Category Archives: News Roundup

News Roundup Wednesday 26th June 2019


News Roundup Wednesday 26th June 2019

NEWS ROUNDUP

TAX NEWS

Home CGT plan criticised

The Telegraph looks at an idea put forward that could see a Labour government tax homeowners on any increase in the value of their property by scrapping the Capital Gains Tax exemption on the sale of main homes. The paper says the idea, detailed in a report called Land for the Many, would have the “inevitable result of making it harder for people to afford to move, and further gumming up the housing market”. It notes other measures carried in the report, including replacing inheritance tax with a “lifetime gifts tax” and the introduction of a tax on equity release that stems from the suggestion such withdrawals are used to avoid IHT. If enacted, the Telegraph argues, the proposals would deliver “an attack on private wealth of the sort not seen in this country since the Sixties.” Elsewhere, the Mail says the proposed CGT move “would kill the housing market and fleece million s of ordinary people”. Labour has insisted the homes tax, which the report says could help tackle “wealth inequality”, is “not under consideration” for its next manifesto. The party’s Jon Trickett said the report is “part of our policy development process for the next General Election“, with Andrew Gwynne telling Sky News: “The ideas are not Labour party policy.”

The Daily Telegraph, Page: 15 Daily Mail, Page: 2, 16 The Times, Page: 14 Daily Express, Page: 7 The Sun, Page: 2

Think-tank warns over Scottish income tax blow

Think-tank IPPR has warned that Scotland could lose out on just under £1.8bn over the next five years due to weaker income tax growth compared to the rest of the UK. The report, entitled How Productivity Could Deliver Inclusive Growth in Scotland, says: “Despite welcome income tax rises in Scotland in recent years, we’re due to be worse off because of weaker income growth in Scotland compared to the rest of the UK.” A Scottish Government spokeswoman said: “Our decisions on taxation have resulted in a more progressive tax system, protecting those lower and middle income taxpayers, while raising additional revenue for the budget to invest in our public services and the Scottish economy.”

The Scotsman, Page: 4 The Press and Journal, Page: 27

Johnson: Labour want to tax ‘virtually everything’

Conservative leadership frontrunner Boris Johnson has said that Britain’s post-Brexit focus should be to “turbocharge” the “most innovative economy in Europe”, saying that the Tories will deliver higher pay while a Labour Government would mean higher taxes. Writing in the Telegraph, he says Labour leader Jeremy Corbyn “wants to tax virtually everything he can,” adding that this would see “swingeing inheritance tax; 50p income tax; the highest corporation tax in Europe; a financial transaction tax and many others so brutal that impartial estimates say he would end up actually reducing tax yields.”

The Daily Telegraph The Daily Telegraph, Page: 14

Taxing time for Conservative contenders

Roger Bootle, chairman of Capital Economics, considers the role tax pledges have played in the Conservative leadership contest, saying that recent months have seen the pool of candidates compete “over the type and extent of possible tax cuts” they could offer. He muses that some leading Conservatives have suggested that tax cuts are not desirable as a “tax cutting agenda fosters competitive individualism as opposed to solidarity and communal action”. Mr Bootle argues that “truly Conservative economic programme” would combine tax cuts with more effective government action in areas where it is needed and a reduction in the role of government where it is not.

The Daily Telegraph, Business, Page: 2

Impenetrable tax laws lead to Treasury losses

In a letter to the FT, Dr Rudolph Kalveks suggests HMRC could conduct reverse audits to identify those who overpay tax and proposes that tax legislation should be simplified.

Financial Times, Page: 20

CORPORATE NEWS

Arrests made in Patisserie Valerie investigation

Several papers carry the news that the Serious Fraud Office last week arrested and questioned five people over issues related to the collapse of cafe chain Patisserie Valerie as part of an investigation into alleged accounting fraud, a story initially reported by the Sunday Times. Patisserie Valerie fell into administration after issues in its books were discovered, with it reported that accounts had been overstated and debts had been understated. A number of publications note that Grant Thornton, Patisserie Valerie’s auditor, has announced a review of its accounting operations.

The Guardian, Page: 14 The Daily Telegraph, Page: 3 Financial Times, Page: 8 The Times, Page: 34 City AM, Page: 3 Daily Mail

Craft distilleries in high spirits

The number of distillery businesses has increased by a fifth, research by UHY Hacker Young shows. There were 205 distilleries in 2018, while gin sales hit a record £2.7bn as exports grew 15% to £612m. James Simmonds, of UHY Hacker Young, said the UK craft spirits industry “is now a global powerhouse in the artisan spirits market.” He added that big manufacturers “have had to react and craft distilleries will need to continue to chip away at the big brands and not allow them to catch up.”

The Times, Page: 38 Daily Express, Page: 16 Daily Star, Page: 22 Yorkshire Post, Page: 3

GSCs botched sums are echoed across Aim as consultants clean up

Kate Burgess looks at issues faced by Goals Soccer Centres, noting that it has called in forensic accountants from BDO, hired RSM Tenon to check its books and appointed Deloitte to assess “future corporate options.”

Financial Times, Page: 11

Firms in Oddbins talks

The former owner of Oddbins is in talks with administrators to save the wine retailer, with Raj Chatha’s European Food Brokers and Duff & Phelps reportedly aiming to secure a deal that would rescue the chain’s remaining stores.

The Times, Page: 38 Daily Express, Page: 49

SMEs NEWS

Carney: Fintech may help small firm finance

Bank of England Governor Mark Carney has suggested a boost to start-ups is on the cards, saying the Bank is to open up its balance sheet to a new generation of payment providers. He also pointed to the potential for fintech to improve the ability of small businesses to access finance, noting that smaller firms face a £22bn funding gap. Mr Carney said that part of the issue stems from the fact the assets that small businesses seek to borrow against are “increasingly intangible” and that many lack the historic data that lenders require for credit scoring. Technology, he added, could give lenders and borrowers a broader set of information by looking at data generated by online activity.

The Times, Page: 41

SME owners focus on valuations

The Market Invoice Business Insights poll has seen 66% of SME owners say increasing their company valuations is their top priority. It was also shown that only 30% increased their valuations by more than 10% in the past 12 months. Figures show that the average small business in the UK is valued at £2.9m, meaning the total value of all UK SMEs stands at around £3trn.

Daily Express, Page: 49 Yorkshire Post, Page: 15

ECONOMY NEWS

Spending growth set to slow

Analysis by EY Item Club suggests consumer spending growth will slow from 1.8% in 2018 to 1.6% in 2019 and 1.7% in 2020. The report also suggests employment growth will slow to 1.0% in 2019 and 0.6% in 2020, from 1.2% in 2018. EY Item Club chief economic advisor Howard Archer comments: “The improvement in purchasing power has meant that consumers have been significantly less affected in their spending decisions than businesses by uncertainties over the economy and Brexit.” “However, we suspect earnings growth peaked in early 2019 and is likely to remain modestly below this level over the rest of 2019 and possibly beyond,” he added.

The Times, Page: 36

Manufacturers question industrial strategy

Research from BDO suggests manufacturers are increasingly frustrated that uncertainty over Brexit is stalling the Government’s industrial strategy, with 74% saying not enough progress has been made in the 18 months since the strategy was announced. Many of the 200 firms surveyed also voiced concern over an ongoing shortage of skilled workers.

The Guardian, Page: 32 The Independent, Page: 50

OTHER NEWS

Women in Engineering

A Guardian analysis of the gender imbalance in engineering and technology careers notes research by PwC which saw half of women say the most important factor when choosing a future career is “feeling like the work I do makes the world a better place”.

The Guardian, Women in Engineering, Page: 32

Contact Paul Southward.

Paul Southward


News Roundup Tuesday 25th June 2019


News Roundup Tuesday 25th June 2019

NEWS ROUNDUP

TAX NEWS

Tax Watch: Tax gap claim ‘laughable’

Considering HMRC figures which show £35bn in tax has been lost through avoidance, evasion, omission and error, George Turner of Tax Watch notes that it marks the biggest tax gap in cash terms since figures were first published in 2008. Analysing the figures in the Independent, he details how profit shifting by multinational companies is not accounted for, while schemes that take advantage of legal loopholes are not pooled in with the total, including cases where the Revenue has declared something to be a tax avoidance scheme but have then lost a case in the courts. Looking abroad, Mr Turner says countries which publish more comprehensive estimates “often use very different methodological approaches which are known to produce higher estimates of tax losses than the approach deployed by HMRC”. He also points to European Commission data showing that, when expressed as the percentage loss of total potential VAT revenues, the UK has the 11th highest VAT gap out of the 28 member countries. He argues that by “leaving out large and important areas of tax avoidance” ministers can claim that the UK has one of the world’s lowest tax gaps at 5.6%, describing the claim as “laughable”. It may be time, he suggests, for the Government to “stop hiding behind HMRC’s flawed figures, and face up to the challenge of tax avoidance.” Elsewhere, Kate Hughes in the Independent looks at the tax gap, noting that figures do not include the so-called hidden economy, highlighting that “ghosts” who do not declare any of their income and “moonlighters” who only own up to some of it cost the economy £ 1.9bn a year. The FT also looks at the tax gap, with James Hender of Saffery Champness saying it is “interesting” that HMRC cites legal interpretation as a growing contributor to the tax gap.

The Independent, Page: 47 Financial Times, Money, Page: 4

Tory hopefuls talk tax

Oliver Wright in the Times crunches the numbers on some of the “expensive promises” the two Conservative leadership candidates have made while on the campaign trail. On Boris Johnson’s pledge to raise the income tax threshold for the 40p rate and upper earnings limit for National Insurance from £50,000 to £80,000, Mr Wright cites experts who note such a change “would overwhelmingly help the better-off.” Jeremy Hunt says he would look to reduce corporation tax, which is set to dip from 19% to 17% next April, to 12.5%. HMRC estimates that cutting it further could cost the Treasury at least £12bn, while Mr Wright offers that a lower rate could act as an incentive for companies to set up in the UK, “thereby increasing the total tax take”.

The Times, Page: 7

PROPERTY NEWS

Buyers paying over the odds in stamp duty

Research by the Daily Telegraph suggests homeowners are being forced to pay excessive levels of stamp duty and then wait weeks for refunds. A Freedom of Information request submitted to HMRC shows that 43,187 people applied for a stamp duty refund in the 2018/19 tax year, with almost £400m handed back to those who paid too much in the period. The paper’s Adam Williams says the complexity of the system means many buyers may be failing to make claims for overpayments. A separate Freedom of Information request revealed that of the 43,187 refund requests, just 34,599 were processed within HMRC’s 15 working day target. Paula Higgins of lobby group the HomeOwners Alliance describes the stamp duty system as a “mess”, saying thousands of people are “being caught out, even though they have done nothing wrong.”

The Daily Telegraph, Money, Page: 1

INDUSTRY NEWS

HMRC urged to rethink TTP wording

The Adjudicator’s Office has suggested HMRC should review the wording of Time to Pay (TTP) repayment plans to make it clear to taxpayers exactly how a deal could fall through, with the Revenue able to cancel such deals if new facts come to light that suggest they are no longer appropriate. Figures show that 700,000 such deals, which can be agreed with HMRC when a taxpayer cannot immediately pay back money owed, were made in 2018/19 – with 90% completed successfully. Paul Spenceley of law firm Irwin Mitchell suggests HMRC has become increasingly aggressive, pointing to the loan charge which levies a tax on people who used avoidance schemes, as an example of its hard-line approach.

The Daily Telegraph, Money, Page: 3

CORPORATE NEWS

Ashley takes a shot at Goals

Mike Ashley’s Sports Direct has confirmed it will vote against the reappointment of the entire Goals Soccer Centres’ board at its annual general meeting. Sports Direct, which holds a 18.9% stake in Goals, says there has been a “lack of transparency” over historical accounting errors and unpaid tax. It has called on Goals to appoint new advisers to investigate the accounting issues, calling for corporate investigator Kroll to carry out an independent review into Goals’ accounts, pledging that the results would be available to all shareholders. Goals, which has described Sports Direct’s position as “disruptive”, has recently hired forensic accountants from BDO to look at its books and appointed Deloitte to assess future options, as well as drafting in RSM Tenon and a specialist VAT consultant.

The Daily Telegraph, Page: 33 The Times, Page: 54 Financial Times, Page: 17 Daily Express, Page: 63 The Independent, Page: 46 Daily Mail, Page: 105 The Sun, Page: 46 The Scotsman, Page: 28 Yorkshire Post, Page: 23

Hilco eyes Bathstore

Restructuring fund Hilco is reportedly considering a move for retailer Bathstore, which is set to appoint BDO to lead an insolvency process. Sky News says Hilco is one of a number of firms interested in continuing to run Bathstore, albeit on a much smaller scale.

City AM Sky News

Phone firms face collusion claims

Mobile phone networks EE, O2 and Vodafone face allegations of price-fixing and collusion as part of a £1bn High Court claim over the collapse of Phones4u. The Times notes that networks cut ties with the retailer shortly before its demise and administrator PwC found Phones4u was “not viable” without their support.

The Times, Page: 55

SMEs NEWS

Small firms short changed by coin stance

Analysis suggests that up to one in ten branches of major banks refuse to accept or offer coins, with the Mail’s Amelia Murray describing this as a “blow” to small businesses that rely on bank branches for change. Mike Cherry, of the Federation of Small Businesses, comments: “Small business owners with cash takings need to be able to deposit all those takings, not just notes.”

Daily Mail, Page: 4

ECONOMY NEWS

Budget deficit grows

Public borrowing rose by £1bn to £5.1bn last month compared to May 2018, figures from the Office for National Statistics show. Tax receipts rose by £1.9bn, with revenue from income tax and national insurance up by a combined £1.3bn. Britain’s deficit has reached £11.9bn for the financial year so far, with this total £1.8bn – or 18% – higher than it was for the same period (April-May) last year. The figures also show that the Government has spent net cash of £9.2bn this financial year so far. This is £8bn more than last year. Howard Archer, chief economic adviser to the EY Item Club, comments that public finances remain on course to meet their target for 2019/20 of £29.3bn, adding: “Much will depend on whether the economy can shrug off its current weakness as well as on Brexit developments.” PwC’s Mike Jakeman said the figures show the public coffers are in a state of “relative health”, saying: “Given that the budget deficit is estimated at around 1% of GDP in 2018/19 and interest rates remain very low, we do not consider a mild increase in borrowing to pose any risk to the health of the government’s finances.”

The Times, Page: 52 The Daily Telegraph, Page: 33 Daily Mail, Page: 105 I, Page: 72 City AM

OTHER NEWS

The era of carefree expense-padding is well and truly over

Tom Braithwaite explores issues around expenses, noting that a Deloitte accountant was handed a suspended sentence after submitting duplicate subscriptions to the Institute of Chartered Accountants, as well as bogus taxi receipts.

Financial Times, Page: 14

Contact Paul Southward.

Paul Southward


News Roundup Monday 24th June 2019


News Roundup Monday 24th June 2019

NEWS ROUNDUP

TAX NEWS

Conservative candidates talk tax at hustings

The first Conservative leadership hustings has seen Boris Johnson defend his proposals to raise the 40p rate of income tax from £50,000 to £80,000, insisting it would form “part of a package” that would also benefit low-paid workers. He also said Conservatives should not be “at all shy” of reducing the tax burden on middle incomes. Mr Johnson also warned that Labour leader Jeremy Corbyn and Shadow Chancellor John McDonnell would send the economy into a “death spiral” with a “deranged £300bn programme of re-nationalisation,” claiming they would “whack up taxes, corporation tax, financial transactions tax, inheritance tax, income tax, up to 50%.” Meanwhile, rival Jeremy Hunt used the event to confirm a plan to cut corporation tax to 12.5%, saying such a move would “land an economic jumbo jet on” on Europe’s doorstep. James Ashton in the Sunday Telegraph looks at some of the financial pl edges made by the leadership candidates, focusing on how they look to appeal to the business sector. On the tax plans put forward, Mr Ashton says “the business community will never turn its nose up at tax cuts,” but says Conservative Stephen Crabb “is right to caution against turning this race into some sort of fiscal bidding war.” Elsewhere in the same paper, Laura Miller compares Mr Johnson and Mr Hunt’s tax pledges, citing Nimesh Shah of Blick Rothenberg who highlights that under Mr Johnson’s mooted tax reform, someone earning £80,000 would pay £6,000 less income tax a year.

The Sunday Telegraph, Page: 4 Sunday Express The Sunday Telegraph, Business and Money, Page: 2

Hunt pledges wider business rates exemptions

Jeremy Hunt has said that if he becomes Prime Minister he will exempt hundreds of thousands of firms from business rates, scrapping taxes for nine out of ten high street shops. This, he says, will “give a new lease of life to the British high street”. Mr Hunt said his administration would reform the current Retail Discount rate so that businesses which qualified for the discount would see their entire business rate bill cancelled, whereas currently those with a rateable value below £51,000 are eligible only for a 33% reduction. “Too many small businesses are being put out of business by tax bills they can’t afford to pay,” Mr Hunt commented.

The Sunday Telegraph, Page: 6 The Sun on Sunday, Page: 2

Homeowners could be hit by CGT plan

The Mail on Sunday’s Glen Owen reports that Labour leader Jeremy Corbyn could deliver reforms that would see homeowners taxed on the increase in the value of their home. A plan set out in the Labour-commissioned Land For The Many report would abolish the Capital Gains Tax exemption on main homes, meaning owners would pay income tax on any profits when they move home. Conservative leadership frontrunner Boris Johnson has hit out at the proposals, saying: “This mad ‘tax on all your houses’ would cripple every Brit who owns or wants to own their own home.” Jeff Prestridge in the Mail questions the proposals in the report, describing the possibility of capital gains tax being applied to all home sales as “a horrifying prospect”.

The Mail on Sunday, Page: 16, 17

1.3m miss out on tax relief

Government figures show that a million women are losing tax relief on their pension savings due to rules relating to net-pay schemes. A total of 1.3m low earners receiving less than the personal allowance missed out on a 20% top-up to their work pension in 2016/17.

The Sunday Times, Page: 16

CORPORATE NEWS

SFO makes arrests in Patisserie Valerie probe

The Serious Fraud Office has revealed that it arrested and questioned five people over issues related to the collapse of cafe chain Patisserie Valerie. This follows the arrest in October of former finance director Chris Marsh. Those arrested do not include former executive chairman Luke Johnson, nor non-executive directors Lee Ginsberg and James Horler, who are understood to have been interviewed as witnesses and not suspects. Patisserie Valerie suffered a blow last year when a £40m hole was discovered in its books. A PwC report pointed to areas of concern including inflated revenues, the manipulation of costs, and unpaid business rates and VAT bills. The Financial Reporting Council is looking into Grant Thornton’s role as auditor at Patisserie Valerie.

The Sunday Times, Business and Money, Page: 1

Comet directors face legal action

Liquidators to the failed electricals chain Comet are exploring legal action against several former directors, with FRP Advisory filing notice of possible court proceedings against former Dixons boss John Clare, who helped private equity firm OpCapita buy Comet in 2011; Carl Cowling, Comet’s COO; Bob Darke, its CEO; and Hailey Acquisitions, set up by OpCapita founder Henry Jackson for the deal. The Sunday Times cites a source who says the possible legal action could be related to a decision to accept secured financing from OpCapita, which meant the owner ranked ahead of other creditors for repayment.

The Sunday Times, Business and Money, Page: 1

Firms eye British Steel

French engineering firm Systra is reportedly in talks to buy part of British Steel, with it said to be considering a bid for wholly-owned subsidiary TSP Projects. Evraz, a steel and mining group owned by Russian billionaire Roman Abramovic, is said to be considering a bid for British Steel’s French business. British Steel is under control of the official receiver after it went into insolvency last month. EY, which is advising the Government on a potential sale, has called for bidders to table offers by the end of June, with it believed to be in favour of a sell off that does not carve up the collapsed company.

The Sunday Times, Business and Money, Page: 2 Financial Times City AM

Energy firm faces bills claims

HMRC has filed winding-up petitions against four of energy supplier Solarplicity’s subsidiaries over allegedly unpaid bills. The firm says a number of the bills were disputed and one petition had been paid.

The Sunday Times, Business and Money, Page: 2

BrewDog and the brewery boom

The Sunday Times looks at craft brewery BrewDog, noting that a number of independent breweries have sprung up across the UK in recent years, with analysis from UHY Hacker Young showing that 179 opened in 2016 alone.

The Sunday Times, Business and Money, Page: 7

INDUSTRY NEWS

Big Four ride high, with robots yet to rise

James Ashton says BBC drama Years and Years, which is set in the near future, “ended with a dystopian imagining to strike fear into white-collar workers” – with an accountant saying her profession no longer existed as a computer programme had rendered the sector’s human staff obsolete. Mr Ashton says the present is “not so bleak,” with the Big Four “riding high” despite regulatory scrutiny. He notes that David Sproul has stepped down at Deloitte having lifted revenues in each of his eight years, while “the likes of EY and KPMG need more bright people to tackle the threat of cybercrime” rather than “an army” of robot accountants. He also cites PwC’s Kevin Ellis, who recalls the industry’s last big technological change, when PCs were introduced, noting that staff numbers “went up then too.& rdquo;

The Sunday Telegraph, Business and Money, Page: 2

SMEs NEWS

Late-payers to be frozen out of public sector contracts

As of September, firms that do not pay 95% of subcontractors within 60 days risk being frozen out of public sector procurement. The new rules force companies to report their payment data every six months to a national database overseen by the business department, with the measures part of efforts to tackle late payments to small businesses. The Federation of Small Businesses (FSB) estimates that problems linked to delayed payments see 50,000 companies shut every year. FSB chairman Mike Cherry comments: “The crackdown on big business suppliers who don’t pay promptly is welcome; those who fail to comply … should be in no doubt of the consequences.” Martin Traynor, the small business crown representative, said those who fail to pay up in a timely fashion may see themselves taken out of the running for public sector contracts. “If you can’t satisfy the people you are procuring, then you won’t be bidding for it,” he sai d.

The Sunday Times, Business and Money, Page: 2

PROPERTY NEWS

Property transactions dip

HMRC figures show that property transactions dropped by 6.4% between April and May, and by 11.3% year-on-year. Mike Scott of Yopa said that other indicators, such as the number of mortgage approvals, “are still showing a healthy level of activity.” He added that it is expected that the number of homes sold in 2019 as a whole is expected to total around 1.2m, the same as in each of the previous five years. Jeremy Leaf, former RICS residential chairman, said that while the figures “reflect weakness in the market at a time when we might have expected more strength”, the seasonal nature of the market “makes spotting short-term trends difficult”.

Sunday Express

ECONOMY NEWS

Tech can drive productivity and prosperity

The Sunday Times’ David Smith considers what might lift the economy from the “doldrums” of weak growth and flat-lining productivity. He notes a survey of economists by Consensus Economics which shows an average expectation of just 1.35% growth this year and next if a Brexit agreement is secured, while a no-deal would see growth drop below 0.5% next year. Mr Smith says technology “can and should be an important driver of productivity, and thus prosperity,” pointing to KPMG’s Economic Outlook, due to be published on Thursday, which will state: “Investment in innovation and technological change can drive a step-change in trade and an acceleration of trade growth in post-Brexit Britain.”

The Sunday Times, Business and Money, Page: 4

OTHER NEWS

Young female leaders

The Sunday Telegraph carries a feature highlighting young female business leaders. These include Crystal Eisinger, Google’s strategy & operations lead, who started her career with a fully-paid gap-year placement with Deloitte; Acosta Europe COO Charlene Friend, who started out in consulting with PwC; and Ana Herranz, head of customer & commercial strategy at Telefonica UK, who previously worked as a management consultant at PwC.

The Sunday Telegraph, Business and Money, Page: 6

Contact Paul Southward.

Paul Southward


News Roundup Saturday 22nd June 2019


News Roundup Saturday 22nd June 2019

NEWS ROUNDUP

TAX NEWS

HMRC: Tax gap at 5.6%

HMRC has revealed that the tax gap for 2017/2018 was 5.6%, meaning the Revenue collected 94.4% of all tax due. The figures show that the tax gap, which shows the difference between the amount of tax that should be paid to HMRC and what is actually paid, has fallen from 7.2% since 2005/2006. The duty-only excise tax gap has reduced from 8.4% in 2005/06 to 5.1% in 2017/18, while the corporation tax gap has reduced from 12.5% to 8.1% in the same period. HMRC says avoidable mistakes are costing the Exchequer over £9.9bn a year, with £3bn of this attributable to VAT. The Revenue says efforts to tackle tax evasion, tax avoidance, and non-compliance mean it has secured and protected more than £200bn in extra tax that would otherwise have gone unpaid since 2010. Commenting on the report, Financial Secretary to the Treasury Jesse Norman said: “The UK’s low tax gap underlines both how the vast majority of people are paying the correct amount of tax, and how effective HMRC has been in its efforts to clamp down on tax evasion and avoidance.” George Bull of RSM said some areas of the gap remain “stubbornly high”, including tax evasion, criminal attacks and the “hidden economy”, which were worth a combined £13.2bn. With the data showing that small firms accounted for £14.4bn of the 2017/18 shortfall, Jason Piper of the ACCA noted the challenge in chasing up tax they owe, saying: “Small businesses by definition will have smaller tax bills, which means that HMRC will need to open more enquiries and handle more pieces of correspondence per pound than for large businesses.”

The Daily Telegraph, Business, Page: 4 The Times, Page: 4 Daily Mirror, Page: 37 Press Release

Judge rules against stamp duty dodge

Property buyers who used annuities to avoid stamp duty could be pursued by the taxman, reports the Telegraph’s Sam Meadows, pointing to a case involving tax adviser David Hannah, who runs Cornerstone Tax. Tribunal judge Victoria Nicholl threw out Mr Hannah’s appeal against a £30,600 bill, siding with HMRC to rule that a process which saw a property paid for via a complex web of annuities and companies registered offshore was a contrived way to avoid tax. Mr Meadows says similar schemes have been promoted to the public by several firms. He goes on to say that while most schemes claiming to mitigate stamp duty are likely to fail, there are a number of ways to limit or eliminate the bill, including: buying a property worth less than £125,000; being a first time buyer; buying overseas; buying commercial property; or being gifted the property.

The Daily Telegraph

Can today’s ultra-rich make peace with a wealth tax?

The FT’s Martin Sandbu considers the merits of wealth taxes, looking at different countries’ approaches to such levies and the impact these taxes have. Elsewhere in the same paper, Stephen Foley says any effort to increase taxes for wealthy US taxpayers “risk being undermined by the exceptionally generous tax break given for charitable donations”.

Financial Times, FT Wealth, Page: 12 Financial Times, FT Wealth, Page: 58

Laffer no laughing matter

Ryan Bourne, the R Evan Scharf Chair for the Public Understanding of Economics at the Cato Institute, looks at economic policy set out by Art Laffer, who has been awarded US Presidential Medal of Freedom. He says that while some have derided and criticised the economist, the effect on global tax policy of Mr Laffer’s “supply-side” school is “indisputable”, noting that many global economies have followed the US in cutting top tax rates on income and profits. Mr Bourne says Mr Laffer has “helped popularise … important tax policy principles we now take for granted.” He adds that Mr Laffer’s ideas “had important application to maintain growth in the transition to low inflation in the Eighties” and “generated a global tax revolution.”

The Daily Telegraph, Business, Page: 2

Banks need more support and tax cuts

UK Finance chairman Bob Wigley has warned the Government that UK banks need more support to promote a positive vision of the finance industry. The trade body chair called for a new formal body to be set up to better represent the sector, as the Government had failed to adequately support the finance industry in the Brexit negotiations, and called for tax cuts. He noted that the aggregate rate of tax paid by banks in New York and Frankfurt was much lower than in London.

City AM, Page: 4

Tories and tax

The FT looks at policy proposals from Conservative leadership candidates Boris Johnson and Jeremy Hunt, commenting that tax cuts aimed at appealing to party members “are not a sensible way to approach fiscal policy”. Meanwhile, research by Prof Tim Bale at Queen Mary University of London suggests that 15% of Conservative Party members think that the tax system should redistribute from the rich to the poor.

Financial Times, Page: 10 Daily Mirror, Page: 4

CORPORATE NEWS

Monsoon seeking lower rents to stay afloat

Monsoon Accessorize is asking landlords to reduce rents on more than half its 258 leased stores in return for a share of £10m future profits. Under the restructuring, which is taking place under a two separate CVAs in a process overseen by Deloitte, no stores would close and no jobs are expected to be lost from the 4,440-strong workforce. Owner Peter Simon, who has also given the company an emergency £12m loan and offered another £18m at 0% interest if the CVA is approved, said that it had faced “significant pressure” on working capital because of the removal of trade credit insurance, meaning it has to pay suppliers up front. Considering the use of CVAs by retailers. Nils Pratley in the Guardian asks “how many more of these requests from wealthy individuals are landlords prepared to tolerate?” He suggests landlords “hold a poor hand, but they’re also playing their cards weakly” and says they have themselves to blame if an “open season for retail CVAs” occurs.

BBC News Financial Times, Page: 18 The Daily Telegraph, Business, Page: 4 The Times, Page: 41 Daily Mail, Page: 80 I, Page: 44 The Guardian, Page: 34 Daily Express, Page: 50 The Sun, Page: 47 The Scotsman, Page: 40

PTSG agrees to £265m offer

Specialist services provider Premier Technical Services Group (PTSG) has agreed a recommended all cash offer from global investment bank Macquarie. The Yorkshire Post notes that KPMG corporate finance partner Giles Taylor is a lead financial adviser to PTSG.

Yorkshire Post, Page: 18

PROPERTY NEWS

Investor could check in to hotels

Centerbridge Partners, a New York-based private equity and real estate business, could acquire 27 hotels for more than £300m, having reportedly entered talks with owner Macdonald Hotels. The Times says the potential deal follows a process by Deloitte that is believed to have led to interest from Kop, a Singapore property company.

The Times, Page: 42

SMEs NEWS

8 in 10 SMEs have no wellbeing strategy

A study commissioned by AXA PPP healthcare shows that 82% of small and medium businesses do not have a health and wellbeing strategy in place. The report reveals that two-thirds of staff at SMEs experience stress or anxiety related to their job, while almost half said they continue to “power through” even when ill. On the impact a wellbeing strategy could have, half of the staff polled said they would feel less stressed, while 52% said they believe it would deliver an improvement in productivity. Tracy Garrad, CEO at AXA PPP healthcare, said: “The reality is small businesses make up more than half the UK’s workforce and their employees are crying out for greater support.”

The Sun, Page: 42

INTERNATIONAL NEWS

Record tax-dodger complaints Down Under

Australians reported suspected tax dodgers a record 60,000 times this financial year, with public reports of tax avoidance up by 42% between July 2018 and May 2019. The tax commissioner said: “Honest businesses and consumers have had enough – they’ve decided to take action.”

I, Page: 45

ECONOMY NEWS

Bank freezes rates and cuts growth outlook

The Bank of England has kept interest rates on hold at 0.75% amid heightened no-deal Brexit fears and as UK growth falters. The MPC voted unanimously to keep rates unchanged as it cautioned the “downside risks” to growth had increased since its last set of forecasts in May. The Bank also trimmed its expectations for second quarter growth, predicting GDP will remain flat against a previous forecast for 0.2% expansion, after official data showed the economy dipped by a worse-than-feared 0.4% in April. However, the Bank reiterated that “gradual” rate hikes would be needed over the next three years to keep inflation to its two per cent target. Howard Archer, Chief Economic Adviser at EY Item Club, said: “With the economy clearly having a difficult second quarter and likely to be hampered by prolonged Brexit uncertainties, we believe the odds strongly favour the Bank of England keeping interest rates at 0.75% through 2019.”

The Times, Page: 38 Financial Times, Page: 2 The Independent, Page: 51 The Daily Telegraph, Business, Page: 4 The Guardian, Page: 33

Poor weather hits UK sales

The Office for National Statistics has revealed that retail sales fell by 0.5% in May from a month earlier, after an unseasonably cold May prompted a sharp decline in summer clothing sales. In the three months to May, retail sales expanded 1.6% compared with the previous three-month period, the smallest annual rise since October. The downturn was led by a slide in Department stores sales, with sales falling by 0.9% in the three months to May, while clothing and footwear sales fell by 4.5%, the biggest drop since July 2015. Rhian Murphy head of retail sales at the ONS, said: “Retail sales continued to grow in the latest three months despite two consecutive monthly falls, with clothing sales declining considerably in May, due to unseasonably cold weather.” Deloitte’s Ian Geddes said: “The grey clouds that have continued to gather in June may foretell further headwinds for retailers for the rest of the month,” while Li sa Hooker of PwC noted that high street discounting has “ramped up earlier than usual”, adding: “While this might provide a short term fillip to sales, the consequent margin erosion points to even more high street distress in the rest of 2019.” Phil Mullis at Wilkins Kennedy commented: “We will have to hope that the sun does come out soon to help shift summer clothing ranges and encourage people to spend a little bit more.”

The Times Financial Times The Daily Telegraph, Business, Page: 4 The Independent, Page: 53 The Guardian, Page: 33 Press Release

OTHER NEWS

UK leads on FDI

EY ‘s 2019 UK Attractiveness Report shows that the UK remained Europe’s most attractive place for international investment in finance in 2018. It was shown that regionally Scotland is the most attractive location for international investment into financial services outside London. Those polled were asked to identify how the UK’s attractiveness might be enhanced in the future, with 32% saying improving the skill levels of the UK workforce was key, while 23% said reducing corporate taxation levels.

City AM, Page: 6 The Press and Journal, Page: 33

Contact Paul Southward.


News Roundup Friday 21st June 2019


News Roundup Friday 21st June 2019

NEWS ROUNDUP

TAX NEWS

Think-tank questions tax pledges

Analysis by the New Economics Foundation (NEF) think-tank suggests tax cuts proposed by Conservative leadership frontrunner Boris Johnson would force up to 100,000 families into poverty. The former Foreign Secretary has said he would look to raise the threshold for the higher rate of income tax from £50,000 to £80,000. NEF research shows this would cost £9.5bn a year and would make the wealthiest 20% of families £1,790 a year better off, while doing nothing to help the poorest 20%. As a result, 50,000 households would be forced into relative poverty. Mr Johnson’s plan to abolish national insurance on the first £1,000 of earnings each month, which has also been mooted by leadership rival Jeremy Hunt, would cost £8.2bn a year and would see the incomes of the richest 20% of families rise by £560 a year, while the poorest 20% would benefit by just £80 a year. The think-tank a lso crunched the numbers on Home Secretary Sajid Javid’s plan to cut the basic rate of income tax below the current 20%, saying it would cost £4.4bn a year for a 1% cut that would help the richest by £450 a year and the poorest by just £10. Alfie Stirling, head of economics at the NEF, believes the proposed tax cuts “will come as a double blow” for those hit by increased NHS waiting times, overcrowded school classes and unaffordable social care, “forgoing billions of pounds in revenues that could otherwise have been used to boost public services”. Elsewhere, figures obtained by Leeds MP Rachel Reeves show that 44% of the beneficiaries of Mr Johnson’s tax rethink would be located in London (23%) and the South East (21%).

The Independent, Page: 9 I, Page: 7 Yorkshire Post, Page: 4

Offshore ownership pledge welcomed

With Jersey, Guernsey and the Isle of Man vowing to adopt public registers detailing ownership of offshore companies incorporated in their jurisdictions, MP David Davis has welcomed the move, saying it means “greater transparency and less tax evasion”. Labour Shadow Chancellor John McDonnell commented: “We’ve insisted on greater tax transparency, so welcome these moves.”

The Daily Telegraph, Page: 8 Daily Mirror, Page: 28

CORPORATE NEWS

Goals ‘blocks’ accounting probe

Goals Soccer Centre, which in March revealed that it owed £12m in VAT, has been accused of having “stonewalled” calls from its largest shareholder, Sports Direct, for an external probe into its £12m accounting crisis. Mike Ashley had urged Goals to approve an external investigation over fears about the scale of the possible issues, over which former Goals auditor KPMG has been reported to be on standby for a potential lawsuit. Sports Direct says Goals’ lenders have appointed Deloitte to conduct an internal investigation but are yet to confirm whether this will be shared beyond creditors and directors.

City AM Financial Times, Page: 18

No buyer for Bathstore

BDO has been lined up to handle a potential administration of bathroom retailer Bathstore after the loss-making business failed to find a buyer. The latest accounts filed at Companies House show the retailer making a pre-tax loss of £22m on sales of £141m in the year to 31 July 2017.

The Guardian, Page: 39 City AM, Page: 5

Monsoon offers share of profits ahead of CVA

Monsoon Accessorize’s owner Peter Simon will offer landlords a share of future profits worth up to £10m as he attempts to persuade creditors to vote for a Deloitte-led CVA which would allow him to reduce the size of his stores and pay less rent. The insolvency procedure has been delayed for several weeks as landlords sought additional sweeteners, including an equity stake in the business. Mr Simon has also pledged to invest £34m in the 270-shop fashion retail chain to keep it afloat.

The Guardian City AM, Page: 5

Collapsed firm sold

Tech firm Hutchinson Networks, which last month went bust, has been sold to Irish tech group PlanNet21 Communications. Blair Nimmo, joint administrator and UK head of restructuring at KPMG, said the acquisition “will provide the new owners with a fantastic base from which to expand their operations into the UK.”

The Scotsman, Page: 36

Jobs saved at Redhall Networks

More than 50 jobs have been saved after the trade and assets of Redhall Networks were purchased by Enact. Chris Petts and Sarah O’Toole of Grant Thornton were appointed administrators.

Yorkshire Post, Business, Page¨1

Construction firm collapses

Construction firm Shaylor Group has fallen into administration, with FRP Advisory in discussion with the company’s clients regarding the transfer of sites and supporting workers affected by the closure.

The Birmingham Post, Page: 5

Investors to pick up Slack

The Telegraph looks at the IPO of messaging app Slack, noting that KPMG’s NYSE IPO guide says: “Once listed, a company will experience far greater public scrutiny and will have a range of continuing obligations with which to comply.”

The Daily Telegraph, Business, Page: 5

SMEs NEWS

Government set to tackle late payments

The Government is aiming to deliver measures designed to tackle late and slow payments, Small Business Minister Kelly Tolhurst has announced. She said the proposals would “ensure that small businesses are given the support they need” and bring an end to the “unacceptable culture” of late payment. The plans would see Small Business Minister Paul Uppal’s powers strengthened. This would include handing him the ability to fine businesses that do not pay bills within agreed contractual terms. The Commissioner would also be given powers to make firms detail payment terms and practices. Payment plans that ensure bills are settled quickly could also be enforced. The plan was welcomed by Mike Cherry, national chairman of the Federation of Small Businesses (FSB), who said companies would be “delighted” with the proposals. The FSB estimates that late payment forces about 50,000 businesses to collapse every year. The Institute of Directors also welcomed the proposals, saying they marked “a significant step forward”. Phil Hall of the Association of Accounting Technicians believes the Government “could and should” go further, suggesting maximum payment terms could be cut from 60 to 30 days.

The Times, Page: 47 City AM, Page: 7

PROPERTY NEWS

London dragging on UK house prices

London continues to drag on UK house prices, according to data by the Office for National Statistics, with the capital enduring the lowest annual growth out of any region with prices falling 1.2% over the year to April 2019. Prices across the UK rose an unadjusted 0.7% month-on-month in April, the first rise in eight months, taking the average property price to £229,000. In England, the East Midlands saw the strongest annual house price growth in April, with a 2.9% increase. Regionally, Wales saw the strongest growth in the UK of 6.7% in the year to April, followed by Northern Ireland at 3.5%, Scotland by 1.6% and England by 1.1%. Northern Ireland remains the cheapest country in the UK to purchase a property, with an average house price of £135,000.

The Daily Telegraph The Independent, Page: 59 City Daily Mail AM

LEGAL NEWS

VAT fraud hits renewable energy industry

HMRC is cracking down in the trading of renewable energy certificates “with immediate effect” to counter “a serious and credible threat to the VAT system”, with criminals believed to be charging VAT on the sale of renewable energy certificates of origin, with the money siphoned off rather than making its way to the taxman.

The Guardian, Page: 39

ECONOMY NEWS

Bank set to hold interest rates

The Bank of England is expected to hold interest rates again today, with economic growth slowing sharply after a stock-building boost at the start of 2019. The MPC is expected to keep rates at 0.75%. Data released yesterday showed that inflation had fallen to a target of 2% in May, down from 2.1% in April, a development that could give the Bank more breathing space to keep rates unchanged. Core inflation, which excludes more volatile food and energy prices, dropped to 1.7% – the lowest figure since early 2017.

The Times, Page: 40 The I, Page: 40 The Daily Telegraph, Business, Page: 3 The Independent, Page: 58

Factory output slows

According to the latest industrial trends survey from the CBI, factory output almost ground to a halt in the three months to June. The business lobby group said that a net balance of 2% of businesses reported an increase in output during the period. This was down from 14% the previous month, when manufacturers were lifted by Brexit-related stockpiling. The CBI said that ten out of sixteen sub-sectors experienced growth. The balance of manufacturing businesses reporting higher-than-usual orders fell to -15% in June, down from -10% last month.

The Times, Page: 40

Young people see spending power shrink

Young people’s spending power is less than it was in 2001, Resolution Foundation research has found. The analysis reveals that 18 to 29-year-olds are spending £380 per week on non-housing items, marking a 7% decline in real terms on what those in the same age group spent in 2001. In the same period, those aged over 65 have seen a 37% increase in spending power.

The Independent, Page: 17 I, Page: 9 Yorkshire Post, Page: 9

OTHER NEWS

No-deal could hit law firms

Analysis of the accounts of the top 50 law firms by Smith & Williamson and Legal Week shows that on average they hold enough cash to cover just three week’s wages, with the average monthly payroll £610m and firms typically holding £410m in cash. Giles Murphy, head of professional practices at Smith & Williamson, said: “If there’s a shock to the economic system for example, a no-deal Brexit, clients may decide to delay payments and that could be devastating to law firms.”

City AM, Page: 11

Oxbridge dominates in hunt for new income

The FT looks at the finances of universities, citing Ian Koxvold at PwC who estimated that around 50 institutions are in deficit.

Financial Times, Page: 2

Contact Paul Southward.

Paul Southward


News Roundup Thursday 20th June 2019


News Roundup Thursday 20th June 2019

NEWS ROUNDUP

TAX NEWS

Boris pulls back on tax plan

Boris Johnson has backed away from contentious plans for tax cuts for the rich. Speaking in his first TV debate of the Conservative leadership campaign, the former Foreign Secretary said a proposal to raise the thresholds for the top rate of income tax was an “ambition” which was open to “debate”. Mr Johnson also said it was “very sensible to have an ambition to raise the threshold for the highest rate of tax for middle income earners”. Commenting on plans for tax, Foreign Secretary Jeremy Hunt said: “People say we are the party of the rich. We must never fall into the trap of doing tax cuts for the rich.” The discussion also saw Rory Stewart comment on promises made by leadership rivals, describing them as “the thing that slightly depresses me in this debate.” He offered: “I’m going to be very straight with people. I don’t think this is the time to be cutting taxes – I would be spending the m oney not on tax cuts but on investing in our public services.”

The Times, Page: 1 The Independent, Page: 3 Financial Times, Page: 2 The Guardian, Page: 1

TPA: IHT plan ‘kicked down the road’

Duncan Simpson, research director at the Taxpayers’ Alliance, says the Treasury and Government made “no serious concerted effort” to abolish inheritance tax, saying a pre-coalition plan was to increase the inheritance tax threshold to about £1m but “that can was kicked down the road because of the political priorities, going into a coalition with the Liberal Democrats.” He added: “But really since then, there has been no serious concerted effort by the Treasury or the Government at least publicly, to really think about how we get rid of this tax or seriously limit the burden on people.” He notes that one option would see raising the threshold from £325,000 to £500,000 and halving the rate so “rather than it being 40% of your estate going to HMRC it’s 20%.”

Daily Express

MPs demand curbs on fast fashion waste

A report by MPs has urged the Government to end the era of throwaway clothes and poor working conditions in the fashion supply chain. The Environmental Audit Committee made 18 recommendations, including a 1p per garment tax which would go towards better recycling schemes, however, the Government has rejected the proposals, saying it has been developing its own set of measures that encourage retailers to self-regulate.

The Daily Telegraph, Business, Page: 3 BBC News

Tax gap concern

Murdo Fraser in the Scotsman looks at tax devolution in Scotland, noting that while it is “barely two years” since Holyrood was given powers over non-savings, non-dividend income tax, with a right to vary bands or rates, the Government has already used the power “to create a significant tax gap between Scotland and the rest of the UK, for those earning over £43,000 annually.” He says the gap has prompted “serious concerns from business” and suggests there is “a real danger that if the tax gap widens, there will be a discernible impact on Scotland’s economic performance.”

The Scotsman, Page: 25

POLICY NEWS

Islands to reveal who owns offshore firms

Jersey, Guernsey and the Isle of Man are to adopt public registers of the true owners of offshore companies incorporated in their jurisdictions, with fully public registers to be introduced by 2023. MP Margaret Hodge and the Conservative MP Andrew Mitchell, who have suggested legislation should be used to force the dependencies to introduce the registers, welcomed the new announcement as “an important first step towards our goal of ensuring greater transparency in the fight against tax avoidance, tax evasion and money laundering”. However, they have called for clarification over some elements of the proposals, saying the 2023 timetable for implementing the new registers was “unacceptably long”, that current proposals would grant banks and accountants access to the information before the public and the media, and that it was unclear if the data would be free of charge.

The Guardian, Page: 14

CORPORATE NEWS

Goals looks to score buyer

Goals Soccer Centres have appointed advisers to look for a possible buyer, saying it has engaged Deloitte to “work alongside its current advisers and its lenders in assessing its future corporate options”. The five-a-side football pitch operator last month appointed forensic accountants to examine its finances after it revealed it had mis-declared its VAT bill over several years, leaving it with a potential liability of £12m. The Guardian says options under consideration by Deloitte are thought to include a sale of the firm, with Goals saying the board could make a move before it settled its tax bill, with talks continuing with HMRC and lenders including Bank of Scotland and auditor BDO.

The Guardian, Page: 35 Daily Mail, Page: 64

LEGAL NEWS

Ex-BHS owner fights tax evasion charges

Former BHS owner Dominic Chappell has appeared at City of London Magistrates’ Court charged with tax evasion. Mr Chappell is charged with three counts of cheating public revenue out of £650,000 and two counts of money laundering connected to his bankrupt finance company Swiss Rock. The charges involve tax evasion offences including failing to register his company for taxes from the correct date, providing false information to the HMRC, failing to pay corporation tax, not declaring profits and failing to submit VAT returns.

The Times, Page: 42 Financial Times Daily Mail, Page: 63 The Daily Telegraph, Business, Page: 3 I, Page: 39 Daily Mirror, Page: 11 The Guardian, Page: 33 Yorkshire Post, Page: 2

Government settles Bank Mellat lawsuit

The Government has made an out-of-court deal to settle a £1.3bn damages claim made by Iran’s Bank Mellat over a UK trading ban. Both sides refused to disclose the size of the settlement, although a source suggested that it could be in the region of £100m. The Government declined to comment on suggestions that it had spent £35m defending itself against Bank Mellat’s claim, including more than £6m paid to Deloitte.

The Times, Page: 42 Financial Times

PERSONAL FINANCE NEWS

Rule changes and rates cuts hit savers

Changes to the way NS&I index-linked savings are calculated could see a drop in interest for up to half a million savers. NS&I moved away from the retail prices index (RPI) inflation measurement on May 1, and adopted the consumer prices index (CPI) method, which is usually lower. In the year to April, the RPI figure was 3% while the CPI was 2.1%. Analysis shows that over a year, somebody with £10,000 worth of certificates could now earn £91 less interest.

Daily Express, Page: 29

ECONOMY NEWS

Pound falls amid rising no-deal threat

The pound is at its lowest in almost six months on heightened fears of a no-deal exit, points out Neil Wilson, chief market analyst at Markets.com. “The calculus is simple – failure to take Britain out of the EU this year risks a General Election and wipe out at the polls at the hands of the Brexit Party, potentially handing Jeremy Corbyn the keys to Number 10,” he says. “The EU says it won’t renegotiate (it may have to), MPs won’t accept the existing deal, and Parliament has limited scope to stop this train. Sterling is increasingly reflecting the no-deal risk.” The pound has stumbled quite badly against the dollar over the past three months, currently at $1.2531, down 0.02% on the day, and is now getting close to a year low. Professor Costas Milas, of the University of Liverpool’s management school, thinks there is a good chance that the pound could rebound if Rory Stewart goes through to the next rou nd of the Tory leadership race, due to his firm stance against a no-deal Brexit.

The Daily Telegraph Financial Times BBC News Daily Mail

Contact Paul Southward.

Paul Southward


News Roundup Wednesday 19th June 2019


News Roundup Wednesday 19th June 2019

NEWS ROUNDUP

TAX NEWS

Jesse Norman to meet MPs calling for loan charge suspension

Jesse Norman has confirmed that he will hold talks with Sir Ed Davey MP, the chairman of the Loan Charge All Party Parliamentary Group (APPG), to discuss concerns about the loan charge. The Financial Secretary to the Treasury said he had already met with senior officials from HMRC and the Treasury as well as the CIOT and the ICAEW to discuss the issue. The loan charge was introduced in response to the Treasury’s concerns about “disguised remuneration schemes” which involved individuals being paid through loans, usually via an offshore trust in a low or no tax jurisdiction, which they did not have to repay. Workers from a wide range of professions have been hit with unexpected tax bills of up to tens of thousands of pounds dating back to 1999.

Yorkshire Post, Business, Page: 1

Inheritance tax and the hard Left’s hypocrisy

The Telegraph’s Madeline Grant and the Mail’s Dominic Sandbrook both launch attacks on Labour’s stance on inheritance tax following the report commissioned by the party espousing reforms that will see a lifetime allowance for gifts to children of £125,000. Both writers slam the far left’s attacks on the notion of family and the idea that achievement might be rewarded in their ideological lust for a levelling down to the lowest common denominator. Grant says “Corbynistas are brilliant at taking traditional virtues and reframing them as vices [while] simultaneously practising these virtues in their personal lives.”

The Daily Telegraph, Page: 16 Daily Mail, Page: 16

CORPORATE NEWS

Underpaying workers proves costly for Staffline

Recruitment company Staffline saw its shares tumble again yesterday after it said it had almost doubled the sum it would set aside to compensate workers who had been underpaid. Staffline’s shares were suspended for six weeks between January and March after PwC delayed the company’s annual results and began to investigate allegations that it had failed to comply with national minimum wage rules.

The Times, Page: 41 The Times, Page: 35

SMEs NEWS

SMEs remain confused about MTD

A survey has found that 11% of SMEs are unaware of new rules on keeping digital tax records. More than one million firms with an annual taxable income of in excess of £85,000 are now legally required to submit VAT returns online. But nearly half of those polled who thought they were compliant were found not to be. HMRC has said it will take a “light touch” approach to penalties in the first year of implementation. However, this is only where businesses are doing their best to comply. Chris Evans, VP and country manager at Intuit QuickBooks UK, advises businesses to read up on Making Tax Digital or try QuickBooks’ free MTD Checker tool.

The Independent

Banks accused of overcharging small customers for forex services

Small businesses are being overcharged for foreign exchange services to the tune of hundreds of millions of euros a year by banks across Europe, according to research by the European Central Bank.

Financial Times, Page: 16

PROPERTY NEWS

Newly listed asking prices back near record highs

The national average price of a newly marketed property has been pushed up by 0.3%, thanks to buoyant property markets in the north according to Rightmove. Despite Brexit uncertainty weighing down house price growth over the past year, the average price of a property coming on to the market was £309,348, close to June 2018’s record high of £309,439. Miles Shipside, director at Rightmove said that resilient markets in the north and Midlands are helping to boost average prices due to the “relentless strength of buyer demand”. “Buyers in four regions are seeing higher new seller asking prices on average than ever before,” he added.

The Daily Telegraph Daily Mail

ECONOMY NEWS

London-Shanghai share trading initiative launched

Britain and China began selling shares in each other’s companies yesterday under a landmark deal between the UK Financial Conduct Authority and China Securities Regulatory Commission. Under the cross-border investment program called Shanghai-London Stock Connect, investors and issuers in the UK and China will have a mutual access to both capital markets through depository receipts. “This new scheme will deepen and strengthen connectivity between U.K. and China capital markets to the advantage of both countries,” FCA CEO Andrew Bailey said. The two countries have also agreed a protocol on beef trade giving UK farmers access to the Chinese market by the end of 2019.

Financial Times City AM Daily Express Yorkshire Post, Page: 1

Stockpiling hampering growth

New research from Lloyds Banking Group has revealed that British businesses have close to £600bn tied up in excess working capital, potentially stifling growth and leaving them exposed to economic uncertainty. Lloyds blamed increased inventories on political and economic uncertainty, with stockpiling at larger UK firms rising by a third in three years. Ed Thurman, Lloyds’ managing director of global transaction banking, said stockpiling “can be risky as cash invested in inventory is rarely easy to release, meaning firms are less able to invest in growth or respond to unexpected changes in demand”.

The Scotsman, Page: 36 The Sun, Page: 43

Global slowdown will continue into 2020

Fitch Ratings has warned that the global slowdown will continue into next year as mounting trade war uncertainty forces businesses to rein in spending and Chinese consumers turn cautious. Fitch trimmed its 2020 global growth forecast to 2.7% from 2.8%. It added that growth would slow a further 0.4 percentage points to 2.4% if President Trump carried out his threat to slap tariffs on the remaining $300bn of Chinese imports and Beijing retaliates.

The Daily Telegraph, Business, Page: 8

OTHER NEWS

Rise in middle-aged “money mules”

New figures from Cifas, the fraud prevention service, have revealed that criminals are increasingly recruiting middle-aged people to act as “money mules”. The research showed that the number of people aged 40 to 60 being used by criminals to transfer funds between accounts rose by 35% last year compared with the previous year. Cifas said that the 40 to 60 age group were easier targets because more of them were going online. Cifas also found that most victims of identity scams last year were young adults and over-60s. Cases involving victims aged 21 and under rose by 26%, and cases involving over-60s rose by 34%.

The Times, Page: 14 Daily Mail, Page: 2 The Scotsman, Page: 20 Yorkshire Post, Page: 9

ATT issues warning over new registration rules

New EU rules for trusts coming into force by March 2020 will require the trustees of all UK resident trusts to register their trusts on the UK Trust Register, regardless of whether the trust has incurred any UK tax liabilities. The Association of Taxation Technicians (ATT) is warning that the extension of registration rules will put trustees at risk of civil and criminal sanctions if they fail to comply. Jon Stride, co-chair of the ATT’s technical steering group, said: ‘While it is impossible to know how many more trusts will need to register under the new rules, the sheer scale of this task must not be underestimated.”

Accountancy Daily

Innocent bank customers suspected of money-laundering

An investigation by the Law Commission has found that bank officials are wrongly suspecting customers of money-laundering and freezing the accounts of innocent people. The commission said that banks, lawyers and financial services staff were wasting time and producing too many “low-quality and unnecessary” reports on suspected money-laundering. It added that one in seven reports was deemed unnecessary. The commission has recommended a new advisory board, statutory guidance and an online form for reporting.

The Daily Telegraph, Page: 11 The Times

X Factor star’s accountant banned

A south Essex accountant who defrauded X Factor winner James Arthur of almost £600,000 has been discredited from the profession – and ordered to pay £7,750. Mark Livermore was jailed for four years in January after being convicted of fraud he had carried out to fund a gambling habit.

Basildon Echo

Contact Paul Southward.

Paul Southward


News Roundup Tuesday 18th June 2019


News Roundup Tuesday 18th June 2019

NEWS ROUNDUP

TAX NEWS

Think tank calls for corporation tax cuts for those who boost wages

The cross-party think tank the Social Market Foundation (SMF) is to call on Conservative Party leadership hopefuls to go further than the corporation tax cuts so far proposed and only offer corporate tax cuts to firms that increase pay or training for young and low-paid staff. A report from the SMF cites a Japanese programme which saw companies raising wages by 3% or more paying corporation tax at 20% rather than 30%. The SMF said other options could include reducing business rates for firms promising to pay staff the living wage or more – £10.55 an hour in London or £9 elsewhere in the UK – or offering employers additional tax reliefs when they train low-paid staff. Elsewhere, Institute of Economic Affairs D-G Mark Littlewood asserts in the Times that: “The economic evidence – however awkward for elected politicians to present – is that in many areas, we can probably increase state revenues and even the proportion of this revenue contributed by the wealthy if the government is actually willing to reduce headline rates of tax. In numerous areas, we are very likely on the ‘wrong side’ of the Laffer curve.”

The Daily Telegraph, Business, Page: 3 The Times, Page: 41

Labour’s shock lifetime gifts tax plan

Several papers pick up on news that Labour is considering a “lifetime gifts tax” which would reduce the inheritance tax allowance to £125,000. The Labour-commissioned Land for the Many report claimed the move would raise £9.2bn more than the present system. But the party was accused of planning a massive tax raid on middle-class parents who help their children get on the housing ladder. Paul Scully, vice chairman of the Conservative Party, said: “This is yet another Labour tax raid in Corbyn’s war on homeowners.” Former Cabinet minister Priti Patel added: “Corbyn’s Labour have no respect for the millions of people across the country who work hard to provide economic security for themselves and their families. Labour’s disregard of people, their rights and freedoms is exactly why socialism never works and it will never work in Britain.”

The Times, Page: 20 Daily Mail, Page: 14 City AM, Page: 7

Woodford directors boosted by restructuring

Shifting Woodford Investment Management from an LLP to a limited company could have earned the company’s directors significant tax benefits, industry experts tell the Telegraph. However, the new structure would also have provided more flexibility especially when it comes to reinvesting profits and building up reserves. A Woodford spokesman said: “The change in status allowed the company to manage its capital more efficiently, provided a more flexible legal structure and improved corporate governance.”

The Daily Telegraph, Business, Page: 1

Can today’s ultra-rich make peace with a wealth tax?

The FT looks at wealth taxes in various countries and those proposed for the US. The paper goes on to explain how a net wealth tax favours those who deploy their assets more productively.

Financial Times

REPORTING NEWS

Campaign group demands global firms come clean on their environmental impact

Global companies with a combined worth of more than $15trn lack transparency over their effect on the environment, according to investor alliance group CDP, formerly known as the Climate Disclosure Project. Many of the companies on a list of over 700 report on their environmental impact in their own sustainability reports but the CDP claims this is insufficient because their reports do not use standardised data. The number of major investors backing CDP has grown to 88, from 57 two years ago and includes HSBC, Investec, asset managers Candriam and Amundi, as well as Cathay Financial Holdings and the Washington State Investment Board. Amazon, Tesco and ExxonMobil are among the majors targeted by CDP along with UK high street brands including Tesco, Ocado, WH Smith, Marks & Spencer and JD Wetherspoon.

The Guardian

SMEs NEWS

Only way is up for Aberdeen

The latest SME health check index, by Clydesdale Bank owner CYBG, found Aberdeen had been particularly hit by the oil and gas downturn between 2014 and 2018, leading to just 1% growth in start-ups over the period – the lowest in the UK. The report also found falling sales and confidence levels among Scottish SMEs in the first quarter of this year mean they now have the weakest business confidence of anywhere in the UK. However, business leaders said the region was picking up. Callum Gray, corporate finance director at Anderson Anderson & Brown, said: “We note that while confidence across the oil and gas sector is improving, these businesses often experience a timing lag so we would anticipate an improvement in their trading performance as the year goes on.”

The Press and Journal, Page: 27

PROPERTY NEWS

Surge in buy-to-let fuelled by Labour’s raid on pensions

A report from the Resolution Foundation claiming the buy-to-let boom was reducing the number of homes available for young people to buy has been widely criticised. The left-leaning think tank said the number of Britons with second homes had soared to 5.5m since 2001, with their extra homes rising in value from £610m to £941m over the period. But critics of the report point out that the rise in buy-to-let purchases was down to the Blair – Brown Labour government destroying final salary pensions in the private sector, prompting people to look after their own retirement needs by buying second properties to let. The Mail’s Alex Brummer says the foundation’s report “offers yet another chilling glimpse of Labour thinking on property ownership.”

Daily Mail, Page: 15, 18

Bank of mum and dad set to hand out £6.3bn in loans

A survey by Legal and General and the Centre for Economics and Business Research (Cebr) suggests parents will hand out £6.3bn worth of loans this year in a bid to help their children get on the property ladder. It found that parents are expected to be involved in more than a quarter of a million (259,400) property purchases this year.

The Independent, Page: 10 The Sun, Page: 26

CORPORATE NEWS

Rise of the CVA heralds greater change

The use of CVAs by retailers to restructure store estates has led to the loss of nearly a thousand shops over the past two years, according to new research by property group Colliers International. But Eugene Klerk at Credit Suisse says the threat to high street jobs will only get worse as consumers migrate to more convenient and cheaper ways of buying goods and services.

The Daily Telegraph, Business, Page: 1

PENSIONS NEWS

More doctors retiring early following pension crackdown

New figures show that the number of doctors taking early retirement has almost tripled following a clampdown pension allowances. A spokesman said the Department of Health and Social Care would be “consulting on proposals to make NHS pensions more flexible for senior clinicians, in response to evidence that shows this issue is having a direct impact on retention and front-line service delivery.”

The Daily Telegraph, Page: 1, 2 The Sun, Page: 11

INTERNATIONAL NEWS

France to scrap €1bn of tax breaks for companies

The French government is planning to scrap €1bn of tax breaks for companies to help fund a pledged €5bn reduction in personal income taxes. The remaining €4bn will be financed through lower spending. Budget minister Gerald Darmanin said 95% of taxpayers would see a reduction in their income taxes from January next year.

City AM, Page: 11

ECONOMY NEWS

Business investment expected to contract

The British Chambers of Commerce (BCC) has forecast 1.3% growth for the UK economy in 2019, up marginally from the 1.2% it predicted earlier, due to what it described as “exceptionally rapid stock-building early in the year”. However, the BCC has downgraded its growth forecast for 2020 to 1% from 1.3% and to 1.2% from 1.4% in 2021 as the unwinding of historically-high inventory levels coupled with weaker business investment weigh on economic activity. “The continued Brexit impasse, including the growing possibility of a no-deal exit, together with the high upfront cost of doing business in the UK and the running down of excess stock, is expected to suffocate investment activity over the near term,” the business group warned.

City AM, Page: 6 The Independent, Page: 52, 53 Yorkshire Post, Page: 4 The Scotsman, Page: 34

Motor insurers must brace for possible downturn

Reforms to the size of whiplash claims and possible tighter pricing regulations in the future are likely to keep insurance premiums down, says EY’s Tony Sault good for car owners, but insurers will “need to differentiate their propositions and take advantage of the latest technologies to help drive down costs and improve their customer offerings.”

The Daily Telegraph, Business, Page: 3

OTHER NEWS

Spurs to pay highest business rates of any UK stadium

Tottenham Hotspur’s new £1bn stadium will have the highest business rates bill of any football ground in the country. The north London club will be forced to pay £3.7m in rates this year, more than any other club in the UK, after tax officials said the ground had a rateable value of £7.19m.

The I, Page: 41

Contact Paul Southward.

Paul Southward


News Roundup Monday 17th June 2019


News Roundup Monday 17th June 2019

NEWS ROUNDUP

TAX NEWS

Corbyn plotting major tax raid on gifts to children

The Labour leader is planning to impose a lifetime allowance of £125,000 on parents’ gifts to their children, the Sunday Telegraph reports. The proposal comes from the Labour commissioned report, Land for the Many, and would see any gifts beyond the allowance classified as income and taxed annually at income tax rates. The average house price in the UK is just over £225,000 meaning even those who inherit even the lowest value homes will be heavily taxed. The document states that the inheritance tax reforms “are designed to allow for the better sharing out of the unearned windfalls arising out of the housing boom.” An editorial in the paper says, “Labour’s proposed new inheritance tax would hit the very working class that it has pretensions to represent.”

The Sunday Telegraph, Page: 1 The Sunday Telegraph, Page: 17

Jeremy Hunt offers tax breaks for granny flats

Tory leadership hopeful Jeremy Hunt has proposed a tax break for families building accommodation for elderly relatives – a move he says would help ease the growing social care and childcare burden on the taxpayer. Mr Hunt said families in countries such as Spain and Italy “stick together more” so they have lower social care costs. Tax breaks to make it easier to create three-generation households would show people who “want to stick together that the State will support you”, Hunt added. Kate Andrews of the Institute of Economic Affairs analyses the various tax offerings from the leadership candidates in the Sunday Express concluding that cuts “to help those struggling the most should be high on the priority list.”

The Mail on Sunday, Page: 2 Sunday Express, Page: 14

Tom Welsh: Boris’s tax cuts are bang on the money

Tom Welsh describes Boris Johnson’s plans to cut taxes for higher earners as “bang on the money” making the point that many people taking home £60k are not necessarily “wealthy” at all – Tories who object to a tax cut for this group appear to be lacking “intellectual self ? confidence”, says Welsh. The oft-made case that lower taxes increase Treasury income is made by Welsh, who links Johnson’s proposals to Trump’s tax cuts in the US and plans in Australia to lower tax for millions; while Italy flirts with a 15% flat tax and France and Portugal hope lower taxes will stem emigration. Perhaps politicians in the UK should ask whether they should expect the British to stay put, just to “prop up a wasteful state that takes my contribution for granted?”

The Sunday Telegraph, Page: 18

Taxman denies terror fraud failures

HMRC’s director of fraud investigation, Simon York, contradicts claims in the Sunday Times some months ago that the Revenue was negligent in its failure to inform the UK security services about a massive carousel fraud committed by men linked to terrorists. HMRC shares a “deep and integrated relationship” with the intelligence services while allegations “taxpayer confidentiality would override considerations of public safety” are “categorically untrue”.

The Sunday Times, Page: 24

Credit Suisse sues HMRC over bankers’ bonuses

Credit Suisse is suing HMRC for the £239m it paid the taxman under the former Labour government’s supertax on bankers’ bonuses. The Swiss bank is trying to recoup the cash arguing that the so-called bank payroll tax was “unfair” and punished banks whose bonus payouts fell between December 2009 and April 2010.

The Sunday Times, Business, Page: 1, 2

CORPORATE NEWS

American landlords sue Green over closures

A group of American landlords have launched a legal challenge against Topshop’s bankruptcy in the US arguing that Arcadia “manipulated and gerrymandered” the CVA process in the UK to effect the “complete forfeiture and deprivation” of their rights. Five landlords, led by the property giant Vornado, are seeking over £100m and intend to challenge the CVA in the British courts. Arcadia’s adviser, Deloitte, has argued that the CVA is irrelevant to the American operations.

The Sunday Times, Business, Page: 1

Goals sale process kicks off

Lloyds Bank, the lender to Goals Soccer Centres, has hired Deloitte to explore sale opportunities. Shares in Goals remain suspended after the five-a-side football operator discovered a £12m tax hole in its accounts in March. Forensic accountants from BDO were hired to investigate. Retail billionaire Mike Ashley is reportedly among prospective bidders.

The Sunday Times, Business, Page: 3 The Sunday Telegraph, Business, Page: 3

PROPERTY NEWS

Harsh mortgage deals for buy-to-let professionals

A crackdown on higher-rate income tax relief on mortgage interest for buy-to-let has led more landlords to consider moving their flats and houses into a limited company, the Sunday Times reports. However, those who do are facing substantially higher mortgage rates than those acting as individuals (2.99% compared with 1.81%). The paper’s James Coney explains the tax advantages of holding a rental property in a company; but Paul Falvey of BDO warns: “Tax alone is rarely a good enough reason for holding property through a company.”

The Sunday Times, Business, Page: 14

More retailers will fall victim to unrealistic rents and business rates

More retailers are likely to go under unless landlords and councils ease the burden on stores groups an expert has warned. Eileen Blackburn, head of restructuring at French Duncan, said the retail sector is grappling with serious infrastructure issues that will results in widespread store closures in Scotland if action is not taken. “The sector is not so much at breaking point as having gone beyond that and is simply collapsing,” said Ms Blackburn. “Without immediate action on rents and business rates many retailers will enter insolvency.”

Herald Scotland

PENSIONS NEWS

Petition launched to reform pension rules for low earners

A petition has been launched to reform pension rules that see low-paid people lose out on £110m a year. Workers earning between £10,000, the point at which they are enrolled into a company pension, and £12,500, the point at which they start to pay income tax, miss out on tax relief on pension contributions because they are not actually paying tax. Their contributions effectively cost 25% more. An estimated 1.7m people in a net pay scheme – the one most usually offered to employees who have been auto-enrolled – will miss out this year on tax relief worth up to £64. About two-thirds are thought to be women.

The Sunday Times, Business, Page: 13

SMEs NEWS

Master of my fate; captain of my soul

Luke Johnson advocates starting up your own company if you want a rewarding job – but choose a career in banking if it’s the money you’re after. The chairman of Risk Capital Partners says: “Why do so many voluntarily embrace the entrepreneurial life, with all its seeming drawbacks? I think there are several reasons, but it is not really about making lots of money. Instead, entrepreneurs relish the autonomy and the ability to control their own destiny.” He then goes on to quote William Ernest Henley, who describes the spirit of adventure in his poem Invictus, thus: “I am the master of my fate/I am the captain of my soul.”

The Sunday Times, Business, Page: 9

ECONOMY NEWS

Deficit expected to creep up

Official data is expected to show public sector borrowing up slightly for May – by £79m to £4.15bn. Capital Economics UK economist Thomas Pugh said. “The downward trend in borrowing may not persist this year.” Phil Shaw, chief economist at Investec, added: “The underlying economy is not doing too badly … The fly in the ointment is the fiscal giveaways. It will soon show in the figures and two to three months are needed to get an idea of what the new trend will be.”

Sunday Express, Page: 43

Rising fuel costs drive up inflation

Figures due out this week are expected to show inflation climbed further above the Bank of England’s 2% target in May, driven by rising petrol prices. City economists expect an inflation rate of 2.2% for the month, up from 2.1% in April.

The Sunday Times, Business and Money, Page: 2

OTHER NEWS

AI to take on a fifth of jobs

A report from KPMG and Harvey Nash forecasts the impact artificial intelligence will have on the jobs market, suggesting more than a fifth of roles will be overtaken by computers in the next five years. A survey of more than 4,000 technology leaders saw most respondents say that at least 10% of the workforce would be replaced by automated roles, with a third saying the rate would be 20%.

The Daily Telegraph, Business, Page: 5 City AM, Page: 6

Councils cut services spend but hold £22bn reserves

Official figures suggest local authorities in England have amassed huge cash reserves while budget cuts have driven a reduction in spending on services, reports the Times. Analysis shows that councils held £21.8bn of non-ring-fenced reserves last year, £5bn more than in 2017 and £11bn up on the total at turn of the decade, while spending on local services has fallen by about 21% since 2010. Elsewhere, the Yorkshire Post looks at local government funding, citing a PwC report which warns councils face a £51.8bn funding black hole over the next six years.

The Times, Page: 14 Yorkshire Post, Page: 11

Law firms which fail to adapt their culture face extinction

An FT editorial questions the wisdom of City law firms offering £100,000 to newly qualified solicitors as they compete with US firms. This risks driving a long hours culture which could backfire, the paper warns, with those discouraged going instead to more entrepreneurial and technology-driven firms as well as the Big Four’s legal operations. But Legal Cheek believes the theory does not fit the reality on the ground with money “talking more loudly among future lawyers than the FT realises.”

Financial Times, Page: 10 Legal Cheek

May’s £27bn spending booby trap for Boris

Theresa May is attempting to “bounce” Cabinet ministers into approving £27bn of funding for the education budget in a move seen as an attempt to stymie her successor’s own spending plans. The Treasury is reportedly resisting the three-year settlement plan while one minister said the “stitch up” was “a desperate attempt to rescue her reputation.” Treasury officials are displeased as they have a spending review due later this year and the Chancellor believes such a decision over the funding should be a decision for the next prime minister.

The Sunday Telegraph, Page: 1, 5

HMRC officials take 130 flights a day

New figures reveal HMRC staff are taking more than 130 flights each working day, more than officials in the Ministry of Defence, the Cabinet Office and the Ministry of Justice combined.

The Sunday Times, Page: 15

Contact Paul Southward.

Paul Southward


News Roundup Wednesday 12th June 2019


News Roundup Wednesday 12th June 2019

NEWS ROUNDUP

TAX NEWS

Chancellor in global tax call

The Chancellor will today call on world leaders to work together to ensure global tax rules keep up with the times. Speaking at the G20 gathering in Fukuoka, Japan, Philip Hammond will warn that the international corporate tax system is outdated. He will also urge finance ministers and central bank governors to ensure plans are in place to tackle the way multinational tech firms are taxed. The Chancellor said: “I will reaffirm the need for global reform of the international corporate tax framework.”

The Times, Page: 48 The Sun, Page: 2

Hancock pledges tax cut for small retailers

In an interview with The Telegraph, Health Secretary and Conservative leadership hopeful Matt Hancock vowed to scrap business rates for hundreds of thousands of small retailers, which would be funded by an increase to the new digital services tax, dubbed the “Amazon tax”, a levy against social media platforms, internet marketplaces and search engines. Speaking as part of his leadership campaign, Mr Hancock said business rates are a “twentieth century tax” which needs a “21st century replacement” – and makes the system unfairly skewed against bricks and mortar businesses.

The Daily Telegraph, Page: 10

IFS: Higher taxes needed to fund social care

Paul Johnson, director of the Institute for Fiscal Studies, has warned that there is a need for higher taxes or radical reforms to care for the ageing population, warning that the care system leaves people facing the “catastrophic risk” of losing their assets.

The Independent, Page: 18

Looking at land taxes

The Times’ Philip Collins looks at a report on land commissioned by the Labour Party, saying it raises the question of taxing land. Noting that land accounts for 51% of Britain’s net worth, Mr Collins suggests that land taxation “could transform British fiscal policy”. He adds that with the 60m acres of land in Britain holding a total value of “something approaching” £5trn, a tax of 1% would raise £5bn. He argues that “if we were brave enough to levy a tax on land at 2% we could abolish council tax, stamp duty and business rates.”

The Times, Page: 25

INDUSTRY NEWS

HMRC wipes 6k child benefit penalty fines

HMRC has wiped the penalty fines for 6,000 families who fell victim to a child benefits loophole following a review into 35,000 High Income Child Benefit Charge cases where a ‘Failure to Notify’ penalty was issued. The fines were issued to customers who had not completed a self-assessment to repay the child benefit they had over-claimed due to their earnings threshold. The Revenue said the fines were wiped after it “changed its view of when some customers may have a reasonable excuse for failing to notify liability,” with this coming following complaints that people were not made aware of the change in law introduced in 2012. A total of £1.8m has been refunded.

Daily Mail, Page: 32 Daily Mirror

Brexit consultants cost £97m

A National Audit Office report shows that £97m has been paid to consultants helping Whitehall plan for Brexit, with Deloitte, PwC, EY, PA Consulting, Bain & Company and Boston Consulting have shared 96% of the work. Public Accounts Committee chair Meg Hillier said: “The lack of transparency around Brexit preparations that my Committee has become all too familiar with applies to the use of these consultants.”

Daily Mirror, Page: 10 Daily Express, Page: 19

CORPORATE NEWS

Administrators warn over LCF conflicts

Administrators at Smith & Williamson, who are in charge of winding down London Capital & Finance (LCF), have applied to the High Court to force the removal of the independent company set up to guard the interests of LCF’s bondholders. In a letter to people owed money by LCF, the administrators said Global Security Trustees (GST) “is in a position of conflict and its duty of undivided loyalty to bondholders is compromised,” pointing to links between the four former bosses of LCF and GST’s directors and lawyers, claiming they are connected through third-party companies. A document filed at the High Court said that GST was “riddled with conflicts”.

The Times, Page: 42

Arcadia ‘likely to be plotting plan B’

The Guardian’s Sarah Butler look at Arcadia Group’s planned rescue restructure as it seeks to avoid the firm’s collapse, saying it is “complex” as it involves seven interlinked CVAs. She says that if the plan fails, Arcadia and its advisers at Deloitte “are already likely to be considering plan B,” saying this could include filing a legal notice to appoint administrators, giving the company at least 10 days to organise a pre-pack administration. The FT also looks at Arcadia’s rescue plan, looking at the measures needed to secure landlords’ approval of the CVAs.

The Guardian, Page: 33 Financial Times, Page: 17

Monsoon holds back rescue plan

Peter Simon, the owner of the Monsoon and Accessorize retail chains, has delayed plans for a CVA after landlords failed to back a similar plan for Arcadia. The CVA, led the by Deloitte, could have been launched today but is now not expected to go ahead until next week at the earliest.

The Guardian, Page: 33

Sir Peter hits out over Amazon’s tax

Sir Peter Wood, founder of Direct Line, Esure and Go Compare, has hit out over tax avoidance, questioning the conduct of Amazon and Apple, saying they take advantage of tax havens. He told the Mail: “That’s disgraceful. They are wiping out the High Street. Amazon’s a great company and I have bought shares. But it should be paying up.” Sir Peter, who paid £62m in capital gains tax when selling his Esure stake, said: “I have no problem paying my taxes,” noting that he recalls “83% tax, 98% for some people.”

Daily Mail, Page: 84

Firms urged to act over IR35

Employment law specialist Claire Scott says the introduction of IR35 tax reforms by HMRC “has the potential to cause increased costs and risks to businesses.” Although changes come into effect from April 2020, Ms Scott advises businesses to “act now, don’t delay.” She says firms “would be wise” to conduct an audit to establish how many contractors are engaged through Personal Service Companies and whether they are engaged directly or through an agency or other intermediary.

The Scotsman, Page: 34

Entrepreneur: Fundraising ‘not the goal’

The Times’ Emily Gosden reports that EY’s Sam Johnson interrupted an interview with Jen Rubio, the founder of luggage start-up Away, to invite the audience at an entrepreneurs’ get-together in Monaco to applaud the fact Away has achieved unicorn status. She adds that Ms Rubio commented: “We’re in a culture where fundraising gets celebrated. It’s not the goal. For every headline about fundraising there’s another headline that isn’t written about a [venture-funded] company shutting down.”

The Times, Page: 42

CEO appointed

John Menzies has appointed Giles Wilson chief executive. Mr Wilson is a chartered accountant who qualified at PwC.

The Times, Page: 42

PROPERTY NEWS

Javid pledges to cut stamp duty

Home Secretary Sajid Javid has pledged to slash stamp duty on the most expensive homes if he becomes Prime Minister, saying the levy has “led to a stalling of the market” at the higher end. “There are families I know from being Housing Secretary whose kids have moved on, they want to downsize. So it is good for the community that that house is made available for younger families,” he said, adding: “I would look sensibly at tax changes – I am interested in what works.”

The Daily Telegraph, Page: 10

Next PM to home in on property taxes?

Anne Ashworth in the Times considers debate over property taxation, saying suspicion is growing that, whoever is the next occupant of 10 Downing Street, “raising more money from property taxes will be on the table.” She also notes calls for the abolition of stamp duty, highlighting that Capital Economics has questioned how the lost revenue would be replaced, with stamp duty raising £8.55bn last year.

The Times, Bricks and Mortar, Page: 4

LEGAL NEWS

HP’s Whitman ‘shot first’ over Autonomy claims

Former Hewlett Packard (HP) boss Meg Whitman “shot first and asked questions later” when she accused Autonomy founder Mike Lynch and finance director Sushovan Hussain of accounting fraud in 2012, a court has heard. In a case in which HP is suing the men for $5m over claims they inflated Autonomy’s revenues and profits before selling it, Robert Miles, QC, said HP had failed to conduct a “proper” valuation exercise to determine its losses from the alleged accounting improprieties before going public with allegations. Ms Whitman said she holds Deloitte, the firm that audited Autonomy’s books, “accountable” for the matter.

The Times, Page: 38

Deutsche Bank investment banking boss targeted in tax probe

Prosecutors in Cologne have launched a criminal investigation into current and former Deutsche Bank employees, including investment banking boss Garth Ritchie, over their links to allegedly illicit tax transactions.

Financial Times, Page: 14

Weir failed to pay £50k tax

Paralympic champion David Weir has been banned from being a company director for four years after failing to pay nearly £50,000 in tax. This comes after a probe by the Insolvency Service. It was found that Mr Weir received £400,000 from David Weir Ltd in its five years of trading, but paid just £30,000 corporation tax.

The Daily Telegraph, Page: 12 Daily Mirror, Page: 17

Shakira in court over tax

Colombian singer Shakira has appeared in a Spanish court to testify over allegations that she avoided paying £13m in taxes.

The Times, Page: 32 The Guardian, Page: 26

ECONOMY NEWS

One in ten go cashless

The latest UK Payment Markets report from UK Finance shows that one in 10 adults are living a largely cashless life, with this climbing to 17% among those aged 25 to 34. Last year, four in 10 payments in the UK were made by debit card, reflecting the popularity of contactless cards. It was also found that almost half of UK adults used mobile banking in 2018, up from 41% the previous year. At the same time, the number of bank payments made using online or mobile banking in 2018 grew to 2bn, up from 1.6bn in 2017. Additionally, an estimated 8.5m people were registered to buy goods and services using mobile payment services such as Google Pay, Apple Pay and Samsung Pay. A total of 39bn transactions were made in the UK last year by businesses and individuals, the report said, with 34.9bn by consumers and 29.7bn of these spontaneous, rather than scheduled payments.

BBC News The Guardian Daily Mail, Page: 26 City AM

Sales dip 3.3% in May

Figures from BDO show that sales fell 3.3% year-on-year in May, marking the worst May performance since the firm’s sales tracker was set up in 2006 – although online firms saw sales climb 19.8%. Sophie Michael of BDO said: “Our high streets are creaking at the seams. Retailers know they need to respond quickly to consumer behaviour but they are in investment paralysis as Brexit uncertainty drags on.” “It is vital that the ambivalence with which the high street is currently being treated is replaced with concerted action, or the results could be catastrophic,” she added.

The Times, Page: 48 Daily Mail, Page: 33 I, Page: 48 Daily Star, Page: 2 The Independent, Page: 24 Daily Mirror, Page: 41 Daily Express, Page: 51 City AM, Page: 2 Yorkshire Post, Page: 18

OTHER NEWS

Permanent placements dip

An employment survey by KPMG and the Recruitment and Employment Confederation shows a fall in permanent staff placements in May, as well as the slowest increase in temporary roles in over six years. Vacancy rates stayed at an 80-month low, while starting salaries for permanent staff grew at their slowest rate in 25 months – although temp wages increased at the quickest pace for six months. KPMG vice-chairman James Stewart commented: “Uncertainty is feeding through to weaker growth in job vacancies, while the supply of candidates fell sharply as people became more risk averse with regards to switching roles.”

The Times, Page: 47 City AM, Page: 7

Drones to deliver?

Matthew Field in the Telegraph considers Amazon’s plans to deliver items using drones, noting PwC research showing that just 31% of the public feel positively about the impact of drones. “If we are going to use drones in urban environments, as a society we are going to want a level of assurance they are not going to fall out of the sky on top of us,” says Elaine Whyte, head of drones at PwC.

The Daily Telegraph, Business, Page: 5

Contact Paul Southward

Paul Southward