Category Archives: News Roundup

News Roundup Friday 16th August 2019

News Roundup Friday 16th August 2019



Labour would raise taxes for 12m workers

The Shadow Chancellor has welcomed a report calling for a tax hike for those earning more than the £28,080 public sector average to fund a £32bn spending spree on public services. The move would cost almost 12.5m workers £2,500 extra in tax. John McDonnell called the Time for Demand report, which also calls for the £12,500 income tax free personal allowance to be axed, “an ambitious plan for economic transformation”. Tory party chairman James Cleverly commented: “These proposals would hammer millions of workers with tax hikes, as well as abolishing the tax-free income allowance, leaving people with less money in their pockets. This once again shows why Labour can never be trusted to handle our economy.”

The Sun, Page: 6


Muddy Waters to report Burford to FCA

Hedge fund Muddy Waters is to report litigation funder Burford Capital – the firm and its directors – to the Financial Conduct Authority and ask it to launch a probe. Muddy Waters has produced a 25-page report on Burford, which alleges that the litigation fund uses “particular accounting techniques which manipulate its financials.” The Telegraph’s Tom Rees considers whether Burford has a case against Muddy Waters which it accuses of coaxing algorithmic trading systems into dumping its stock. The Times’ Alistair Osborne questions whether there is any independent oversight of Burford’s financials considering its auditor (EY) and four-strong board is unchanged in the ten years since it was founded. Having the wife of boss Christopher Bogart as CFO is also suspect, says Osborne.

Evening Standard The Daily Telegraph The Times The Times, Page: 33 The I, Page: 37

Shareholders bring case against BT over Italy fraud

US law firm Robbins Geller Rudman & Dowd is set to file a case against BT within days over its Italian accounting scandal. Former CEOs Gavin Patterson and Lord Livingston are named alongside the group, which had to write down £530m after the fraud was uncovered, sending shares plummeting by a fifth. A subsequent review of BT by KPMG found finance bosses in Britain failed to challenge Italian accounts. Lawyers are also pointing to claims made by BT Italy chief Luis Alvarez that fraudulent dealings were signed off by former auditors PwC and the parent company in London.

Daily Mail, Page: 66


Living wage increases impact bottom line

A survey from the Federation of Small Businesses (FSB) reveals that four in 10 SMEs are raising their prices as a result of having to pay higher wages. The FSB said business owners were also forced to pay themselves less, hold back investment and reduce staff hours in an attempt to absorb inflation-beating wage rises. “More than half were paying all staff the current national living wage before they were obliged to do so – an even greater proportion were doing so in the smallest firms,” said Mike Cherry, FSB national chairman. He added: “We’re now seeing more small business owners than ever saying that living wage increases are impacting the bottom line. Their first instinct is usually to take the hit personally, paying themselves less rather than cutting staff.”

The Times, Page: 31 City AM, Page: 7

As HMRC moves up the list of creditors, risks increase

Todd Davison, director at Purbeck Insurance Services, warns small businesses that the risks of taking a Personal Guarantee backed finance facility are about to increase following new rules making HMRC a preferred creditor in a business insolvency. Davison explains that the change will mean that, in the event of an insolvency, any available funds left to pay existing Personal Guarantee backed loans will be reduced or even wiped out. Additionally, Davison says, “if you are owed money by a customer who has become insolvent, you too will be much further down the list of creditors to be paid, and this in turn could impact the financial performance of your business.”

Financial Director

Industry groups told to prepare business for no-deal

The Government has told industry associations to bid for cash to fund their ideas on how to help businesses prepare for Brexit on October 31st. The initiative comes amid growing concern that small firms in particular are not ready for a no-deal exit from the EU. One person who has seen documents relating to the plans said: “There’s really not a lot more we can do beyond push out our guidance – it’s very hard to connect with small business members.”

The Daily Telegraph

Leeds is the new business hotspot

Leeds has topped the list of the best cities in which to launch a business, beating traditional hotspots London, Manchester and Birmingham. Online local services marketplace examined more than 500,000 “data points” and conducted external research to compile its lists of the best and worst locations.

The Scotsman, Page: 33


Dozens of retailers call for business rates overhaul

More than 50 leading retailers have written to the Chancellor urging him to change tax rules to boost the UK High Street. The group is calling on Sajid Javid to fix the “broken business rates system”, which it called outdated. It said the tax had jumped by 50% since the 1990s and had contributed to some retailers going out of business. In the letter to Mr Javid, co-ordinated by the trade body the British Retail Consortium, the group pointed out that retail accounted for 5% of the economy but paid 25% of all business rates. It said this “disparity” was damaging high streets and “harming the communities they support”. It said as a result there were a growing number of empty shops, with vacancy rates at a four-and-a-half year high.

Financial Times, Page: 2 Daily Mail, Page: 4 The Guardian, Page: 37 Daily Mirror, Page: 4 The Daily Telegraph, Page: 27 The Times, Page: 38


Online shopping anti-fraud scheme delayed

A new system designed to tackle fraud in online shopping has been delayed for 18 months. Banks and retailers had been expected to introduce a new layer of security from mid-September that would normally see a passcode sent to a customer’s mobile phone at the point of checkout for online purchases of £28 or more. However, following pressure from the industry, the Financial Conduct Authority has effectively granted an 18-month delay.

BBC News Financial Times The Sun, Page: 43 The Times, Page: 40 City AM, Page: 5


Pension deficits fall among FTSE 350 firms

FTSE 350 companies have seen their defined benefit pension scheme deficits fall by 29% over the last year to £39bn, from £55bn the year before. However, 54% of firms are still operating on a deficit, according to research by Barnett Waddingham. The consultancy’s corporate partner Nick Griggs said: “Defined Benefit scheme liabilities have long weighed on company balance sheets […] As a growing number of companies can see the light at the end of the defined benefit pension scheme tunnel, it is vital they proactively put in place a strategy targeted at reaching the scheme’s endgame.”

City AM


Income and wellbeing up, but consumers fear for the economy

Despite household income rising and scores for wellbeing increasing, British consumers fear for the economy in general, with worries over rising unemployment at a six-year high and expectations of the economy’s performance over the next year their most gloomy since 2011. The Office for National Statistics said that “all main measures of economic wellbeing increased” in the first three months of 2019, with household income up by 1.8% while spending per head rose by 1.2%, compared to the same period last year – an all-time high. Per-capita net wealth rose by 3%, driven by an increase in the value of equity and investment fund shares and pension schemes. Howard Archer, chief economic adviser at EY Item Club, points out that consumer confidence has played an important role in countering falling investment over the year so far. Martin Beck at Oxford Economics notes: “Intuitively, personal circumstances are likely to be a more important driver of households’ willingness to spend than the rather nebulous concept of the ‘economy’.”

Financial Times The Daily Telegraph, Page: 27 The Times, Page: 36 The Guardian City AM

UK faces long-term risks on all fronts

Kallum Pickering, the senior economist at Berenberg, examines the economic risks facing the UK as it leaves the EU, suggesting Boris Johnson’s spending plans could backfire. But a snap election resulting in a Corbyn-led Labour government would bring higher risks, says Pickering, pointing out that an “economy facing excessive regulation and poor fiscal discipline could not prosper even within the most frictionless trading regime.” With the risks of a no-deal Brexit and a far-Left government, it is no wonder investors are spooked; but for the UK to be taken seriously outside the EU “it has to pursue policies that adhere to sound economic principles,” Pickering concludes.

The Daily Telegraph, Page: 28

Wages surge amid rising employment

Pay is rising at the fastest rate in 11 years with a record number of workers in employment, according to the Office for National Statistics. Annual average pay – excluding bonuses – rose by 3.9% in the three months to June, the highest rate since June 2008. The ONS also said total pay, including bonuses, was 3.7% higher in the three months to June than in the same period a year earlier. Unemployment rose slightly from 3.8% to 3.9% but remains at its lowest level since the mid-1970s. “This will continue to support consumer spending, which has been the main thing keeping the UK economy afloat over the past six months in the face of ongoing Brexit-related uncertainty and a slowing global economy,” said John Hawksworth, chief economist at PwC.

The Daily Telegraph Financial Times The Guardian


Steinhoff to sell assets in push to survive debts and lawsuits

Poundland owner Steinhoff International has said it will slim its business and sell assets to survive heavy debts and shareholder lawsuits in the wake of a $7bn (£5.8bn) accountancy scandal. A probe by PwC found that the company had recorded fictitious or irregular transactions adding up to $7.4bn over a period covering the 2009 and 2017 financial years.

Financial Times, Page: 16 City AM, Page: 7


German financial sector wants EU to take hardline with UK

Findings released on Monday by Frankfurt University’s Centre for Financial Studies indicate a hardening of sentiment among German bankers and financial service providers, who now expect a no-deal Brexit is unavoidable, with 70% saying the EU should not offer the UK any more concessions to avoid no-deal. Some 61% of those surveyed believe the financial markets have not yet effectively factored in the risk of no-deal, however, almost two-thirds said they believed the German financial sector was sufficiently prepared to cope with no-deal. Hubertus Väth, managing director of Frankfurt Main Finance, which funded the study, said it would be important for financial centres in continental Europe “to demonstrate their efficiency” and successful cooperation could see Europe “emerge from the crisis even stronger.”

The Daily Telegraph, Page: 4, 5

New Zealand legalises salaries paid in cryptocurrencies

New Zealand will become the first country to allow salaries and wages to be paid in cryptocurrencies from September 1, as long as the payments are in regular, fixed amounts.

Financial Times, Page: 23
Costa agrees €1.7m tax bill

Former Chelsea striker Diego Costa has agreed to pay €1.7m to the Spanish authorities for non-payment of taxes on image rights, the newspaper El Mundo reported yesterday.

The Times, Page: 58
Contact Paul Southward.

Paul Southward

News Roundup Tuesday 13th August 2019

News Roundup Tuesday 13th August 2019



Osborne’s ‘toxic’ tax plan drives exodus of the wealthy

With HMRC figures this week showing that the number of non-doms fell to a record low of 78,300 last year – and that the amount of tax directly contributed by them fell from £9.5bn to £7.5bn – Harry Brennan and Victoria Ward in the Telegraph look at factors which have seen an exodus of the super-rich – and their wealth. They attribute much of the blame to tax policies introduced by former Chancellor George Osborne, with Rebecca Fisher, of solicitors Russell-Cooke, saying a “toxic mix” of changes to stamp duty, inheritance tax and capital gains tax on second properties has played a part.

The Daily Telegraph, Page: 10

Taxing times for the ‘evil elite’

The Mail’s Saturday essay sees Dominic Sandbrook explore taxation, looking at statistics released in the last week. He notes an Institute for Fiscal Studies report showing that just 57% of British adults pay income tax and that the richest 1% of people pay 27% of all income tax. He goes on to highlight HMRC figures showing a fall in the number of non-domiciled taxpayers and the £2bn hit their exit meant for tax receipts. Considering both sets of figures, Mr Sandbrook says they point to the contribution of the “most successful people in society,” suggesting that while an “evil elite” are often the target of criticism, their taxes help deliver school and hospitals.

Daily Mail, Page: 20

What’s the future for the pensions tax taper?

The FT looks at the pensions taper, considering its future as criticism of it has prompted a Treasury review, with Baroness Altmann, a former pensions minister, commenting that it is “just not operating effectively or efficiently”. The paper also carries opinion from pensions consultant John Ralfe who proposes a 30% flat rate of pensions tax relief. Elsewhere, the Times’ Carol Lewis calls for the taper to be scrapped, saying it would “cost the Treasury little in the long term, would reduce complexity and help to get public services moving again.”

Financial Times, Money, Page: 6 Financial Times, Money, Page: 7 The Times, Page: 58

PM urged to deliver radical tax rethink

Looking at the economy and policy options open to Prime Minister Boris Johnson and his Chancellor, the Telegraph suggests the Government “mustn’t just tinker” with the tax system, it must “radically remodel it.” This, it argues, would help turn Britain into “the thing the Europeans fear the most: a magnet for money and talent.”

The Daily Telegraph, Page: 21

Wealth is all relative, IFS study shows

Institute for Fiscal Studies analysis of tax return data shows that earnings of £162,000 would put someone in the top 1% of UK income tax payers but it takes £700,000 to make London’s top 1%.

Financial Times, Money, Page: 2

Reform tax and red tape to invigorate the UK – Bootle

Roger Bootle, the chairman of Capital Economics, writes in the Telegraph on how tax and regulatory reform needs to be at the centre of UK economic policy post-Brexit. Mr Bootle says that the key to economic success is governance, not resources – see Singapore and Hong Kong compared with resource rich countries, including Russia and many countries in Latin America and Africa. Any deal Boris Johnson strikes with the EU, he says, must omit mandatory regulatory alignment so the country can pursue the right policies to invigorate the domestic economy and also establish a platform for export success. The evidence suggests poor governance is to blame for poor performance in Europe over recent decades, says Bootle, adding: “Could this perhaps be something to do with the EU? We may be about to find out.”

The Daily Telegraph, Page: 28

Sir Vince calls for review of loan charge policy

Sir Vince Cable has written to the Chancellor demanding an independent judge-led review into the loan charge. The charge was introduced in response to the Treasury’s concerns about “disguised remuneration schemes” which involved individuals being paid through loans, usually via an offshore trust in a low or no tax jurisdiction, which they did not have to repay. But Sir Vince claims the charge is unfair, retrospective and poses a suicide risk.

Yorkshire Post, Business, Page: 15


Funding for British biotech companies hit by Brexit uncertainty

Funding for British biotech firms has dried up this year in contrast to fundraising across Europe. According to data compiled for the Telegraph by Pitchbook, British biotech companies have raised just $107.4m (£89m) across 15 deals so far, compared with $643m across 62 deals in 2018. European biotech companies have attracted $1.6bn in funding this year, exceeding the $1.5bn invested in the whole of 2018. Overall, in the first three months of 2019, the number of venture capital investments into British businesses fell by almost 60%. KPMG’s Tim Kay said investors had expected politicians to have made more progress on Brexit by now. Dr Martin Turner, head of policy at the BioIndustry Association, said financing was expected to pick up in the near future.

The Daily Telegraph, Page: 29


MPs call for mandatory climate risk reporting

MPs on the environmental audit committee (EAC) have called for Britain’s biggest companies, investors and pension funds to be required to report on the risks they face from climate change within the next three years. The EAC said it did not believe a voluntary approach would be effective and instead called for climate risk reporting to be mandatory on a “comply or explain” basis.

The Guardian, Page: 31


No-deal guidance “pretty impenetrable” for SMEs, says IoD

The Institute of Directors has warned that half of its members say they could never be prepared for a no-deal Brexit. The IoD said that only 15% of members questioned believed they were “fully prepared” for no-deal and 53% had done “as much preparation as we can but cannot be fully prepared”. A further 14% said they “have more preparation to do” and 15% did not expect Brexit “to impact our organisation”. The IoD’s Edwin Morgan added that guidance needed to be improved; technical notices “were pretty impenetrable for the average small business” and companies found them “too technical, too jargonistic”.

The Times, Page: 36

SME bosses risk health by shunning holidays

Small business owners are being urged to take a break after a survey by Simply Business found bosses are going without a holiday for several years. Time pressures and money concerns mean that 9% of SME owners – equivalent to more than half a million – haven’t had a holiday in as long as five years. The business insurance firm said the trend of UK business owners struggling to switch off could lead to mental and physical health issues and dent productivity.

Daily Express, Page: 49 The Scotsman, Page: 32

Johnson needs to support firms hit by late payments

The small business commissioner has called on Boris Johnson to prove his business credentials by giving small businesses greater support over late and delayed payments. Paul Uppal said: “My message to the Prime Minister is that small businesses have heard themselves be described as the backbone of the economy, so I want him to walk the walk and ensure they are supported.”

Daily Express, Page: 49


Landlords face tax hit as they exit the sector

The Telegraph’s Adam Williams says that property investors being driven out of the sector by “punishing tax” reforms are taking a further tax hit as they look to sell their additional properties. He says that some landlords hit by a restriction on relief offered on mortgage interest are facing large capital gains and inheritance tax bills as they pull out of the rental sector. David Smith of the Residential Landlords Association comments: “It is completely illogical to have a tax system which encourages investors to pull their money from the sector but then hits them with a massive tax penalty when they do.”

The Daily Telegraph, Money, Page: 1

Tesco CFO pushes for rates reform

Tesco finance chief Alan Stewart has been trying to drum up support from rival retailers to pressure the Government into reforming business rates. Mr Stewart wants the UK’s biggest supermarkets to publicly support a 20% cut to rates and a 2% levy on online retail sales.

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


New accounting standards are not a big improvement

Michael L Gullette of the American Bankers Association supports a delay to implementing the current expected credit losses (CECL) accounting standard, advocating a re-examination of the rules by the FASB.

Financial Times, Page: 20

Opening of China markets puts spotlight on auditors

China is under pressure to clean up its accounting industry following a series of billion-dollar corporate scandals and a probe into Ruihua Certified Public Accountants.

Financial Times, Page: 9


Firm offered steel deal

The Department for Business, Energy and Industrial Strategy has reportedly agreed a deal with Ataer, which controls Turkish steel company Erdemir, that would see it receive incentives and support from the Government if it buys British Steel. It is understood the support package could be worth up to £300m. British Steel was taken over by the Official Receiver and placed in compulsory liquidation after failing to secure a £30m taxpayer bailout. A taxpayer-backed indemnity is keeping the manufacturer running while the Official Receiver and EY seek a sale.

The Daily Telegraph, Page: 31 The Guardian, Page: 35 The Times, Page: 50 Daily Express, Page: 5 Daily Mirror, Page: 2

Hargreaves loses tax case appeal

Hargreaves Lansdown has lost a long-running court battle with HMRC regarding loyalty bonuses. The two sides had been locked in a dispute over whether investors should pay income tax on fund discounts they receive in the form of loyalty bonuses. HMRC’s victory means that loyalty bonuses will be now be taxed as income. Hargreaves Lansdown chief executive Chris Hill commented: “We challenged this tax on behalf of clients as we always felt it was an unnecessary and unwarranted attack.” An HMRC spokesperson said the ruling “supports the published view of HMRC that these payments to investors are taxable.”

The Daily Telegraph Financial Times, Page: 3

Rugby club CVA backed

Rugby club Yorkshire Carnegie have avoided a points deduction after satisfying conditions set out by the game’s board for entering into a CVA, with Begbies Traynor confirming that 100% of the club’s creditors have either agreed to the terms of the CVA or been paid in full by third parties.

Yorkshire Post, Sport, Page: 6

Shipyard bidders

BDO Northern Ireland says several potential bidders have expressed an interest in buying Belfast shipyard Harland and Wolff. It has agreed a “temporary” unpaid lay-off of the workforce so as to explore the opportunities.

I, Page: 70 Yorkshire Post, Sport, Page: 12


Economy shrinks 0.2%

Data from the Office for National Statistics shows that the economy shrank by 0.2% between April and June, marking the first contraction since 2012. Consensus among analysts had seen a forecast of 0% growth in Q2. The 0.2% dip in GDP follows growth of 0.5% in the first three months of the year, with Q1 boosted by stockpiling ahead of the original Brexit deadline of March 29. This contributed to Q2’s fall, with buying reduced as companies utilised the stockpiled goods and materials. Analysis of Q2 performance shows that import levels were down 13% quarter-on-quarter, exports fell 1.5%, manufacturing output was down 2.3% and business investment was 0.5% lower. PwC economist Mike Jakeman warned that the possibility of a recession – defined as two consecutive quarters where the economy shrinks – “is now very real”. He commented: “Monthly data for June showed no growth at all, which suggests that the economy is entering the third quarter with no momentum.” Tej Parikh, chief economist at the Institute of Directors, said the economy is “facing a bumpy ride going into the third quarter”. Chancellor Sajid Javid offered that while we are in a “challenging period across the global economy … the fundamentals of the British economy are strong”.

BBC News The Times The Daily Telegraph, Page: 31 Financial Times, Page: 1 The Independent, Page: 27 Daily Mail

Job vacancies fall by 4%

The number of job vacancies has fallen by 4% since the start of the year as firms contend with rising wages and a sluggish economy, according to BDO. The firm’s Peter Hemington said: “This could be the beginning of the end of the strong employment market in the UK. Businesses are facing upwards pressure on wages even while the economy lags, so hiring plans are taking a hit.”

Daily Mirror, Page: 2 Daily Star, Page: 11

Shop vacancy rate worst since 2015

The number of empty shops in town centres is at its highest for four years, according to a British Retail Consortium and Springboard survey. The vacancy rate was 10.3% in July, its highest level since January 2015, while footfall also fell by 1.9% in July, the worst July performance for seven years.

BBC News
Contact Paul Southward.

Paul Southward

News Roundup Monday 12th August 2019

News Roundup Monday 12th August 2019



Will the top 1% hang around to pay more tax?

David Smith considers the nature of the top 1% of taxpayers in the Sunday Times, noting that those who occupy the top tier are not a fixed group: a quarter of those in the top 1% this year will not be in the group next year and only half will still be at the top in five years. The top 1% pay nearly a third of total income tax revenues – up from 21% two decades ago, according to a report from the IFS. They are mobile and able to take their talents elsewhere, as well as use tax planning to minimise liabilities. “Tax plans that aim to get a lot more revenues out of the top 1% are almost certain to disappoint,” Smith concludes.

The Sunday Times, Business, Page: 4


Seedrs shares suspended as reserves dwindle

Seedrs is looking to raise extra cash following a recent report by its auditors KPMG which warned a failure to raise extra capital would “cast significant doubt on the group’s ability to continue as a going concern”. The crowdfunding site has suspended its shares from trading on a secondary market while it attempts to complete a financing deal. Seedrs has been criticised for putting volume ahead of quality of deals as it tries to compete with Crowdcube.

The Sunday Times, Business, Page: 3

High profile disappointments put investors off IPOs

Investors are holding back IPOs after witnessing firms such as Funding Circle and Uber struggle after listing, according to fintech firm NextHash. Research by the company found 24% of Brits felt their performance made flotations “unpalatable” while 68% of investors would only be prepared to trade or invest where there is security or protection against fraud.

Sunday Express, Page: 44

German Mittelstand issues no-deal warning

Germany’s trade body for SMEs fears a no-deal Brexit is a “major ingredient” in a “toxic cocktail” being “stirred up in global trade relationships” which could deal the country’s Mittelstand a crippling blow. Marc Tenbieg at the German Mittelstand Association said that although companies had prepared well, creating a “perfect plan for such a complex scenario as a no-deal Brexit is illusionary”.

The Sunday Telegraph


British Steel thrown £300m lifeline

The future of British Steel could be secured after the Government put together a £300m support package for the company, paving the way for a takeover by Ataer, is a subsidiary of Oyak, Turkey’s military pension fund. Oyak is itself the largest shareholder in Turkish steelmaker Erdemir. Discussions between the Official Receiver and Ataer are being led by EY, which has been under pressure from lenders to seal a takeover or begin closing down British Steel’s Scunthorpe site. A BEIS spokesperson said: “This government will leave no stone unturned to get a good solution for British Steel at Scunthorpe, Skinningrove and on Teesside. The Official Receiver continues to run the business, whilst the sales process is ongoing.”

Sky News

Vulture fund claws back £20m in HMV collapse

The Sunday Times reports that companies controlled by the vulture fund Hilco have recouped millions from the collapse of HMV, while staff and suppliers are set to lose out. According to a report by HMV’s administrator KPMG, the retailer’s two secured creditors, both owned by Hilco, have received £20m of the £46.8m they were owed. The chain’s unsecured creditors, which include suppliers and staff, are owed £65.2m but will share a maximum distribution of just £600,000 before costs.

The Sunday Times, Business and Money, Page: 3

Mini-bond savers warned over losses

Investors in failed mini-bond firm Harewood Associates have been told they will get back no more than 16p for every pound they invested. A spokesman for Begbies Traynor, the administrators, said: “The proposals issued to creditors anticipate a range of returns between nil and 16p in the pound. The return is subject to realisations of debts due from associated companies.”

The Sunday Telegraph, Business, Page: 12

Schuh drafts in restructuring experts

KPMG has been hired by footwear retailer Schuh to assess its options after a spell of dismal trading.

The Sunday Times, Business, Page: 3


FCA to probe fraud at Goals Soccer Centres

The Financial Conduct Authority (FCA) has launched an investigation into alleged fraud at five-a-side football group Goals Soccer Centres. The inquiry follows a report by BDO alleging former finance chief Bill Gow sent email requests to former chief executive Keith Rogers asking him to create false invoices. The pair are also said to have manipulated results to prevent the company breaching covenants with Bank of Scotland.

The Sunday Times, Business, Page: 1, 2


Ministers could halt retrospective rates appeals

The Government is considering plans to implement a cut-off date for business rates appeals. A spokesman for the Ministry of Housing, Communities & Local Government said: “We are considering arrangements for the 2017 rating list and will set out our position in due course.” Alex Probyn, president of expert services at Altus Group, said halting appeals would be “anti-business” and “deny tens of thousands of ratepayers” justifiable tax rebates.

The Mail on Sunday, Page: 100


BoE told to cut rates ahead of Brexit

Following ONS data showing a 0.2% fall in GDP in the second quarter, the Bank of England has come under pressure to cut interest rates before Britain’s departure from the EU. Geoffrey Yu of UBS Wealth Management said: “As uncertainty continues to loom over the UK economy, the difficult run of data is expected to continue and the Bank will need to consider its next step carefully as its global peers embark on further rate cuts.” Elsewhere, Yael Selfin, chief economist at KPMG, commented: “It is clear that the uncertainty and prospects of Brexit are causing havoc on the UK business environment, with business investment contracting once again and significantly hurting the future prospects of the UK economy.”

The Sunday Times, Business, Page: 2

Investors shun London’s blue-chip stocks ahead of no-deal Brexit

Analysis by Goldman Sachs indicates that FTSE 100 shares are trading at their biggest discount to global peers in a decade. The index’s price to earnings ratio trades at a 21% discount compared to the MSCI World Index with housebuilders and domestic-focused banks trading at 38% and 56% less respectively than their global peers.

The Sunday Telegraph, Business, Page: 3


Top bankers shift tone over horror of no-deal Brexit

David Crow reports on how some senior bankers are swinging behind a no-deal Brexit. Tired of the inertia and buoyed by Boris Johnson’s enthusiasm, some say the disruption would be good.

Financial Times

Contact Paul Southward.

Paul Southward

News Roundup Friday 9th August 2019

News Roundup Friday 9th August 2019



Families allowed to make tax decisions for incapacitated relatives

A judge has ruled that a family may make tax exempt gifts on behalf of a wealthy relative who has been in a coma for several years. District judge Sarah Ellington ruled in the Court of Protection that millions of pounds of gifts to family, charities and political organisations, which would reduce tax payable on death, were in the best interests of the man, who is in a persistent vegetative state. Lynne Rowland, a private client tax partner at Kingston Smith, called the ruling “ground-breaking”, saying it sets a precedent for carers to cut tax bills after someone has lost the ability to look after their own money, even if they had never previously expressed a wish to do so. Ms Rowland said the ruling also has “huge implications for inheritance tax – potentially saving thousands of pounds for the beneficiaries.”

The Daily Telegraph, Page: 8

3 in 4 would pay more tax to ease care crisis

Research by the GMB union shows that three-quarters of people would be willing to pay more tax if the money went toward social care, while just 7% would oppose an increase in income tax or national insurance designed to boost the care system.

Daily Express, Page: 2

Opinion: Tax everyone to deliver solidarity

Bill Jamieson in the Scotsman considers the possibility of reform of the tax system. He notes that while the UK tax take is set to hit a high of £756bn this financial year, data from the Institute of Fiscal Studies shows that 43% of adults do not pay income tax, up from 38% in 2010. He questions the fairness of this, saying that “in the interests of social cohesion and social solidarity, everybody should pay something.”

The Scotsman, Page: 23

Non-dom exodus sees tax receipts fall

The number of super-wealthy UK residents who pay no tax on foreign earnings in Britain has hit a record low, according to HMRC, taking tax receipts with them. There were 78,000 non-domiciled taxpayers in Britain last year, down from 98,500 the year earlier, HMRC figures showed, taking the tax paid into UK coffers by non-doms down from £9.5bn to £7.5bn. The Revenue said that of those who stopped using non-dom status, about half switched to domiciled status and continued to pay tax in the UK, while half left the British tax system altogether. It has been suggested that Brexit uncertainty and fears that a Jeremy Corbyn-led government would introduce a “wealth tax” have seen a number of wealthy people leave the UK. James Hender, head of private wealth at Saffery Champness, said the Government’s non-dom reforms “may have started to bite”, suggesting a change in rules that came into force in April 2017 “is arguably the main driver of the continued fall, with many people no longer able to benefit from non-dom treatment.”

The Times, Page: 9 The Guardian, Page: 35 Daily Mail, Page: 2 City AM BBC News

Equality call for pension taxation

Former shadow pensions minister Gregg McClymont considers the Government’s pledge to review the impact of the tapered annual allowance on the public sector to address concerns about pensions tax. This, he argues, “would be a bad move” as tax law needs to apply equally across the sectors, warning that the review could lead to different tax rates for the public sector and the private sector. Writing in the I, Mr McClymont goes on to suggest that the taper needs to be scrapped entirely, saying pension tax relief is unsustainable now that auto-enrolment has brought an extra 10m people into workplace pension saving.

The I, Page: 41


Letter: EORI rethink needed

In a letter to the Times, Martin McTague of the Federation of Small Businesses warns th at a no-deal Brexit could see thousands of small businesses unable to import from, or export to, the EU. He highlights concerns that large numbers of businesses will not have the Economic Operator Registration and Identification (EORI) numbers that they require to continue trading within the EU, with only a third of those in need of an EORI number having applied. He says the solution would be to drop the requirement to apply for an EORI number and automatically issue the numbers to all VAT-registered firms that trade exclusively with the EU.

The Times, Page: 26

Female entrepreneurs more likely to take a salary cut

A study by small business investor Iwoca shows that female entrepreneurs are more likely to take a salary cut to get a new venture off the ground than men. The poll of 400 entrepreneurs shows that 46% of women sacrificed income to launch their business, compared to 34% of men. The study also found that while 28% of men sacrifice family time when starting a company, 18% of women do the same.

The Daily Telegraph, Page: 8

Co-op Bank increases small business lending

Co-op Bank has increased its lending to small business customers for the first time in six years, with deposits rising 2.5% in the first half of the year. The lender, which currently has 3.5m retail customers and 85,000 small business customers, is the UK’s seventh biggest provider of loans to small businesses but put the brakes on lending in 2013 after discovering a £1.5bn hole in its finances that threatened its survival. With Co-op having secured £15m of funding from the Banking Competition Remedies, which is designed to increase competition for lending to small businesses, CEO Andrew Bester commented: “I see our SME business as key for growth.”

The Times, Page: 41 The Daily Telegraph, Page: 31 The I, Page: 41 Daily Express, Page: 50 The Sun, Page: 49 Daily Mirror, Page: 46 The Scotsman, Page: 33 City AM The Press and Journal, Page: 30 Yorkshire Post, Page: 18


Shortages of skilled staff triggering pay rises

New research from the Recruitment and Employment Confederation and KPMG has found that workers are in high demand and are taking home a bigger chunk of the economy’s earnings than thought – about 10% more hours of work than a decade ago. Official data showed regular pay in June was up 3.6% on the year – the fastest rise in 11 years. The REC/KPMG research suggested that this could continue to rise as employers have to pay more to attract staff. The IT and computing industry has the most vacancies for permanent jobs, followed by hotels and catering, engineering, and the accounting and financial sector.

The Daily Telegraph, Page: 29

‘Brexit breakthrough’ could boost hiring

The Mirror looks at a KPMG and Recruitment & Employment Confederation report showing that permanent staff appointments fell for a fifth month running in July with temporary hires falling to a six-year low. KPMG vice chair James Stewart commented: “Businesses continue to take a cautious approach to hiring as Brexit and economic uncertainty linger. They will be eager to see a Brexit breakthrough in Westminster to help re-establish market confidence on hiring and investment.”

Daily Mirror, Page: 46


Pensions tax review to go beyond health service

Chancellor Sajid Javid has vowed to review the pensions taper which has seen high-ranking doctors hit with high tax bills, prompting some to reduce their hours or, in some cases, retire. The review will consider the impact of the taper on other public sector staff, not just those in the health service.

Financial Times, Page: 3 Financial Times, Page: 1


Insolvencies up in Q2

Analysis of Insolvency Service data by RSM shows that under-25s make up 6.5% of all personal insolvencies, compared to 1% three years ago. Q2 2019 saw a total of 31,000 people declare bankruptcy, a 7% increase on the number recorded in Q2 2018.

Daily Mirror


House prices dip 0.2% in July

UK house prices slipped 0.2% month-on-month in July, according to Halifax’s latest figures, hitting an average of £236,120. Year-on-year, values are up 4.1%, with a 0.4% climb in the May to July quarter compared with the February to April period. Howard Archer, chief economic adviser at EY ITEM Club, said of Halifax’s data: “Housing market activity seemingly got some help from the avoidance of a disruptive Brexit at the end of March, but the overall benefit looks to have been limited.” Elsewhere, HMRC figures show that the number of home sales fell 16.5% year-on-year in June, with 84,490 properties sold, while Bank of England data shows that the number of mortgage approvals rose to 66,440 in June, a total 793 up on that seen in May.

The Guardian, Page: 31 Daily Mail, Page: 4 The Sun City AM

Rics: House prices and sales ‘losing momentum’

House prices and sales are “losing momentum”, the Royal Institution of Chartered Surveyors (Rics) said in its report for July. Some 69% of property professionals said that sales prices were coming in below asking prices for homes marketed at more than £1m. For properties on the market for up to £500,000, 59% of surveyors reported that sales prices were at least level with asking prices. A net balance of 9% of surveyors reported house prices falling rather than increasing. Simon Rubinsohn, Rics chief economist, said: “The forward-looking metrics on prices and sales also seem to be losing momentum as concerns, clearly voiced in the anecdotal feedback – both about Brexit and political uncertainty – heighten”.

BBC News


Brexit bothers business?

Rashmi Dubé considers the impact Brexit may have, noting ICAEW research which suggests business confidence has declined and a quarter of smaller firms are having difficulties. She also highlights EY research suggesting that the City will be less accessible to the EU if no Brexit deal is secured, with around 9% of financial services companies moving their business abroad.

Yorkshire Post, Page: 2

Muddy Waters rocks Burford

Short seller Muddy Waters has torn into Burford Capital, accusing the litigation funder of “egregiously misrepresenting” returns. Muddy Waters confirmed that it now holds a short position and described Burford as “a poor business masquerading as a great one”. “Burford has been audited by EY since 2010 with clean audit opinions every year,” Burford said in a statement.

The Guardian, Page: 31 The Times, Page: 36 Financial Times City AM

Preferred British Steel buyer set to be named

Business Secretary Andrea Leadsom has contacted potential buyers for British Steel, saying one of the three firms left in the running will be named as the Government’s preferred option in the coming days. The official receiver took control of British Steel after its failure in May and will continue to run it during the sales process, which is being managed by EY.

The Guardian, Page: 35 City AM

Ashley’s buying spree will hurt auditor search

Mark Kleinman in City AM looks at Mike Ashley’s acquisition of Jack Wills, saying Sports Direct owner Mr Ashley’s “unwillingness to step back from his prolific buying spree” will make it harder for the retailer to secure a new auditor to replace Grant Thornton.

City AM, Page: 11


Rates cut as downturn fears persist

Central banks are cutting interest rates as fears grow of an economic downturn amid concerns about slowing growth rates and weak inflation. New Zealand, India and Thailand have announced cuts that exceed forecasts, while the US Federal Reserve has made its first cut since the financial crisis. Australia’s central bank this week decided to hold its rate at a record low, while the Bank of England last week held its base rate at 0.75%.

Daily Mail

Online sales surge but high street struggles

In-store like-for-like sales increased 0.1% in July, according to BDO’s High Street Sales Tracker. Online sales fared far better, posting a 20.5% increase which marks the strongest growth figures since December 2017. BDO’s head of retail and wholesale, Sophie Michael, said 2019 “is proving to be a year to forget” for the high street, adding: “July’s flat sales figures will not only be disappointing for retailers but will also add further pressure to margins that are already being squeezed to the extreme.”

The Times, Page: 43 Daily Mirror, Page: 46 City AM

Economy vulnerable to housing crash

Economists at IHS Markit have warned that the world economy is vulnerable to a major housing crash, suggesting that risks stemming from prices which have soared since the financial crisis could have a greater impact than Brexit or the US-China trade war. It says that an outright collapse in property prices in key economies could see global GDP growth fall from current forecast rates of about 2.5% a year to a low of just 0.9% next year, although it would not deliver a full-blown global recession.

The Daily Telegraph, Page: 30


Food suppliers eye competition rules waiver

With the Food and Drink Federation calling for competition rules to be relaxed in the event of a no-deal Brexit, Moore Stephens’ Duncan Swift said co-operation designed to maintain supply chains would be “really complex.”

Financial Times, Page: 2

Gaming growth

A report from Deloitte shows that Europe’s competitive video gaming market generated revenues of €240m last year, an increase of €50m on 2017’s total. Revenues in Europe are expected to rise 23% a year to hit €670m by 2023.

The Daily Telegraph, Page: 31

Taxman should tune in?

A letter to the Telegraph muses that HMRC may want to watch the BBC’s Antiques Roadshow as episodes regularly feature valuable items that have been given or bequeathed to the owner by a relative, adding: “Many of these fall well above the tax threshold for gifts or probate.”

The Daily Telegraph, Page: 15

Contact Paul Southward.

Paul Southward

News Roundup Thursday 8th August 2019

News Roundup Thursday 8th August 2019



Taxman targets crypto for CGT

Bitcoin investors could be set to see a tax crackdown, with HMRC writing to a number of major brokers to request details about their customers. The Telegraph says that while profit made on the coins’ increase in value since purchase should incur capital gains tax (CGT), their anonymous nature makes it hard for any tax liabilities to be tracked. It adds that the letters sent to exchanges such a Coinbase and Etoro are similar to measures taken by US tax authorities looking to tax gains made through the acquisition of digital coins. Iqbal Gandham, UK managing director of Etoro, said the request was “no surprise”, with taxing crypto “the first step to bringing it in line with other investments, solidifying its position as an emerging asset class.” He added that he expects regulation will follow, saying this would be good for “the industry and for mass adoption.”

The Daily Telegraph Daily Mail, Page: 65

Record CGT take as HMRC pulls in £8.8bn

HMRC figures show that the tax office saw a record capital gains tax take of £8.8bn in the 2017/18 tax year, a total that marks a 14% increase and exceeds the £5.2bn pulled in through inheritance tax. With the analysis showing that the average CGT bill was £31,317 last year, Harvey Jones in the Express looks at ways people can cut their bills with “some basic financial planning.” Mark Giddens of UHY Hacker Young advises that CGT planning is easier for married couples and civil partners, who can make tax-free gifts to each other.

Daily Express, Page: 29


Tax rate sees pension overpayments

Tax overpayments by people dipping into their pension pots have hit record levels, with around 17,000 people clawing back nearly £47m between April and June – up from the £29m claimed by 14,000 savers in the same period for 2018. Analysis shows that over-55s have reclaimed almost £500m since pension freedoms were introduced in 2015. Much of the overpayment comes from HMRC charging the savers an emergency rate of tax on their initial withdrawal, with the average overpayment of £2,355 the first time these people dip into their pot. Figures from the Financial Conduct Authority suggest more than 200,000 people a year risk being overtaxed on their first pension withdrawals.

Daily Mail, Page: 44

Bid to end NHS pensions tax row

Ministers have designed new proposals to end the row with doctors over pensions. Doctors had started refusing to do overtime shifts because they were being landed with bills after changes to the amount that can be accrued tax-free. The dispute has been linked to a rise in waiting times caused by medics refusing to work beyond their planned hours. The Government said it would now be putting forward a plan to allow doctors complete flexibility when it comes to scaling down their pension contributions to avoid breaching the annual tax-free allowance. Health Secretary Matt Hancock said the move “will give doctors the pension flexibilities they called for.”

The Times, Page: 4 Daily Mail, Page: 2 Financial Times, Page: 1 The Daily Telegraph, Page: 1 The Guardian, Page: 14 The Sun, Page: 2

Fraud fears for pension pots

A Financial Conduct Authority poll has found that two-fifths of pension savers would be likely to fall for common tactics used by fraudsters. Nearly 45% of the 45 – to 65-year-olds surveyed said they would discuss their pension with a cold caller, while one in six aged 45 to 54 would be interested in speaking to companies that could help them take money from their pension early, despite withdrawals below the age of 55 not being permitted and drawing a 55% tax penalty from HMRC. Figures from Action Fraud show that fraudsters took around £15m from pension savers last year, with victims losing an average of £82,000 each.

The Daily Telegraph, Page: 29


Boohoo buys Karen Millen and Coast has bought the online business and intellectual property of Karen Millen and Coast in a £18.2m pre-pack administration, with more than 200 stores set to close. Administrators at Deloitte said stores would only stay open for “a short time” while stock was sold off. Rob Harding, joint administrator at Deloitte, said Karen Millen had tried and failed to find a buyer for the whole business, adding that the Boohoo deal will enable “the survival of these iconic British brands through an online platform”. He added that “the retail trading environment in the UK remains extremely challenging”.

The Times, Page: 36 Financial Times, Page: 13 Financial Times, Page: 17 The Daily Telegraph, Page: 29 The Guardian, Page: 27-28 The Independent, Page: 58 The I, Page: 38 The Scotsman, Page: 2 Daily Express, Page: 51 Daily Mail, Page: 62 The Sun, Page: 42 Daily Mirror, Page: 38


SMEs voice Brexit concerns

Ian Rand, chief executive of Barclays Business Banking, has revealed the concerns he most often hears from small business owners in regard to Brexit. These include worries about staff levels once the UK exits the EU, the finance options available to SMEs to see them through any turbulence, the impact currency movements will have on costs, and the potential disruption to supply chains.

Daily Mirror, Page: 37


Belgian prosecutors settle with HSBC

A Swiss private banking branch of HSBC has reportedly agreed a settlement worth almost €300m with Belgian prosecutors in a fraud and tax dodging case.

The Independent, Page: 61


M&A deals decline in H1

Analysis by EY shows that the value of merger and acquisition deals in Europe fell by £15bn to £23.8bn year-on-year in the first half of 2019, with the number of deals down from 251 to 238. H1 2019 saw UK investors complete 97 deals totalling £6.3bn, marking a decline on the 103 deals – which were worth £13.5bn – completed in H1 2018. EY said global tensions such as Brexit and the trade dispute between China and the US have contributed to the dip in enthusiasm for M&A deals. The firm’s Tom Groom commented: “While the drop in deals in volume terms is not that significant, in value terms it is.”

City AM, Page: 4

Contact Paul Southward.

Paul Southward

News Roundup Wednesday 7th August 2019

News Roundup Wednesday 7th August 2019



Record numbers pay no income tax

Institute of Fiscal Studies (IFS) analysis of HMRC tax records shows that a record number of adults are paying no income tax, with the proportion rising from 38% in 2010 to 43% now. The figures reveal that the top 1% of earners account for 27% of the income tax take. The IFS says relying on such a small group is “risky”, suggesting that any policy that threatened them could have a disproportionate effect on tax and public spending. Robert Joyce, the IFS’ head of income, work and welfare, said: “It creates additional risks if such a large share of your revenues is coming from a small group. Suddenly, the behaviour of that group becomes a particularly big issue for the rest of us.” RSM’s George Bull attributed the increase in people not paying income tax to efforts to remove the lowest paid from contributions, saying an increase in the tax-free personal allowance has led to “a situation where t he tax burden is concentrated among the highest earners”. He added: “I don’t think there is any good reason why we can’t have a much more sophisticated set of tax bands which reflect more accurately the circumstances of different income groups.” The IFS analysis shows that there are just 30 of the 650 parliamentary constituencies where more than 2% of adults are in the top 1% of taxpayers, with 17 of these in London. Researchers found that men make up 83% of the top 1% of income tax payers and 89% of the top 0.1% – who earn more than £650,000 a year.

The Daily Telegraph, Page: 1 The I, Page: 7 The Times, Page: 36 Financial Times, Page: 2 Daily Mail, Page: 23 The Sun, Page: 2


Sports Direct wins race for Jack Wills

Sports Direct has won the bidding war for retail fashion chain Jack Wills, adding yet another brand to Mike Ashley’s high street empire. Advisers at KPMG said Jack Wills had been put into administration and was immediately sold to Sports Direct for £12.75m in a pre-pack administration. The sale includes all 100 UK and Ireland stores and stock, as well as a distribution centre, along with all employees. Will Wright, partner at KPMG and joint administrator, said: “Jack Wills has a strong brand and proud British heritage, so it is pleasing to have been able to secure this agreement with Sports Direct.”

Financial Times, Page 17 The Guardian, Page: 28 BBC News The Times, Page: 43 The Daily Telegraph, Business, Page: 27 The I, Page: 41 Daily Express, Page: 51 Daily Mirror, Page: 43 Daily Mail, Page: 68-69 The Sun, Page: 43 The Scotsman, Page: 5

Administrator appointed at Titanic shipyard

BDO has been appointed as administrator to Harland and Wolff, the Belfast shipyard where the Titanic was built. The shipyard’s owners had been seeking to sell the business but failed to find a suitable buyer. It is set to file for insolvency today. Unite, the union representing the shipyard’s workers, has called on the Government to save the shipyard by placing it into the hands of the official receiver and underwriting the business.

The Daily Telegraph Financial Times, Page: 2 The Times, Page: 35 The Guardian, Page: 3 The Sun, Page: 43 Daily Mail, Page: 30 Daily Mirror, Page: 6

SVS Securities collapse prompts probe

Stockbroker SVS Securities is to face a regulatory investigation amid “serious concerns” about its business after the City-based broker fell into administration. Administrators at Leonard Curtis have been appointed to take control of the business and are exploring options – including a sale – the Financial Conduct Authority said in a statement.

The Times, Page: 34 City AM


PE investment at 5-year low

Analysis by KPMG shows that private equity investment in the UK has fallen to its lowest level in over five years. A total of 384 deals were completed between January and June 2019, with a combined value of £28.5bn. This marks and a decline of 31% in deal volumes compared to H1 2018, with a 40% dip in deal values. The figures also fall short of the 483 completed deals totalling £31.5bn during the first half of 2014. The number of first-half deals involving private equity in the middle market also fell, from 273 in 2018 to 199 this year, although the total value of these deals increased, hitting £18.4bn compared to £17.69bn last year. Jonathan Boyers at KPMG attributed the slowdown in transactions on “a reticence amongst vendors to bring assets to market,” but added: “The truth is that private equity remain incredibly hungry to invest.” He suggests that it is likely that “most deal decisions” will be “deferred until a Brexit outcome is known”.

City AM


Services growth sees recession fears recede

Stronger than expected growth in the services sector means the economy is set to avoid a recession, offering a boost after contractions in the manufacturing and construction sectors. IHS Markit’s purchasing managers’ index (PMI) rose to 51.5, marking the strongest score for the industry since October and an increase on June’s 50.2 on an index in which a score above 50 indicates growth. Combining all sectors the PMI rose to 50.7, up from 49.7 in June. Chris Williamson, chief business economist at IHS Markit, said the improved rate of growth in the service sector is “welcome news” after other sector surveys revealed “the sharpest drop in manufacturing output for seven years and a construction sector that is mired in its deepest downturn for a decade”. He added: “The overall picture is one of an economy that is only just managing to skirt recession,” noting that July’s performance was “among the worst since the height of the global financial crisis in 2009”.

The Daily Telegraph The Times, Page: 2 Financial Times, Page: 2 City AM

Sales growth down in July

Figures from KPMG and the British Retail Consortium (BRC) show that retail sales growth fell to its lowest level on record last month, hitting 0.3% in July. This was down from a 1.6% increase in July 2018 and represents the lowest rate for July since records began in 1995. While online sales of non-food items rose by 3.7% in July, in-store sales fell by 4.1% and food sales fell by 0.3%. The BRC attributed the month’s weak performance to “the combination of slow real wage growth and Brexit uncertainty”. Paul Martin, head of retail at KPMG said: “Shoppers are notably disengaged overall. The pressure continues to build between online and physical offerings, costs continue to rise and the demands of consumers continue to grow.”

The Times, Page: 36 The Guardian, Page: 28 Daily Express, Page: 51 The I, Page: 39 Yorkshire Post, Page: 7

Contact Paul Southward.

Paul Southward

News Roundup Tuesday 6th August 2019

News Roundup Tuesday 6th August 2019



Taxpayers’ Alliance: Death getting dearer

Research published by the Taxpayers’ Alliance (TA) shows that inheritance tax and probate fees are driving up the cost of death, with the Government set to receive £5.35bn from relatives of those who pass away this year and next. The Cost of Death report notes most estates do not pay inheritance tax and highlights that while the cost of death varies across the UK, the average cost for homeowners in England is £405, with this covering probate fees, land registration fees and death certificate costs. John O’Connell, chief executive of the TA, says IHT is “anti-aspirational”, asking: “Why work so hard to look after your children if the taxman guzzles it all up anyway?” On proposed increases to probate fees, he added: “Hopefully this stealth death tax rise will be dropped and taxpayers can breathe a massive sigh of relief.”

The Daily Telegraph, Page: 10

FTSE 100 boards cut tax dispute cash pots

Figures from Thomson Reuters show that FTSE 100 companies put aside £4.5bn to cover tax disputes in 2018/2019, down from the £5.2bn set aside in 2017/2018.

Financial Times, Page: 11

Doctor calls for pension tax rethink

In a letter to the Times, BMA council chair Dr Chaand Nagpaul says pension reforms have seen a number of doctors face high tax bills, saying doctors “are paying to go to work.” The issue, he adds, is causing staff to reduce hours and a proposed solution would not see tax rules changed but would merely offer doctors flexibility in the way they save for their pensions. He calls for “major reform” to the annual allowance and tapering annual allowances.

The Times, Page: 24


Scots insolvencies climb 45%

Analysis from KPMG shows that Scottish insolvencies have risen by more than 45%, with 698 corporate insolvency appointments in the six months to June. This is up from the 479 recorded in the first half of 2018. The figures for H1 2019 saw 661 cases involving a company liquidation, while there were 37 administration and receivership appointments.

The Scotsman, Page: 32 The Press and Journal, Page: 31

Spudulike shuts up shop

Baked potato restaurant chain Spudulike has closed all 37 of its takeaway branches, with all 298 employees made redundant. The business collapsed after failing to secure backing from landlords for a rescue restructure, with a CVA rejected and attempts to find a buyer failing. Neil Bennett and Alex Cadwallader of Leonard Curtis were appointed joint administrators of parent company T&G Fast Food Developments.

Daily Mirror The Guardian, Page: 23 Daily Mail, Page: 4

Denmark wants Just Eat to deliver £126m

Danish authorities say Just Eat failed to pay enough tax after shifting its headquarters from Copenhagen to London in 2012 and last year made a £126m claim against the fast-food delivery app business.

The Times, Page: 34

Ashley seeks Jack Wills deal

Sports Direct owner Mike Ashley is reportedly closing in on a deal to buy struggling fashion retailer Jack Wills. The retailer has been searching for a buyer for the past month, with the Mail saying its sale may be structured as a pre-pack administration.

Daily Mail, Page: 66


SMEs not ready for no-deal

Many smaller businesses are “desperately under-prepared” for a no-deal Brexit, the Federation of Small Businesses has warned. Martin McTague, the FSB’s policy and advocacy chairman, has called for clarity over £108m the Treasury has said was set aside to promote and support businesses to ensure they are ready for Brexit, saying: “We urgently need more information about what this money is actually for,” asking: “What kind of support will it fund? How many small businesses will be able to access it? When will they be able to access it?” Craig Beaumont, director of external affairs at the FSB, has called for resources to help small firms work out what they can do to prepare for a no-deal scenario.

The Times, Page: 38

10k cyber-attacks a day on small firms

The Federation of Small Businesses (FSB) has said that the UK’s small companies are collectively subject to almost 10,000 cyber-attacks a day. In a report, the FSB said that one in five small firms had been the victim of a cyber-attack in the two years to January, with an average of 9,741 incidents reported daily in that period. Phishing attempts are the most frequently reported form of cyber-attack, affecting 530,000 small firms over the past two years. Malware (374,000 firms), fraudulent payment requests (301,000) and ransomware (260,000) incidents were also frequently reported.

The Times, Page: 37 The Scotsman, Page: 32 City AM, Page: 10


One in six firms falls into rates arrears

Research by business rates consultancy Altus has estimated that almost one in six businesses in England have been issued a summons for non-payment of business rates in the past year. Robert Hayton, head of UK business rates at Altus, said increases in business rates were having a detrimental effect on the economy, saying major retail and hospitality businesses “are reducing their estates and headcount, often citing the high level of rates as a contributory factor.” In total, the firm found that around 190,000 businesses, over 500 a day, were issued a summons last year.

Financial Times, Page: 3 The Daily Telegraph, Page: 26 The Guardian, Page: 18 Daily Express, Page: 49


IMF expert: PM can spend to boost the economy

Olivier Blanchard, the former chief economist of the International Monetary Fund, believes Boris Johnson will be able to embark on a spending spree to boost the economy after Brexit, saying ultra-low bond yields mean deficits can be widened with little damage to public finances. He told the Telegraph: “Not only does debt have lower costs, deficits have larger benefits”, adding: “If the economy is not at full employment, and monetary policy has run out of ammunition, then deficits can help maintain demand and maintain low unemployment.” Considering the UK, Mr Blanchard said there is little need for spending restraints but there is “not much of an argument” for widening the deficit as the economy is close to full employment. He added, however, that if Brexit brings a change and the economy slows down considerably, “fiscal help would be needed.”

The Daily Telegraph

Profits see worst quarter since 2016

A report from the Share Centre shows that revenues at listed UK businesses rose by 1.6% in Q2 2019, while pre-tax profits were up 3.1% on Q2 2018. These figures mark the weakest set of quarterly results since 2016. More than half of the FTSE 350 reported lower profits, while a third saw sales declines during the period. The Times says that while the Brexit-related weakness of sterling has lifted the value of revenues and profits generated abroad, sales and earnings would be down if the foreign exchange impact was stripped out.

The Times, Page: 34 The Daily Telegraph, Page: 28

Only three in 10 exporters ready for no-deal Brexit

Only 27% of the 245,000 businesses HMRC says would need an Economic Operator Registration and Identification number to export to the EU in the event of no-deal Brexit have applied for one.

Financial Times


Europe bickers over passporting future

Siobhan Riding looks at passporting and asset managers’ cross-border activities, with insight offered by David Doyle and John Liver of EY and KPMG’s Julie Patterson.

Financial Times, Page: 10

Contact Paul Southward.

Paul Southward

News Roundup Monday 5th August 2019

News Roundup Monday 5th August 2019



Probate delays push up IHT bills

The Telegraph’s Harry Brennan reports that delays in the courts mean families are being charged punitive rates of interest on their inheritance tax (IHT) bills. This comes as overdue IHT attracts interest rates of 3.25% a year. While bills have to be settled before someone’s assets can be passed on, and payment is due six months after the date of death, system failures and a backlog of cases have led to delays at the Probate Registry. Kieran Bowe, a partner at Russell-Cooke Solicitors, said a fifth of his active cases had already gone six months without the grant of probate – which would normally take two or three weeks to obtain. While the Ministry of Justice says the process is currently taking four to six weeks on average, lawyers say they are having to wait as long as 12 weeks for the grants to arrive. A spokesman for HM Courts & Tribunals Service said: “Probate applications are only processed when the relevant IHT form has been completed, so, even with current delays of four to six weeks on average, those who apply in good time should be able to pay IHT well within the six-month window.” HMRC said: “When a customer knows their HMRC IHT reference they may make a payment on account to avoid interest.”

The Sunday Telegraph, Business and Money, Page: 9

Money laundering fears over free ports

The Liberal Democrats have questioned Boris Johnson’s plan to create 10 free ports – special tax-free zones that allow goods to be manufactured, stored, imported and exported without the normal checks and paperwork. They warn that the Prime Minister’s plans risk turning Britain into “the world capital of money laundering”. With critics suggesting that free ports can be used to launder money and dodge taxes, Liberal Democrat home affairs spokesman Sir Ed Davey says it is important that an anti-money laundering directive called 5MLD that is being introduced by the EU is “implemented in full”.

Sunday Express, Page: 44

EU could issue £1trn tax bill

The Sun reports that Whitehall officials believe the EU could hit Britain with a £1trn tax bill that Brussels will argue is owed for unpaid VAT on certain commodities. The sum would come on top of the £39bn payment that the EU would command as part of a Brexit deal. MP Mark Francois, vice-chairman of the European Research Group, said: “The House of Lords says that, legally, we don’t owe them £39bn, so if they’re now ludicrously claiming a trillion, they can whistle for it.”

The Sun on Sunday, Page: 2

3% increase in CGT payers

HMRC figures show that the number of people paying capital gains tax rose by 3% to 281,000 in the past tax year, with the levy paid on gains totalling more than £57.9bn. Of those paying the tax, 62% had gains exceeding £1m.

The Sunday Times, Business and Money, Page: 16

Liz Truss lays out plans for ten free ports

The Government has unveiled plans for as many as ten free ports across Britain in a move trade secretary Liz Truss said would trigger a multi-billion pound investment boost. Shipping ports and airports across the UK will be invited to bid for “free port” status after Britain leaves the EU. The idea is that goods can be manufactured, imported and exported inside the zones without incurring tariffs. Rishi Sunak, the chief secretary to the Treasury, said: “We will focus on those areas that could benefit the most, as we look to boost investment and opportunity for communities across the country.” The proposals have been welcomed by the Federation of Small Businesses, which said it “would be transformational for this society, whether you are a unionist, nationalist or neither”. However, the shadow international trade secretary, Barry Gardiner, was critical: “This is not new investment and growth. It is a race to the bottom that will have money launderers and tax dodgers rubbing their hands with glee.”

Financial Times The Times, Page: 6 The Independent Daily Express, Page: 9 The Guardian, Page: 9 The Daily Telegraph, Page: 4, 17 The Sun, Page: 9 The Scotsman, Page: 7 Yorkshire Post, Page: 1

Inheritance tax bill battle over trust payments

A retired couple could have to pay £100,000 a year for the rest of their lives and their disabled son millions of pounds in death duties after falling foul of an inheritance tax trap. Olaf Rogge, a successful former investor, and his wife spent more than £15m buying and developing a manor house, converting a wing for their disabled son and put the home into trust for him. But they were deemed to be benefiting from continuing to live in the property and so face paying £100,000 a year in rent to the trust for the rest of their lives, on which their son will have to pay tax. Mr Rogge said: “I never understood the gift with reservation issues and the fact that my wife and I would have to pay full market rent to occupy a property we [ourselves] had purchased. If I had understood this, I would never have agreed to the house being transferred into trust.” The Office of Tax Simplification (OTS) recently recommended a radical ove rhaul of the system to try to improve people’s understanding of the levy. Rachael Griffin of wealth advice firm Quilter said the regime responsible for Mr Rogge’s case was like “something from a fictional society rather than a modern-day tax system”.

The Daily Telegraph

Sajid Javid orders HMRC to ramp up no-deal Brexit preparations

The Chancellor has ordered HMRC to make preparations for a no-deal Brexit on October 31 its “absolute top priority” amid fears the taxman is a weak link threatening border operations. Sajid Javid wrote to HMRC chief executive Sir Jon Thompson demanding action to support businesses and taxpayers and ensure staff and systems are in place to “deliver a functioning regime” on Brexit day.

Financial Times, Page: 2 Daily Mail, Page: 15 Daily Express, Page: 8

Pension savers overtaxed

HMRC says large numbers of savers are being overtaxed by almost £3,000 each when they withdraw money from their pension pot, with at least £480m overpaid by people taking advantage of the pension freedoms since April 2015. Figures show that 29,811 people claimed refunds for a total of £77.89m in overpaid tax on their pension withdrawals this year, with the £47m claimed in the past 3 months marking the highest of any quarter since the freedoms were introduced. The average amount reclaimed has risen from £2,003 in the three months to the end of June 2018 to £2,715 in the same quarter of 2019. Former Pensions Minister Steve Webb, the director of policy at insurer Royal London, commented: “It remains a scandal that people who are legitimately accessing their own money, using freedoms given to them by the Government, are routinely being overtaxed at the convenience of HMRC.” He added: “Thousands of peo ple every month are having to fill in complex paperwork to recover tax that they should never have had to pay,” saying that figures suggest “this problem is reaching epidemic proportions.”

The Times, Page: 49

Tech tax could hit UK-US trade deal

The Telegraph reports that Britain is unlikely to get a free trade deal with the US unless a new tax affecting large tech firms is dropped. The paper’s Ben Riley-Smith says US officials have told the UK Government “at multiple levels” that the digital services tax, which could hit US firms like Amazon, Google, Facebook and Twitter, could stand in the way of an agreement. He cites a “well-placed source” who says new International Trade Secretary Liz Truss has privately expressed concerns that tightening rules against US tech companies could make securing a trade deal harder. The digital services tax – a 2% tax on the UK revenues of search engines, social media platforms and online marketplaces – is due to be written into law in the autumn budget and come into effect from April 2020. Estimates suggest that it will raise more than £400m for the Treasury by 2022.

The Daily Telegraph, Page: 1 The Independent Daily Express

90% of loan charge bills yet to be settled

HMRC figures show that almost 90% of loan charge bills have yet to be settled, despite that tax office urging contractors to do so by the end of September. The Revenue has agreed payment plans with just 7,000 of the estimated 50,000 people affected by the loan charge.

The Daily Telegraph, Money, Page: 3

NHS leaders call for chancellor to address pension tax rule

The NHS Confederation has urged Chancellor Sajid Javid to remove the tapered annual allowance which restricts pensions tax relief, saying some doctors are reducing their hours or retiring early to avoid large pension tax bills. The Mail says the Government is set to overhaul doctors’ pension schemes, saying the Department of Health and the Treasury have been drawing up reforms which would give doctors greater flexibility with their pensions contribution.

Daily Mail, Page: 22 Financial Times, Page: 3


Candy Crush firm gaming the tax system?

Activision Blizzard, the firm that owns popular game brands Call of Duty and Candy Crush Saga, is being investigated by HMRC over tax avoidance. The firm has reduced its tax bills by sending revenues and royalties into lower tax jurisdictions and tax havens. These include Malta, which has an effective corporation tax rate of just 5%, compared with a main rate of 19% in the UK. Tax Watch UK has analysed the company’s international tax structures, prompting the think tank’s director George Turner to warn that Activision Blizzard faces a potential liability of more than $1bn in taxes and penalties. HMRC is also investigating one of the firm’s subsidiaries, Activision Blizzard UK, and has demanded £2.4m in unpaid tax for the year ending December 31 2013 – and is pursuing an estimated £6m for 2014 to 2017.

The Sunday Times, Page: 9

Harland and Wolff close to administration

Engineering group Harland and Wolff will collapse into administration and appoint BDO as administrator unless a buyer is found by Monday night. Union GMB says that unless someone steps into rescue the firm, which was put up for sale in December due to financial problems at parent company Fred Olsen Energy, its administration will directly affect 130 jobs and up to 1,000 more in the supply chain.

Sunday Express, Page: 43

Goals uncovers ‘improper’ accounting

Goals Soccer Centres is to delist from the stock market after it discovered “improper behaviour” that means it will be unable to file its accounts. Goals said an investigation into historical accounting practices around the recognition of revenue and the preparation of financial statements uncovered improper behaviour which involved a number of individuals and dated back to at least 2010, with this leading to “material uncertainty” about its historical financial statements. Goals, which saw trading in its shares suspended in March after it made a “substantial mis-declaration of VAT” totalling approximately £12m, said work on its full-year 2018 audit has been suspended “until further clarification on the historic financial statements has been obtained”. A report from BDO claims former Goals chief executive Keith Rogers “corroborated” with former chief financial officer Bill Gow to create “fictitious documents”, including invoices. KPMG, Goals’ former auditor, was said to have been given “completely false information” and was “completely misled by the company”.

The Times, Page: 41 The Daily Telegraph, Page: 31 Financial Times, Page: 1 Daily Mail, Page: 105 The Guardian, Page: 36 Daily Express, Page: 67 The Sun, Page: 46 Yorkshire Post, Page: 23 City AM

Holiday firms collapse

Malvern Group, the parent company of holiday firms Super Break and, has collapsed. KPMG, which has been appointed as administrator, said the firms had “significant cash-flow pressure”. Tracey Pye, of KPMG, said the group’s directors had failed in their attempt to obtain further investment, prompting them to “take the difficult decision” to enter administration.

The Daily Telegraph, Page: 12 Daily Mirror, Page: 20 Financial Times, Page: 14 Daily Express, Page: 6 The Scotsman, Page: 14 Yorkshire Post, Page: 9

Ipagoo enters administration after watchdog’s clampdown

FRP Advisory has been appointed as administrator to Ipagoo, which has collapsed into administration just days after the Financial Conduct Authority ordered it to cease all regulated activity.

Financial Times, Page: 14


FCA boss: SMEs need better protection

Andrew Bailey, chief executive of the Financial Conduct Authority, says small businesses are in need of greater protection. The regulator has been criticised for a report into the treatment of small businesses by RBS’s Global Restructuring Group. Mr Bailey says the idea that the regulator “sort of washed our hands” of the issue “is far from the truth,” telling the Sunday Times: “Of course, we do care about it a lot, and actually we do think that small firms need better protection. ”

The Sunday Times, Business and Money, Page: 6

Small businesses need more targeted help preparing for Brexit

The FT and the Times report on the Government’s efforts to prepare businesses for a no-deal Brexit as Liz Truss and Andrea Leadsom meet with MPs and trade groups to consult on next moves. MPs told Ms Truss that companies would benefit from “short bullet-point guides, containing targeted calls to action”, adding that with an exit without a deal becoming more likely it was “crucial that businesses receive the best advice as soon as possible”. Over £100m has been set aside to help support businesses, but Martin McTague, policy chair of the Federation of Small Businesses, said the money was not enough. “Many small businesses are desperately underprepared for a chaotic no-deal Brexit on 31 October,” he said. “This offer desperately underestimates the support that small businesses need … it does not really cut it.” The FSB has urged ministers to take action, for example by issuing Economic Operator Registration and Identific ation (EORI) numbers to all VAT-registered small companies. The FSB also wants “Brexit vouchers” of up to £3,000 to be given to companies for no-deal preparation.

Financial Times, Page: 2 The Times, Page: 42


UK aid money paying terrorists?

Nick Craven in the Mail on Sunday reports that UK foreign aid money is said to have funded “salaries” given to Palestinian prisoners held in Israeli jails for terrorist acts. He says campaigners have been calling on the Department For International Development (DFID) to release an audit of where aid given to the Palestinian Authority has gone. Mr Craven says that ministers have claimed that since the process was audited by independent accountants, the UK knew where British money was going. However, PwC says the narrow scope of its work did not require it to consider whether the money was going to terrorists.

The Mail on Sunday, Page: 35


Workers dip into pension pots

Half of over-55s using rules that allow them to draw money from their pension funds are still in gainful employment, according to research from financial company Zurich. The firm’s Alistair Wilson comments: “Savers taking a pension income they don’t yet need are in danger of leaving a black hole in their finances when they eventually retire.” The Mail notes recent HMRC figures showing that 336,000 savers withdrew a record £2.75bn from their pension funds between March and June this year.

The Mail on Sunday, Page: 63

Pension gap nears 40%

Analysis by the union Prospect show that the average woman’s annual pension income is 39.9% lower than the typical man’s, with men receiving £7,000 more a year on average. It was also shown that the gender pay gap stands at 17.9%. The union looked at data from the Office for National Statistics, the European Commission. HMRC and the Department for Work and Pensions.

The Sunday Times, Business and Money, Page: 12

Small schemes failing to meet standards

The Pensions Regulator’s annual survey on defined contribution schemes has found that 71% of savers are now in pension schemes which are meeting all of the expected governance standards. This represents an increase from 54% in 2018 and 32% in 2017. However, most smaller schemes are failing to meet standards, with only 4% of micro pension funds and 1% of small schemes meeting all of their governance requirements.

FT Adviser


EY: No-deal could see banks opt for overseas hubs

A study by EY shows that banks are preparing to move some of their UK business to hubs outside the EU in the event of no-deal, with 42% of financial services firms saying they would make such a move on the first day of a no-deal scenario. While most of those who would look to bases outside the EU would opt for New York, around 6% said they would move business to Singapore, while 3% would move to Hong Kong. John Liver, a partner at EY, commented: “Should the UK leave without an agreement, the City will be less accessible to the EU than those global centres with equivalence status with the EU.”

The Sunday Times, Page: 2


ICAEW report shows confidence dip

The Institute of Chartered Accountants in England and Wales’ (ICAEW) quarterly business confidence monitor will this week reveal that confidence has turned negative in every sector of the economy and every region in England and Wales. It is also set to show that a fifth of all businesses are having difficulties as a result of late payments, with the proportion rising to around a quarter for smaller businesses. Michael Izza, the ICAEW’s chief executive, said that action was needed to restore “confidence and momentum” to business.

The Sunday Times, Page: 2

Bank of England cuts growth forecast on Brexit uncertainty and trade tension

The Bank of England has forecast a 30% chance that the UK economy will shrink at the start of 2020, amid growth of just 1.3% this year and next. The forecast is based on a smooth transition to a Brexit deal and a disorderly exit would have more severe consequences. The Bank left interest rates at 0.75%. It said that assuming a smooth Brexit and some recovery in global growth, it would be appropriate to raise rates “at a gradual pace and to a limited extent”. But Tory Brexiteer Iain Duncan Smith said Carney’s forecast should be taken with a “massive pinch of salt” accusing him of reviving Project Fear and undermining Brexit negotiations.

Financial Times, Page: 3 The Daily Telegraph, Business, Page: 29 The Daily Telegraph, Page: 1, 4 The Times, Page: 42 The Times, Page: 7 The Guardian, Page: 2 The I, Page: 46 Daily Mail, Page: 14 Yorkshire Post, Page: 2

Manufacturing output falls to seven-year low

The Purchasing Managers’ Index compiled by research group IHS Markit has shown that British manufacturing is “suffocating”, with factory activity at a six-and-a-half-year low as a downturn in the sector continued into July. Marking the third consecutive month that the majority of companies reported a fall in output, the figure remained at 48.0 in July, its lowest level for more than six years.

City AM Financial Times

Construction shrinks for third consecutive month

The UK construction industry outlook plummeted to a seven-year low in July and output fell for the third consecutive month, adding to evidence of a stalling economy. The latest Purchasing Managers’ Index (PMI) came in at 45.3 – substantially below the 50 level that indicates no change from the previous month. Howard Archer, chief economic adviser for EY Item Club, commented: “The weak July construction survey increases the concern that the UK economy has started the third quarter poorly, after GDP likely stagnated in the second quarter and could have contracted marginally,” adding that Brexit related uncertainties “were reported to be particularly affecting the commercial sector, with some companies unwilling to commit to new projects.”

The Times, Page: 43 The Independent, Page: 36 The Daily Telegraph


Spain set to top spending league

Analysis by Deloitte shows that Premier League clubs have spent £925m on transfers this summer and are on track to hit the £1.2bn mark by Thursday’s transfer deadline. Spending in Spain’s top league could top this, however, with clubs in La Liga on course to break the record £1.4bn set by Premier League clubs in the summer of 2017.

Sunday Express, Page: 43

Cowell in the clear over tax

The Sun says Simon Cowell is in line for an OBE after getting the all-clear over tax, with it found that he had done nothing illegal despite the X-Factor boss being named in the Panama Papers scandal.

The Sun on Sunday, Page: 3

Kingman a BoE front runner?

The Daily Mail’s Alex Brummer says that Legal & General chairman Sir John Kingman is the Treasury’s “top choice” to replace Mark Carney as governor of the Bank of England. He adds that deputy governor of the Bank of England, Sir Jon Cunliffe, is another preferred candidate, while “ante-post favourite” Financial Conduct Authority chief executive Andrew Bailey is said to lack “fulsome” support at the Treasury.

Daily Mail

Contact Paul Southward.

Paul Southward

News Roundup Friday 2nd August 2019

News Roundup Friday 2nd August 2019



HMRC warned over anxiety caused by loan charge administration

MPs on the Treasury sub-committee have said HMRC’s attempts to claw back money from those who used “disguised remuneration schemes” has caused “widespread anxiety and distrust”. The committee criticised HMRC’s “retrospective” loan charge policy which campaigners have linked to as many as five suicides. John Mann, Treasury subcommittee chair, said: “Setting aside the policy, HMRC’s administrative approach to the payment of large unexpected tax bills has been sensible. The delay, however, in clarifying payment terms for those wanting to settle their past use of such schemes has caused widespread anxiety and distrust.”

The Sun, Page: 2 The Daily Telegraph, Page: 2 Yorkshire Post, Page: 4

HMRC told to be “fair and consistent” when fining large companies

A report compiled by the Treasury select committee urges HMRC to be consistent when targeting large firms in tax disputes. Law firms told MPs they did not think HMRC went easy on big companies, rather it took a harder line and was “inflexible”, often forcing resolution through the courts rather than settlement. KPMG told the committee HMRC increasingly put inaccuracies down to “deliberate” behaviour, resulting in higher fines and reputational damage. An HMRC spokesman said: “We make sure that large businesses, just like everyone else, pay all the taxes due under UK law. Large businesses are responsible for around 40% of the UK’s total tax receipts.”

The Daily Telegraph, Business, Page: 29

Self-employed face ‘fiasco’ HMRC glitch

Self-employed people potentially face tax bills twice as high as expected next year due to a “glitch” in HM Revenue & Customs’ tax return system not including payment on account information – which is due imminently. HMRC has said that no one would be charged interest for paying late because of its error – though those who can’t pay in January are vulnerable to interest charges. Nimesh Shah of Blick Rothenberg described the situation as a “total fiasco” and Moore Stephens’ Lucienne Parry said the issue was also causing concern for those who choose to use tax refunds to offset these payments.

The Daily Telegraph

One in ten keep assets offshore

HMRC has revealed that one in ten taxpayers in Britain has offshore financial interests after it received information through the new Common Reporting Standard, which allows more than 100 countries to exchange financial data automatically. The taxman told the Treasury select committee it had received information about 5.67m offshore accounts in the past year and had written to tens of thousands of people who may owe tax.

The Times, Page: 14

Guillaume hits out at Trump in wine tax rant

French agriculture minister Didier Guillaume has called Donald Trump’s threat to tax French wine “completely moronic” and “absurd”. The US President made the threat last week in response to French plans for a tax on the revenue of large digital firms – a move that would hit the likes of Google, Amazon, Facebook and Apple. Mr Guillaume said Trumps tit-for-tat reaction was “completely stupid” before adding: “American wine is not better than French wine.”

BBC News The I, Page: 24

Poland scraps income tax to halt brain drain

Poland is to scrap income tax for workers under the age of 26 who earn less than £18,500 a year in an attempt to lure emigrants home.

The Independent


More UK firms in ‘significant distress’

The number of UK businesses facing “significant distress” has increased, according to Begbies Traynor’s latest Red Flag Alert index, with 14% of all UK businesses – 484,000 – indicating they were experiencing significant distress at the end of June. The retail, property and leisure industries are being hit hardest, due to what Begbies described as the continuing economic and political uncertainty facing Britain, and the average debt of insolvent companies has more than doubled – from £29,873 in 2016 to £66,226. The number of firms reporting critical financial distress also rose by 5% year-on-year. According to Insolvency Service figures, corporate insolvencies have reached their highest level in more than five years, rising 11% in Q2 compared with the same period last year. Martin McTague, policy and advocacy chairman for the FSB, called the latest figures “hugely concerning”.

City AM, Page: 6 The Times, Page: 36 Financial Times The Independent

Deal making slumps in Yorkshire

Private equity investment in Yorkshire businesses fell by 59% in the first six months of 2019, with just 11 deals completing in comparison to 27 in the second half of 2018, according to a new survey from KPMG.

Yorkshire Post, Page: 17


Young people see 10-fold rise in bankruptcy

Individual insolvencies are at their highest quarterly level since 2010, with 30,936 people filing for bankruptcy, debt relief orders or individual voluntary arrangements, according to Insolvency Service data. “The situation is still serious for the UK’s personal finances,” said Duncan Swift, president of insolvency and restructuring trade body R3. “Money worries are a fact of life for millions.” Meanwhile, analysis of the data by RSM found that rising self-employment and easily-obtainable credit has pushed Generation Z into debt with the number of young people going bankrupt increasing 10-fold in three years. Under-25s now make up 6.5% of all personal insolvencies, up from 1% three years ago.

The Daily Telegraph Financial Times


FCA set to ban contingent charging by pensions advisers

The Financial Conduct Authority is to consult on a ban on pensions advisers operating a “contingent charging” model, under which they get paid only if their client follows their advice to transfer a “defined benefit” pension. Contingent charging is estimated to cost consumers £2bn a year. The FCA’s Christopher Woolard said: “We want to ensure people receive suitable advice and drive down the number giving up defined pensions when it is not in their interests.” Stuart Bradbury, pensions director at PwC, said: “Contingent charging has become more common because many find the upfront cost of advice to be prohibitive.”

Financial Times, Page: 3 The Times, Page: 14 Daily Express, Page: 49 The Sun, Page: 43 Daily Mail, Page: 44


Majority of Scots back new taxes on holiday lets

A YouGov survey commissioned by 38 Degrees has found that 84% of Scots would back new taxes on short-term lets such as Airbnb. A majority, 64%, also supported ring-fencing most of the money raised to improve local housing. Currently, while private landlords have to register with local authorities, there is no such requirement for those who run holiday lets and take bookings through third parties like Airbnb. Campaigners have called on the Scottish Government to let councils limit the number of holiday lets, introduce new taxes and require landlords to register.

Glasgow Evening Times The Herald, Page: 4


Households remain upbeat as wages continue to rise

Consumers remain optimistic about their financial situation despite worries about the economy, according to GfK’s latest survey, with a sustained rise in real wages countering concerns over Brexit. However, households’ confidence did not extend to the wider economy, with the overall index for July standing at minus 11, albeit up from minus 13 last month.

The Times, Page: 14

Pound falls again on no-deal fears

The pound has continued to fall on currency markets amid fears of a no-deal Brexit, hitting a fresh two-year low of $1.2120 against the dollar on Tuesday before recovering some ground. Sterling also slid against the euro, falling to €1.0881 at one point.

Financial Times The Daily Telegraph, Business, Page: 29 BBC News The Guardian, Page: 14


Profoundly low interest rates are here to stay

Robin Harding considers the consequences of permanently low global interest rates in the FT, suggesting it is “time to stop waiting for rates to recover and face the world as we find it.”

Financial Times

No-deal Brexit would tip Germany into recession

Analysis by Blick Rothenberg shows Germany would fall into recession in the event of a no-deal Brexit, with the loss of 200,000 jobs and 1% of GDP.

The I, Page: 41

Contact Paul Southward.

Paul Southward

News Roundup Thursday 1st August 2019

News Roundup Thursday 1st August 2019



Johnson’s “Boosterism” a winning formula

A senior City source has told the Mail that Boris Johnson has described his economic philosophy as “Boosterism” – a vision that observers say equates to a Blairite enthusiasm for infrastructure spending coupled with a Thatcherite belief in the power of tax cuts to stimulate the economy. The paper cites plans already outlined by Johnson for infrastructure spending and adds that he is also considering a £100bn plan put forward by Sajid Javid for investment to help bridge the North/South divide. The PM has also commissioned work on plans to raise the starting threshold for paying National Insurance to £12,500, at a cost of £11bn a year. This comes after a pledge to raise the starting threshold for paying 40p tax from £50,000 to £80,000 and a review on stamp duty, which could see the tax being scrapped for properties worth less than £500,000. Tory MP Robert Halfon said the PM’s plans we re a “winning formula”.

Daily Mail, Page: 16

Self-employed at risk of underpaying tax due to HMRC glitch

An HMRC glitch could mean self-employed people are at risk of underpaying their tax bill on 31st July, according to Moore Stephens. HMRC may have incorrectly reduced the amount or may not have issued taxpayers with a reminder at all, meaning self-employed taxpayers will have to pick up the bill in January 2020. Partner Lucienne Parry said: “In some cases, we have seen individuals being wrongly sent automatic refunds from HMRC, which will need to be repaid. Those impacted are going to think it very unfair that an HMRC error could lead to interest charges and in some cases potential surcharges.” A similar glitch occurred in January 2019 but then HMRC assured taxpayers that they would not be charged additional interest.

Accountancy Age

Farmer wins £1m VAT appeal in Supreme Court

Aberdeenshire farmer Frank Smart has won a battle with HMRC over VAT payments on units of farmland he bought from the Scottish government. Judges ruled that Mr Smart should not have paid VAT on a £7.7m purchase of more than 34,000 units of “single farm payment entitlement” subsidies because he bought the units in support of “current and planned” economic activities. Glyn Edwards, VAT director at MHA MacIntyre Hudson and a legal adviser to Mr Smart’s team, he said: “If HMRC had won instead, every business in receipt of subsidy could have been subject to a restricted right of VAT recovery.”

The Scotsman, Page: 8 The Press and Journal, Page: 4

Duncan Smith calls for loan charge rethink

Iain Duncan Smith has urged the Prime Minister and the new Chancellor Sajid Javid to urgently review the loan charge arguing that the retrospective tax is forcing businesses to close and making individuals bankrupt and risking homelessness. The charge was introduced in response to the Treasury’s concerns about “disguised remuneration schemes” which involved individuals being paid through loans, usually via an offshore trust in a low or no tax jurisdiction, which they did not have to repay.

Yorkshire Post, Business, Page: 1

The taxman’s digital dream

The FT’s Chris Giles asks whether Russia’s AI-driven real-time centralised VAT system, which has reduced the tax gap from 20% to 1%, is the right answer or too much like Big Brother.

Financial Times, Page: 9


R&D tax credits could lessen pain for SMEs preparing for Brexit

Allie Renison, head of European and trade policy at the Institute of Directors (IoD), considers the complexities facing businesses preparing for Brexit. She says at least a third of IoD members say they can adjust only after they know what no-deal looks like and that although there is no silver bullet the Government could do two things to help. Firstly, a voucher scheme would help SMEs access approved legal, tax and professional services and offset the cost of compliance and planning advice. Secondly, the Chancellor could make Brexit planning tax deductible by expanding the scope of R&D tax credits to cover certain preparations, or by creating a new type of tax credit.

The Daily Telegraph, Business, Page: 28


UK mortgage approvals rise

The number of mortgage approvals hit 66,400 in June, up from 65,650 in May, according to the Bank of England’s latest data, above economists’ expectations and the highest number since January. Howard Archer, an economist at the EY Item Club, said the reprieve from a disruptive Brexit in March, together with better consumer purchasing power and strong jobs growth, had helped, although the “overall benefit has been relatively limited”. However, annual lending growth to UK consumers slowed to 5.5% in June, from 5.7% in May, the slowest rate since April 2014.

Financial Times, Page: 2 The Times, Page: 40 City AM


David Maclean heading to Revolut

Metro Bank finance director David Maclean is heading to fintech group Revolut – after a stormy few months at the bank following its accountancy scandal.

Financial Times, Page: 17 The Times, Page: 40 The Daily Telegraph, Business, Page: 26 Daily Mail, Page: 67


Threat of no-deal sends pound to 28-month low

A hardening of rhetoric from the Boris Johnson government over Brexit pushed the pound to a 28-month low against the dollar on Monday. Sterling dipped 1.1% to $1.2242 and €1.1004, with analysts at ING Group now assuming an early election will take place and that the pound will sink as low as $1.18 and €1.05.

BBC News Financial Times, Page: 1 The Daily Telegraph The Times, Page: 1 The Guardian, Page: 1, 28


Brussels shortlists three for top IMF post

Brussels has excluded Mark Carney and George Osborne from its shortlist of candidates to replace Christine Lagarde at the IMF. There are three contenders remaining: Jeroen Dijsselbloem, former Dutch finance minister, Kristalina Georgieva, Bulgarian chief executive of the World Bank, and Olli Rehn, Finland’s central bank chief.

Financial Times, Page: 4 The Times, Page: 36

Contact Paul Southward.

Paul Southward