Category Archives: Misc

News from the first days of 2020


News from the first days of 2020

NEWS ROUNDUP

TAX News from the first days of 2020

Voters prefer public service boost to tax cuts

A poll by YouGov for the Times shows that 57% of people believe it is more important to increase spending on public services than it is to cut taxes, while just 16% said tax cuts were more important. Of those that voted Conservative, 54% said increased spending on services such as education and the NHS was more of a priority, while 22% said tax cuts were. A separate survey of members by the Conservative Home website shows that two-thirds of respondents want the Prime Minister to make good on a promise to increase the threshold for the 40p rate of income tax from £50,000 to £80,000, a vow Boris Johnson made during his leadership campaign.

The Times, Page: 4 (1/1/2020)

Calls for stamp duty cut to stimulate market

The Government is facing renewed calls to cut stamp duty to breathe life into the housing market, according to the Express. Estate agents and property experts have blamed stamp duty for clogging up sales by making moving home expensive, deterring pensioners from downsizing and stopping buy-to-let investors from buying homes for rent. Nick Sanderson, chief executive of retirement living provider Audley Group, commented that tax breaks would make it easier for older homeowners to downsize, while Residential Landlords Association policy director David Smith fears investors are being taxed out of the market.

Daily Express, Page: 29 (01/01/2020)

Christmas and Boxing Day tax returns climb

HMRC figures show that a record 3,003 tax returns were completed on Christmas Day, marking a 15% increase on Christmas Day 2018’s 2,616. The number of self-assessment forms submitted on Boxing Day was up 9% on a year ago, with 9,254 completed on December 26.

Daily Mail, Page: 44 (1/1/2020)

Civil partners and tax

With opposite-sex partners now legally entitled to enter into a civil partnership, the Mail’s Fiona Parker considers the financial entitlements the change brings, noting that civil partners are entitled to the Marriage Allowance, with up to £1,250 of a person’s personal allowance able to be transferred to a civil partner. Civil partners can also transfer assets between them without paying Capital Gains Tax.

Daily Mail, Page: 44 (1/1/2020)

CORPORATE News from the first days of 2020

Google to end use of tax loophole

Google has overhauled its global tax structure, moving away from a set-up which allowed it to delay paying taxes on its international profits. Parent company Alphabet will no longer use an intellectual property licensing scheme in anticipation of more stringent tax avoidance regulation. The firm will no longer rely on the “double Irish, Dutch sandwich” loophole which allows companies to move profits to a tax haven registered in the Caribbean by moving it through subsidiaries based in Ireland and the Netherlands without being taxed in either country. As of this year, Google will simplify its corporate structure, licensing its intellectual property from the US, rather than Bermuda.

The Daily Telegraph, Page: 25 (1/1/2020) The Guardian, Page: 27 The I, Page: 9 Daily Mail, Page: 63 Financial Times, Page: 7

HK firms failing on environmental performance rules

Hong Kong-listed companies are failing to meet the “comply or explain” disclosure rules on environmental performance indicators, with BDO research showing that only 39% of 500 reports fully disclosed their environmental key performance indicators under the current “comply or explain” regime.

The I, Page: 39

Firm in receivership

Construction form Marcus Worthington has gone into receivership with debts in the region of £23m. The contractor announced it was in trouble last year and appointed PwC as administrators.

Daily Express, Page: 16

Redx in takeover talks

Biotechnology company Redx Pharma has received bid interest from a syndicate led by senior industry executive Sam Waksal. An overview of Redx notes that it exited administration in 2017, with FRP Advisory having acted as administrator.

The Times, Page: 35 (1/1/2020)

Google used loophole to pay no tax on $40bn profits

Analysis shows that Google has used the double Irish arrangement to pay no tax on profits of almost $40bn over the past three years. Accounts filed by Irish subsidiary Google Ireland Holdings shows that it had profits of $15.5bn in 2018, up from $14.4bn the year before, with profits over the past three years totalling $38.9bn. However, the firm did not pay any Irish corporate tax on these profits as it is tax resident in Bermuda, which has a 0% tax rate. With the double Irish loophole, which allows big companies to move their profits from high-tax countries to nations with a lower rate of tax – often using two Irish entities, set to come to an end this year, it has been reported that Google is changing its international tax structure to remove its use of the arrangement. A spokeswoman for Google said: “In line with changes to US and Irish tax laws, we’re now simplifying our corporate structure and will license our IP from the US, not Bermuda.”

The Times

42% of CFOs expect uncertainty to continue beyond 2020

A Bank of England poll of 2,887 CFOs shows that more than four in 10 believe that Brexit-related uncertainty for business will not be resolved until at least 2021, while a fifth fear that Britain will leave the EU with no deal in place. December’s edition of the monthly poll saw 42% of respondents say they do not expect the uncertainty surrounding Brexit to be resolved until 2021, up from 33% in November. It was also found that 19% believe the UK will leave the EU this year without a deal, up from 16% a year earlier – although the number who expect Brexit with a deal to occur this year rose from 46.2% to 46.6%. The poll saw 53% of CFOs say Brexit was among their top three sources of uncertainty in December.

The Independent The Guardian

Carclo trading halted

Trading in shares of plastics manufacturer Carclo were suspended after it failed to issue its half-year results by the end of the year. The firm, which last month appointed administrators at PwC to its Wipac arm, missed the deadline because of the delayed publication of its annual results in November and work on its disposal of the business.

The Times, Page: 39

TECHNOLOGY News from the first days of 2020

Book-keeping app scores £55m investment

Receipt Bank, a book-keeping app for small businesses which automatically processes uploaded images of receipts and invoices, has secured a £55m investment from venture capital funds. The fundraising was led by New York-based Insight Partners, with Augmentum Fintech and Kennet Partners also understood to have taken part. Receipt Bank is run by Adrian Blair, who served as COO at Just Eat between 2011 and 2018. He commented: “This investment is an endorsement of our mission … to help accountants do more, empowering millions of small businesses grow by getting control of their finances.” “Our machine learning technology enables accountants to do far more for their small business clients, and expands the market for professional advice by making accountants far more productive.”

The Daily Telegraph, Business, Page: 3

PENSIONS News from the first days of 2020

Pension scammers shift operations abroad

A Daily Mail investigation has revealed that rogue firms are shifting their operations abroad, dodging UK regulations while taking advantage of official listings with the Inland Revenue. Campaigners are calling on ministers to clamp down on the abuse of HMRC’S system for registering non-UK pension schemes. The paper’s report found that firms based-overseas can levy huge commissions, a practice outlawed in the UK, and are also cold-calling potential customers – a sales tactic which is banned here. An HMRC spokesman said it has “done much to combat pension scams”, adding: “We will continue to come down hard on scammers.”

Daily Mail, Page: 20 (1/1/2020)

HMRC to act over state pension ‘missing years’

HMRC is to overhaul how it deals with people investigating gaps in their state pension records following a case where it took a taxpayer almost a year to rectify an issue.

Financial Times

PROPERTY News from the first days of 2020

First-timers at highest level since 2007

Analysis of UK Finance figures by Yorkshire Building Society suggests the number of people taking their first step on the property ladder reached its highest level since 2007 last year. There were 353,436 first-time buyers in 2019, up from 2018’s 353,130 and the highest annual total since the 357,590 recorded 12 years ago.

The Independent, Page: 53 Daily Express, Page: 44

Green light for property deals after election

London is likely to see a surge in commercial property deals in 2020 after a flurry of activity following the general election. Investors have acquired or agreed deals on a dozen properties in the capital worth about £1.2bn since the Conservative’s election victory, according to analysis by Green Street Advisors. Meanwhile, in its latest UK Real Estate Market Outlook, CBRE said central London transaction volumes should increase in 2020 helped by “strong occupier fundamentals and about £32bn of overseas equity targeting the region”.

The Times, Page: 33 (01/01)

Choc boss: CVAs penalise successful retailers

Hotel Chocolat co-founder Angus Thirlwell has complained that his company is effectively being penalised for its success, as struggling rivals are granted lower rents as part of CVAs while his rents remain sky-high. He says it is unfair that profitable firms like his are subsidising rents for less successful retailers, arguing that lower rents should be extended across the high street. Hotel Chocolat is calling for clauses in rent contracts that say it should receive the same benefits given to neighbours in CVA processes.

Daily Mirror, Page: 51 The Independent, Page: 50 The I, Page: 47 Daily Mail

First-timers pay 44% more in Edinburgh

Analysis suggests first-time buyers in Edinburgh face paying a premium of 44% compared with the Scottish average. While data from Registers of Scotland shows that the average Scottish house price stands at £151,891, research from the Bank of Scotland suggests that a typical starter home in the Scottish capital cost £217,406 last year. This is up 255% on 1999’s average. First-time buyers made up half of Scottish property transactions in 2019 and paid an average of £19,952 for a deposit.

The Times

SMEs News from the first days of 2020

Small firms miss out on Government spending

Analysis of public sector contract awards shows a 17% rise in spending to £93bn in 2019, spread over 45,216 contracts awarded to 16,218 suppliers. However, the study by consultant Tussell shows that, by value, just 12% of the contracts went directly to SMEs. This comes despite a target of £1 in every £3 of central government cash being spent with SMEs by 2022, either directly or through the supply chain. In 2017/18, just 23.7% went to smaller firms. The figures show the Government’s 34 “strategic suppliers” – which include accountants Deloitte and KPMG – claimed 16% of contracts by value last year. A Cabinet Office spokesman said the Tussell figures did not “accurately reflect the value of the business the Government does with SMEs”.

Daily Express, Page: 1

Minimum wage rise could hit SMEs

The Telegraph’s Tim Wallace warns that plans to increase the minimum wage are set to put serious pressure on smaller businesses. Nearly 3m people are set to receive increases to their hourly rates in April, and it is predicted that millions more will get a raise to reflect the premium given to more skilled or experienced workers. The Low Pay Commission estimates at least 35% of all workers will get a boost. Retailers and lobby groups are worried it could see wage bills spiral out of control, having a knock-on effect on the economy.

The Daily Telegraph

MEP: Small firms to thrive post-Brexit

Brexit Party MEP Rupert Lowe believes Brexit will boost British SMEs, arguing that EU regulations serve to protect the interests of large corporations and multinationals at the expense of small businesses. He said that while more than 90% of private sector firms in the UK are SMEs which do not export to the EU, they have to follow EU regulations, which adversely affects their profitability. Mr Lowe told the Express: “I think small businesses in Britain are thriving in spite of the European Union and our Government. So I don’t think they will suffer any negative effects [of Brexit].”

Daily Express

EMPLOYMENT News from the first days of 2020

Over-60s to drive employment growth

Analysis of Office for National Statistics data suggests people in their 60s will deliver more than half of all employment growth in the next 10 years, with this set to rise to almost two-thirds by 2060. In the past 20 years the number of employed over-65s has increased by 188% from 455,000 to 1.31m, while the proportion has grown from just over 5% to just under 11%.

Daily Express, Page: 1

Robots to rise in the 20s

The Telegraph’s Russell Lynch and Lizzy Burden look at what the next decade may hold, saying automation is set to be “a key trend” – with the Office for National Statistics suggesting 7.4% of the workforce is at high risk of being replaced by robots. They say the UK “has some catching up to do,” with the World Robotics Report showing spending on industrial robots fell 3% in the UK in 2018, with the country 22nd in the league table for density of robots to workers, with 85 per 10,000 staff. BDO estimates that businesses will pump up to 9% of investment budgets into automation this year, with the firm’s Tony Spillett suggesting 2020 may be “the springboard year for automation that could set the stage for a decade of innovation”.

The Daily Telegraph, Business, Page: 4

Fake apprenticeships exploit £3bn levy

A survey by the education and skills think tank EDSK suggests half of the apprenticeships created by a levy launched in 2017 are fake, with hundreds of thousands of apprenticeships either low-skilled jobs labelled as training or rebadged schemes for middle managers. The levy sees large employers with a payroll of more than £3m pay into a fund held by HMRC that firms can access for apprenticeship training. The fund was worth £2.7bn in the first year alone. The Guardian notes that a recent survey by Grant Thornton found that 45% of companies with an apprenticeship levy had not used any of the funds they had set aside since the scheme was launched.

The Guardian, Page: 13 The I, Page: 4 The Times, Page: 12

ECONOMY News from the first days of 2020

BCC: Economy stagnated in Q4

The British Chambers of Commerce has warned that the economy stagnated in the final quarter of 2019, prompting director general of the group Adam Marshall to call on the Government “to take big decisions to stimulate growth”. The service sector, which accounts for almost 80% of economic output, worsened in Q4. “Listless” manufacturers saw falling export business rather than rising order books for two quarters in a row – the first time that has happened for a decade, while domestic orders are in a sustained decline for the first time since 2011 and investment intentions are at an eight-year low. Dr Marshall said: “If ministers take action to reduce up-front costs, move key infrastructure projects forward, and to help businesses on training, they’ll be rewarded with increased investment.”

The Guardian, Page: 27 The Daily Telegraph, Business, Page: 1 The Times, Page: 33 Daily Express, Page: 44 Daily Mail, Page: 2 The Independent, Page: 6

Fewest floats in a decade

Figures show that 2019 saw the lowest number of stock market floats in London since the financial crisis, with just 36 companies completing initial public offerings on the London Stock Exchange. This is the lowest total since the 23 recorded in 2009. The analysis shows that £7.2bn was raised in new issues last year, with five of the listings from companies capitalised at more than £1bn. PwC’s annual review of the market shows that London “retained its position as Europe’s most active market in 2019”, contributing about 30% of total European IPO proceeds. The firm’s Peter Whelan says he sees a “positive backdrop to the IPO markets as we go into 2020”.

The Times, Page: 44 (1/1/2020)

Retail administrations set to continue

The Telegraph’s Laura Onita considers the climate for retailers, saying a “steady stream” of administrations is expected to continue in 2020, with mid-market retailers set to be the most exposed. “The ‘at risk’ register will continue to remain a long one,” warns the KPMG/Ipsos Retail Think Tank.

The Daily Telegraph, Business, Page: 1

Deals on the horizon?

The Guardian looks at what 2020 may hold for investments, with Jonathan Boyers, the head of mergers and acquisitions at KPMG, predicting that a stable government may see a number of takeovers in the next six months. He says: “”Many have done their early prep work and are set to launch processes in the new year. Meanwhile, I expect there will be a significant amount of demand.”

The Guardian, Page: 29

Economists predict little change for UK growth in 2020

An FT survey of economists sees KPMG’s Yael Selfin say a “cloud of uncertainty” may keep business investment at bay, while EY’s Mark Gregory considers the UK’s place in European supply chains.

Financial Times, Page: 3

Manufacturing stalls in December

UK manufacturing shrank at its fastest pace in almost seven-and-a-half years in December, with an eighth successive month of decline. The IHS Markit/CIPS Purchasing Managers’ Index was 47.5 last month, down from 48.9 in November on an index where any figure below 50 is seen as a contraction. Duncan Brock, a director at the CIPS, said: “As the downturn deepened, Brexit uncertainty continued to dominate the business landscape and impact on client confidence. Combined with the effects of a slowing global economy, new orders from domestic and export markets dried up at one of the fastest rates seen in seven and a half years.” Howard Archer, chief economic adviser to the EY Item Club, commented: “Manufacturers are clearly hoping that the uncertainties surrounding the economy are diminished by December’s decisive general election result and by the UK leaving the EU with Boris Johnson’s deal on 31 January – and that this encourages businesses to step up their investment and demand for capital goods and consumers to become more willing to splash out on big-ticket durable goods.”

The Times Daily Mail The Daily Telegraph The Guardian Financial Times The I City AM

OTHER News from the first days of 2020

Recruiting with confidence

The army’s latest recruitment campaign centres on confidence and is based on research by the Prince’s Trust and Deloitte which shows that 54% of 16-to-24-year-olds believe a lack of self-confidence holds them back.

The Times, Page: 12 The Daily Telegraph, Page: 4 The Independent, Page: 16

Wildfire warning for insurers

The Daily Mail looks at the costs insurers are facing over the wildfires hitting Australia. It notes that two years ago, Deloitte warned that Australia would face growing costs from natural disasters, saying the bill could hit £21bn a year by 2050.

Daily Mail, Page: 69

Contact Paul Southward.

Paul Southward


News Roundup Monday 14th October 2019


News Roundup Monday 14th October 2019

NEWS ROUNDUP

TAX NEWS ROUNDUP

Outrage over Facebook’s tax bill

News that Facebook saw UK sales surge to £1.7bn but paid just £28.5m of tax in Britain last year has led to a chorus of indignation from politicians and tax experts. The social media company recorded profits of £96.6m in the UK last year, up more than 50% on 2017. However, this was after administrative costs of £666.8m were stripped from a gross profit of £763.5m. Experts say Facebook’s UK accounts fail to detail these charges thoroughly. Prem Sikka, emeritus professor of accounting at the University of Essex, said the accounts were “legally compliant but opaque”, adding: “It is clear that without regulatory intervention we will not see transparent accounts.” MP Margaret Hodge, who chairs an all-parliamentary group on responsible tax, called the amount “outrageous”. Steve Hatch, vice-president for Northern Europe at Facebook, said: “Businesses across the country use our pla tforms to grow, and revenue from customers supported by our UK teams is now recorded here so that any taxable profit is subject to UK corporation tax.” The Mirror says EY audits the “tax avoiding tech firms” Facebook, Amazon and Google.

The Daily Telegraph, Business, Page: 33 The Times, Page: 53 The Times, Page: 51 The Independent The Guardian, Page: 43 Daily Mirror, Page: 7 Daily Mail, Page: 31 Daily Express, Page: 2

HMRC boosts IHT income with increased checks on property values

The taxman increased its IHT take last year by £22m to £271m after conducting checks on the value of homes that people had inherited. Rupert Wilkinson, a partner at Wilsons, says those who misreport the value of their residential property do so “in some cases by mistake and in others on purpose to reduce inheritance tax bills”. He suggested that the figures did not mean that more people were lying about property values, but that HMRC was investigating more IHT cases because it was easier to check house prices.

The Times, Page: 63

Scotland sees rise in R&D tax credit claims

New figures from HMRC show a rise in research and development (R&D) tax credit claims in Scotland, with firms making a total of 2,210 claims over the year so far, up from 1,900 in the previous year. Overall, Scotland-based companies secured 4% of the value of 48,635 R&D tax credit claims made across the UK in the latest period. A total of £4.3bn of tax relief support was claimed corresponding to £31.3bn of R&D expenditure by British businesses.

The Scotsman, Page: 31

Parliamentary support to axe loan charge grows

Over 130 MPs have now called on the Government to suspend all activity related to the loan charge. The All-Party Parliamentary Group on the Loan Charge (APPG) said that Parliamentary support is growing for an immediate suspension of the “draconian” loan charge and associated accelerated payment notices (APNs).

Yorkshire Post, Page: 25

Will Congress vote for a fairer US tax system?

Ira Sohn suggests a move to a consumption tax on all goods and services, which he says would also remove the need for “tax accountants, tax lawyers, tax lobbyists and tax forms.”

Financial Times, Page: 10

“Let’s get beyond the bluster and listen to the experts”

The Sunday Times’ James Coney laments the predictability with which the government seems to reject advice on reforming the finance sector or taxes. Proposals to extend the power of the Financial Conduct Authority were dismissed last week while a series of “rather brilliant” proposals from the Office of Tax Simplification (OTS) “seem to have gone nowhere.” The OTS is backing a campaign by the paper to close a loophole affecting people who earn £10,000-£12,500 with net pay pension schemes, who are denied the benefit of tax relief on their retirement savings. A report from the tax watchdog also suggested topping up the national insurance of mothers who stop claiming child benefit because of a tax charge that affects higher earners, including unmarried partners. The Sun also runs with this story pointing out that children of mothers who do not claim are not automatically issued with a National Insurance number when they turn 16.

The Sunday Times, Business, Page: 16 The Sunday Times, Business, Page: 16 The Sun on Sunday

McDonald’s sends cash to US and pays higher UK tax bill

The European arm of McDonald’s wired a $2.7bn (£2.1bn) dividend to its American parent last year, the first since Donald Trump’s tax reforms which were intended to persuade US multinationals to repatriate foreign earnings. McDonald’s UK has also increased its corporation tax payments from £64.9m in 2017 to £75m last year after ending an arrangement where it paid millions in “franchise rights fees” to an entity in Luxembourg, reducing taxable profits in the UK.

The Sunday Times, Business, Page: 3

HMRC called on to probe XR payments to activists

Tory MP David Davies has called for HMRC to investigate Extinction Rebellion (XR) over hundreds of pounds it pays its activists weekly to campaign. Documents seen by the Mail on Sunday reveal protesters have received payments totalling more than £70,000 in four months alone. The paper says XR’s documents raise concerns about the fact that it has paid no tax or National Insurance on these sums and questions the employment status of activists.

The Mail on Sunday, Page: 16

INDUSTRY NEWS

Failed airlines to fly passengers home

Insolvency legislation is set to be reformed to enable bankrupt carriers to be put in “special administration”, meaning their aircraft and crew can continue flying. The collapse of Thomas Cook last month triggered a £100m operation by the Civil Aviation Authority to repatriate almost 150,000 stranded tourists on a fleet of 62 chartered jets. Transport Secretary Grant Shapps said: “I’ve personally spoken with Peter Bucks, the chair of the Airline Insolvency Review, and plan to draw on his expertise and bring in airline insolvency reforms as quickly as possible.” The legislation is expected to be outlined in the Queen’s Speech when MPs return to Parliament on Monday.

The Times, Page: 2 Daily Mirror, Page: 18 The Guardian, Page: 2 Daily Mail, Page: 37 Daily Express, Page: 5 The Sun, Page: 4

WILLS NEWS

Probate fee changes scrapped

Justice Secretary Robert Buckland has said changes to probate fees planned by Theresa May will not go ahead. The current probate fees are £215 for individuals and £155 if applying through a solicitor. But changes to the law announced last November would have meant administrative fees ranging from £250 to £6,000. A Ministry of Justice spokesman said: “Fees are necessary to properly fund our world-leading courts system, but we have listened carefully to concerns around changes to those charged for probate and will look at them again as part of a wider review to make sure all fees are fair and proportionate.”

Daily Mail, Page: 14

CORPORATE NEWS ROUNDUP

Wrightbus rescue back on the cards

A deal between Jo Banford and the owners of Wrightbus is back on after Jeff Wright, son of founder Sir William Wright, rowed back on his opposition to terms related to the sale of the company’s premises. Deloitte is overseeing the administration of Wrightbus.

The Times, Page: 52 The Daily Telegraph, Page: 35 The Guardian, Page: 43 Yorkshire Post, Page: 4

Pizza Express could jettison 150 restaurants

As many as two in five Pizza Express restaurants are loss making, the company’s lenders fear, with sources telling the Sunday Telegraph that bondholders are considering a company voluntary arrangement (CVA) to close those stores. The move could put more than 150 restaurants and an estimated 3,300 jobs under threat. Pizza Express is struggling under a £1.2bn debt pile.

The Sunday Telegraph, Business, Page: 1 The Sunday Times, Business, Page: 12

Customers distressed by unexplained bills from old supplier

The Observer reports on the high level of complaints made by customers of failed energy company Extra Energy. An investigation by the paper reveals that Extra Energy’s administrator, PwC, has been issuing bills to former customers without accurate billing histories or meter readings, leaving many with unexplained three-and four-figure bills months after the company ceased trading.

The Observer, Page: 70

Investor agitates for removal of Babcock CFO

Defence contractor Babcock is under pressure from at least one major shareholder to replace its finance director Franco Martinelli, the Sunday Times reports. Babcock said it had no intention of replacing Martinelli, who has held the role for five years and spent 12 years before that as financial controller.

The Sunday Times, Business, Page: 1

WEALTH MANAGEMENT NEWS

Wealth managers who are worth their fees

Jonathan Jones in the Telegraph reflects on a report from Citywire which last week unveiled the best performing wealth managers. The list was topped by Wise Funds, with its Multi-Asset Growth fund returning 47.5% over the past three years. Vincent Ropers, co-manager of the fund, said, despite being the winner of the “aggressive” category, it was its defensive assets that had propelled the performance this year. In the “steady growth” category, for those with a slightly lower appetite for risk, P1 Investment Management ranked best. At the other end of the risk scale, Sanlam was ranked best for those investors that are more cautious.

The Sunday Telegraph

SMEs NEWS ROUNDUP

Small business commissioner sacked over conflict of interest

Paul Uppal, the Government’s small business commissioner, has been sacked after suggestions that his involvement in a scheme to provide redress to small companies represented a conflict of interest. Mr Uppal has been helping the banking industry and small business groups to set up the business banking resolution service. The Federation of Small Businesses said it was a “disappointing development that will put the brakes on our efforts to date”. The Association of Independent Professionals and the Self-Employed called the news “troubling”.

The Times, Page: 55

Funding Circle seeks to ease fears over withdrawal delays

Funding Circle has written to investors assuring them that it was “a robust, well-capitalised business” amid concerns over liquidity issues in the peer-to-peer lender’s secondary market.

Financial Times, Page: 17

Two fifths of SMEs forced to take legal action over late payments

A survey by Hitachi Capital Business Finance found the proportion of SMEs that were taking legal action chasing late payments from clients had grown from 31% to 40% over the past year. A fifth of SME owners did not pay themselves when they were left with unpaid invoices. Over 60% of SMEs are affected by late payments according to Hitachi, with 35% having to seek short term loans to stay afloat, it said.

Sunday Express, Page: 43

EMPLOYMENT NEWS

Top earners get 7.6% rise

Pay for the top 1% of earners increased by 7.6% in real terms over the past two years – faster than for any other income group, according to a report from the TUC. By comparison, typical workers saw their earnings increase by just 0.1%. TUC general secretary Frances O’Grady said: “Boris Johnson’s promised tax giveaway to high earners would only make things worse. The prime minister is focused on helping his wealthy mates and donors, not working people.”

The Guardian, Page: 45 The I, Page: 19 Daily Mirror, Page: 7 Yorkshire Post, Page: 4 The Press and Journal, Page: 16

PENSIONS NEWS ROUNDUP

OTS urges review of pensions allowances

The Office for Tax Simplification has said the government should consider applying different pension allowances to taxpayers depending on whether they are saving into a defined contribution scheme or a final salary plan. A report by the OTS highlights the issues many defined benefit members have been facing with the annual allowance and the tapered AA. It states: “As the legislation produces distortions in behaviour that have negative effects such as those in the NHS, it seems sensible this legislation should be reviewed with a clear focus on its wider impact.”

FT Adviser Financial Times, Money, Page: 4

Majority of self-employed not saving into pension

Calls are growing for a change to pension rules for the self-employed after a poll revealed just 24% are saving into a pension. A survey of 2000 self-employed people by Nest, found 55% want more guidance on how to best save for their retirement. In addition, 56% said they favoured the idea of automatically diverting a proportion of their income to saving for retirement, which is already available via auto-enrolment for those who are employed by a business.

FT Adviser

Pensions rules bring windfall for locums

Hospitals are paying locum doctors nearly £4,000 a shift to plug a growing staffing crisis made worse by pension tax rules which encourage medics to cut their hours to avoid onerous penalties.

The Daily Telegraph, Page: 1, 2

PROPERTY NEWS

Shops fear worst winter in a decade

Retailers fear this will be the worst Christmas since 2008 as high street stores struggle with consumer concerns over the economy and crippling business rates. One executive told the Mail on Sunday: “The rates system is broken. The high street is in continual decline. But this tax is based on 2015 property values, when the world was very different. When is the Government going to wake up?”

The Mail on Sunday, Page: 96

ECONOMY NEWS ROUNDUP

Sterling rallies on hopes of a late deal

The pound surged on Friday to a three-month high amid investor optimism about a last-minute Brexit deal between Britain and the European Union. Against the dollar the pound rose 1.9% to $1.2682, and against the euro was up 1.67% at €1.1489. The currency has rallied more than 3% since Thursday, its biggest two-day gain since before the June 2016 referendum on leaving the EU. Mike Cherry, national chairman of the Federation of Small Businesses, said: “After months lost in the Brexit uncertainty that has hit many of our small businesses, there finally appears to be a glimmer of hope at the end of the tunnel.”

The Daily Telegraph, Business, Page: 33 Financial Times BBC News Daily Mail, Page: 8 Daily Express, Page: 65

Autumn sales see record price cuts

High street stores are slashing prices by up to 90% in a desperate bid to win customers. Jason Gordon, of Deloitte, said this autumn’s sales are “the deepest we have seen historically”.

Daily Mail, Page: 5

Investors could reap £240bn Brexit deal dividend

Data giant MSCI predicts that the pound would claw back 8% against the dollar if Boris Johnson secures a deal with the EU while London stocks would rise 10% bringing investors a £240bn “deal dividend”. Peter Garnry, head of equity strategy at Saxo Bank, commented: “Tactically UK stocks could become one of the best equity markets next year if we avoid an ugly global recession and the UK can kick-start growth again.” However, MSCI also forecast that a no-deal Brexit would trigger a 15% plunge in London-listed stocks.

The Sunday Telegraph

OTHER NEWS

Facebook’s Libra cryptocurrency abandoned by payments firms

Mastercard, Visa, eBay and payments firm Stripe have pulled out of Facebook’s cryptocurrency project, Libra, amid intense regulatory scrutiny. Last week, PayPal also announced it was also pulling out of the project. Politicians and regulators have voiced concern that Libra could be used for money laundering and may harm wider financial stability.

BBC News Financial Times The Daily Telegraph

Contact Paul Southward.

Paul Southward's News Roundup


News Roundup Friday 27th September 2019


News Roundup Friday 27th September 2019

NEWS ROUNDUP

TAX NEWS

Government urged to suspend loan charge now

The Yorkshire Post’s business section leads on the review into the loan charge announced by the Chancellor. The move is welcomed, but the Government should recognise the damage the policy is doing and cease the pursuit of affected taxpayers now, says the paper’s Greg Wright. MPs have called on Sajid Javid to widen the scope and time frame of the review and suspend all enforcement activity related to the loan charge immediately while the review is carried out.

Yorkshire Post, Business, Page: 1-2

CORPORATE NEWS

Thomas Cook executives could be stripped of their bonuses

Transport Secretary Grant Shapps has said Thomas Cook executives could be stripped of their bonuses as the backlash over the company’s collapse worsens. Speaking in the Commons, Mr Shapps also noted that Business Secretary Andrea Leadsom had written to the Financial Reporting Council “to ensure they prioritise as a matter of urgency an investigation into both the causes of [Thomas Cook’s] failure and the conduct of its directors and of its auditors.” The firm’s accountants EY and PwC are set to be investigated by the industry watchdog.

The Daily Telegraph The Times, Page: 21 Daily Express, Page: 15 Daily Mail, Page: 23 The Scotsman, Page: 29

Wrightbus goes into administration

Northern Ireland’s Wrightbus, famous for building the so-called Boris bus Routemaster model, has entered administration – leaving nearly 5,000 jobs at risk. The company had been looking for a new owner and Deloitte, the administrator, said the failure of a buyer materialising was the reason that job cuts were to be made. Unions are demanding that Prime Minister Boris Johnson steps in to “do something decent” by helping rescue the company, rather than leave staff to face “devastating consequences”.

Financial Times, Page: 2 The Daily Telegraph, Business, Page: 1 The Times, Page: 49 City AM The Guardian, Page: 33

Aberdeen paper mill saved

The future of a paper mill has been secured and hundreds of jobs saved after a management buyout of Arjowiggins’s Stoneywood plant in Aberdeen. Administrators at FRP Advisory had been called in early in 2019 but have now confirmed a management buyout for an “undisclosed sum” meant the jobs had been saved.

The Independent, Page: 54 The Scotsman, Page: 23

REPORTING NEWS

Tim Martin: “Corporate governance system is f***ed”

The Times’ Dominic Walsh says he talked with JD Wetherspoon boss Tim Martin about Thomas Cook’s failure. Mr Martin reportedly slammed the company’s accounting practices and hit out at “the world of corporate governance”: “Audit committees have substantially loosened financial control, remuneration committees have overseen a boom in pay when their purpose was restraint, and management is underrepresented on boards packed with non-execs.” Mr Martin went on to complain that instead of running their businesses he and others like him were forced to spend thousands of hours explaining why they “don’t adhere to arbitrary rules”. He concluded: “The whole system is f***ed.”

The Times, Page: 48

Rosenblatt wades into litigation funding debate

Law firm Rosenblatt has said it will change the way it accounts for legal cases it funds following criticism of Burford Capital for writing up the value of cases on its books before they had ended.

Financial Times, Page: 20

PENSIONS NEWS

FCA finds pension pots accessed without advice

The Financial Conduct Authority has found that 48% of pension pots that have had funds withdrawn were accessed by people who had not taken any advice. According to the FCA, more than 645,000 pensions were accessed during the 2018-19 period. More than 350,000 pots were fully withdrawn at the first time of access, of which 90% had a value of less than £30,000. Keith Richards, chief executive of the Personal Finance Society, called the findings “deeply concerning” adding that the Government and the FCA should “do more to make sure providers are signposting guidance services and advice and explaining the potential ramifications if you don’t seek assistance”.

The Times

Pension schemes urged to boost exposure to venture capital

The British Business Bank has recommended that workplace pension schemes should be able to invest in venture capital funds and that management fees should be adjusted to better facilitate this.

Financial Times

SMEs NEWS

HSBC launches £14bn fund to help SMEs navigate Brexit

HSBC has launched a £14bn package for SMEs across the UK to help them navigate Brexit. The fund includes ring-fenced pots for international businesses and the agriculture sector. Meanwhile, Barclays is to hold dozens of so-called 100 Brexit clinics to give support to its customers north of the border. It also launched its own £14bn lending fund earlier this year.

The Sun, Page: 47 The Scotsman, Page: 39 The Press and Journal, Page: 34

PROPERTY NEWS

Labour backs plan to seize ’empty private homes’

The Mail reports that Labour could seize private family homes and introduce price controls into the market if the party wins the next general election. Delegates at the party conference in Brighton also committed the party to a 20-year council house-building blitz creating 2m council homes in a bid to tackle the UK’s housing crisis.

Daily Mail

WEALTH MANAGEMENT NEWS

Chasing wealth managers is a risky business

The FT notes the profitability of the private banking business compared with traditional retail banking but warns the assets of the emerging ultra-wealthy have yet to be tested in a global recession.

Financial Times, Page: 13

INTERNATIONAL NEWS

Macron set to unveil new household tax cuts

French taxpayers are to be offered more than €10bn (£8.9bn) of new tax cuts in Emmanuel Macron’s 2020 budget on Friday. Budget minister Gerald Darmanin said tax cuts had been stepped up in response to the gilet jaunes protests.

City AM, Page: 21

ECONOMY NEWS

Deutsche boss warns of ‘darkened skies’

Christian Sewing, chief executive of Deutsche Bank, struck a gloomy tone over the future of the world economy with banking delegates in London on Wednesday, warning that central banks have already “turned on the money tap to the limit.” He also cautioned that, despite the low interest rates, Europe’s financial sector faces troubling structural issues: “What is really worrying is that the central banks have used their tools to a large extent already, so there are no conventional measures left to effectively cushion a real economic crisis,” he said, adding: “Very few economists believe that cheaper money at this level will have any effect, something our clients absolutely reinforce”.

Financial Times City AM

Car-making up for first time in a year

Car production increased by 3.3% last month, the first rise in more than a year. Some 92,158 vehicles were built in August, said the Society of Motor Manufacturers and Traders. However, Mike Hawes, chief executive of the SMMT, said: “Today’s figures mask the underlying downward trend.”

The Times, Page: 49 The I, Page: 43 Yorkshire Post, Page: 5

Retail sales continue to slide

Retail sales fell for the fifth consecutive month in September, down 16% according to the latest CBI Distributive Trades Survey, which also indicates that even internet sales growth eased in the year to September.

The Times, Page: 51 City AM Daily Express, Page: 51

Surging demand boosts boat building industry

Britain’s superyacht industry enjoyed its seventh year of growth with revenues rising to £660m in 2018/19, up 7.1% on the previous financial year, British Marine said.

Daily Mail, Page: 83

OTHER NEWS

Accountant scammed £4k with cancer tale

Chartered accountant Badal Arun Hindocha, 34, lied to his internet girlfriend that he was dying from cancer to swindle her out of £4,300. He has lost his job and has also been stripped of his professional accreditation.

Evening Standard

Contact Paul Southward [Tax Consultant].

Paul Southward


News Roundup Tuesday 24th September 2019


News Roundup Tuesday 24th September 2019

NEWS ROUNDUP

TAX NEWS

TPA: Tax cut would boost businesses

The Taxpayers’ Alliance has called for measures that would “back British businesses”, suggesting widespread tax and regulation cuts could drive UK firms up the World Bank’s Ease of Doing Business rankings. Recommendations include cutting corporation tax to 10% and the business rates multiplier to 30%. The Alliance’s John O’Connell said UK businesses are being “burdened with excessive taxes and endless red tape”.

City AM, Page: 11

Labour: Taxes will boost welfare spend

Labour has pledged to boost spending on welfare and could double the number of people receiving state-funded support. Revealing the proposals at its party conference, the party said that it will use tax hikes to fund the spending commitments but refused to set out the details of the increases needed to cover the costs until its next manifesto is released. The conference also saw shadow health secretary Jon Ashworth announce a £745m plan to scrap the prescription charge in England, saying it would be paid for by a “fairer tax system”. Conservative chairman James Cleverly spoke out over Labour’s plans, saying: “Labour’s latest splurge would clobber hardworking people with higher taxes.”

Daily Express, Page: 1 The Guardian, Page: 8

Labour to scrap private schools’ ‘tax privileges’

Labour says it will abolish private schools, with delegates at the party conference approving a motion that said a commitment on abolishing private education should be included in its next general election manifesto. This would include withdrawal “public subsidies and tax privileges”, including business rate exemption. Backing of the motion came after education spokesman Angela Rayner said a future Labour government would scrap “tax loopholes” that benefit private schools in its first budget.

The Times, Page: 1 The Independent, Page: 6 The Guardian, Page: 8 The Daily Telegraph, Page: 6 Daily Mail, Page: 8

PROPERTY NEWS

Bailiff figures prompt business rates call

The Chancellor is being urged to ease the burden of business rates after research by real estate adviser Altus Group has found that local councils sent bailiffs to more than 78,000 companies that have struggled to pay business rates across England in the year to the end of March. This equates to 310 incidents a day. Altus said around one in 16 of all business premises faced having goods seized by bailiffs last year, when stripping out those which receive small business rates relief. Altus calculates that business rates could increase by £536m for 2020/21 if the headline rate of inflation of 1.7% remains unchanged in September. Robert Hayton, head of UK business rates at Altus, said: “It’s not the mechanics of the rating system that is of primary concern of business but the level of the actual bills.” He noted that commercial property is “already making a significant contribution to tax revenues”, adding : “With the highest property taxes across the EU, the Chancellor should recognise this in his upcoming autumn Budget by removing the automatic inflationary increase.”

The Guardian, Page: 28 Daily Express, Page: 49 Yorkshire Post, Page: 15

Retailers hit by rate refund delays

The Times’ Ashley Armstrong says retailers face a £115m hit to their cash flows because the business rates process is delaying overdue refunds. The government introduced a system for companies to “check and challenge” their rates bill two years ago, but this has delivered a huge backlog of appeals, with statistics showing that the number of outstanding appeals has risen six-fold. Analysis by property group Colliers International shows that the valuation tribunal cleared just 13 appeals between April and June this year, with 123 claims outstanding. Experts forecast up to 40,000 appeals against the 2017 valuation. John Webber, head of business rates at Colliers, claims that the Valuation Office Agency is now focusing on values for the forthcoming 2021 revaluation, with case workers being reassigned from appeal work to deal with this.

The Times, Page: 39

CORPORATE NEWS

Thomas Cook collapses

Last-minute talks between Thomas Cook, its banks and shareholders have failed, with the travel firm collapsing. The UK Civil Aviation Authority said the tour operator has “ceased trading with immediate effect”. The firm’s failure puts 22,000 jobs at risk, including 9,000 in the UK. It is reported that the Government’s Official Receiver will manage Thomas Cook’s insolvency alongside KPMG, with AlixPartners expected to oversee the insolvency of the group’s airlines.

BBC News The Daily Telegraph, Page: 1 The Times, Page: 1 The Independent, Page: 9 Daily Express, Page: 6 Daily Mirror, Page: 10 City AM, Page: 1

No comment from Wrightbus over rescue talks

Bus maker Wrightbus has refused to deny or confirm reports that two major bidders have withdrawn from talks aimed at saving the firm, with it reported over the weekend that Chinese engineering firm Weichai and Jo Bamford, the son of JCB chairman Lord Bamford, had pulled out. The firm also declined to comment on whether administration was now likely. The Guardian notes that while Deloitte is running the sales auction, it is unclear whether it is being lined up as administrator.

The Guardian, Page: 25

EMPLOYMENT NEWS

£22k for accounting and finance graduates

The Times offers a table breaking down the average salaries per university course, looking at the median salary of those in employment six months after graduation. The Higher Education Statistics Agency figures for people leaving higher education in 2016/17 show accounting and finance graduates in professional employment saw a salary of £22,000 while the figure for those in non-professional employment was £18,000.

The Times, Good University Guide 2020, Page: 5

Insurance sector lags on diversity

City AM looks at diversity and inclusion in the insurance industry, with a survey on the matter seeing 54% of respondents say gender equality is an issue that the industry had to focus on, with 47% mentioning mental health and 38% culture and ethnicity. Jim Bichard, head of insurance at PwC, comments: “Frankly, insurance is not where it needs to be from a diversity perspective, if you just look at gender it’s easy to see that.” Figures show that the sector had a gender pay gap of 27.7% last year compared to a national average of 17.9%.

City AM, Page: 14

FINANCIAL SERVICES NEWS

Are asset managers ready to take responsibility?

The FT considers the potential impact of the senior managers and certification regime, saying it will make it easier for the Financial Conduct Authority to hold people to account for misdemeanours.

Financial Times, FT Fm, Page: 6

ECONOMY NEWS

Manufacturing to be hit by no-deal

Analysis of the manufacturing industry by BDO and Make UK suggests that some of Britain’s worst-off regions will be hit hardest in the event of a no-deal Brexit. The report says regions heavily dependent on exporting to the European Union, such as Wales and the North East of England, will be hit in a no-deal scenario. Leaving the EU with no agreement in place would be particularly harmful to Britain’s automotive industry, the analysis shows, with delays in the supply chain expected. “The survey makes it clear that regions heavily reliant on the automotive industry will be more significantly impacted by a no-deal Brexit,” Tom Lawton, head of manufacturing at BDO, commented. The analysis looked at Office for National Statistics and HMRC data and reveals that London and the South East are set to become the country’s biggest manufacturing regions.

The Daily Telegraph, Business, Page: 1 The Times, Page: 36 The I, Page: 9 The Guardian, Page: 25 Yorkshire Post, Page: 15

OTHER NEWS

Embracing automation

In a letter to City AM, Alastair Bathgate, chief executive of robotic automation firm Blue Prism, calls on people to embrace the potential for automation to “unleash human potential” and boost productivity. He cites a PwC report suggesting that artificial intelligence and robotics could contribute up to $15trn to global GDP by 2030.

City AM, Page: 22

Contact Paul Southward.

Paul Southward