn in lost output. Public bodies are among the worst offenders, with research released last week by the FSB revealing that 89% of suppliers to government had been paid late. “Big businesses and government think it is acceptable to pay late,” said Mike Cherry, the FSB’s national chairman. “It is unethical and immoral to force small business owners to chase payments and to turn to personal credit cards, overdrafts or even laying off staff just to keep their head above water.”

The Sunday Times, Business, Page: 2

Yorkshire firms win big at FSB awards

Businesses from Yorkshire brought home two of the 11 awards from the FSB UK Celebrating Small Business Awards 2018 in London on Thursday. IGO Pets, a Doncaster-based pet pampering firm, scooped the UK Start-up Business of the Year award, and Rosewood Farm, an environmentally-minded meat box delivery company in the East Riding, was named UK Ethical/Green Business of the Year.

Yorkshire Post

ECONOMY NEWS

Rates could stay at 0.5% for two more years

Analysts expect the Bank of England to row back on plans to raise rates next week after figures showed inflation was falling and economic growth had weakened. James Smith, an economist at banking group ING, says a rise now “could be one headwind too many for the faltering consumer-facing sector.” EY ITEM Club said that instead of seeing two interest rate rises in 2018, it is likely that there will only be one in August now and two increases next year, pushing it up to 1.25% by the end of 2019. But other economists believe the Bank may have to cut back its longer-term inflation forecasts due to weak global growth as well, potentially pushing back a rate rise to two years’ time.

The Sunday Telegraph, Business, Page: 3 The Mail on Sunday, Page: 44 Sunday Express, Page: 56

Manufacturing’s new dawn may sadly be a false one

David Smith considers whether the slump in manufacturing growth to 0.2% in Q1 indicates the promise of a revival for the sector over the past two years was in fact a false dawn. The benefits of stronger global growth and sterling’s depreciation last year are beginning to fade while investment is held back due to ongoing uncertainty over the Government’s Brexit strategy and the sense that the much-vaunted industrial strategy has been kicked to one side, he says.

The Sunday Times, Business, Page: 4

High Street woes chill UK’s northern retailers

A PwC/LDC report shows northern retailers are being hit particularly hard by high street woes, while EY found a sharp increase in companies based in Yorkshire and the north-east issuing profit warnings in Q1.

Financial Times, Page: 18

April rebound in UK car sales obscures underlying downtrend

UK car sales climbed 10.4% last month compared with a year earlier, the SMMT said, but overall sales for the first four months of the year remain down by close to 9%.

Financial Times, Page: 3 The Independent, Page: 15 The Sun, Page: 48 The Times, Page: 51

OTHER NEWS

What fate for Lynch after US Autonomy judgement?

Simon Duke runs over the Autonomy story in the Sunday Times following the conviction of former FD Sushovan Hussain last week on 16 charges of wire and securities fraud. The case was brought by Hewlett-Packard, which bought Autonomy in 2011 only to write off $8.8bn of its value due to the software firm’s alleged creative accounting. Hussain faces 25 years in a US jail but HP has also filed a $5bn fraud suit against founder Mike Lynch and Hussain in London, set to start next year, and is likely to be emboldened by the result in San Francisco. Hussain’s lawyer John Keker said he would appeal. He said: “Defence evidence of Hewlett-Packard’s conduct in the year following the acquisition, which would have shown that HP was not in fact misled at all, was excluded from evidence and will be one basis for the appeal.”

The Sunday Times, Business, Page: 7

City grandees say leaving CU would damage economy

About 76% of FTSE 100 chairmen believe Britain must stay in the customs union to avoid inflicting damage on the economy, according to a poll by headhunter Korn Ferry.

The Sunday Times, Business, Page: 2

Paradise Papers claim against the Guardian and BBC settled

A claim brought by Ashurst against the Guardian and BBC over the Paradise Papers investigation has been settled. Michael O’Connell, the group managing partner of Appleby, said it had started the legal action to understand which of its confidential and privileged documents had been taken. “From the outset we wanted to be able to explain to our clients and colleagues what information of theirs had been stolen. That was our duty. As a result of this legal action we are well on our way to achieving our objectives.”

The Guardian, Page: 2

Graham Corbett, British business leader, 1934-2018

The FT carries an obituary of Graham Corbett, described as a moderniser of accountancy and audit and by Mike Rake as “the most inspiring leader in KPMG for whom I worked”.

Financial Times, Page: 11

Contact Paul Southward for all the latest news.

Paul Southward


News Roundup Friday 11th May 2018


News Roundup Friday 11th May 2018

NEWS ROUNDUP

TAX NEWS

Hermes accused of misleading tax inspectors

HMRC is considering taking action against courier firm Hermes after a whistleblower told MP Frank Field that managers “coerced” employees to mislead tax inspectors when they questioned staff over pay last year. Mr Field has forwarded the allegations to HMRC, saying: “Hermes appears to have coerced its management staff into supplying information to HMRC that is untrue and which offers an inaccurate representation of the couriers’ employment relationship with the company.” Hermes said: “All employees were asked to cooperate fully with HMRC as we are confident in our operating model,” adding that it urged managers to tell staff “to be open and honest with HMRC”.

The Guardian, Page: 12

Fewer dark corners for dirty money to hide in

The FT backs moves to increase transparency of companies registered in UK overseas territories, adding that the “fight against dirty money” needs to be “backed up by government enforcement.”

Financial Times, Page: 10

KKR restructures to make most of Trump tax boost

US buyout group KKR is scrapping its partnership structure in favour of becoming a corporation following Republican tax reforms. The move will mean it pays higher taxes, but its simpler structure is expected to increase demand for its shares.

Financial Times, Page: 13 Financial Times, Page: 12

INDUSTRY NEWS

Rising number of retailers in distress

The number of retailers in financial distress is up 21% on last year, according to insolvency firm Begbies Traynor‘s Red Flag Alert research for the first quarter, which warns that almost 43,000 businesses are struggling. “The UK high street has been having a torrid time of late, with the Beast from the East, growing competition from online rivals, higher staff costs, rising business rates and declining consumer spending, pushing many retailers to the point of no return,” said Julie Palmer, partner and retail expert at Begbies Traynor. While food retailers saw a less sharp increase (11%) in ‘significant’ financial distress, general retailers endured the largest increase (25%) to 30,668 companies.

City AM Daily Mirror, Page: 58 The Times, Page: 40 The Sun, Page: 49

HoF in pensions talks with regulators

House of Fraser is in discussions with The Pension Regulator and the Pension Protection Fund following the announcement that China’s C.banner is buying a 51% stake in the retailer. House of Fraser has two pension schemes with around 4,000 members. It had assets of £705.1m and liabilities of £608.2m to March this year. The department store has approached the PPF in the hope of gaining approval for its CVA plans.

The Daily Telegraph, Business, Page: 3 The Guardian, Page: 36 Financial Times, Page: 18 The Times, Page: 40

Lloyds fraud-fighting team nets £1m

A Lloyds Banking Group team in Leeds formed earlier this year to stop the movement of money taken by scammers and shut down their ability to shift the cash has already frozen £1m from fraudsters trying to trick people into receiving and transferring cash. The success of the scheme is such that the bank plans to share its secrets with its rivals, Paul Davis, the firm’s retail fraud director, said.

Daily Mail

ECONOMY NEWS

NIESR predicts 2% base rate by 2020

The National Institute of Economic and Social Research has predicted that the Bank of England will only raise interest rates every six months for the next two years, starting this August. This will see rates hit 2% by the end of 2020, up from 0.5% now. The institute added that there had been “some welcome and tentative signs of a recovery” in productivity in the second half of last year but assumed this would remain at a subdued level of less than 1.5% each year over the medium term. The NIESR has downgraded GDP growth for this year to 1.4% from a previous estimate of 1.9% because of weak performance in the first quarter. GDP growth in the eurozone has peaked, NIESR believes, predicting a slowdown from 2.5% in 2017 to 2.3% this year, 1.9% in 2019 and an average of 1.4% from 2020 to 2024.

The Times, Page: 39 The Daily Telegraph, Business, Page: 1, 5

Slow services sector growth cools rate rise

The IHS Markit/CIPS services purchasing managers’ index rose only slightly to 52.8 in April, potentially lowering the chances of an interest rate increase next week. “The disappointing services data will add to expectations that the MPC will take its finger firmly off the rate hike trigger,” said Chris Williamson, chief business economist at IHS Markit.

BBC News The I, Page: 48 Daily Express, Page: 53 The Daily Telegraph

OTHER NEWS

Brussels issues warning over Trump’s trade policies

The European Union has claimed that US tax cuts and the rise of protectionist policies around the world are putting economic growth in the eurozone under threat. However, European Commission economists left their GDP forecasts unchanged from February with the bloc expected to expand at 2.3% in 2018 and 2% in 2019.

The Times, Page: 38 Financial Times, Page: 4

Contact Paul Southward if you have any queries.

Paul Southward

Contact Paul Southward if you have any queries.


News Roundup Thursday 10th May 2018


News Roundup Thursday 10th May 2018

NEWS ROUNDUP

TAX NEWS

MPs could force crown dependencies to reveal firms’ owners

MPs have indicated that the crown dependencies of the Channel Islands and the Isle of Man could be made to introduce public registers of company ownership if they are not willing to do so. Following the decision by parliament to compel the UK’s overseas territories to introduce such registers, Conservative Andrew Mitchell and Labour’s Margaret Hodge have called for the crown dependencies to fall in line by the end of the decade. “We expect the government to use its good offices to persuade the crown dependencies to introduce public ownership registers,” Mr Mitchell said. “But if they do not, parliament will return to the charge.”

The Guardian, Page: 22 Financial Times, Page: 3

INDUSTRY NEWS

Insolvency Service roots out unfit directors

Insolvency Service chairman Stephen Allinson writes to the Telegraph to defend the organisation’s approach to identifying and disqualifying unfit company directors. He says more than 1,200 directors of small and large companies were disqualified last year, and the average period of disqualification was 5.7 years.

The Daily Telegraph, Page: 17

Accounting growing fast

Research by LinkedIn has found accounting to be the seventh fastest-growing industry in the UK over the past 15 years, with higher education topping the list.

I, Page: 2

SMEs NEWS

Grants for small firms a step closer

A leadership team has been chosen to oversee the handing out of £775m in grants to spur competition in lending to small businesses. Lord Cromwell has been appointed executive chairman of Banking Competition Remedies, with Brendan Peilow as an executive director. Royal Bank of Scotland was ordered to put up the money to comply with its £45.5bn bailout conditions.

Daily Express, Page: 45 The Times, Page: 48 City AM, Page: 3

SMEs expect steady growth

Small firms have reported moderate confidence in the state of the economy over the past three months. SMEs told the CBI that they expect to grow steadily in the coming months, despite their investment plans taking a knock amid signs of weaker export growth as the eurozone economies slow down.

The Daily Telegraph, Business, Page: 8

PENSIONS NEWS

Tax charge soars as lifetime pension allowance is breached

Figures from HMRC show tax charges for breaching the lifetime allowance on pension savings have nearly tripled over two years following successive cuts to the relief.

Financial Times

CORPORATE NEWS

Paradise Papers lawsuit to air issues of public interest

A senior judge has said important matters of public interest are likely to be aired in a trial that has been brought against the Guardian and the BBC in response to their reporting of the Paradise Papers investigation. Mr Justice Vos, who heads the chancery division of the High Court, said it would take a five-day hearing to examine the issues raised by the project.

The Guardian, Page: 22

INTERNATIONAL NEWS

France cuts tax on wealthy

France has scrapped an “exit tax” paid by high earners when they move assets outside the country. The Macron government said that it was fulfilling a campaign promise to encourage investment by ending the 30% levy.

The Times, Page: 32

Bupa under investigation by Australian tax authorities

Australian tax authorities are investigating Bupa after the Tax Justice Network lobby group claimed it and other large healthcare providers receiving state subsidies had deployed “ aggressive tax avoidance strategies”.

Financial Times, Page: 16

ECONOMY NEWS

Construction industry rebounds

The UK construction industry recovered in April from March’s inclement weather, according to IHS Markit/CIPS’ latest construction survey, which said PMI rose to 52.5, its highest level for five months. April’s rebound was driven by the housebuilding sector, for which the PMI jumped to its highest level since May last year. However, the commercial construction and civil engineering industries face deeper problems. Brendan Sharkey, of MHA MacIntyre Hudson, said that following the collapse of Carillion: “UK construction companies aren’t showing many signs of being able to break away from their perilous low-margin culture.”

Financial Times The Times, Page: 40 The Daily Telegraph, Business, Page: 8

Hundreds of Scottish high street outlets close

A report from PwC and the Local Data Company reveals that 290 Scottish high street retail outlets closed their doors last year.

The Scotsman, Page: 22

Contact Paul Southward if you have any queries.

Paul Southward

Paul Southward


News Roundup Wednesday 9th May 2018


News Roundup Wednesday 9th May 2018

NEWS ROUNDUP

TAX NEWS

Lower taxes and scrap regulations to boost productivity, says Taxpayers’ Alliance

The Taxpayers’ Alliance has called for a raft of policy changes to stimulate UK productivity. The campaign group says easing planning restrictions, scrapping stamp duty, reducing taxes for both the lowest and highest-paid workers and devolving more tax powers to the regions would provide “huge gains” and “give the nation a pay rise”. The Alliance also called for CGT to be scrapped to boost entrepreneurship and investment and for it to be made harder for zombie firms to raise finance. The group also said being outside the customs union would boost productivity as it ultimately protects unproductive firms. John O’Connell, chief executive of the Taxpayers’ Alliance, said: “By scrapping burdensome regulations and lowering the tax burden on families and businesses, the UK could significantly increase productivity and give everyone a much-deserved pay rise.”

The Times, Page: 2

EU to beef up legal protection for corporate whistleblowers

The EU is set to boost legal protection for corporate whistleblowers, with plans to shield workers from being penalised for disclosing information in the public interest, including tax avoidance ruses.

Financial Times, Page: 4

INDUSTRY NEWS

Those in power have failed to empower the FRC

Robert Lea says in the Times that Britain’s regulators are in an “unholy mess” but to blame the Financial Reporting Council alone for its failures is to misunderstand that ministers and politicians have failed to properly empower the regulator, whose powers of enforcement are limited. That said, Lea admits that if the FRC’s regulation had been a success, “we wouldn’t still be talking about KPMG” and its role both in the 2008 HBOS scandal and Carillion’s failure. Lea says the fact that multiple agencies are looking at Carillion “is a failure not of the FRC but of government” and the irony of the state’s review into the efficacy of the FRC is that it comes just as it is “finally shaking up the City Code.” However, the FRC’s resistance to creating a regime in which all listed companies are subject to prudential regulation is wrong in Lea’s view, with the collapse of Carillion illustrating the point.

The Times, Page: 35

Fox: Liberal trade policies will bring post-Brexit agility

Liam Fox has pledged to cut “bureaucracy and red tape” in a bid to promote free trade post-Brexit. The International Trade Secretary will make a speech to leading policymakers as part of City Week in London, stating that: “Liberalising the trade in services is at the heart of DIT’s offer to the finance industry. We will work with old allies and new partners across the world, utilising the UK’s economic strength and diplomatic prowess to forge new trading relationships. Ultimately, our task is to remove the unnecessary regulation, bureaucracy and red tape that inhibit the free trade in services.” He will add: “The robust performance of the UK economy continues to defy the gloomier forecasts. Official figures show that inflation fell last month to its lowest level in a year. As recognised by the ONS, wages are now outpacing inflation, meaning more money in people’s pockets.”

Daily Express, Page: 44

IMF to target financial corruption as part of health check

The IMF is to ask member countries to open up their legal and institutional frameworks for assessment by the fund to see whether they have effective mechanisms to prevent bribery and money laundering. Penny Mordaunt, the international development secretary, commented: “The UK is working with international partners to end impunity for those engaged in corruption, to recover assets stolen from developing countries and to empower citizens to stand up to and report corruption.”

The Guardian, Page: 24

SMEs NEWS

SMEs trading internationally more than double official estimates

Research compiled by specialist lender Wyelands Bank indicates that the number of SMEs trading internationally is more than double official estimates, with almost one in three companies exporting or importing compared with Government estimates of slightly more than one in ten. Iain Hunter, chief executive at Wyelands Bank, said: “This reinforces our belief that small and medium-sized companies are vital to UK trade. Smaller, more innovative companies, especially in manufacturing, play an important part in the UK’s capacity to form a part of global supply chains.”

The Times, Page: 41

Late payment commissioner off to slow start

The Federation of Small Businesses questioned the effectiveness of the government’s small business commissioner after officials revealed Paul Uppal is currently only investigating two cases of late payment to small businesses. The commissioner had “entered into dialogue” with companies on 14 occasions, officials said, but the FSB warned that with late payment costing the economy an estimated £2.5bn every year: “Things have to change, and fast.”

The Times, Page: 33

Aim ventures need to take blinkers off on good governance

The FT’s Kate Burgess explains how new rules requiring AIM-listed companies to sign up to the Quoted Companies Alliance or the Financial Reporting Council’s Code will bring a sea change for many.

Financial Times, Page: 19

WEALTH MANAGEMENT NEWS

Wealth firms wary of failing women

New research by wealth management tech firm Orbium has found that the needs of high-net-worth and billionaire women are not being met because wealth firms have been caught out by the speed of their growing numbers. Orbium’s Ian Woodhouse, a former PwC director, says: “Wealth managers were telling us that women have slightly different needs. They’re more likely to go for a goals-based approach when investing, looking at what are they are trying to achieve, whereas men will be more focused on investment performance.”

City AM, Page: 11

REPORTING NEWS

UK set to force companies to reveal ratio of CEO pay to workers

Legislation due in May will require companies to publish the ratio of what they pay their chief executive compared to the average worker’s salary, as part of changes to corporate governance standards in the UK.

Financial Times

PROPERTY NEWS

Hunt saved £100,000 in tax through bulk purchase

Jeremy Hunt’s bulk purchase of seven flats in Southampton saved him nearly £100,000 in stamp duty, the Telegraph reports. The second home or buy-to-let surcharge introduced in 2016 is waived on the purchase of six or more properties in a single transaction.

The Daily Telegraph, Page: 4

ECONOMY NEWS

Consumer confidence rises

New figures from Deloitte show consumer confidence rose in the first quarter of 2018. The group’s latest Consumer Tracker report suggests the economic pressures facing Britons over the past year may be starting to relent, with confidence rising to -6% in the first quarter, up from -7% in the previous quarter. Although still in negative territory, consumer confidence is at the highest level since the end of 2016 and is up sharply from a score of -10% in the second quarter of 2017. Ian Stewart, chief economist at Deloitte, said: “Confidence has crept up against a backdrop of consumer-friendly economic conditions. Unemployment has hit a 43-year low and is stoking wage pressures, while falling inflation will boost consumer spending power and has eased the pressure for rate rises.” He added: “The consumer picture mirrors that of the business landscape, with chief financial officers also reporting an uptick in confidence following the announcement of the Brexit transition deal.”

The Times, Page: 36 The Independent, Page: 7 The Sun, Page: 19 City AM, Page: 10 Daily Express, Page: 44 Yorkshire Post, Page: 17

OTHER NEWS

New tools needed to combat recession

The Institute for Public Policy Research (IPPR) says the Bank of England is “dangerously ill-equipped” to avert the next recession and remains mired in fighting the last downturn. A report from the IPPR says radical new policy tools are required, including a new national investment bank that could drive economically and socially productive lending during downturns. Interest rate adjustments and QE would not be sufficient means to protect the economy in the future, the IPPR said, with the report’s author, Alfie Stirling, stating: “We are heading for a car crash if nothing is changed.”

The Guardian, Page: 24

US corporation takes out Corbyn hedge

A senior derivatives banker has revealed a US client asked for a hedging strategy against a Labour government – thought to be the first move of its kind. The American corporation’s hedge involved a short position on the pound, the banker said, as protection against Labour winning the next election.

The Times, Page: 14

Contact Paul Southward for all your News Roundup queries.

Paul Southward


News Roundup Tuesday 8th May 2018


News Roundup Tuesday 8th May 2018

NEWS ROUNDUP

TAX NEWS

 Brexit will delay digital tax revamp

HMRC has said that plans to digitise tax returns have been indefinitely put on hold as a result of the UK’s Brexit preparations. The Revenue said it had made the decision to delay the changes “to release project capability to EU Exit work.” It added: “This means halting progress on simple assessment and real time tax code changes. The MTD [Making Tax Digital] for Individuals has made significant progress here, so we’ve laid foundations that will enable us to return to this in the future.” George Bull, a partner at RSM, said: “This delay is very wide reaching and will affect millions of people who would have otherwise moved to pre-populated tax returns in the coming years”.

The Daily Telegraph, Page; 2

Think-tank calls for IHT to be scrapped

The Resolution Foundation believes inheritance tax should be scrapped and replaced by a system that spreads the money more fairly between the generations and is harder to avoid. The think-tank has proposed replacing IHT with a lifetime receipts tax that would raise more for the state and would encourage families to pass their wealth to younger members. Under the proposal, each beneficiary would have a £125,000 inheritance allowance, above which they pay 20% up to £500,000 and 30% beyond that. Resolution estimates that the new tax would deter avoidance and raise £11bn a year in 2021, compared with £6bn under the present system. The current review of IHT by the Office of Tax Simplification has been welcomed by John Bunker of the CIOT as an opportunity to make IHT simpler.

The Times, Page: 40 The Daily Telegraph, Page: 2 The Scotsman, Page: 19 Daily Express, Page: 31

Ministers back down on tax haven company registers

The government has agreed to calls for new measures aimed at increasing transparency in offshore tax havens. Facing a possible Commons defeat, ministers said they would not oppose an amendment to force British overseas territories to publish details of the true owners of companies based there. Campaigners say public registers make it easier to uncover corruption, money laundering and tax dodging. The move was backed by both Labour and Conservative MPs. The measures do not apply to Britain’s crown dependencies: Jersey, Guernsey and the Isle of Man.

BBC News Financial Times Financial Times, Page: 1 The Guardian, Page: 1, 4 The Daily Telegraph, Page: 1 The Times, Page: 11 Daily Mirror, Pa ge: 6 The Independent, Page: 3

Tax errors ‘used to expel skilled migrants’

The Home Office has been accused of using a clause designed to deport people deemed a national security risk to remove highly-skilled migrants for minor tax mistakes. Campaigners say officials have refused people’s right to remain in the UK because of problems including missing tax deadlines and errors made by accountants. Evidence seen by the Telegraph shows caseworkers discussing whether minor infringements could be used against applicants.

The Daily Telegraph, Page: 6

BBC presenters contest tax bill

A tribunal has heard that the BBC employed household names on “an elegant form of zero hours contract”, as three presenters appealed against a £920,000 tax bill. Joanna Gosling, David Eades and Tim Willcox were “pushed by the BBC” into setting up personal service companies, which allowed the corporation to avoid paying employers’ NI contributions. Gosling, Eades and Willcox, who have all worked for the BBC’s rolling news services, argue they were freelancers who received none of the benefits afforded to employees, and that their contracts amounted to “no work, no pay”. However, HMRC is arguing the presenters were effectively employees of the BBC and should have paid more tax. It is claiming £920,000 in total from the three presenters, of which £609,000 has already been paid.

The Daily Telegraph, Page: 7

Pressure on Government over anti-money laundering bill

Conservative MP Andrew Mitchell says he is confident the Government will support an amendment to the Sanctions and Anti-Money Laundering Bill to force British overseas territories to publish registers revealing who owns which assets. Separately, the FT reports that more than 500,000 companies in the UK have failed to identify their controlling shareholders, despite recent legislation to stop British corporations from being used to hide illicit wealth. Elsewhere, Henry Foy and Barney Thompson consider whether the introduction of new unexplained wealth orders (UWOs) will be a deterrent to money launderers, with contributions from law firm Dechert and EY.

The Daily Telegraph City AM, Page: 8 Daily Mirror, Page: 23 Financial Times Financial Times, Page: 2

INDUSTRY NEWS

 BDO calls for greater restrictions on non-audit work

Scott Knight, head of audit at BDO, has called for harsher rules limiting the amount of non-audit work that accounting firms can offer amid growing concerns about conflicts of interest.

Financial Times, Page: 19

Fewer staff phoning in sick

The number of companies reporting a rise in workers going in when they are ill has more than tripled since 2010, according to a survey by the CIPD. Its report reveals that “presenteeism” has hit a record high, but warns that this is affecting the country’s productivity. Some 86% of companies said people were coming to work ill, up from 72% in 2016 and 26% in 2010.

The Times

Icas names new president

Icas has named Sandy Manson, chief executive of Johnston Carmichael, as its new president. Mike McKeon, non-executive director of National Express, has been appointed deputy president of Icas, and Catherine Burnet, senior partner for KPMG in Scotland, has been appointed vice president of the accountancy body.

The Scotsman, Page: 37

SMEs NEWS

 Branch closures anger small businesses

Small businesses have reiterated criticism of the decision by Royal Bank of Scotland to close 162 branches in England and Wales. Mike Cherry, national chairman of the Federation of Small Businesses, said: “This fresh round of closures will hurt high streets all over the country at a time when thousands of small firms are already struggling. When a bank goes, it means less footfall, less cash in the local economy and less revenue for local firms.”

Daily Mail, Page: 19 Daily Express, Page: 51 The Times, Page: 45 The Scotsman, Page: 9

Many small businesses operating in the red

Just 49.5% of small businesses in the UK were operating in positive cash flow last year, according to Xero’s latest Small Business Insights index, which also notes that, on average, SME’s 30-day invoices were paid after 46 days, squeezing many smaller businesses. Vicky Pryce, economist and previous director general for economics at the Department for Business, Innovation and Skills, cautioned: “The impact of late payments on the economy cannot be exaggerated”. Elsewhere, a poll by the Institute of Directors reveals three in ten business leaders see “excessively bureaucratic payments systems” as the main reason for late payments. The survey of company directors found that almost half have suffered due to the issue in the last six months.

City AM The Scotsman, Page: 39

CORPORATE NEWS

Former BT finance chief loses bonuses over Italian fraud

The Telegraph reports that BT’s former finance chief will be stripped of bonuses worth more than half a million pounds, after failing to uncover fraud in the company’s Italian unit. It is understood that BT’s remuneration committee has decided to scrap more than 208,000 shares due to Tony Chanmugam, who served as CFO between 2008 and 2016. BT had already stripped Mr Chanmugam of deferred bonus plan shares valued at £193,000.

The Daily Telegraph, Business, Page: 1, 4

Autonomy’s ex-CFO convicted of accounting fraud

A US court has found the former chief financial officer of Autonomy guilty of fraud and securities charges for lying about the company’s financials before Hewlett-Packard’s $11.7bn acquisition of the British software maker in 2011. Sushovan Hussain faces a maximum sentence of 20 years in prison and a fine of $250,000 for each count on which he was convicted.

Financial Times The Times, Page: 33 The Daily Telegraph

Panasonic charged with accounting fraud violations

Panasonic has agreed to pay more than $280m (£203m) to resolve charges brought under US anti-corruption law. The fine includes a penalty of $143 from the Securities and Exchange Commission to resolve charges of Foreign Corrupt Practices Act (FCPA) and accounting fraud violations involving Panasonic’s global avionics business.

BBC News

PROPERTY NEWS

BoE figures show dip in home loan approvals

Bank of England figures show that mortgage approvals fell more than 1% to 62,914 in March. This marks a low for 2018 and is the second-lowest total since August 2016, after December 2017. Howard Archer, chief economic adviser at EY ITEM Club, said house price gains are likely to be “limited to a modest 2%” over 2018.

Daily Mail, Page: 19 Financial Times

INTERNATIONAL NEWS

Businesses use Trump tax cuts to boost capex

The overhaul of tax legislation in the US has been partly credited with triggering an overdue and “durable recovery” in capital spending.

Financial Times, Page: 14

ECONOMY NEWS

Snow freezes consumer spending

March saw the weakest consumer spending in more than five years, according to the Bank of England’s latest data, which shows just £254m was spent on credit cards and personal loans over the month, blighted by blizzards in much of the UK, the lowest since November 2012.

The Times, Page: 37, 40 Evening Standard

UK manufacturing growth remains slow

Britain’s manufacturing industry has experienced its slowest growth since late 2016. The IHS Markit/CIPS purchasing managers’ index fell to a 17-month low of 53.9 in April, down from 54.9 in March.

Financial Times The Daily Telegraph, Business, Page: 1 The Times Daily Mail, Page: 67 The Independent, Page: 59

London firms lose confidence

Confidence among London firms declined during April, as optimism around the prospects for the British economy sagged. According to data from Lloyds Bank Commercial Banking, the balance of firms in the capital expressing overall confidence fell 12 points during April to reach 43%. Confidence was highest among north west businesses at 49%, while those in the south west were the least confident, with an overall score of 20%.

City AM

Consumers spending less on leisure

A Deloitte survey reveals consumers are spending less on leisure activities, with culture and entertainment spending falling the most. Some 45% of those who spent less on going out in the first quarter had done so “because they could not afford it, suggesting that consumers were consciously downshifting their discretionary spending”.

The Times, Page: 40

Profit warnings rise in Yorkshire

EY’ s latest Profit Warnings report shows quoted companies based in Yorkshire and the North East issued 10 profit warnings in Q1, up from seven in the previous quarter. A spokesman said: “The figures show that general retailers based in the region were particularly hit with three warnings in total, in what was a tough quarter on the UK’s high street.”

Yorkshire Post, Business, Page: 5

OTHER NEWS

High earners most likely to hit the bottle

High earners are far more likely to drink alcohol than those in manual jobs, according to data from the Office of National Statistics’ Opinions And Lifestyle Survey. Finance workers, teachers, lawyers and doctors are among those classified as higher earning managerial and professional occupations. Dr Tony Rao from the Royal College of Psychiatrists said: “While alcohol abuse appears to have improved over the last two years, the general trend is still that hazardous drinking among those aged 45 plus has increased since 2005”.

Financial Times The Daily Telegraph The Times The Guardian, Page: 7 The Independent, Page: 12

Nation split on money buying happiness

A survey by the Sun has asked people if they would be happier if they were richer. Across the UK as a whole, 38% of people said they believed money can buy happiness – but 33% disagreed. People in London were the most likely to think money could buy happiness, with 44% agreeing this was the case.

The Sun, Page: 22-23

Contact Paul Southward for further information about any of the News Roundup matters.

Paul Southward


News Roundup Friday 4th May 2018


News Roundup Friday 4th May 2018

NEWS ROUNDUP

TAX NEWS

UK opposed to temporary tech tax

France is battling to save plans for an EU-wide tax on tech giants, after proposals from the European Commission for a temporary tech tax were criticised by some European governments, including the UK. Philip Hammond called for a global approach to digital taxation through further dialogue at the OECD, rather than pursuing a temporary solution in the EU. “You have to understand that the Trump administration will regard the turnover tax as a hostile act,” Mr Hammond is also reported to have said.

Politico Financial Times

Campaigners call for end to tax haven secrecy

The Guardian publishes a letter from tax campaigners urging the government to pass a law requiring Britain’s overseas territories to publish public registers of company ownership by the end of 2020.

The Guardian, Journal, Page: 6

SMEs NEWS

RBS invites small firms to leave

Royal Bank of Scotland has begun writing to its small business customers, inviting them to switch to another bank. As part of RBS’s £45bn taxpayer-funded bailout, it is being forced to provide £350m for rivals to offer incentives to customers to switch (the subject of the letters), as well as £425m for a “capability and innovation fund” to help other banks and finance firms to expand their services for small companies. It is hoped that the move will boost competition and give customers more power and choice. Anne Boden, who runs the online-only banking start-up Starling Bank, says that the so-called “alternative remedies package’ “could create far more new competitors in the market than any other previous idea.” “This has the potential to add three or four new players with sizeable market share,” she says. However, with the biggest tranche of the innovation fund, worth £280m, expected to go to only three banks, there are also doubts over the extent of the change that will be delivered. Mike Cherry, national chairman of the Federation of Small Businesses, believes that “there’s a fine balance to be struck when allocating this fund. Some large grants need to be given to those with the existing scale to challenge the biggest players. But meaningful sums should also be awarded to smaller, genuinely challenger banks who are prepared to bring real innovation to the market.”

The Times, Page: 45

Help for Scots firms on GDPR

The Federation of Small Businesses has announced a series of events to help Scottish firms prepare for looming changes to data protection law. It comes after FSB research found 68% of small businesses had either not started or were only in the early stages of preparation for the new General Data Protection Regulations.

Aberdeen Press and Journal, Page: 39

INDUSTRY NEWS

Advisers await fees bonanza from supermarket merger

The Times reports that lawyers, professional services firms and investment banks could share more than £100m in fees from the proposed merger of Sainsbury’s and Asda. The two grocery chains are likely to face more than a year of complex negotiations to seal their deal.

The Times, Page: 39

PROPERTY NEWS

Land value tax ‘would price people out of homes’

The Conservatives have warned that replacing IHT, CGT, stamp duty and council tax with a land value tax would “price people out of their own homes.” A document prepared by the Labour Land Campaign (LCC) has suggested several different methods by which a land value tax could be calculated, but housing secretary Sajid Javid said it would result in “huge tax hikes” for people living in London and the South East.

The Daily Telegraph, Page: 4-5

ECONOMY NEWS

Deal expectations hit 18-year high

Research by EY shows the number of UK businesses looking to pursue mergers or purchases of other companies is at the highest level in 18 years. The finding comes after it was announced M&A deals surged to an 11-year high at the start of 2018, totalling $120bn (£87bn) in the first quarter in the UK. Business leaders also reported bullish attitudes towards global growth, with 86% of those questioned saying they expect the economic outlook to improve. However, feelings about the domestic economy are less positive, with only 68% of UK executives expecting improved growth in the UK.

The Daily Telegraph, Business, Page: 3 City AM, Page: 8 The Scotsman, Page: 34

Consumer confidence boosted

Data to be published today will show consumer confidence reached its highest since January 2017 in April. The headline confidence index from YouGov and the Centre for Economics and Business Research (CEBR) increased by 2.2 points to hit 109.8, above the 100 mark which indicates overall positive sentiment. The improvement was driven by a broad rise across perceptions of the health of household finances, job security and broader business activity.

City AM, Page: 2

OTHER NEWS

Chancellor’s tax bolt from the blue

The Times publishes an extract from Sport Inc: Why money is the winner in the business of sport, by Ed Warner. The former chairman of UK Athletics hails the tax exemptions introduced by George Osborne for the London Anniversary Games in 2013, 2015 and 2016, which he says were essential in signing Usain Bolt to compete at the events.

The Times, Page: 42-43

Proportion of high-earning women stalls

A study by law firm Clyde & Co has shown the proportion of women in high-earning jobs has remained static since 2011. It found women account for a quarter of higher rate taxpayers in each of the last seven financial years.

Daily Express, Page: 44 Daily Mirror, Page: 4 Yorkshire Post, Page: 4

Contact Paul Southward for all your news roundup.

Paul Southward


News Roundup Thursday 3rd May 2018


News Roundup Thursday 3rd May 2018

NEWS ROUNDUP

TAX NEWS

Tax avoidance clampdown could bankrupt thousands

HMRC’s clampdown on tax avoidance by freelance workers could result in thousands facing bankruptcy, with the Revenue demanding sums of up to £900,000. HMRC is seeking money owed by almost 100,000 contractors who used “disguised remuneration” and similar schemes that avoided paying NI or income tax. The contractors, most of whom work in IT or healthcare, claim they were duped into believing that the schemes were within the law. However, their arguments have cut no ice with HMRC, which is adding hefty penalty charges and interest rates to the amounts owed – often more than doubling the value of the debt. Graham Webber, director of tax at WTT Consulting, who is representing 2,000 contractors facing retrospective demands, estimates that 40% of his clients will go bankrupt. An HMRC spokesperson commented: “These schemes are, and were always, tax avoidance. They used contrived transactions to bend the rules of the tax system to gain a tax advantage that parliament never intended.”

The Times, Page: 59

Consultation offers chance to reshape IHT

The Office of Tax Simplification (OTS) launched its review of IHT yesterday, offering the general public and professional advisers the chance to have their say about whether the current system is fit for purpose. It comes amid reports from the OECD and the Resolution Foundation proposing that IHT can be used to reduce wealth inequality and redistribute between the generations. However, the Guardian notes that IHT faces entrenched hostility, with a 2015 opinion poll showing 59% opposed it, making it the UK’s least popular tax. Meanwhile, the Times reports that relatives who have lost loved ones could be missing out on thousands of pounds because they mistakenly think the new residential nil-rate band applies only to those inheriting property. “We think that people are missing out on the new nil-rate band because they don’t realise that you can get it even if the deceased sold the house or downsized before they died,” said Sean McCann of NFU Mutual.

The Times, Page: 63 The Guardian, Page: 52 Financial Times, Money, Page: 8-9

Footballers out of pocket in £25m tax scam

Police have launched a criminal investigation into a company which provided tax avoidance advice to Premiership footballers, after many received huge bills from HMRC. Victims are said to have lost more than £25m in total after investing in a wide range of supposedly high-yield investments and tax avoidance schemes on the advice of Kingsbridge Asset Management. Officers have arrested three people as part of the criminal probe.

The Times, Page: 10 Daily Express, Page: 8 Daily Mail Evening Standard The Scotsman, Page: 30 Yorkshire Post, Page: 2

SMEs NEWS

 Small Business Commissioner needs more powers

The Forum of Private Business is calling on the government to extend the powers of the Small Business Commissioner. It follows Commissioner Paul Uppal’s evidence to the Business, Energy and Industrial Strategy Select Committee this week, in which he spoke about the potential of introducing fines for late payers. Forum MD Ian Cass said Mr Uppal “needs greater investigative powers in a format small business will trust and respond to… and in those instances where his directions and advice are ignored be given the ability to apply penalties.”

Business Link

FSB condemns RBS branch closures

The Federation of Small Businesses has warned that Royal Bank of Scotland’s ongoing programme of branch closures will hurt small firms and vulnerable customers. The bank reported first-quarter profits of £792m yesterday. Mike Cherry, the FSB national chairman, commented: “With RBS’s finances improving, it’s disappointing to see the majority taxpayer-owned bank continuing to reduce in-person support for the public.”

Daily Mail, Page: 20 The Guardian, Page: 42

PENSIONS NEWS

Pension freedoms withdrawals pass £17bn

HMRC figures show that almost £17.5bn has been flexibly withdrawn from UK-based pensions since freedoms were launched in April 2015. The Financial Conduct Authority is currently undertaking its Retirement Outcomes Review, which is likely to focus on sustainability of withdrawals under the pension freedoms regime. The FCA’s interim report revealed that more than half of fully withdrawn pension pots were not spent, but were moved into other savings and investments, with the Association of British Insurers warning that some consumers could therefore be paying too much tax.

International Investment

Fears over workers ‘nudged into self-employment’

Royal London’s Sir Steve Webb has called on HMRC to investigate whether employers are nudging workers into self-employment to save on costs.

Financial Times, Money, Page: 4

CORPORATE NEWS

Second finance chief departs Brewin Dolphin

Brewin Dolphin has announced the departure of finance director Andrew Westenberger, only two months after the firm’s head of finance was poached by a rival.

The Times, Page: 54 The I, Page: 68-69 The Scotsman, Page: 30

INTERNATIONAL NEWS

Swiss reports of suspected money-laundering hit record high

Reports to Switzerland’s money-laundering watchdog hit record levels last year. The Money Laundering Reporting Office Switzerland said it handled nearly 4,700 cases of suspicious activity worth more than 16.4bn francs in all, once again led by suspected bribery.

Daily Mail

ECONOMY NEWS

Insolvencies hit six-year high

Official figures show personal insolvencies have hit a near six-year high, while underlying corporate failures are at their highest level since the first quarter of 2014. Experts said weak Christmas trading, bad weather, slow wage growth and rising prices were behind the trend. The Insolvency Service said that the number of businesses closing in the first three months of the year rose by 13% compared with the previous quarter, and 0.6% on the same period last year. The ICAEW has predicted that corporate insolvencies would continue to rise this year. It said that retailers had suffered as consumers cut back on spending in the new year, while there had also been an increase in manufacturers announcing cutbacks and redundancies.

The Times, Page: 53 The Sun, Page: 46

UK economy slows

The ONS has reported that the UK economy grew at its slowest rate since 2012 in the first quarter of the year. GDP growth was 0.1%, down from 0.4% in the previous quarter, driven by a 3.3% fall in construction output and a 0.2% drop in the manufacturing sector. Consumer-facing industries, including retail, were also down amid an ongoing spending squeeze caused by higher inflation and slow wage growth. Rob Kent-Smith, head of national accounts at the ONS, said: “Our initial estimate shows the UK economy growing at its slowest pace in more than five years with weaker manufacturing growth, subdued consumer-facing industries and construction output falling significantly.” He added that the recent extreme weather had a “relatively small” impact.

Financial Times, Page: 1 The Daily Telegraph, Business, Page: 31 The Times, Page: 2 The Guardian, Page: 2 Daily Express, Page: 74 The Independent, Page: 9

OTHER NEWS

Royal wedding could prove taxing

Tax experts have said that aspects of Meghan Markle’s wedding to Prince Harry could be construed as a taxable benefit in the US, leaving the former actress open to a showdown with the IRS. Generally, loans or gifts of more than $100,000 a year to US citizens from foreigners need to be disclosed to the IRS. The cost of the royal wedding has been put at as much as £30m.

The Times, Page: 9

Contact Paul Southward for your news update. 

Paul Southward


News Roundup Wednesday 2nd May 2018


News Roundup Wednesday 2nd May 2018

NEWS ROUNDUP

TAX NEWS

HMRC withdraws 6,000 APNs

HMRC has decided to withdraw 6,000 of its accelerated payment notices. Law firm RPC says APNs have been withdrawn due to miscalculations and suggests many more have been issued incorrectly due to the complex nature of the law. In 2016 the number of APNs retracted by HMRC was 3,000, doubling to 6,000 in 2017. RPC’s Adam Craggs commented: “APNs have always been controversial and these figures are going to do little to silence their critics or reassure taxpayers that HMRC is exercising its powers in a proportionate and lawful manner. HMRC said: “We have issued over 80,000 accelerated payment notices. Even where we withdraw APNs it doesn’t mean there is no tax to pay. We pursue the outstanding tax until it is paid.”

Financial Times Money Marketing

CIOT proposes improvements to scrutiny of tax legislation

The Chartered Institute of Taxation has made a number of proposals for improving parliamentary scrutiny of the Finance Bill and other tax legislation. Amongst its recommendations are that the Finance Bill Public Bill Committee takes oral evidence from tax experts and others, and that the Office of Tax Simplification publishes simplification assessments of new tax proposals. The CIOT also calls for a debate on whether the House of Lords should play a greater role in scrutinising tax legislation as it goes through Parliament.

Politics.co.uk

INDUSTRY NEWS

More needs to be done to improve value of auditing

In a letter to the FT, PwC head of assurance Hemione Hudson says recent reforms in the UK and EU appear to be having a positive impact on audit quality.

Financial Times, Page: 10

SMEs NEWS

Support for small firms after TSB fiasco

Paul Pester, the boss of TSB, has said the bank is on its knees as it attempts to recover from the botched switchover of customers between IT platforms. In an attempt to prevent an exodus of customers, TSB said it would waive all overdraft fees and interest charges for all retail and small business customers for April. Elsewhere, HMRC has also said it would be understanding if small businesses could not make payments. The Federation of Small Businesses said TSB’s small business customers had been unable to pay bills, transfer staff wages and check that invoices have been settled.

The Daily Telegraph The Guardian, Page: 37 The Times, Page: 6 Daily Mail, Page: 14

Women-led startups prove more fundable

A study by Access Commercial Finance reveals women entrepreneurs and small business owners are 18% more likely to receive business funding than men, but are 80% less likely to apply for it. The research shows that only 16% of applications received since July 2016 were submitted by women. However, some 13% of applications from women were successful, compared to 11% from men. Due to men making 84% of the funding applications, they received the vast majority of funding awarded – £4,051,052 in total, compared to £332,437 for women.

Business Matters

ICAEW backs new business adviser platform

The ICAEW has teamed up with Enterprise Nation to create a new dynamic Business Advisor platform to improve the accessibility of accountants and business advisors to small companies.

Press Release

PROPERTY NEWS

First-time buyers save £160m on stamp duty

Some 70,000 first-time buyers have collectively saved £159m in stamp duty since the exemption was introduced in November last year, an average of £2,300 each. The Government still collected around £1bn more in stamp duty (£12.9bn) in the 2017-18 tax year, compared to the previous 12 months. Analysis by estate agent Savills reveals that the upsurge in stamp duty revenue has been helped by high-value properties and second homes.

The Daily Telegraph The Times, Page: 38-39 City AM, Page: 12

Baby boomers scramble to release equity

Britain’s baby boomers are releasing unprecedented amounts of equity from their homes. Almost 15% of equity release went to under-65s last year, doubling from around 7% in 2015, according to insurance regulator David Rule.

The Daily Telegraph, Business, Page: 5

CORPORATE NEWS

SFO faces uncertain future

The Times examines the appointment of former FBI lawyer Lisa Osofsky as the next director of the Serious Fraud Office. It notes that Ms Osofsky has backed controversial plans to bring the office under the wing of the national crime agency. She has also appeared to criticise the organisation’s policy of targeting big-name prosecutions. She said: “A classic SFO prosecution is about individual scalps and even big brand names such as Rolls and Tesco, but the scale of money laundering is much bigger but largely unknown.”

The Times, Page: 37-39

PENSIONS NEWS

ECJ says UK Pension Protection Fund cap unlawful

An opinion for the European Court of Justice says the Pension Protection Fund’s cap on payouts to high earners is unlawful, following a case where a pension was cut by 67%.

Financial Times

ECONOMY NEWS

Business lending up but mortgage lending falls

Net lending to businesses reached its highest level in a year last month, at £3.24bn. There was a 9% rise in lending to manufacturing companies in the year to March, according to the figures from UK Finance. However, gross mortgage lending dropped 2.3% in March, compared to the same month last year, to £20.5bn. There was also evidence of cooling in other credit markets. Net credit card lending increased by £10m on the month, the smallest rise since April 2016. Meanwhile, the number of people going bankrupt is expected to have jumped 14% in early 2018, according to RSM.

The Times, Page: 40 Daily Star, Page: 17

Contact Paul Southward for the latest Tax, Finance and Business news.

Paul Southward

Paul Southward


News Roundup Tuesday 1st May 2018


News Roundup Tuesday 1st May 2018

NEWS ROUNDUP

TAX NEWS

British overseas territories may be forced into transparency

An amendment to the Sanctions and Anti-Money Laundering Bill could force the Government to demand British overseas territories and crown dependencies introduce a public register of beneficial ownership for shell companies established on their shores. The amendment, tabled by the Labour MP Dame Margaret Hodge, has cross-party support, with Conservative backer Andrew Mitchell declaring he had the “certain” backing of 19 Conservative backbenchers. Campaigners say that the secrecy provided by tax havens such as the British Virgin Islands and Cayman Islands enables money laundering, criminality, corruption and oppression.

The Times, Page: 1, 2

BBC rescues presenters hurt by tax changes

BBC presenters facing tax bills after using personal service companies to receive their pay have been given loans and advances by the corporation after running into financial difficulties. Deputy director general Anne Bulford told the Commons Public Accounts Committee (PAC) that after being moved to a PAYE system last year, some lower paid presenters had faced cash flow problems.

The Daily Telegraph, Page: 4 The Sun, Page: 8 The Times, Page: 5 Daily Mail, Page: 23 Yorkshire Post, Page: 1

Dutch abolished dividend tax to lure Unilever to Rotterdam

Unilever’s decision to move its headquarters to Rotterdam was contingent on a change in tax law in the Netherlands, according to Dutch government memos. Unilever lobbied against the corporate tax on dividends, the abolition of which will cost taxpayers €1.4bn a year from 2020. Dutch prime minister Mark Rutte described the Unilever decision as “very good news”, but denied that it was the government’s reason for scrapping the tax. “We’re not just doing this because of Unilever. We want to bring as many head offices as possible to the Netherlands,” he said.

The Times, Page: 43

HMRC challenged over bankers’ bonus tax

Credit Suisse is taking HMRC to court claiming Britain’s one-off bankers’ bonus tax amounted to an unlawful levy that breached EU state aid rules. The bank is seeking hundreds of millions of pounds in tax repayments that it says it was unfairly charged eight years ago.

The Times, Page: 48

US cities willing to pay for Amazon’s second HQ

The Guardian’s David Pegg provides an overview of Amazon’s tax strategy over the years and the complicity of officials in Luxembourg and allegedly the UK too in helping the online retailer pay as little as possible. Now, Amazon is inviting US cities to outbid each other to host its “second headquarters”, with New Jersey even promising $7bn of tax incentives – $2bn more than Amazon’s maximum investment. The company’s criteria for bidders specifically cites “a stable and business-friendly environment and tax structure” as a high priority, Mr Pegg notes.

The Guardian, Page: 13

INDUSTRY NEWS

Fund manager attacks ‘amateur’ FRC

SCM Direct co-founder Alan Miller has criticised the Financial Reporting Council for what he says is their “amateur approach” to investigations. The fund manager also accuses the FRC of deep-seated conflicts of interest and says it is not fit for purpose.

This is Money Financial Times, Page: 20

WPP co-chief says focus will be on growth, not break-up

The FT examines WPP’s strategy in the wake of Sir Martin Sorrell’s departure, noting that the company faces challenges from the likes of Deloitte offering advertising alongside their core services.

Financial Times, Page: 17

Corporate insolvencies jump 67%

Official statistics from the Accountant in Bankruptcy show corporate insolvencies jumped from 155 in January-March 2017 to 259 in the first quarter of 2018, a rise of 67%.

The Scotsman, Page: 2

REPORTING NEWS

Pay ratio reporting – what will it achieve?

Dawn Lewis discusses the merits of companies being required to report pay ratios following confirmation from BEIS that it intends to bring in the measure as part of corporate governance changes expected by the end of June. The Institute of Directors’ head of corporate governance Roger Barker, said he was sceptical about the impact that the publication of executive pay ratios will have on the issue of executive pay at individual companies. Deborah Rees-Frost, director at Innecto Reward Consulting, added that pay ratios would be “more nuanced and complex” than gender pay reports and would be “extremely dependent on the industry type.”

People Management

SMEs NEWS

SMEs urged to find their ‘hidden accountant’

A study by the Association of Accounting Technicians (AAT) has found that four out of five small businesses have unqualified staff managing their finances. SMEs are losing around £15,000 a year on average because of poor financial management, the ATT said, and were only seeking professional support two years after starting up. Adam Harper, director of strategy and professional standards at AAT, said as well as engaging an external accountant, businesses should “consider looking for their own ‘hidden accountant’ – that colleague who is best placed to upskill and keep your business in good financial shape on a day-to-day basis.”

Money Donut

Lloyds urged to rethink branch closures

Lloyds Bank is being urged to halt branch closures following news the bank’s profits rose to £1.6bn. Mike Cherry of the Federation of Small Businesses said: “The public was there for the bank during the financial crash. It’s high time that support was returned. When a town loses a branch it hurts vulnerable consumers, footfall and small business revenues.”

Daily Mail, Page: 70

EU targets tech giants over unfair business practices

According to a draft European Commission legal text, app makers and small businesses could soon be able to collectively sue big tech firms for unfair business practices.

Financial Times, Page: 4

ECONOMY NEWS

Number of struggling UK firms rockets

Begbies Traynor ‘s Red Flag Alert for the first quarter 2018 reveals that 477,210 businesses were in ‘significant’ financial distress at the end of March 2018, up 33% from the same time last year. Some 255,131 UK businesses ended the quarter with negative net worth, while 110,266 had a considerable increase in their working capital deficit. Julie Palmer, managing partner at Begbies Traynor, said: “Should these headwinds continue, they could impact the government’s bargaining power when it comes to negotiating new trade deals after the UK’s exit from the European Union, which would be a major concern.”

City AM The Scotsman, Page: 37 The Press and Journal, Page: 36

Declining demand hits UK car output

The Society of Motor Manufacturing and Traders (SMMT) has said the number of cars made in the UK during March fell by 13.3%, with domestic demand falling 17.7% while exports dropped by 11.9%. Mike Hawes, chief executive of the SMMT, blamed uncertainty about future policies towards diesel and post-Brexit trading relationships. In Europe, by contrast, demand for new vehicles is at a near 20-year high.

BBC News Financial Times The Daily Telegraph The Guardian, Page: 37

Hammond rejects shift to CPI index

Philip Hammond has rejected calls to switch from the retail prices index of inflation to the consumer prices index. While it would be a sensible move, the Chancellor said it was not the right time and that the “fiscal consequences” could not be ignored.

The Times, Page: 43

OTHER NEWS

Handelsbanken warned over lax financial crime controls

The Financial Conduct Authority has scolded Swedish bank Handelsbanken for “serious weaknesses” and failings by senior management in not tackling financial crime.

Financial Times

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Paul Southward