Category Archives: News Roundup

News Roundup Tuesday 23rd April 2019


News Roundup Tuesday 23rd April 2019

NEWS ROUNDUP

TAX NEWS

Matalan founder wins £84m tax appeal

HMRC has lost out on £84m in tax after John Hargreaves, the founder of Matalan, convinced a court that the Revenue took too long to go after money relating to a tax return filed in 2002. An investigation was opened in 2004, with HMRC being alerted to the fact that Mr Hargreaves, who had told taxman he had moved to Monaco and was no longer a tax resident in the UK, was working for three days a week at the firm’s head office in Skelmersdale. The Revenue did not issue its charge for £84m in unpaid capital gains tax until 2007.

The Daily Telegraph, Page: 11

700k couples could miss out on tax break

Couples could be missing out on a tax break worth more than £1,000, warns the Mirror’s James Andrews. He highlights that the marriage tax allowance which was introduced four years ago has a four-year deadline for backdated claims, noting that HMRC estimates that around 700,000 couples are eligible for the free tax break, which applies to anyone who’s married or in a civil partnership, but are yet to claim it. Victoria Todd from the Low Incomes Tax Reform Group says: “You can still claim to transfer the personal allowance for 2015/16 and subsequent tax years, even if you did not do it at the time.”

Daily Mirror

MP in Loan Charge report climbdown

MP Ross Thomson, vice-chairman of the parliamentary group looking at HMRC’s crackdown on tax avoidance by freelancers, says he wants to retract some of the key findings of a 91-page report, suggesting he had not had time to read it because of Brexit-related votes. “It is a hefty piece of work, it’s a very long report. Given the time demands on MPs over Brexit, with hindsight, not enough time was allocated to scrutinise the report properly before publication,” he said. He added that it was written by a campaign group opposed to attempts to claw back unpaid tax, saying: “As the secretariat to the all-party group, members of the Loan Charge Action Group, who also had a personal interest in the issues, compiled and produced the report on behalf of the APPG and provided the staffing. The focus of the report should have been on the implementation of policy by HMRC.” In a statement to the Times, Mr Thomson said he supported the report’s main findings but added: “I do regret that some of the language used within the 91-page document was not tempered before publication.” He said the suggestion that ministers or civil servants were “deliberately misleading” should have been removed, and expressed regret over suggestions that Melvyn Stride, the financial secretary to the Treasury, “deliberately and dishonestly” misled MPs. Ruth Cadbury, Mr Thomson’s fellow vice-chairman in the all-party group, stands behind the report’s findings, saying the Loan Charge inquiry report “is factual and evidence based and exposes the unfairness of the Loan Charge and also the misinformation from the Treasury and HMRC in seeking to justify it.”

The Times, Page: 58 Press Release

HMRC warns over spring scams

HMRC has warned young adults with less experience of the tax system to be especially vigilant against springtime refund scams, with this group – alongside the vulnerable and elderly – increasingly being targeted by fraudsters. Last spring HMRC received around 250,000 reports of tax scams, or almost 2,500 a day, and requested that over 6,000 phishing websites be deactivated. HMRC says April and May often see scammers target people to coincide with the time legitimate rebates are being processed. Pauline Smith of Action Fraud said criminals will often target victims with spoofed calls, voicemails and text messages and urged people to be wary of emails with attachments which might contain viruses designed to obtain personal or financial information.

BBC News Press Release

Broker calls for SDRT to be scrapped

Online broker Etoro has called for a tax that brings in almost £4bn a year for the Government to be scrapped, with UK managing director Iqbal Gandham describing Stamp duty reserve tax (SDRT) as “the ultimate stealth tax.” SDRT is paid by investors on the electronic purchase of more than £1,000 of UK stocks and shares. A poll by YouGov and Etoro suggests that 80% of Britons are unaware of the charge which is expected to raise £3.8bn for the Government in the 2019/20 tax year, rising to £4.3bn by 2023. Patrick Cannon, a tax barrister, says: “The area where SDRT really hits people is their pensions and the whole thing should be abolished.”

The Times, Page: 57

HMRC loses case against Loose Women presenter

TV presenter Kaye Adams has won a case against HMRC over her employment status and a £81,000 PAYE tax bill, with the Revenue arguing she was a BBC employee rather than a freelancer.

Financial Times, Money, Page: 3

Change UK treasurer used tax dodge

Neil Davidson, treasurer of the new Change UK party, has admitted taking part in a tax avoidance scheme, telling the Sunday Times he had repaid substantial sums to the authorities. The matter relates to Eclipse film partnerships, which were tax avoidance schemes set up by Future Capital Partners. HMRC described them as “aggressive tax avoidance” and won a court case against one of the schemes. Mr Davidson said: “Eclipse was sold to me as an investment with tax advantages. When it became clear that it was a tax avoidance scheme, I voluntarily repaid the tax advantage I had received in full.”

The Sunday Times, Page: 2

PROPERTY NEWS

Lenders expect demand for mortgages to weaken

The Bank of England’s quarterly survey shows lenders expect demand for mortgages to fall over the next three months amid continuing Brexit uncertainty. A net balance of 18.9% of respondents said that demand from homebuyers was likely to fall between April and June. This is the largest figure since the fourth quarter of 2010, when almost a third of lenders were preparing for a slowdown. According to the Royal Institution of Chartered Surveyors, both new buyer inquiries and instructions to sell have been falling for several months.

The Times, Page: 40

Letter: Tax system ‘not neutral’

In a letter to the Guardian, Rev Paul Nicolson of Taxpayers Against Poverty says the tax-benefit system is “not neutral between home ownership and rental”. Looking at regulation of the sector, he adds that rewards from rule-breaking are higher for landlords “than any penalty that might be incurred through bad behaviour.”

The Guardian, Page: 6

 Fewer homes earn more than owners

Analysis suggests that the proportion of homes earning more than their owners is shrinking as house price growth continues to slow. Halifax says the average rise in house prices over the last two years has outstripped post-tax earnings in 8% of local authority districts. This compares to 18% in 2017 and 31% in 2016. The average UK house price has increased by £14,975 over the past two years, while the average take-home pay over two years has been £46,225.

Daily Express, Page: 63 I, Page: 25 Yorkshire Post, Page: 9

1.8m Scottish homes fall short on energy efficiency

A report from KPMG shows that while the Scottish Government wants all homes to reach energy efficiency standards by 2040 as part of its Energy Efficient Scotland plan, 1.8m homes failed to reach the EPC C benchmark in 2016. This equates to around 66,000 buildings requiring major improvements each year over the next two decades.

The Scotsman, Page: 7

PERSONAL FINANCE NEWS

Credit card defaults jump

Figures from the Bank of England show the number of people defaulting on their credit card debts rose sharply in the first three months of the year. The Bank’s survey of major lenders found the default rate had increased to 22.9% in the first quarter from 12.7% in the last quarter of 2018.

The Guardian, Page: 46 The Independent, Page: 55 Daily Mail, Page: 2

SMEs NEWS

Funding Circle loan book grows

The loan book of Funding Circle has reached £3.4bn after it arranged £644m of new SME lending in the first three months of the year. The company’s revenues rose by 40% in Q1 thanks to more loans being written and an improved cut for Funding Circle, particularly on loans to American companies.

The Times, Page: 45 The Daily Telegraph, Business, Page: 3 Daily Mail, Page: 78

Millennials may be better off with a Lisa

Michael Johnson, of pension company Barnett Waddingham, says nine out of ten young savers would be better off investing in a Lifetime Isa (Lisa) rather than a pension, saying employers should offer staff the option of workplace Lisas. Mr Johnson, a former adviser to David Cameron, says a Lisa will produce a larger return in later life than a pension for most under-40s. He commented: “For the majority of millennials, the Lisa is better. The pensions industry knows this, and is terrified. The next generation of self-invested personal pension buyers, for example, is likely to be very thin.”

The Daily Telegraph, Money, Page: 4

SMEs urged to make the most of Brexit delay

Consultant Ready For Brexit says 80% of small businesses were not prepared for Brexit, saying they would have been at risk of disruption if the UK had exited the EU on March 29. Ready for Brexit chairman Paul Hodges has urged SMEs to utilise the delay, saying: “They can’t waste the extension and can’t afford to be complacent, as no deal remains the default position and businesses need to know how Brexit will affect them.” Andrew Gray, PwC’s head of Brexit, comments: “Any extra time to plan for Brexit is a gift. As the European Council president Donald Tusk suggested, don’t waste it.”

Sunday Express, Page: 43

ECONOMY NEWS

Sales up in March

Data from the Office for National Statistics show s retail sales increased for the third straight month in March. Sales grew 6.7% over the year – the highest since October 2016 – after a monthly rise of 1.1%. Three-quarters of the growth came from internet sales, with department stores the only sector to register declining sales in March, with sales shrinking 0.3%. Commenting on the health of the sector, Anne Alexandre of the British Retail Consortium said: “It is clear that retail is going through a tough year, with increasing store closures and job losses. It is under enormous pressure from both rising costs and Brexit uncertainty.”

The Independent, Page: 55 I, Page: 48

Weather set to deliver Easter shopping boost

Shoppers are expected to spend £11.5bn over the Easter weekend, with the High Street set to see a boost from hot weather. Garden centres and DIY stores are forecast to see sales up 8.5% on last year. The forecast comes from the Centre for Economics and Business Research, which said: “Recent retail data has been very strong, and aided by the good weather and Easter falling late this year, we expect a bumper long weekend for the High Street.” Anne Alexandre, of the British Retail Consortium, said: “When the weather is good as forecasted, consumers are attracted to the summer ranges of clothing and footwear, which are available in the shops, leading to good fashion sales.”

Daily Mail, Page: 1

Arts contribute more to the economy than agriculture

Research from Arts Council England suggests arts and culture have overtaken agriculture in terms of their contribution to the UK economy. The study shows that the sector added £10.8bn to the economy at the last count in 2016, £390m more than the previous year and more than the agricultural sector .

The Guardian, Page: 59

Budget deficit undershoots expectations

Figures this week are set to show that the budget deficit in the fiscal year just ended was lower than expected. Public borrowing for 2018/19 is set to come in at just over £22bn, lower than the £25.5bn predicted by the Office for Budget Responsibility (OBR) last autumn, and £15bn below the forecast in March 2018. Analysts at Investec predict a budget surplus of £0.8bn for March, while Capital Economics is predicting borrowing of £0.5bn for last month. The OBR’s projection is for borrowing to increase to £29.3bn this year before resuming a downward trend. The Sunday Times notes that strong retail sales have boosted VAT receipts while faster earnings growth has boosted tax revenues.

The Sunday Times, Business and Money, Page: 2

OTHER NEWS

FCA reveals credit complaints fall

The Financial Conduct Authority says the number of consumer credit complaints fell by 5% to 3.91m in the second half of 2018, compared to 4.13m in the same period the year before. The figures show that payment protection insurance made up 40% of total complaints.

The Daily Telegraph, Business, Page: 9

Poor mental health hits employers

Sophie Smith in the Telegraph looks at work-related stress, noting a Deloitte report which suggests the collective cost of poor mental health to employers was between £33bn and £42bn a year.

The Daily Telegraph, Business, Page: 10
Millennial insight on business focus

Chris Blackhurst, director of CTF Partners, considers the need for companies to appeal to millennials. He highlights the annual Deloitte Millennials Survey, which polls 10,500 people born between January 1983 and December 1994 who hold degrees, are employed full-time, and work in large, private sector organisations. Deloitte says the latest poll shows: “They believe business’ priorities should be job creation, innovation, enhancing employees’ lives and careers, and making a positive impact on society and the environment.”

The Independent, Page: 45
Contact Paul Southward.

Paul Southward


News Roundup Thursday 18th April 2019


News Roundup Thursday 18th April 2019

NEWS ROUNDUP

TAX NEWS

Yellow vests scorn cathedral pledges as Macron prepares tax cuts

Wealthy donors to the restoration of Notre-Dame are facing a backlash over tax breaks on their gifts. Pledges approached €1bn yesterday, with donations from the owners of Chanel and Dior, as well as Disney and Apple. Representatives of the “yellow vest” protesters noted that the tycoons stood to receive major tax breaks linked to donations in support of restoring national treasures. French president Emmanuel Macron was about to broadcast a speech just as the cathedral caught fire. In it he announced the closure of France’s elite school for future leaders – the Ecole Nationale d’Administration – and vowed to lower taxes on the middle classes – a measure he says he will pay for by cracking down on tax evasion. A leaked text of the speech also shows Macron was to promise a review in 2020 of his deeply unpopular decision to reduce a wealth tax.

The Daily Telegraph, Page: 7 Daily Express, Page: 10 The Times, Page: 31 The Times, Page: 30 The Guardian, Page: 29

PROPERTY NEWS

London and South East drag on national house prices

London endured a 3.8% decline in property prices for the year to February, according to the latest data from HM Land Registry and the Office for National Statistics, the largest drop for almost a decade. Prices fell by 1.8% in the South East, offsetting stronger growth in other parts of the UK – prices in the North West and the West Midlands rose by 4% and 2.9% respectively – meaning that house prices rose by just 0.6% in the year to February nationally, to an average price of £226,000. Howard Archer, chief economic adviser at EY Item Club, said buyers remained cautious amid heightened Brexit and economic uncertainties, adding: “We suspect house prices will rise only 1% over the year and would not be at all surprised if they stagnate.”

The Daily Telegraph The Times, Page: 4 The Guardian, Page: 35

SMEs NEWS

Nurseries should be exempt from business rates, FSB says

The Government is coming under pressure to offer childcare providers in England 100% relief on business rates, following the example of Wales and Scotland. A report from the Federation of Small Businesses says nurseries are struggling to survive in the face of rising staff wages, rents and business rates. As a result, fees are going up and this is putting pressure on household finances.

The Daily Telegraph, Business, Page: 8

UK law must back freelance rights to be paid on time

The FT backs small businesses suffering from late payment. It says local government bodies should be onside, free legal help should be made available, and financial penalties imposed on offenders.

Financial Times, Page: 10

PERSONAL FINANCE NEWS

FCA to overhaul industry register

The Financial Conduct Authority (FCA) has vowed to overhaul its industry directory, following reported failings with the current register. While critics complain that the watchdog has created a black hole for fraud, as the existing register will not be updated after December, the regulator itself says: “This improved transparency will enable consumers to verify the identity of those selling or providing advice on financial products, will help firms to cross-check references, and support the FCA, law enforcement, professional bodies and other regulators in monitoring the market.”

The Daily Telegraph

ECONOMY NEWS

Inflation holding steady

The UK’s headline annual inflation rate held steady at 1.9% in March, according to monthly figures from the Office for National Statistics (ONS), with real wages increasing above price rises. The inflation rate including housing costs and council tax held at 1.8%, with wages rising at 3.4%. Howard Archer, chief economic adviser to the EY Item Club, commented: “Any help to consumer purchasing power is particularly welcome as the economy is likely to be hampered by prolonged Brexit uncertainties following the flexible extension of the UK’s exit from the EU to October 31.”

City AM Financial Times, Page: 3 Daily Express, Page: 8 The Sun, Page: 51 The Independent, Page: 59
Contact Paul Southward.

Paul Southward

HAPPY EASTER!


News Roundup Wednesday 17th April 2019


News Roundup Wednesday 17th April 2019

NEWS ROUNDUP

TAX NEWS

Scammer behind bars after tax probe

Serial fraudster Duncan Johnson has been jailed for four years and nine months after repaying a tax fraud debt with money stolen in another scam. Johnson admitted a £107,000 tax fraud but promised the judge that he’d repay the money, so sentencing was postponed for six months. But HMRC investigators discovered Johnson was raising the money to pay the debt through a second scam that involved stealing more than £500,000 from other businesses.

Press Release

HMRC accused of “conducting a co-ordinated attack” against actors

Actors union Equity claims hundreds of high-profile actors face massive tax bills and risk “losing their homes”, after the actor Robert Glenister lost a landmark dispute over his national insurance contributions. The Hustle star was found liable to pay £150,000 in backdated NI contributions covering a period of seven years, during which he provided services as a performer through a personal service company. HMRC said that Glenister would have been regarded as self-employed for tax if he had not used a personal service company to reduce his liability. The union accused HMRC of “conducting a co-ordinated attack” against its members.

The I, Page: 17

HMRC cutting callers off after 10 minutes

The Mail reports that HMRC is now cutting off taxpayers who spend hours trying to get through to someone to speak to. One self-employed consultant told the paper she spent all of Friday afternoon unsuccessfully trying to speak to HMRC about a £100 penalty she had wrongly received for a late tax return that she had filed in December. She says: “It was an automated message for ten minutes, and at the end they say we are too busy and the phone line goes dead. It is a ridiculous system. They make it incredibly difficult to speak to anyone.” The latest figures from HMRC show the average time to answer a call in February was six minutes 27 seconds, but this does not include the automated voice system. The target time is five minutes. An HMRC spokesman said: “We know that at busy times some customers have to wait longer, and we are doing all we can to keep all waiting times as low as possible.”

Daily Mail, Page: 48

CORPORATE NEWS

UK world’s top investment destination despite Brexit

A survey on corporate deal-making published by EY says Britain is the top investment destination in the world for the first time in the report’s 10-year history – overtaking the United States, which has held the top spot since 2014. EY said the UK had topped the rankings “despite continued uncertainty stemming from its intention to leave the European Union.” The UK’s top sectors for investment were consumer products and retail, industrials and financial services. The fall in the value of the pound since the 2016 Brexit referendum was not a major driver of foreign investment in Britain, EY said. “By and large, deals are driven by strategic rationale not currency movements,” said Steve Krouskos, EY’s global vice chair for transaction advisory services. “What hasn’t changed is that the UK has great companies, great talent, great tech and great IP. These assets attract capital. Also, remember the UK isn’t the only country dealing with significant geopolitical challenges.”

The Daily Telegraph The Times, Page: 33 City AM Daily Mail Daily Express

Monsoon Accessorize downsizing as CVA looms

The company behind the Monsoon and Accessorize fashion brands has appointed Deloitte to work on the potential closure of dozens of stores. A possible company voluntary arrangement (CVA) could lead to rent reductions for landlords and job losses. Monsoon Accessorize has closed almost 40 stores in the past two years but is aiming to speed up closures and is seeking creditor approval for a potential CVA.

The Times, Page: 33 The Sun, Page: 45 Daily Express, Page: 53 The Guardian, Page: 31 Daily Mail, Page: 69

Store First could be wound up

After Lancashire-based Store First offered investors a “guaranteed” 8% return on its a storage pod scheme within the first two years, increasing to 10% in years three and four, the Insolvency Service applied to have the business and four sister companies wound up in the public interest. Now thousands of people are unsure if they will get any of their money back, with former Top Gear presenter Quentin Wilson, who promoted the scheme and invested in it himself, among them. The Manchester District Registry of the High Court is to hear the winding-up petitions as part of a three-week session.

The Daily Telegraph

Gunning takes on CFO role at IAG

British Airways’ finance boss Steve Gunning is to replace Enrique Dupuy de Lôme as CFO at parent company IAG. Gunning has been CFO at British Airways since 2016 and acting director of IAG global business services since December 2017.

City AM The Times, Page: 38

SMEs NEWS

Is the small business commissioner finally warming up?

The Times’ James Hurley reports that Paul Uppal, the small business commissioner charged with tackling late payments to suppliers, has recovered just £3.7m of unpaid invoices to SMEs since December 2017 from a total of 125 cases of mistreatment. Mike Cherry, national chairman of the Federation of Small Businesses, said: “You can’t escape the fact that these numbers aren’t where we would ideally like them to be.” However, he said that the commissioner was “moving in the right direction”. Phil Hall, head of public affairs at the Association of Accounting Technicians, said that the modest figures were not a surprise since the commissioner had “no real powers”. But Conrad Ford, chief executive of Funding Options, said “the commissioner is finally hitting its stride” while Mr Uppal himself said he was “encouraged to see an increase in the number of complaints we have received.”

The Times, Page: 43

Government pledges funding for fast-growing firms

The government has pledged to provide a further £200m of funding to the British Business Bank to ensure that fast-growing private businesses have access to capital after Brexit. The funding is intended to mitigate any damage caused by loss of access to the European Investment Fund . Robert Jenrick, exchequer secretary to the Treasury, said: “The UK is creating more start-ups and attracting more venture capital funding than any other European country, but we want to do more to ensure our small businesses and entrepreneurs can thrive.”

Financial Times, Page: 3 The Times, Page: 50

Long Bailey: Labour will reform access to finance

Rebecca Long Bailey writes in the Yorkshire Post in support of Labour’s plans for a publicly-owned Post Bank. The shadow business secretary says the Post Bank, which will be run through the post office network, will “tackle financial exclusion, provide small businesses with the finance they need [and] ensure every community has easy access to face-to-face, trusted and affordable banking.” Labour will also create a £250bn National Investment Bank served by a network of Regional Development Banks that will lend to small businesses. “Labour is going to fundamentally reform the UK’s banking system, ensuring everyone can access to finance and supporting our economy to grow in a sustainable way,” says Long Bailey.

Yorkshire Post, Page: 13

SPORT NEWS

Former Rangers stars face huge tax bills after missing EBT deadline

Former Rangers stars face huge bills this year after failing to strike a deal with HMRC over the club’s Employee Benefit Trust (EBT) scheme. A source connected with the EBT investigation said: “Some former players were quick to agree a deal with the taxman who has been very fair in sorting out repayment plans. But others involved in the EBT scheme believe it’s the club who are to blame for this and are reluctant to pay the tax.” A Supreme Court ruling in July 2017 that said EBT payments made at Ibrox were not loans but earnings that should have been taxed.

Daily Record

PENSIONS NEWS

Brexit effect brings best ever pension deals to retirees

The Telegraph’s Laura Miller reports on how, on average, savers were offered £10,000 more last month to swap a guaranteed lifetime income for an immediate lump sum, compared to pensioners doing the same in February. Average transfer values for a 64 year old peaked at £251,000 – the highest level since pension freedoms were introduced in April 2015. Swings in the financial markets resulting from nervousness over Brexit have led companies to offer higher transfer values as they look to offload their liabilities, says James Baxter of transfer specialist Tideway.

The Daily Telegraph

Women pay for rise in state pension age yet again

Pensions expert Steve Webb is warning women approaching retirement that they may be missing out because of how pension pots are treated ahead of retirement. Pensions are usually shifted into safe investments ten to 15 years before people are expected to retire, but with the changes to the state retirement age from 60 up to 67, women could be missing out on seven years of more lucrative investment. “Life-styling” pensions too early could cost someone with an average pension pot of £50,000 up to £9,357 in returns over the course of retirement.

Daily Mail, Page: 48

PROPERTY NEWS

Best buy-to-let yields revealed

New research from lending platform Landbay has ranked the best places for buy-to-let landlords to invest in the UK, based on three key metrics: capital value growth, rental yield and rental price growth to achieve a total yield. Number one on the list is Newport, with a total annual yield of 13.22%, followed by Torfaen and West Lothian at 11.87% and 10.94% respectively. “Despite landlords suffering as a result of tax changes, these figures highlight the resilience of the UK’s residential property market,” says John Goodall, chief executive of Landbay. “Savvy landlords might be wise to consider looking further afield. Areas with significant investment in infrastructure like Manchester, Nottingham and Liverpool have also performed well.”

The Daily Telegraph

ECONOMY NEWS

New metrics reveal UK economy slowdown

New government economic indicators compiled by the Office for National Statistics (ONS), using “big data” from things like VAT and road traffic, have suggested that the UK economy slowed down very slightly in March. The Telegraph points out that business surveys had pointed to a more severe slowdown in recent months and the ONS hopes that by using “hard” data instead of surveys it will be able to offer a more comprehensive insight into the economy.

Financial Times, Page: 1 City AM The Guardian The Daily Telegraph, Business, Page: 4 The Times, Page: 34

Unemployment continues to fall

Unemployment fell by 27,000 in the three months to February to 1.34m, ONS figures show. The number of people in work was also virtually unchanged at a record high of 32.7m, with a jump of 179,000. The figure has increased by 457,000 over the past year, all among full-time employees and the self-employed. Average weekly earnings, excluding bonuses, had an estimated rise of 3.4%, before adjusting for inflation. When adjusted for inflation, pay, including bonuses, increased by 1.5% on the year, the highest figure since the summer of 2016.

The Daily Telegraph Financial Times, Page: 1 The Times

OTHER NEWS

PM Corbyn as bad as no-deal Brexit warns Citigroup

US bank Citigroup has warned that Jeremy Corbyn as prime minister would be just as bad for UK banks as a no-deal Brexit as fears grow in the City of a collapse in support for the Tory party. Researchers told clients that the current Labour manifesto with its “deficit financed policies” could lead to capital outflows from the UK.

The Daily Telegraph
Contact Paul Southward.

Paul Southward


News Roundup Monday 15th April 2019


News Roundup Monday 15th April 2019

NEWS ROUNDUP

TAX NEWS

Hustle star’s loses test case in blow for BBC stars

Hustle star Robert Glenister has lost his appeal against a 2017 tribunal ruling that the actor should have been paid by the BBC as a full-time employee rather than as a freelance service provider. For 10 years from 2004, Glenister’s BBC earnings were paid to his Big Bad Wolff company, meaning he paid tax at 20% instead of 45%. Glenister, who played con man Ash Morgan in the hit show, has been told he must hand over £147,547 in backdated National Insurance contributions. The court heard that there were “a number of other appeals, particularly concerning members of the acting profession, awaiting the outcome of this case”.

The Sun, Page: 16 The Daily Telegraph, Page: 12 Yorkshire Post, Page: 8

The Range chief hands business to his wife saving millions in tax

The boss of retail chain The Range has shifted ownership of his main business to his Jersey-based wife, allowing them to save as much as £15m in tax last year when the company paid a £39.5m dividend. Chris Dawson transferred his 60% share to Mrs Dawson in March 2017 with the dividend paid out during the year until January 28, 2018. Those who are non-UK resident for tax purposes do not have to pay 38.1% UK dividend tax. A spokesman said: “Mr and Mrs Dawson and their companies comply with HMRC legislation. Mrs Dawson’s move to Jersey has no impact on the group’s tax status.”

The Times, Page: 3

Drop in drinking and smoking hits HMRC ‘sin tax’ receipts

HMRC has collected less from “sin taxes” over the past decade, according to UHY Hacker Young, as consumers cut down on alcohol, cigarettes and gambling activities in favour of healthier lifestyles.

Financial Times, Page: 18

Former Top Gear mechanic jailed for helping tax fraudsters flee to Spain

Stephen Howard, a former Top Gear mechanic who helped tax cheats Jamie Colwell and his father Brian flee to Spain before they could be sentenced for a £1m VAT scam, has been jailed. The pair have since been extradited back to the UK and are currently serving prison sentences totalling almost eight years.

Press Release

Labour’s garden tax plans would double annual bills

The Sunday Express reports on Labour plans for a land value tax which could mean local property taxes doubling for some homeowners. Dubbed the “garden tax” the levy would take into account the value of farmlands, driveways and back gardens and charging 3% of its value. According to the TaxPayers’ Alliance estimates residents in Southport would see bills rise from £1,570 to £3,267.

Sunday Express, Page: 12

Raab’s radical new Help to Buy scheme

Dominic Raab outlines how he plans to revive the dream of home ownership in a piece for the Sunday Telegraph. The former Brexit Secretary and Tory leadership candidate says private renters should be helped onto the property ladder by offering landlords a CGT exemption if they sell properties to existing tenants.

The Sunday Telegraph, Page: 9 The Sunday Telegraph

UK focused on ‘low-hanging fruit’ in minimum wage fight

HMRC is overlooking the most serious violations of Britain’s minimum wage laws to concentrate on the easiest cases, according to the UK’s director of labour market enforcement, David Metcalf.

Financial Times, Page: 3

HMRC accused of carelessness over disputed tax demands

HMRC has withdrawn 10% of tax demands associated with avoidance schemes leading Adam Craggs, partner at RPC, to accuse HMRC of not taking “sufficient care and attention” when issuing the orders.

Financial Times, Page: 3

PENSIONS NEWS

Pension warning for those approaching 75th birthday

The Sunday Times’ Ali Hussain warns savers approaching their 75th birthday to check their pension policies or risk being caught out by a range of tax charges. Savers will need to confirm retirement funds total less than the lifetime allowance (£1.03m) or they face an emergency tax charge of 25% – or 55% in some cases. Additionally, some pension contracts were written with an end date set for when the customer reached 75, which means savers have to move their money to another provider if they do not want to be forced into their pension firm’s “default” annuity.

The Sunday Times, Business, Page: 14

One in 10 doctors could quit NHS over pension taxes

The Sunday Telegraph reports that the NHS is facing a 10% fall in doctor numbers due to high tax charges for breaching annual and lifetime pension saving allowances. Older doctors are threatening an early retirement exodus over pension tax charges that they say make them effectively work for free.

The Sunday Telegraph, Business, Page: 3

NHS hands doctors cash top-ups to halt wave of early retirements

Several NHS trusts are offering to give the employer’s pension contribution to doctors in cash rather than putting it into their retirement savings in an attempt to stave off early retirements to avoid tax bills for breaching savings limits. Separately, Dame Jane Dacre, president of the Royal College of Physicians, has said a pensions tax on high earners could deter female doctors from applying for senior roles and awards and harm efforts to reduce the gender pay gap in medicine.

Financial Times, Page: 1 The Times, Page: 20

SMEs NEWS

Late payments hitting SME workers

More than 2.2m SME workers have not been paid on time due to cash-flow problems at their employer, according to research carried out by Intuit QuickBooks. The average SME is owed £31,055 due to late payments from clients and customers, the firm said, with 57% left with debts they could not afford to pay as a result.

Sunday Express, Page: 43

Scottish SMEs expecting greater difficulties from Brexit

The latest Citibase Business Confidence Index has found that 46% of SMEs in Scotland believe revenues will rise or stay the same once the UK has left the EU, this compares to 65% across the UK overall. The report also revealed that the proportion of SMEs in Scotland experiencing difficulty when it comes to attracting investment or raising funding rose from 41% in the previous quarter to 65% in the past three months.

The Scotsman

Tax-efficient schemes enjoy second-highest year on record

At £731m, venture capital trusts – which invest in the UK’s higher-risk small businesses – amassed more assets in the 2018-19 tax year than in any other year since 2005-06.

Financial Times

PROPERTY NEWS

Boom in holiday rentals spurred by buy-to-let crackdown

A tax crackdown on buy-to-let landlords and a Brexit-related boom in staycations has encouraged banks to offer mortgages for holiday lets in the UK. Holiday rentals are expected to generate more than £2.2bn this year, with mortgage experts reporting a rise in the number of owners boosting their incomes. Second Estates, the property investment firm, says rents on holiday lets have gone up by 4% since 2016, bringing the average rental income in the peak season to £1,250 a week.

The Sunday Times, Business, Page: 12

ECONOMY NEWS

Eurozone factories stuck in longest slump since debt crisis

Eurozone factories have suffered a fourth straight month of contraction with industrial production slipping 0.3% year-on-year in February, dragged lower by a 2% decline in Germany’s ailing factories. The region’s manufacturers have blamed trade tensions, Brexit uncertainty, the car industry’s woes and China’s slowdown for the longest losing streak since 2013.

The Daily Telegraph Financial Times

Investors flee UK stock funds on Brexit worries

Investors have fled UK stock funds for a fourth consecutive week, withdrawing $304.5m and extending the total for the year past $1bn and to $24.8bn since the vote three years ago amid unease over Brexit.

Financial Times

Finance ministers say global growth will ‘firm up’

Following the Spring meetings of the IMF and World Bank, finance ministers and central bank governors said global growth was likely to “firm up” in coming months, leading to an improved outlook in 2020. However, new research suggests Britain is the only large advanced economy likely to see a decline in productivity growth this year, something Mark Carney puts down to Brexit uncertainty.

Financial Times Financial Times, Page: 2

OTHER NEWS

Accountant jailed after £170k weekend sex & drugs binge

Accountant Darren Carvill blew £170,000 on cocaine and prostitutes in a “weekend of madness” after stealing from bosses at a car servicing business. After realising he would be caught for stealing a total of £260,000 and almost bankrupting firm Mr Clutch, Carvill said he wanted to “go out with a bang”. Mr Carvill’s barrister James Ross said: “He has had a very unhappy life. For most of his life he has been bullied.” He was jailed two and a half years after admitting 18 fraud charges.

Daily Mirror, Page: 22 The Sun, Page: 5

 ‘Go skinny dipping before your next meeting’ accountants urged

National Geographic adventurer Alastair Humphrey told accountants to have “micro-adventures” such as skinny dipping in a river while on their way to a meeting or sleeping outside on a hill in summer as a way of bringing more happiness and fulfilment to work. Addressing the ICAEW West of England branch dinner, Mr Humphrey said: “You may work nine-to-five but that leaves you with five-to-nine to do something out of the ordinary.”

Swindon Business News

Contact Paul Southward [Tax Consultant].

Paul Southward


News Roundup Friday 12th April 2019


News Roundup Friday 12th April 2019

NEWS ROUNDUP

TAX NEWS

Treasury rejects loan charge delay

Ministers remain unmoved on HMRC’s loan charge despite MPs protesting its consequences in Parliament again yesterday. The retrospective charge applies to tax schemes dating back to the early 2000s under which self-employed people could receive their pay into an offshore trust and then loan the money back – thereby avoiding tax payments. Following a law change in 2015 around 50,000 people face large bills – one man reportedly committed suicide after receiving a £50,000 bill. But Mel Stride, the Treasury minister, said the tax office would not bankrupt anyone nor would anybody “lose their primary residence as a result” of the charge.

The Daily Telegraph, Page: 2

An inheritance tax trick for widowed spouses who remarry

Harry Brennan explains in the Telegraph how individuals who are no longer married can continue to take advantage of their partner’s IHT allowance after they die. The use of discretionary trusts has practically died out since the introduction of the transfer of allowances, says Brennan, but widowed spouses who remarry can enjoy almost the same amount of protection as direct descendants under current IHT rules if they utilise IHT-exempt discretionary trusts, enabling them to pass on £975,000 tax-free. Brennan adds that beneficiaries can use a deed of variation up to two years after death to make use of this tactic retrospectively.

The Daily Telegraph

TAX ALERTS

Here at KSK we periodically release Tax Alerts regarding the latest changes and proposals that may have an impact on individuals and businesses.  Here are links to the latest Tax Alerts issued:

Capital Gains Tax

Proposed changes to Capital Gains Tax and Personal Residences

Private residence relief consultation

Tax Alert CGT – personal residence

CAPITAL GAINS TAX FOR NON-UK RESIDENTS

Non-UK Resident owners of UK property need to be aware of new changes

Tax Alert CGT – Non-UK resident

CORPORATE NEWS

Green brings in restructuring specialists in preparation for Arcadia overhaul

Sir Philip Green has appointed two board members with extensive restructuring experience as he prepares to overhaul his fashion empire. Jamie Drummond Smith, a former Deloitte partner who is chairman of alternative credit provider Cattles, joins the board of holding company Taveta Investments as its interim chairman. Peter Bloxham, a former restructuring partner at Freshfields Bruckhaus Deringer, sits as an interim non-executive director. The two men will also sit on the boards of Arcadia and Topshop. Green is preparing to close stores and is seeking to halve annual payments to Arcadia’s pension pot to £25m, a move that was condemned yesterday by the parliamentary work and pensions committee. Arcadia’s pension fund has a deficit of about £530m on an actuarial basis.

The Times, Page: 51 Financial Times, Page: 18 The Daily Telegraph, Business, Page: 4 The Independent, Page: 62 The Guardian, Page: 37 Daily Mirror, Page: 46 Daily Mail, Page: 80

REPORTING NEWS

S&P climate risk assessment will turn up heat on auditors

The Mail’s Ruth Sunderland considers how the issue of climate change has become more important to investors citing a report by advisory firm Mercer this week which found that high levels of global warming would cause negative effects across swathes of the stock market. Sunderland notes that companies and their auditors will come under pressure to reveal their exposure to climate change as rating agency Standard and Poor’s this week launches a new service assessing environmental and social risks, alongside its credit rankings.

Daily Mail

PENSIONS NEWS

Auto-enrolment pensions can mean a smaller mortgage

The Telegraph’s Sam Barker reports on how last week’s rise in auto-enrolment pension contributions will leave some workers unable to borrow as much from mortgage lenders. Some lenders will subtract pension contributions from income before working out how much they will lend, a fact which Chris Sykes, of mortgage broker Private Finance, said would “likely to result in a number of prospective [buyers] finding their borrowing power reduced despite their earning capacity remaining constant”.

The Daily Telegraph

PERSONAL FINANCE NEWS

Scots see their savings fall by 60% over ten years

Household savings in Scotland have fallen by 60% since 2010, research figures reveal. In 2010 households had on average £3,840.41 in the bank, but by 2017 this was reduced to £1,517.31, analysis from Scottish Labour shows. James Kelly, Scottish Labour MSP for Glasgow and party finance spokesman, said the reduction in savings was “fuelled” by stagnant wages and debt.

The Scotsman, Page: 9 The Press and Journal, Page: 14

ECONOMY NEWS

Scottish cities among Britain’s top ranking “digital destinations”

A new report by property consultancy CBRE reveals that Edinburgh and Glasgow are among Britain’s top ranking “digital destinations”. The firm’s Tech Cities study ranks the top UK locations based on factors such as education, concentrations of existing tech firms and employment, cost of living, cost of office space and wage levels. Over the last two years, Glasgow has climbed three places to become the UK’s second-top tech destination outside London, just behind Manchester, while Edinburgh maintains third spot outside the UK capital. CBRE Scotland chairman Doug Smith commented: “The digital tech sector added £14bn to the UK economy in 2018, up 8% since 2016, and the sector is growing three times faster than the rest of the economy. The creative industries sector – which encompasses businesses from tech to media and telecoms – is therefore fundamental to the future success of Scotland.”

The Scotsman, Page: 35

Further Brexit delay will hinder growth

The head of the IMF, Christine Lagarde, has said that further uncertainty over Brexit will hinder growth in the UK economy. Speaking ahead of the agreement of an extension to Article 50, Ms Lagarde warned that any prolonged uncertainty would have a “negative impact”. Her comments were followed by a lukewarm welcome from business lobby groups in the UK, who said extended uncertainty meant companies would likely persist with curbing investments.

BBC News Financial Times, Page: 3

Contact Paul Southward.

Paul Southward


News Roundup Thursday 11th April 2019


News Roundup Thursday 11th April 2019

NEWS ROUNDUP

TAX NEWS

Tax and the top tier

David Smith in the Times says the wealthy are “helping to ensure a healthy flow of tax receipts into the Exchequer,” with the Office for Budget Responsibility recently saying that revenues were up because of “particularly strong earnings growth among the highest earners”. He considers why the highest earners, who are “normally good at finding ways to reduce their tax liabilities”, are proving to be a rich source of revenue. He notes that the top 1% of earners account for 12.2% of incomes before tax and the top 5%, 24.4%. Mr Smith says the tax system “has got a lot better at redistributing income”, pointing to estimates that in 2018/19, the top 1% of earners accounted for 27.9% of all income tax revenues while the top 5% accounted for 48.4%. This reduced their post-tax shares of income to 19.6% and 9%, respectively. Mr Smith also looks at the impact of the additional ra te of income tax, the income tax personal allowance and allowances for pensions.

The Times, Page: 41

Thousands facing “retrospective” loan charge yet to receive settlement offers

A backlog at HMRC means thousands of contractors have yet to receive loan charge settlement offers from the tax office, the Telegraph reports. HMRC is seeking payment from those who used disguised remuneration schemes in the form of tax-free loans over the past 20 years. Those affected had until April 5 to register to settle but HMRC has yet to inform may contractors about the final amount they will need to pay. HMRC said an estimated 50,000 people will be liable for the loan charge and it has written to more than 40,000 scheme users. The crackdown has been heavily criticised by campaigners and MPs as overly aggressive and “retrospective”. The Yorkshire Post’s Greg Wright cites Tory MP Ross Thomson who called for an immediate suspension of the loan charge for six months and demanded an independent inquiry to be conducted by a party that is not connected with either the Government or HMRC.

The Daily Telegraph Yorkshire Post, Business, Page: 2

UK businesses ignore paperwork needed for no-deal Brexit

HMRC has admitted that only a third of companies whose foreign trade is only with the EU have registered for a customs ID number.

Financial Times, Page: 2

TAX ALERTS

Here at KSK we periodically release Tax Alerts regarding the latest changes and proposals that may have an impact on individuals and businesses.  Here are links to the latest Tax Alerts issued:

Capital Gains Tax

Proposed changes to Capital Gains Tax and Personal Residences

Private residence relief consultation

Tax Alert CGT – personal residence

CAPITAL GAINS TAX FOR NON-UK RESIDENTS

Non-UK Resident owners of UK property need to be aware of new changes

Tax Alert CGT – Non-UK residents

CORPORATE NEWS

Debenhams falls into administration

Debenhams has been taken over by its lenders after the department store group fell into administration. Its 165 UK outlets will continue to trade under the pre-pack administration deal, with around 50 stores believed to be under threat from cost-cutting plans being considered by the chain’s new owners. Mike Ashley’s Sports Direct, which attempted a last minute takeover of Debenhams, has said that the takeover by its lenders is “nothing short of a national scandal”, with Mr Ashley calling for the administration process to be reversed. The Telegraph notes that KPMG and property agents at Savills have been working on a review of Debenhams’ estate and lease liabilities.

The Daily Telegraph, Business, Page: 1 The Times, Page: 37 Financial Times, Page: 13 The Guardian, Page: 3 Daily Mirror, Page: 11 The Independent I, Page: 38 The Sun, Page: 45 Daily Star, Page: 2 The Scotsman, Page: 1 City AM, Page: 2 BBC News

Mike Ashley threatens to sue Debenhams administrators and directors

Sports Direct is considering legal action against Debenhams’ directors after the retailer’s administration wiped out shareholders. Sports Direct boss Mike Ashley branded the pre-pack administration a “national scandal” yesterday after he failed to gain control of the department store chain. He is also demanding Debenhams’ administrators at FTI resign or reverse the administration claiming they are “conflicted”, having been an adviser to Debenhams’ lenders since February. RPC, Sports Direct’s law firm, added that FTI had been “heavily involved” in the events that led to the pre-pack. FTI responded saying that it understood “that Sports Direct as a shareholder will be disappointed that there is no value in the equity. However the transaction delivers continuity for all group operations and was in the best interests of the group’s creditors, employees, customers, pe nsion holders and suppliers. We strongly refute our actions in undertaking a sale for the benefit of the company’s creditors were subject to any conflict of interest.”

The Daily Telegraph, Business, Page: 1 The Times, Page: 39 City AM The Guardian

Green’s US backer dumps Topshop stake ahead of restructuring

Los Angeles-based private equity firm Leonard Green & Partners has sold its stake in Topshop back to Sir Philip Green’s Arcadia as the business gears up for a radical restructuring. It is thought that Sir Philip could pursue cuts to store rents and the closure of shops as part of a company voluntary arrangement (CVA) while pension contributions may also be slashed. The chairman of the work and pensions select committee, Frank Field, has criticised Sir Philip’s plans to reduce Arcadia’s pension recovery repayments from £50m a year to £25m as part of its restructuring. Field said that MPs and the Pensions Regulator were monitoring the situation and the pension deficit, believed to be close to £1bn. The Labour MP added: “Does he really think he’s going to get away with his old tricks again? Run the business down, pocket whatever cash is left, stiff the pensioners and sail off on the Lionheart leaving employees, pension schemes and his long-suffering creditors in the lurch? Not if we have anything to do with it.” The Guardian notes that Arcadia’s advisers at Deloitte have been presenting the CVA deal to major landlords over the past few weeks in the hope of announcing firm plans next month.

The Daily Telegraph, Business, Page: 3 The Times, Page: 38 The Guardian, Page: 37 Daily Mail, Page: 71

SMEs NEWS

How SMEs can attract and retain the best staff

Writing in the Telegraph, Yorkshire Bank’s Alison Coleman asks recruitment firms how SMEs can compete with larger organisations when it comes to attracting new talent. James Calder, CEO at Distinct Recruitment, says that adequate promotion is essential and advises firms to make use of social media. SMEs can also widen the net for talent by thinking smartly about what is really required for the job, says Alex Fleming, president and country head of Adecco Group UK&I. Finally, Brighter Connections’ Darren Stringer says that it is essential for firms to offer adequate training and coaching opportunities.

The Daily Telegraph

Venture capital investment remains steady

A new report by KPMG has revealed that venture capital investment into UK start-ups over the first three months of 2019 was around the same level as last year. In total more than £1.2bn has been invested since the start of the year across 161 deals. Fintech, biotech and healthtech were the most popular sectors for venture capital firms.

City AM, Page: 9

The big tech companies are smothering small start-ups

Greycroft co-founder Alan Patriocof says venture capitalists are discounting companies that rely on a digital platform to reach their markets because minor changes to a platform’s algorithms can harm a business’s traffic overnight.

Financial Times, Page: 11

PENSIONS NEWS

Should personal auto-enrolment pension contributions rise above the current level?

Steve Webb and Samantha Seaton debate whether personal auto-enrolment pension contributions should rise above the current level of 5%. Ms Seaton, the chief executive of Moneyhub, says yes, because even saving the minimum amount is still unlikely to be enough for workers to have a comfortable retirement. She adds that the low opt-out rate indicates “there is scope to further increase the employee contribution”. Sir Steve Webb, a former pensions minister and director of policy at Royal London, suggests that instead of pushing up personal contributions above 5%, “we should gradually expect firms to match the 5% contribution made by their workers.” He adds that behavioural nudges should be used, “such as suggesting people save more when they get a pay rise, to encourage people to save at realistic rates, without risking mass opt outs.”

City AM

PERSONAL FINANCE NEWS

VCTs at 13-year high

Data from the Association of Investment Companies shows that investors shielded £731m from the taxman in the tax year 2018/19 by buying shares in venture capital trusts (VCTs). The figure marks the second-highest amount ever raised in a year, with only 2005/06 seeing a greater total. The investments, which tend to be higher risk while offering a higher reward, provide investors with big tax breaks in return for putting their money in unquoted, fledgling companies. VCTs offer 30% income tax relief on up to £200,000 per year on new shares held for five years, with dividend payments and capital gains also tax free.

The Daily Telegraph

ECONOMY NEWS

Shop closures at record level

PwC research compiled by the Local Data Company shows that the number of high street shop closures were at record highs last year, while store openings fell to their lowest levels on record. In 2018, a record net 2,481 high street stores closed their doors – with 5,883 closures and 3,372 openings – compared to a net loss of 1,772 in 2017. The findings show that closure rates remain high in Q1 2019 due to a number of CVAs, restructures and administrations announced last year. Zelf Hussain of PwC said: “We have already seen several casualties and there will undoubtedly be more.” “Retail companies looking to survive, let alone flourish, in 2019 face an uphill battle,” he added. The Times notes Deloitte research showing that the total number of retailers falling into administration rose by 6% to 125 in 2018.

Daily Mail, Page: 6 The Daily Telegraph, Business, Page: 1 The Times, Page: 9 Daily Star, Page: 2 Daily Mirror, Page: 11 Yorkshire Post, Page: 1 The Scotsman, Page: 5 City AM, Page: 3

IMF cuts global growth forecast

The IMF has predicted that the global economy has slowed sharply since last summer and is now relying on a “precarious” boost from emerging markets to stabilise the economy. The global economics watchdog downgraded world growth for 2019 from 3.5% to 3.3%. It has also warned that the British economy would be hit seven times harder than the rest of the EU in the event of a no-deal Brexit, slipping into recession.

The Times, Page: 37 Financial Times, Page: 5 Financial Times, Page: 2

Economy standing firm against Brexit chaos

Despite the ongoing political impasse over Brexit, the UK economy expanded 0.2% in February and is now 2% larger than it was a year ago. John Hawksworth, chief economist at PwC, said: “The main reason why the economy has held up is that while business investment has been falling over the past year, consumer spending has fared much better on the back of continued strong jobs growth and a steady pick-up in real earnings growth,” while Ian Stewart, chief economist at Deloitte, added: “The pace of growth could be choppy, but the UK is likely to grow at about the same pace as the euro area this year.”

The Daily Telegraph, Business, Page: 8 The Guardian, Page: 39 Daily Express, Page: 5 Daily Mail, Page: 2

OTHER NEWS

Royal baby faces IRS bill

The Duchess of Sussex and her baby may, as US citizens, be liable to pay the Internal Revenue Service. David Treitel, the founder of American Tax Returns, which provides taxation advice to US expats, said the US has a citizenship-based taxation system, “so as long as Meghan is a citizen of the United States she is taxed”. He adds that the royal baby will automatically be a citizen of the United States simply because her mother is, noting that the child will inherit investments which will then generate income – reportable and taxable in the United States – as soon as they are born.

Daily Express

OECD: Decimating middle classes could undermine political stability and economic progress

The Organisation for Economic Co-operation and Development (OECD) has warned that the world’s middle classes are shrinking rapidly as taxes squeeze incomes, inflation and rising house prices slash spending power and robots threaten jobs. “The shift in employment towards high-skilled non-routine jobs and some low-skilled non-routine jobs has hollowed-out middle-skilled jobs.” The OECD argues that a large middle class is crucial to maintaining political stability and economic progress. “The investment of the middle class in education, health, and housing, their support for good quality public services, their intolerance of corruption, and their trust in others and in democratic institutions, are the very foundations of inclusive growth,” it said.

The Daily Telegraph, Business, Page: 8 The Times, Page: 2

Contact Paul Southward.

Paul Southward


News Roundup Tuesday 9th April 2019


News Roundup Tuesday 9th April 2019

NEWS ROUNDUP

TAX NEWS

1.75m workers miss out on tax relief

Royal London analysis of figures obtained from HMRC via a freedom of information request suggests that up to 1.75m workers could be missing out on tax relief worth a total of £60m. The issue stems from the fact the threshold for enrolling people in a workplace pension is £10,000, significantly less than the new tax threshold of £12,500. It means that someone paid £12,000 a year automatically loses £528 from their take-home pay in pensions contributions while someone on £15,000 sees their take home pay drop by £510 and gets £240 more added to their pension fund as a result of tax relief.

I, Page: 43 Daily Mirror

‘Europe must take the lead’ on a digital tax, says EU competition chief

EU Competition Commissioner Margrethe Vestager says Europe must put itself in the driving seat regarding a digital tax on technology companies, should a global consensus not be reached. There is currently disagreement over how to implement a GAFA – Google, Apple, Facebook, Amazon – levy to ensure the companies pay their fair share of taxes, with Denmark, Finland, Ireland and Sweden set against proposals from France. “The best thing is a global solution. But if we want to obtain results in a reasonable period of time, Europe must take the lead”, Ms Vestager told the France Inter radio station on Monday.

The Daily Telegraph City AM, Page: 5

MPs call for loan charge review

At least 69 MPs have signed a letter demanding that the Government suspends the loan charge for six months to allow for an independent review, with the All-Party Parliamentary Loan Charge Group telling Financial Secretary to the Treasury Mel Stride: “With the huge anxiety thousands of people are facing, we believe that a pause and a review is vital and the right and responsible thing to do.”

Yorkshire Post, Business, Page: 1

CORPORATE NEWS

Creditors reject Patisserie Valerie plan

Creditors to collapsed café chain Patisserie Valerie have hit its administration by rejecting KPMG’s plan to wind the business down. This means that KPMG must now negotiate a deal with the creditors to proceed, with failure to reach agreement potentially seeing the administrator apply to the court for directions. A person close to KPMG said it was unclear why its proposals had been rejected.

The Times, Page: 38

Debenhams set for pre-pack administration

Debenhams is expected to enter a pre-pack administration after a rescue offer by Sports Direct was rejected. Sports Direct owner Mike Ashley had offered to raise £150m by issuing new shares, which would also have seen lenders write off £148m of the chain’s debt, on the condition that he be made chief executive of Debenhams.

The Daily Telegraph, Business, Page: 1 The Times, Page: 35 Financial Times, Page: 19 The Guardian, Page: 31 Daily Mail, Page: 65 Daily Mirror, Page: 44 Daily Express, Page: 53 City AM, Page: 3 BBC News

Banks face tax dodge lawsuits

Santander has been drawn into a lawsuit over alleged tax avoidance schemes centred on film-financing. The Imagination scheme was part-funded by Alliance & Leicester, which Santander has since acquired. Barclays is facing legal action over a similar scheme. Newport Tax Management, which is managing a class action, said letters will be sent to Santander and Barclays. It also said that, across the financial sector as a whole, compensation claims could hit £11bn.

The Sun, Page: 45 I, Page: 41 City AM, Page: 6 Yorkshire Post, Business, Page: 5

HMRC extends deadline for funding initiative

HMRC and the Treasury have extended the deadline for applications for an £8m Government initiative to help businesses prepare for Brexit from April 5 to 31 May. The funding, which supports customs intermediaries and traders completing customs declarations, can be used toward the costs of employee training and IT improvements. Mel Stride, the Financial Secretary to the Treasury, said: “We have already received over 300 applications, and I’d urge businesses to apply as soon as possible to avoid missing out.”

City AM

SMEs NEWS

Small firms hit by emissions initiative

Small businesses have voiced concern over London’s new ultra-low emission zone, an initiative that will see older models of cars and vans charged £12.50 to enter central London. Sue Terpilowski, the London policy chair of the Federation of Small Businesses, said this could “spell disaster” for many businesses. She said: “The cost of doing business in the capital is already high which is forcing many small businesses to re-evaluate their business activity,” adding: “Small businesses are suffering due to lethal cocktail of increasing business rates, higher employment charges.” Eddie Curzon, London director of the Confederation of British Industry, said smaller firms “can struggle to afford the switch to low-emission vehicles”.

The Independent, Page: 15

LEGAL NEWS

Furniture boss jailed for VAT scam

Anthony Whitehead, the owner of furniture store Warehouse Prestwich, has been jailed for two years and five months over a £150,000 tax scam. Despite the firm seeing sales of £2,229,197, Mr Whitehead paid just £205 in VAT over five years, having lied on his tax return.

Press Release

ECONOMY NEWS

Companies amass record cash balances

Figures from the ONS show that private companies, excluding financial institutions, have stored away £173bn since March 2016 and are now sitting on £747bn of cash, a level not seen before. The ONS said the figures underscore the financial health of Britain’s corporate sector and point to pent-up potential for investment in the economy. The Treasury believes that the balances are proof that there will be a “deal dividend” from better economic growth as companies raise spending if or when the UK leaves the European Union on good terms.

The Times, Page: 41

Retail sales dip

The British Retail Consortium-KPMG monitor showed a “truly disappointing end to the first quarter” for retail sales, with an annual decline of 0.5% recorded in March. Like-for-like growth fell from 0.3% in February to 0.1% in March.

The Times, Page: 41 Financial Times, Page: 3 The Guardian, Page: 32 I, Page: 40 Daily Mirror, Page: 44 Daily Express, Page: 53 The Sun, Page: 45 City AM, Page: 4

Analysis prompts recession fears

OECD indicators designed to predict economic growth over the next six to nine months show that the US, Japan, the eurozone, UK, Canada and Russia are all losing momentum. Ian Stewart, chief economist at Deloitte, comments: “It’s far too early to predict a recession, but it’s not too early to worry about one.”

The Daily Telegraph, Business, Page: 4

OTHER NEWS

600 council staff paid more than the PM

Analysis by the Taxpayers’ Alliance shows that 608 council workers earn more than the Prime Minister’s £150,000 salary, while 2,454 council employees received a remuneration package worth more than £100,000 in 2017/18. This marks the highest total since 2013/14 and is 148 up on the total recorded a year ago. Rob Whiteman of the Chartered Institute of Public Finance and Accountancy, said: “It causes concern to the public to see the number of senior staff, but at local level, these roles are running vital public services.”

The Times, Page: 2 Daily Mail, Page: 16 The Daily Telegraph, Page: 11 Daily Express, Page: 1 City AM, Page: 12

Contact Paul Southward.

Paul Southward


News Roundup Monday 8th April 2019


News Roundup Monday 8th April 2019

NEWS ROUNDUP

TAX NEWS

HMRC’s loan charge assault runs contrary to legal safeguards

Keith Gordon of Temple Tax Chambers looks at concerns over the loan charge and considers whether it goes against safeguards protecting taxpayers from retrospective or retroactive legislation.

Financial Times, Money, Page: 5

Jet tax breaks soar

Figures show that tax breaks for owners of private jets registered in the Isle of Man increased to £100m last year, taking the total of tax avoided on private jets to £940m since 2011. This comes despite warnings from the European commission that the practice is a breach of EU laws, with Brussels describing the tax breaks as “abusive” and characterising them as “evasion” in November 2018.

The Guardian, Page: 28

Tax disputes jump 40% in 2 years

Analysis by Price Bailey shows that disputes between HMRC and taxpayers have climbed by more than 40% in two years, with 7,377 first-tier tribunal cases in the tax year that ended in April 2018 compared to 5,161 in 2015/16. Richard Grimster of Price Bailey suggests HMRC, under pressure to maximise tax revenues, has adopted a “more aggressive and intransigent approach in its dealings with taxpayers”.

The Sunday Times, Business and Money, Page: 16

Rate rethink leaves tax gap for Scots

The Sunday Times looks at a tax gap between Scotland and the rest of the UK, noting that the starting point for 40% income tax has risen to £50,000 in England, Northern Ireland and Wales while taxpayers in Scotland pay higher-rate tax on earnings above £43,430, at a rate of 41%. Steven Cameron, pensions director at the insurer Aegon, says: “Someone earning £50,000 in Wales, England or Northern Ireland will pay £7,500 income tax this year, while someone earning the same in Scotland will pay £9,044”, before pointing to a positive for those north of the Border, saying: “People in Scotland earning £50,000 will be entitled to up to 41% tax relief on their pension contributions, whereas those earning the same in the rest of the UK would be entitled to only 20% tax relief.”

The Sunday Times, Business and Money, Page: 13

Tax and pension thresholds hit doctors

James Coney in the Sunday Times considers whether people in the top tax band are being unfairly treated, questioning why the point at which the additional-rate tax starts has remained unchanged at £150,000 since its introduction in 2010. HMRC data, he notes, shows that the number of taxpayers in this band has grown from 236,000 to 393,000 over that period. Mr Coney also highlights concerns around tax relief on pensions and the earnings threshold, detailing the impact it has had on some NHS doctors.

The Sunday Times, Business and Money, Page: 12

£1bn tax bill for FTSE firms

A European Commission investigation has ruled that a tax scheme introduced in 2012 gave an unfair advantage to multinationals based in the UK, with up to £1bn in lost tax set to be clawed back. Tommy Stubbington in the Sunday Times says the Treasury is unhappy at the decision, believing EC officials have been inconsistent in criticism of tax rules. The Treasury said it would “carefully consider” the ruling before taking action, while Dan Neidle of law firm Clifford Chance said the ruling was likely to be challenged by big companies as “HMRC and business have been forced into a billion-pound dispute neither want.”

The Sunday Times, Business and Money, Page: 1

Tax change boosts high earners

Torsten Bell, director of the Resolution Foundation, looks at austerity and notes that this year’s income tax cuts “are bumper ones for higher earners,” saying that those earning £30,000 will be £73 better off, but those earning £60,000 will see a £327 boost. Writing in the Observer, he adds that new tax and benefit changes for the year mean an average £280 income boost for the richest fifth of households, but a £100 reduction for the poorest fifth.

The Observer, Page: 4

IHT hit under Labour?

The inheritance tax regime would become more punitive under a Jeremy Corbyn led Labour government, argues Jeff Prestridge in the Mail on Sunday, saying the removal of exemptions would be likely, as would higher tax rates. He says Conservative governments have tried to help families shield more assets from the tax but adds that the changes have increased inheritance tax’s complexity, prompting Chancellor Philip Hammond to ask the Office of Tax Simplification to see whether the tax could be made fairer and easier to understand – with the outcome of its review imminent. Mr Prestridge also considers changes a Labour election win could see to tax matters such as relief on pension contributions and capital gains tax.

The Mail on Sunday, Page: 82

Zero rate on savings income

Mike Warburton in the Telegraph looks at a special rate that can apply to savings income which HMRC estimates will mean three-quarters of a million people will pay a zero rate of tax this year.

The Daily Telegraph, Money, Page: 2

Chief executive defends HMRC over pay regulations

HMRC chief executive Sir Jonathan Thompson has defended pay regulations which have come under criticism, denying suggestions that they prevent employers from setting up salary schemes for staff. With Business Secretary Greg Clark examining claims that the rules are “overly complex” and “too difficult to comply with”, Sir Jonathan has insisted they are “very clear” and “designed to avoid any potential for abuse”. With some critics suggesting HMRC is targeting companies that accidentally fall foul of pay regulations through salary sacrifice schemes, Sir Jonathan insisted that the Revenue has a “legal duty” to pursue all cases. Helen Dickinson, chief executive of the British Retail Consortium, comments: “HMRC should be focusing its time and effort on catching those who abuse the law, rather than responsible employers who are trying to do the best for their employees but are being held back by poorly thought-out legislation.”

The Times, Page: 48

Tax scam reports increase

The Mail reports that HMRC staff have dealt with 60,000 scam reports in the six months to January, marking a 360% increase on the previous six months. The paper, which earlier this year exposed scammers operating from overseas call centres, says reports of tax fraud have climbed 10% since it published details of its investigation. It adds that Treasury Minister Mel Stride has written to Foreign Secretary Jeremy Hunt to demand diplomatic action to tackle such fraudsters.

Daily Mail, Page: 22

Doctors warn of tax impact

David Chung, a vice-president of the Royal College of Emergency Medicine, says changes to pension taxation could see hospital services reduced and a less safe service for patients, with some consultants cutting their hours or refusing extra shifts to avoid an effective 100% tax rate.

The Times, Page: 21

Suicide claim over loan charge

The family of a grandfather who took his own life say he did so after struggling with stigma of being branded a tax avoider by HMRC. They say the man said he could not face the shame of being targeted by the loan charge and a £50,000 tax bill. The Telegraph notes that a panel of MPs chaired by Sir Ed Davey has said the Revenue has been told of a “suicide risk” linked to the loan charge.

The Daily Telegraph, Page: 11

SUMMARIES OF THE NEW TAX YEAR CHANGES

The new tax year starts on 6th April and we have reviewed the tax changes that come into effect this April and you can check these out in the downloads below..

Personal tax changes

2019-20 Personal Tax Changes

Business tax changes

2019-20 Business Tax Changes

SMEs NEWS

SMEs hit by invoice fraud

Barclays Bank research shows that one in seven UK SMEs have paid fake invoices in the last year, with over a quarter of those saying invoice scams resulted in losses of more than £5,000. Mike Cherry of the Federation of Small Businesses warned: “All too often businesses introduce cyber-defences only after they have been the victim of fraud or an attack, and this attitude needs to change.” Tony Price of PwC comments: “We are living in a time where digital technology pervades everything a business does and as a by-product businesses are open to a range of new scams. The cyber-attacks and online scams we are seeing are becoming increasingly sophisticated and devious.” James Maycock of KPMG said: “Individuals who have the inside track on a business can often exploit loopholes in financial procedures to their advantage, and the repercussions for a business, particularly smaller businesses, can be devastating.”

The Times, Page: 67

Scheme sees 80 new small firms a week

Official figures show that 28,000 entrepreneurs have taken advantage of the New Enterprise Allowance scheme, with 80 new small businesses created every week since its launch in 2011. Of the 126,000 companies created through the initiative, a quarter were started by someone with a disability. The scheme, which supports new firms with mentoring and funding of up to £25,000, has been extended for two more years.

The Sun on Sunday, Page: 13

Uppal criticises retailer over payments

Small Business Commissioner Paul Uppal has criticised Holland & Barrett, saying it has treated suppliers “shabbily” and accused the health food chain of “a purposeful culture of poor payment practices”. Highlighting figures showing that Holland & Barrett took an average of 68 days to pay invoices and that 60% of invoices were not paid within agreed terms, Mr Uppal said this, along with its refusal to co-operate with his investigation into payment practises, points to “a company that doesn’t care about its suppliers or take prompt payment seriously.”

The Guardian, Page: 37

PERSONAL FINANCE NEWS

Employers urged to alert staff over pensions change

Saffery Champness has urged employers to inform their staff that auto-enrolment pension contributions have increased, with the minimum contributions paid into defined contribution automatic enrolment workplace pension schemes increasing from 2% to 3% for employers and from 3% to 5% for staff contributions.

The Press and Journal, Page: 33

Isa rethink call

The Telegraph’s Matthew Lynn reflects on Isas, which were launched twenty years ago, saying that they could be boosted by reforms. He suggests Isas could be “turbocharged” by giving tax relief as well as tax breaks, by exempting them from inheritance tax and by extending them to new forms of finance such as crowdfunding.

The Daily Telegraph, Page: 34

Podcasts pay off?

The Mail evaluates whether investment in podcast firm Audioboom would be worthwhile, noting that the sector is booming and that PwC estimates advertising revenues will reach £1.2bn by 2022.

Daily Mail, Page: 102

CORPORATE NEWS

Google tax claim

Campaign group the Tax Justice Network claims that Google avoided £1.5bn in UK corporation tax last year, with it noted that the firm paid £67m in corporation tax in 2018. Google UK generated £1.4bn in revenue last year, with this not including the bulk of Google’s business – advertising sales – which are traditionally booked in Ireland. If those were included, Google’s UK’s total turnover could be at least £9.7bn, according to the analysis. Google refused to comment on the Tax Justice Network’s study but said in a statement: “As an international business, we pay the majority of our taxes in our home country, as well as all the taxes due in the UK.”

Daily Mirror, Page: 5 Daily Express, Page: 6 The Sun, Page: 2

PROPERTY NEWS

House prices fall in March

The latest Halifax House Price index shows that the average property value fell by 1.6% in March. This follows a 5.9% month-on-month increase reported in February. Quarterly figures show a rise of 1.6% over the first three months of the year. Annually, the data shows an increase in the average house price of 3.2%, bringing the typical property value to £233,181. Howard Archer, chief economic adviser at EY Item Club, said: “The overall impression is that the housing market is currently soft as it is being hampered by challenging conditions with buyer caution currently being reinforced by heightened Brexit and economic uncertainties.”

BBC News The Daily Telegraph, Business, Page: 35 The Guardian, Page: 41 The Independent, Page: 41 The Times, Page: 50

Tax warning for homeowners

Experts have warned that tax rules set to come into force next April could drive accidental landlords from the market. The Government is consulting on alterations to principal private residence relief that would see the 18 month exemption from capital gains tax on the proceeds from the sale of a main home cut to nine months. The changes could affect anybody who owns their own home “because nine months is not a long period to dispose of a home, especially in difficult economic times. “The new exempt period means that those who are going through separation may find themselves dragged into the capital gains tax net if the former marital home is not sold within nine months of the separation.”

The Times, Page: 58

Hotels and pubs hit by business rates

Rising property taxes will see London’s hotels facing renewed pressure, according to business rate experts who fear that the sector could suffer under the latest round of bills. Real estate firm Colliers found that 93 London hotels have been charged with a combined total rates bill of £12.2m this year – over two-and-a-half times the sum in 2016/17. Meanwhile, the Campaign for Real Ale has warned that business rates are forcing publicans to lay off staff and put up prices. A poll of 650 licensees saw three-quarters say the system is unfair to pubs.

City AM, Page: 12 Daily Mirror, Page: 16

ECONOMY NEWS

Confidence concern for businesses

Business confidence has fallen to the lowest point since 2012, BDO’s latest optimism index shows. The overview of how businesses expect output to develop in the next three to six months suggests the UK economy could struggle to grow in 2019. The report said: “In absolute terms, sentiment is now weaker than its previous low point after the UK’s vote to leave the EU in 2016. The services sector, which comprises around 80% of UK GDP, drove the overall decline in confidence, with the sector index falling by a dramatic 4.15 points to 95.13 in March.” BDO’s output index held steady at 98.74 in March, up from 98.32 in February.

The Guardian, Page: 37 The Times, Page: 45 Daily Mirror, Page: 2 The Sun, Page: 4 City AM, Page: 2 Yorkshire Post, Page: 4

Float numbers sink in Q1

Analysis from EY shows that London has seen the slowest quarter for flotation’s in eight years, with just four companies listing on London’s main market from January to March, while only one business floated on the junior market. The first quarter figures mark a fall of 69% compared with the nine main market companies and seven Aim floats that took place over the same period last year, while the amount raised fell 63%. Considering factors behind the dip, Scott McCubbin at EY pointed to a global slowdown and Brexit uncertainty, but said there is a strong pipeline of companies waiting to list, adding that clarity over the UK’s relationship with Europe will be a “key trigger for this.” Meanwhile, separate figures from PwC show a decline in IPOs across European markets in Q1 2019. The research shows that the value of flotations over the first quarter came in at only & euro;700m, against €13.1bn a year earlier.

The Times, Page: 49

OTHER NEWS

Five times more men than women earn over £150k

HMRC figures show that five times as many men as women earn more than £150,000, with analysis by the Sunday Times also revealing that 10 times as many men earn more than £1m. The data shows that around 295,000 men earn more than £150,000 a year, while only about 61,000 women do – although figures from 2012-2017 do show that the number of female workers earning more than £100,000 is increasing at about double the rate of men. Ann Francke, chief executive of the Chartered Management Institute, commenting on the analysis, said: “Male dominance of powerful positions is centuries in the making – and this shows how men still have a stranglehold on the best-paid jobs.”

The Sunday Times, Page: 20
Leaving London: Voices from financial front line speak of foreign attractions

The FT looks at how financial services companies with London hubs have responded to Brexit, with EY analysis showing that 28 have committed to relocate staff or operations to Dublin since 2016.

Financial Times, Page: 9

Contact Paul Southward

Paul Southward


News update extra Friday 5th April 2019


News update extra Friday 5th April 2019

NEWS UPDATE EXTRA

TAX NEWS

IFS hits out at stealth taxes

Institute for Fiscal Studies (IFS) analysis has found that around 1m people are losing more than £1bn in tax allowances. The research shows that the Government freezing the salary threshold at £100,000 has seen an extra 340,000 people have their income tax personal allowance withdrawn over the past decade, taking the total number affected to 986,000. If ministers had increased the £100,000 threshold in line with inflation these people would have been paying more than £1bn less in tax. The figures also show that the threshold being frozen at £150,000 since 2008 means 110,000 extra people have been pulled into the highest 45% tax rate, taking the total to 428,000. The IFS said “stealth” taxes have moved from being the “rare exception to being commonplace.” The IFS added the “most perverse case of all” was the reduction in the pension annual allowance for high-income individuals, saying: “In some cases, people with pension contributions in excess of £40,000 can face a marginal tax rate of more than 100%,” adding that they “would actually be worse off if they increased their earnings.” IFS director Paul Johnson said: “Recent governments have, rather stealthily, increased tax rates on high earners and the number of people facing high marginal rates of tax. If government thinks there is a case for more high-income people to pay more tax, it should be upfront about that view.” Elsewhere, City AM calls for a rethink of tax bands, saying that while a “long-overdue attempt” to prevent workers with modest lifestyles from falling into the 40p tax bracket by lifting the threshold should be applauded, “static thresholds continue to trap a growing number of employees.”

The Daily Telegraph, Page: 8 Daily Mail, Page: 75 City AM, Page: 2

Threshold change widens tax gap

Scottish workers earning under £27,000 – which equates to around 55% of the country’s taxpayers – will contribute less income tax than their counterparts elsewhere in the UK when new income tax thresholds are implemented on April 6. However, those earning more than this will pay more than taxpayers south of the Border. While Chancellor Philip Hammond raised the top rate of income tax to earnings over £50,000, Scottish Finance Secretary Derek Mackay announced in October that the point at which the higher rate kicks would be frozen at £43,430. The change effectively widens the gap between Scotland and the UK for higher rate taxpayers, who pay 41% in Scotland compared to 40% in the UK.

Daily Express

Loan charge delay call

A number of MPs have backed calls for a six-month delay to the loan charge and an independent inquiry, with Justine Greening saying: “The approach HMRC has taken has been punitive rather than proportionate.” Elsewhere, Dawn Register of BDO commented: “This controversial tax charge has not received sufficient Parliamentary scrutiny.” She added: “With MPs’ time dominated by Brexit it is hardly surprising, however the flurry of evidence and activity in recent weeks suggests that more time is needed to consider the impact of the measure.” Meanwhile, the Loan Charge Action Group has called for the charge to be forward-looking rather than retrospective.

Financial Times BBC News

Pension tax break cuts risk crippling the NHS

The FT looks at the impact regulations restricting tax relief on pension contributions for higher earners are having on the NHS, with senior doctors opting to reduce hours or retire early.

Financial Times, Page: 10

UC impact on tax credit claimants revealed

A study by HMRC and the Department for Work and Pensions into how tax credit claimants coped with a shift to universal credit found that 60% of those who reported struggling financially said their difficulties began when they made the move.

The Guardian, Page: 23 Daily Mirror, Page: 2

SUMMARIES OF ALL THE NEW TAX YEAR CHANGES

The new tax year starts on 6th April and we have reviewed the tax changes that come into effect this April and you can check these out in the downloads below..

Personal tax changes

2019-20 Personal Tax Changes

Business tax changes

2019-20 Business Tax Changes

CORPORATE NEWS

BBC criticised over pay arrangements

The Commons Public Accounts Committee has said the BBC’s “muddled and chaotic” handling of freelance pay arrangements caused misery and hardship for staff. The report comes amid claims the BBC told freelancers to set up personal service companies so it could avoid paying millions in national insurance, with HMRC subsequently chasing staff over unpaid tax bills. The BBC’s attempt to reach an agreement with HMRC that would see it settle all outstanding cases with a lump-sum payment is taking longer than expected, the committee noted.

The Times, Page: 48 The Guardian, Page: 15 The Sun, Page: 4

Stores hit by online rivals

The Daily Mail reflects on a report which shows that one in eight high street stores are empty, saying “ruthless competition from tax-avoiding internet firms” has taken its toll. The editorial says such firms “pay microscopic sums to HMRC” and as they operate out-of-town warehouses “they avoid the suffocating business rates”.

Daily Mail, Page: 16

Pottery firm collapses

Pottery manufacturer Dudson has collapsed, with over 300 jobs lost. Of the 390 staff employed at the firm, 72 “will be retained to support the closing down of the business”. Administrator PwC said “a deterioration in sales and increased costs” had hit the business.

The Times, Page: 48

SMEs NEWS

Late payment pain for small firms

Sathnam Sanghera in the Times looks at the impact late payment has on SMEs. He notes Federation of Small Businesses analysis which suggests about 50,000 businesses fail every year due to larger firms neglecting to settle bills, while Lloyds Banking Group research suggests that 65% of firms which report their payment practices took more than 30 days to settle invoices and 21% took more than 50 days. Mr Sanghera also points to a Small Business Commissioner report showing that a third of payments to small businesses are late, 20% of small firms have experienced cash flow problems due to late payments, and that the economy would see an annual boost of £2.5bn if bills were settled promptly. Meanwhile, the Cabinet Office has written to Government suppliers saying they risk being barred from future public sector work if they fail to pay subcontractors on time.

The Times, Page: 43 Financial Times, Page: 2

ECONOMY NEWS

Sales up but dip not offset

The latest BDO high street sales tracker shows that like-for-like in-store sales rose by 4.8% in March, with the increase not strong enough to rebound from a 10.1% dip seen in March 2018. The data also shows that online sales rose 18.7%, up on the 11% growth recorded a year ago. BDO’s Sophie Michael commented: “Retailers continue to trade on paper-thin margins and the impact of further increases in business rates and staffing costs will only add to the fears of further possible high street casualties.”

The Times, Page: 42 City AM, Page: 3 Yorkshire Post, Page: 9

Hiring slows

The monthly Report on Jobs by KPMG and the Recruitment and Employment Confederation shows that the number of permanent job appointments in March fell to its lowest level since immediately after the 2016 referendum. The survey of 400 UK employment consultancies found that permanent appointments dropped for the second time in three months in March and at the steepest rate since July 2016, with political uncertainty said to have played a part. James Stewart, vice chair at KPMG, said: “Brexit has been sapping business confidence for months, and now it is causing the jobs market to grind to a halt.” “With unclear conditions ahead, many companies have hit the pause button on new hires,” he added.

The Times, Page: 48 The Sun, Page: 51 Yorkshire Post, Page: 4

Contact Paul Southward.

Paul Southward


News Roundup Friday 5th April 2019


News Roundup Friday 5th April 2019

NEWS ROUNDUP

TAX NEWS

Customers face tax bills on mis-sold Isas

People who held mini-bonds with collapsed firm London Capital & Finance (LC&F) may have to pay tax on the failed investments, with HMRC saying Isa accounts dating back to April 2017 are void. Although LC&F was approved by HMRC as an official Isa manager and its bonds advertised as Isa-eligible, the mini – bonds it sold were not Isa-compliant. The Revenue has thus declared that income tax must be paid on any interest earned over and above individual tax allowances. This comes despite requests for leniency from joint administrators Smith & Williamson. HMRC says it is not pursuing investors aggressively or retrospectively and is sympathetic to the position they find themselves in. Meanwhile, the Daily Mail’s James Burton says EY apparently missed suspicious trades at LC&F before it went bust, giving its accounts a clean bill of health. EY signed off on LC&F’s accounts for the year to 2017, while its books were checked by PwC the year before, with both firms saying LC&F was keeping accurate records and following rules. Mr Burton says the revelations “pile fresh pressure on the audit profession”.

The Daily Telegraph Financial Times, Page: 18 Daily Mail, Page: 74

HMRC urges loan scheme users to come forward

HMRC is encouraging users of disguised remuneration (DR) schemes to settle their tax debt by 5 April, with the majority of those who used DR schemes likely to pay less by settling now rather than waiting until the loan charge comes into force. Those earning less than £50,000 and no longer involved in tax avoidance can spread their payments over five years minimum while anyone earning less than £30,000 can spread payments over a minimum of seven years. Meanwhile, MPs on the loan charge all-party parliamentary group have branded the loan charge a “cynical attempt by HMRC to cover up past failures” and called for it to be delayed and an independent review conducted.

Press Release Financial Times, Page: 2 Yorkshire Post, Business, Page: 1

Taxman targets image rights payments

HMRC is targeting football clubs and players for what it considers to be unpaid tax related to image-rights payments, with tax consultant Andy Wood suggesting a ruling in favour of the taxman in a case involving Hull City could see new laws introduced.

I, Page: 51

TAX CHANGES

The new tax year starts on 6th April and we have reviewed the tax changes that come into effect this April and you can check these out in the downloads below..

Personal tax changes

2019/20 Personal Tax Changes

Business tax changes

2019/20 Business Tax Changes

CORPORATE NEWS

Google’s tax bill hits £66m

Google UK reported a corporation tax bill of £66m for last year, up on the £47m it paid the previous year. The firm reported a 10% rise in UK revenues to £1.4bn, with pre-tax profit up to £246m. The figures do not include Google’s advertising revenues – which make up the lion’s share of its income. City AM, which says tech firms have faced criticism for paying low levels of tax in the UK, notes that Google’s tax figures are significantly higher than those at Amazon, which handed HMRC just over £4.5m last year. Paul Monaghan, of campaign group Fair Tax Mark, commented: “The accounts make little or no effort to shed light on whether Google is paying a fair amount of tax on UK earnings, in all likelihood because it is not.”

The Daily Telegraph, Business, Page: 5 Daily Mail, Page: 21 The Sun, Page: 2 Daily Mirror, Page: 7 City AM

Bolton score court delay

Bolton Wanderers have been granted a further stay of execution by the High Court as the club look to avoid a winding-up order over an unpaid £1.2m tax bill. The football club’s case has been adjourned until May 8 to allow a proposed sale of the club to proceed.

The Independent The Times, Page: 69 The Daily Telegraph I, Page: 54 The Sun, Page: 53

Wageday victims may miss out

People mis-sold payday loans by Wageday Advance are set to be emailed details on how to claim compensation, with KPMG, the lender’s administrators, saying there would be insufficient funds to pay everyone what they were owed. “Creditors with valid claims will only receive a partial payment,” the firm warned.

The Times, Page: 40

INTERNATIONAL NEWS

Freshfields sued over role in German bank’s tax scandal

The liquidator of failed lender Maple Bank is suing law firm Freshfields Bruckhaus Deringer for €95m in relation to share-swapping schemes that allegedly allowed investors to reclaim tax they never paid.

Financial Times

PROPERTY NEWS

Market primed for sales surge?

A report from estate agent Savills suggests that despite political uncertainty and fragile consumer sentiment, the prime housing market held up “better than expected” in the first quarter of 2019. The firm said a build-up of buyer demand in the market could trigger increased sales when there is more certainty over Brexit, noting that while the first quarter saw new buyer registrations for properties over £1m up 36% in central London and 11% across the rest of the capital, this has not yet translated into increased market activity.

I, Page: 40 Daily Mail

ECONOMY NEWS

Brexit stunts services growth

Growth stalled in the first three months of 2019 as the services sector contracted in March for the first time in two-and-a-half years. The purchasing managers’ index from IHS Markit/CIPS fell to 48.9 in March from 51.3 in February, below forecasts. It is the first time the index has fallen below 50 since July 2016, immediately after the UK voted to leave the European Union.

The Daily Telegraph The Times, Page: 38 Daily Mail, Page: 73 The Guardian, Page: 35 Evening Standard City AM

OTHER NEWS

Poker champ no longer flush

Poker champion Adam Lulat has been stripped of £30,200 in tournament prize-money to repay cash he stole in a tax fraud. This marks the second time that Mr Lulat has had to hand winnings over after he was jailed for 28 months in 2015 for his involvement in a money laundering scam and VAT fraud. The conviction, which followed an HMRC investigation, saw him ordered to repay £68,930 in August 2018.

Press Release
Contact Paul Southward

Paul Southward