Category Archives: News Roundup

News Roundup Thursday 7th February 2019


News Roundup Thursday 7th February 2019

NEWS ROUNDUP

TAX NEWS

Raab: Tax cuts could be a rocket boost for firms

Former Brexit Secretary Dominic Raab says tax cuts could provide the boost needed to see Britain through the “difficult moment” that its exit from the EU may deliver. Praising a cut to corporation tax, Mr Rabb told the Conservative Home website: “There are other tax cuts which sector by sector, and without infringing on state aid rules domestic or international, we could provide businesses, who are undoubtedly feeling a bit uncertain right now, with a bit of confidence.” He added that the Government has yet to publically tell firms what it will do to give them “the rocket boosters” to see them through Brexit. He said rather than being reactive to EU terms or a no-deal scenario, ministers should “get on the front foot and give the public and businesses that reassurance.”

Daily Express

Probate fee ‘stealth tax’ to hurt family businesses

The Institute for Family Business (IFB) trade body has warned that proposed new “stealth tax” probate fees will hurt small business owners. The proposals, which would see estates worth £2m or more pay £6,000 in probate fees, equates to a 3,770% increase on the current flat fee and, in a briefing to the Parliamentary Delegated Legislation Committee, the IFB has urged the Government to rethink its plans. Simon Davis of the Law Society said the cost of administering a grant of probate was the same regardless of the size of your estate and that the changes were not in the public interest.

The Daily Telegraph

Pensions tax error

Analysis suggests that HMRC has overtaxed savers by more than £400m by applying emergency tax codes to pension withdrawals. HMRC says it will refund the money by the end of the year, with 174,000 savers overcharged an average of £2,312 each since pensions freedoms began in April 2015.

Daily Mail, Page: 41

CORPORATE NEWS

Sunrise offers HMV a new dawn

HMV has been sold to a company controlled by Doug Putman, the owner of Sunrise Records in Canada, for an undisclosed sum. The deal will see 100 stores remain open, securing 1,487 jobs, although 455 redundancies will come from the closure of 27 outlets. Will Wright, partner at KPMG and joint administrator of HMV, said: “We are pleased to confirm this sale which, after a complex process, secures the continued trading of the majority of the business.”

The Times, Page: 37 The Daily Telegraph, Page: 8 The Guardian Daily Mail Financial Times, Page: 14 I, Page: 38 The Independent, Page: 58 Daily Express Daily Star Daily Mirror, Page: 16 The Sun, Page: 43 The Scotsman, Page: 17 Yorkshire Post, Page: 9 Evening Standard City AM

Café chain may sue auditor

Patisserie Valerie chairman Luke Johnson has said he is considering suing its former auditor Grant Thornton over the £40m accounting black hole which pushed the cafe chain into administration. Mr Johnson says the chain may have a case against the auditor, which was last week ordered to pay more than £21m in damages to another former client, AssetCo, over negligence.

Daily Mail, Page: 65

Tax claim over tobacco firms

Researchers from the University of Bath say large tobacco companies are paying a “pitiful” amount of corporation tax, with big players shifting their corporate structures to minimise their UK tax bills. George Butterworth, Cancer Research UK’s policy manager, comments: “The tobacco industry is dodging its obligation to contribute to the UK tax system,” adding a call for ministers to impose a tobacco industry levy.

The Independent, Page: 24

Apple settles French tax dispute

Apple has settled a tax dispute with France, agreeing to pay €500m of backdated tax on French-generated income, according to L’Express. Apple declined to comment on the figure but confirmed the settlement.

The Times, Page: 42 Financial Times, Page: 4

PROPERTY NEWS

Tax changes contributing to private rentals increases

Investors will spend another £36bn on building rental homes by 2025, according to a new study by Knight Frank, to capitalise on growing demand from those who can’t get on the housing ladder. While there are 110,092 rental homes under construction, or being planned in the UK, the estate agent said an extra 560,000 households are expected to be living in the private rented sector by 2023. Nick Pleydell-Bouverie at Knight Frank said buy-to-let tax changes have deterred some smaller players from the market but “large-scale professional private-rented sector landlords are well placed to absorb this.”

Evening Standard

SMEs NEWS

SMEs reveal banking concerns

Research from Nationwide Building Society shows that 4 in 10 small businesses only have personal current accounts, rather than a separate business account. It was also found that half of the UK’s SMEs think banks place too much emphasis on making a profit at their expense, while nearly two in three said switching accounts was difficult due to a lack of competition. Firms also voiced concern over branch closures and hikes in fees.

Daily Mirror, Page: 37

ECONOMY NEWS

Service sector slows

The UK service sector lost momentum in January as incoming new work fell for the first time since July 2016. The purchasing managers’ index (PMI) compiled by IHS Markit and the Chartered Institute of Procurement and Supply fell to 50.3 last month, down from 51.4 in December and from 53.4 a year ago. Howard Archer, adviser to the EY Item Club, said: “Overall, the purchasing managers’ surveys point to very weak UK economic activity in January.”

The Guardian, Page: 25 The Daily Telegraph The Times, Page: 38 The Independent, Page: 57 Daily Express, Page: 45 City AM, Page: 5

OTHER NEWS

Mourinho handed sentence and fine over tax fraud

Football manager Jose Mourinho has accepted a one-year prison sentence for tax fraud in Spain, and has been ordered to pay €2m (£1.75m). Mr Mourinho, who failed to declare revenue from image rights from 2011 and 2012 during his time as manager of Real Madrid, will not serve any jail time after agreeing to the fine, with Spanish law saying sentences under two years can be served under probation.

The Daily Telegraph, Page: 5 The Times, Page: 10 The Guardian, Page: 40 Daily Mirror, Page: 51 Daily Mail, Page: 72 The Independent, Page: 67 Daily Star, Page: 7 Daily Express, Page: 55 The Sun, Page: 53 City AM, Page: 6

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Paul Southward


News Roundup Wednesday 6th February 2019


News Roundup Wednesday 6th February 2019

NEWS ROUNDUP

TAX NEWS

Deadline day returns up 29% in 5 years

The Telegraph’s Anna Mikhailova looks at how increasing numbers of taxpayers are leaving filing their returns until close to the deadline. Figures show that over 735,000 people filed their tax return on January 31 – 29% more than those leaving it until deadline day five years ago – with 30,000 submitting their returns between 11pm and midnight. The taxman’s hotline received over 100,000 calls on January 31 and 4.8m in total in January – up 2m on the total received in December. Ms Mikhailova highlights that while 14% of callers faced waiting times of more than 10 minutes, the average call met HMRC’s target of a wait of under five minutes. She notes that last year the Commons Public Accounts committee suggested HMRC had misled the public over waiting times by not including up to four minutes of automated messages per call in its statistics.

The Daily Telegraph, Page: 6

PROPERTY NEWS

Rate relief offers marginal boost – Landlord

Shopping centre landlord Ellandi says the Government’s small business rates relief due to be introduced in April will only give town centres a minimal boost. It says research from property consultancy Montagu Evans shows that relief measures will only trim Ellandi tenants’ total rates bill of £37m by £700,000 – less than 2%. Mark Robinson, property director and co-founder of Ellandi, said: “Given the structural changes happening within the retail industry, it is imperative that Government urgently looks at fundamental reform of the way the retail industry is taxed.”

The Times, Page: 42

City building rates climb

Deloitte ’s annual crane survey, which gauges the volume of commercial property under construction, has revealed record levels of construction activity in Britain’s cities. Birmingham, Manchester and Leeds saw 88 new developments started last year, up on the 72 recorded in 2017. The number in Belfast was flat at nine, although office development rose by 35%.

The Times, Page: 40 Yorkshire Post, Business, Page: 1

Regional pre-lets boom

The number of businesses agreeing to pre-let offices outside London is at a record high, according to real estate firm Cushman & Wakefield. More than 12m sq ft of regional offices were rented out on a pre-let basis in the past two years, with pre-let space now accounting for 8% of all office construction. It is noted that a major reorganisation of the public sector’s property estate, particularly by HMRC, has helped boost demand.

The Daily Telegraph, Business, Page: 3

SMEs NEWS

SME VAT investigations pull in extra £3.75bn

HMRC collected an extra £3.75bn from SMEs last year through investigations into the underpayment of VAT, with this total marking a 12% increase on the previous year. PfP says this extra revenue made up half of all revenue collected through investigations into SMEs in 2017/18. It added that VAT receipts, which represent over a fifth of total tax receipts, reached a record high of £125bn last year, up 60% on a decade ago.

City AM, Page: 10

Landlord takes on arch sites

The Arch Company, Britain’s biggest small business landlord, plans to bring 900 abandoned railway arch sites back into use. The landlord, a joint venture between American private equity group Blackstone and British property manager and investor Telereal Trillium, comes into being today and has pledged to support independent businesses. The landlord says some sites may see rent increases.

The Times, Page: 42

MiFID II rules now hitting UK SMEs

The EU’s new MiFID II rules, which force brokers to charge for research rather than wrap it up in banking fees, are leaving UK SMEs finding it harder to raise funds. A fresh survey of investors by Peel Hunt and the Quoted Companies Alliance warns the quality of brokers’ research is consequently getting worse, making it harder for fund managers to justify buying into potential growth stocks.

Evening Standard

CORPORATE NEWS

ICAEW: Business confidence dips

The ICAEW’s business confidence monitor suggests that corporate sentiment has dipped, with a reading of -16.4 for the last quarter, compared with -12.3 for the previous quarter. Confidence has dipped in all sectors apart from IT, property, construction and retail. ICAEW chief executive Michael Izza said company directors are relying on “guesswork” when anticipating the impact of Brexit on business models.

The Times, Page: 37

Insolvencies surge as businesses face chill winds from all quarters

The FT looks at how corporate insolvencies hit levels not seen in five years in 2018, with Begbies Traynor saying the number of businesses in financial distress jumped in Q4.

Financial Times, Page: 20

Accountants paid £300k in BTG deal

Drugs company BTG is to be acquired by rival Boston Scientific in a £3.3bn deal that will see it pay almost £41m to bankers, lawyers, accountants and public relations executives, with £300,000 going to accountants. Meanwhile, KPMG, EY and Deloitte are set to see large payouts on the back of the tie-up between drugmakers Bristol-Myers Squibb and Celgene.

The Times, Page: 38 Financial Times, Page: 15

Google tax bill questioned

Google’s tax affairs have been criticised after parent company Alphabet revealed Q4 profits of £6.9bn, taking full year profit to around £23.6bn. Campaigners had spoken out against Google UK after accounts published last year showed its corporation tax bill came to £49.3m for the year to June 2017, with sales of £1.27bn and profits of £202.4m. Paul Monaghan of campaign group Fair Tax Mark said: “The continued funnelling of UK income into low-tax Netherlands and on to zero-tax Bermuda is an affront to all those who pay their fair share of taxes.” Google said it pays all taxes due and complies with the tax laws in every country it operates in.

Daily Mail, Page: 67

ECONOMY NEWS

Millennials pay scarred by financial crisis

New research from the Resolution Foundation has suggested that pay for workers in their 30s is still 7% below the level at which it peaked before the 2008 financial crisis. The think-tank said people who were in their 20s at the height of the recession a decade ago were worst hit by the pay squeeze. The research found those who stayed in the same job in 2018 had real wage growth of 0.5%, whereas those who found a different employer saw an average increase of 4.5%.

BBC News

Professionals’ confidence in UK economy at record low

Confidence in the UK’s economic prospects among financial services professionals is at its lowest level since 2012, according to a poll of members of the Chartered Institute for Securities & Investment (CISI). Highlighting the latest ACCA member survey, which showed confidence in the UK’s economy is at its lowest level since 2009, CISI chief executive Simon Culhane said: “Businesses abhor uncertainty, they can’t plan, they can’t invest and they can’t recruit and now, with less than two months before the UK plans to leave, we have complete uncertainty, so this survey result is no surprise.”

City AM

Sales climb in January

British Retail Consortium / KPMG figures show that discounting contributed to total retail sales rising 2.2% in January, the highest growth since June 2018. This follows the worst December trading in a decade.

The Times, Page: 40 Daily Express, Page: 45 City AM, Page: 3 Yorkshire Post, Page: 4 Aberdeen Press and Journal, Page: 33

Brits borrow more than they earn

Figures from the Office for National Statistics show that Britons are borrowing a third more than they take home after tax. The data shows the average person owes £26,800 a year despite a disposable income of £20,200.

The Sun, Page: 18

OTHER NEWS

BBC in £1m pay boost

It is reported that the BBC has paid staff wrongly told to register as self-employed an extra £1m – with almost 300 presenters seeing a one-off payment of around £3,750 in their January pay packet. This comes after staff were advised to set themselves up as self-employed, with salaries routed through personal service companies, allowing them to be taxed as a company and pay 20% corporation tax. A crackdown by HMRC made it the BBC’s responsibility to get people’s employment status correct for the purposes of tax collection. This left some BBC staff facing backdated tax payments. A BBC spokesman said the payment was not a bonus but given to staff instead of expenses they were unable to claim while changes were made to their employment status.

Daily Mirror

Banking app plans MTD tools

Financial admin start-up Anna Money has landed £8.5m in funding from Kinetik. The firm says it is preparing to launch several new tools in anticipation of HMRC’s Making Tax Digital scheme.

City AM
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Paul Southward


News Roundup Thursday 31st January 2019


News Roundup Thursday 31st January 2019

NEWS ROUNDUP

SELF-ASSESSMENT TAX RETURNS

Today is the last day for filing your 2017/18 self-assessment tax return.  It may not be too late if you contact us now to see how we may help.

TAX NEWS

OECD pushes ideas for global corporate tax overhaul

Members of the Organisation for Economic Co-operation and Development have agreed to “address the tax challenges of the digitalisation of the economy”, meaning global taxation rules will be redrawn in a bid to end avoidance by technology giants and other multinationals. The reform will see the organisation review what some call the ten commandments of tax law. “The implications of these proposals may reach into fundamental aspects of international tax architecture,” the Paris-based institute said. Plans will be published in June, with an agreement hopefully in place by October 2020.

The Times, Page: 35 Financial Times, Page: 7

REPORTING NEWS

Underlying causes of audit failures must be assessed

Rodger Hughes outlines what he thinks has driven a fall in audit quality and asks whether “regular retendering and restriction on providing non-audit services [has] perversely caused a decline in audit quality?”

Financial Times, Page: 10

UK statistics agency sets up international business unit

With globalisation increasingly distorting international capital flows, the Office for National Statistics is setting up an international unit to work with multi-national firms to ensure that their reporting is accurate.

Financial Times

CORPORATE NEWS

RCapital keen on Patisserie Valerie

RCapital is among the front runners in the race to acquire most of the remaining Patisserie Valerie business from administration. KPMG is running the sale. The list of potential buyers is also thought to include private equity firm Endless. Meanwhile, it has emerged that Patisserie Valerie failed to share a fraud report with its banks as it grappled to secure a funding lifeline prior to its collapse last week. According to the Telegraph, neither Barclays nor HSBC were given sight of analysis prepared by forensic accountants from PwC. The paper suggests the revelation raises fresh questions over the role of top executives at the company during the final throes of its existence.

The Times, Page: 37 The Daily Telegraph, Business, Page: 1

Ashley targets sofa retailer

Mike Ashley is thought to be keen on buying the online furniture specialist Sofa.com which is being auctioned off by owner LGT European Capital. KPMG is handling the sale.

The Guardian, Page: 32 Daily Mail, Page: 60

SMEs NEWS

Venture capital trusts booming

Investors are steaming into venture capital trusts (VCTs), which offer tax breaks in return for investing in smaller companies, with £116m invested so far in January – 245% more than this stage a year ago. Andrew Wolfson, managing director of Pembroke VCT said his trust is seeing its fastest rate of investment ever this year. The most promising new issues, which are strictly limited and come with 30% income tax relief on up to £200,000 per year, and tax-free dividend payments and capital gains.

The Daily Telegraph

A move towards proportionality will help SMEs

Writing in the Yorkshire Post, Tim Ward, CEO of the Quoted Companies Alliance, voices his approval of the Kingman review of the Financial Reporting Council (FRC). He says its replacement, the Audit, Reporting and Governance Authority, would, among other duties, “have to take account of the size and resources of those being regulated and adjust its regulatory actions accordingly”. This, says Ward, would greatly lesson the burden on small and mid-sized businesses which he asserts are disproportionately affected by regulation.

Yorkshire Post

PENSIONS NEWS

Savers scammed out of £23m in 2017

Action Fraud has reported that, in 2017, £23m was stolen from savers accessing their pensions under freedoms introduced in 2014, with two people losing over £1m. The average loss was £91,000 with a total of 253 savers affected. Pensions expert Steve Webb commented: “The combination of someone being not that financially literate but having lucrative pension savings is obviously hugely attractive to scammers.”

The Times, Page: 2 Daily Express, Page: 27

Insurance boss warns pension shake-up plans are ‘terrifying’

Tracy Blackwell, chief executive of Pension Insurance Corporation, has said the government’s new pension proposals are “terrifying” and could leave members with less protection than currently.

Financial Times, Page: 19

ECONOMY NEWS

Personal insolvencies hit seven-year high

Amid a backdrop of tightening consumer credit and stagnating wages, the number of people in England and Wales turning to insolvency has reached a seven-year high. The number of people who became insolvent in England and Wales in 2018 was 115,299, a 16.2% rise from 2017, and there were 71,034 individual voluntary arrangements (IVAs), an increase of 19.9% on 2017 and the highest level ever recorded. Stuart Frith, president of insolvency and restructuring trade body R3, said: “As banks and other lenders have tightened their credit standards in response to the Bank of England’s concerns around consumer over-indebtedness, many people have run out of road,” while Brian Johnson, a partner at H W Fisher & Company, predicted that a rise in interest rates could lead to a further spike in individual insolvencies, adding: “The rise in CVAs likely to have been driven by the retail sector last year, which faced a perfect storm of reduced consumer spending, internet shopping, an interest rates rise and minimum wage increase.”

Financial Times, Page: 2 City AM, Page: 7 Daily Mirror, Page: 13 The Times, Page: 38 The Independent, Page: 66 The Guardian, Page: 32

Spring Statement scheduled before Brexit

Philip Hammond has revealed that he will deliver his Spring Statement in March, shortly before Britain is due to leave the EU. Should the country crash out of Europe with a no-deal scenario then the Chancellor will follow it up with an emergency mini-Budget in April designed to boost spending and confidence in the economy. Mr Hammond said he was not planning to unveil any changes to tax and spending plans in March.

Evening Standard Sky News Financial Times

OTHER NEWS

Parents passing on bad money habits

A survey of 1,000 primary school parents carried out by financial education charity RedStart has revealed that 19% of parents do not save for a rainy day, and 18% say they “overspend”. A further 13% say they do not have the right knowledge to educate their children about money, while 26% believe schools should be promoting more financial education.

The I, Page: 43

Royals looking for accountant

The Royal Household is advertising for an accountant. “You’ll produce management information and financial accounts for a number of entities including retail, charitable bodies and private accounts,” the advertisement on the royal website states. The successful candidate will be paid around £40,000 per year.

Daily Mail, Page: 32

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Paul Southward


News Roundup Wednesday 30th January 2019


News Roundup Wednesday 30th January 2019

NEWS ROUNDUP

SELF-ASSESSMENT TAX RETURNS

Only 2 days left to file your 2017/18 self-assessment tax return with the taxman.  There is still time to contact us to see how we may help.

TAX NEWS

Facebook should pay more tax, Nick Clegg asserts

In some of his first public comments since joining the social media network, Sir Nick Clegg has asserted that Facebook should pay more tax in Europe. The former UK deputy prime minister said it was “unbalanced” that most of Facebook’s tax bill is paid in the US “even though the vast majority of Facebook’s users are outside the United States”. Elsewhere, Spotify CEO Daniel Ek has written to the EU finance ministers arguing that a tax on digital revenues would “create a harmful legal precedent of taxing revenues over profits, even when the taxpayer is not yet profitable”. The letter was co-signed by executives from Booking.com and e-retailer Zalando and the CEOs of software company Allegro, gaming company Supercell and delivery company Takeaway.com.

The Daily Telegraph The Times, Page: 9 The Daily Telegraph, Business, Page: 5

Corporation tax cut to cost UK government coffers £12bn

The Government’s planned cut to corporation tax from 19% to 17% in April 2020 will cost the exchequer some £12bn by 2022, according to estimates from HMRC.

Financial Times, Page: 2

CORPORATE NEWS

Documents show Patisserie Valerie in a new light

A report from KPMG intended for potential buyers, shows that Patisserie Valerie sales were in decline for at least three years before the £40m accounting black hole was unearthed. The information provided by KPMG is in stark contrast to that put out by the café chain prior to its collapse. The management of the business is criticised in the document as is the lack of “any reliable financial info”.

The Daily Telegraph, Business, Page: 1

Oddbins on the brink of collapse

More than 500 jobs are at risk as Oddbins faces collapse for the second time in less than ten years. Its owner, European Food Brokers, has reportedly lined up Duff & Phelps to handle a pre-pack administration.

Daily Mail, Page: 65 The Sun, Page: 45 Daily Express, Page: 60

SMEs NEWS

Costs weigh heavily on small businesses

Small businesses are spending an average of £480,000 a year on taxes, levies and employment obligations, according to research by the Federation of Small Businesses. The group found that costs such as business rates and pension auto-enrolment rose by 15% from 2011 to 2017. The study also found that the burden was slightly heavier on businesses in Wales, Scotland and Northern Ireland than in London. The construction sector has suffered most, with a 28% increase in policy-linked costs while manufacturing costs are up a fifth in just two years. Mike Cherry, FSB chairman, said: “The minute you start firing on all cylinders as a business owner – you’re struck with an avalanche of additional costs. That has to change.”

The Times, Page: 44 Financial Times, Page: 2 The Daily Telegraph, Business, Page: 1 The Scotsman, Page: 37

PERSONAL FINANCE NEWS

MSPs reject ministers’ proposed debt payment calculator

The Scottish Government’s proposed system to calculate the financial situation of people in debt or facing bankruptcy should be delayed until significant reservations are addressed, a Holyrood committee reported on Monday. It is the second time that the Economy, Energy & Fair Work Committee has chosen not to endorse the Common Financial Tool (Scotland) Regulations, which would replace the common financial statement currently in use. The Committee said it remains “unconvinced that the adoption of a UK wide system would be beneficial to Scottish debt advisers and their clients at this time”.

The Journal of the Law Society of Scotland

PENSIONS NEWS

Pension providers required to disclosure charges under FCA proposal

Under Financial Conduct Authority proposals to increase transparency and competition, the providers of popular pension products will be required to show consumers the fees they have actually paid in “drawdown”. The FCA also wants firms to offer customers ready-made “investment pathways” that broadly meet their aims.

Financial Times, Page: 2 The Daily Telegraph, Page: 10 The Times, Page: 36

ECONOMY NEWS

Retailers warn of no-deal food shortages

The bosses of Britain’s leading supermarket chains have signed a letter put together by the British Retail Consortium warning that a no-deal Brexit could put food supplies at risk. The CEOs of McDonald’s and KFC also added their names to the letter which was sent to all MPs. Tesco said that although it did not sign the letter, as it is not a member of the consortium, it had the same concerns. The Department for Environment, Food and Rural Affairs said: “The UK has a high level of food security built upon a diverse range of sources, including strong domestic production and imports from other countries. This will continue to be the case whether we leave the EU with or without a deal.”

The Times The Daily Telegraph Financial Times, Page: 3 The Guardian, Page: 14

OTHER NEWS

Carney: Digital ID cards could keep online finance safe

Accessing money online could be may safer by the introduction of digital ID cards, Mark Carney has said. Speaking at the Bank’s Future Forum, the Bank of England Governor admitted that the idea would raise privacy concerns, but “having a consistent and comprehensive digital ID” would unlock a lot of opportunities and provide some of the protections needed for a digital financial system. Mr Carney added that ID cards were a decision for the Government, not the bank.

The Daily Telegraph

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Paul Southward


News Roundup Tuesday 29th January 2019


News Roundup Tuesday 29th January 2019

NEWS ROUNDUP

TAX NEWS

SELF-ASSESSMENT TAX RETURNS

Only three days left to submit your 2017/18 self-assessment tax return to HM Revenue & Customs.  Don’t panic contact us.

No-deal Brexit could stymie $1.5bn EU tax bill

The European Commission is running out of time to issue the UK with a demand to recoup $1.5bn from British companies deemed to have benefitted from illegal tax breaks. Raymond Luja, a tax professor at Maastricht University in the Netherlands, questions whether the EU could enforce any decision taken just before Brexit. In the event of a no-deal Brexit, Howard Liebman, a tax partner at Jones Day in Brussels, says the UK “might indeed just ignore the whole thing”. “If the EU wins before the court and then wins again as part of any appeals, what can the EU or the European Courts actually do to force the UK to comply?” said Liebman. “I do not believe there is any enforcement mechanism available.” Diageo, Pearson and Compass Group are among 53 companies said to have warned of costs arising from the EU probe.

Bloomberg

HMRC raises billions more in tax

HMRC data shows it raised £19.4bn more between April and December 2018 than it did during the same period the previous year. This was largely down to a £12.8bn increase in the amount of inheritance tax, National Insurance and capital gains tax paid by Britons, while VAT receipts rose by £4bn and income from corporation tax grew by £1.7bn. Increases in income tax allowances were announced in the Budget but Sarah Coles of Hargreaves Lansdown warned: “For basic-rate taxpayers, savings from income tax cuts will easily be eaten up by higher council tax, VAT, fuel and alcohol duty costs”. She said local authorities could raise council tax by 3%, plus a further 1.5% for policing. Some councils can add 2% for social care. The average band D property will cost £107 more.

The Daily Telegraph

CORPORATE NEWS

The Patisserie Valerie puzzle

Bill Jamieson considers the failings at Patisserie Valerie in the Scotsman and ponders the motivations of those who allegedly cooked the books. Jamieson also queries how many boardroom roles someone like Luke Johnson can have before they lose focus. “As for the Financial Reporting Council and auditors Grant Thornton, they also have searching questions to answer,” concludes Jamieson. The Times continues to report on the probe by PwC into the fraud, which hasn’t been released, but which sources say reveals a slew of irregularities that ran on for years. Gavin Pearson, a forensic accountant at Quantuma, says: “This is a company that may have been built on sand all along and no one got wind of it.” The FRC is probing Grant Thornton’s audits going back three years, the paper notes. Meanwhile, administrators KPMG are confident they can find a buyer for the company’s remaining outlets.

The Scotsman, Page: 35 The Times, Page: 36

SMEs NEWS

Banks to issue Brexit advice to SMEs

UK Finance is teaming up with the FSB, the CBI and the British Chambers of Commerce as well as trade groups and accountancy bodies to draw up emergency no-deal Brexit support for small businesses. They predict a surge in demand for loans and cashflow problems resulting from delays at ports and broader economic disruption. One source told the Times: “We would like people to stop and think about the impact of a possible no deal, not to scaremonger but for scenario planning. We want to give reassurance that banks will retain capacity to lend.” The alliance plans to issue non-financial advice too, such as on import/export issues.

The Times, Page: 35

Small business confidence set to slide

A study by Bibby Financial Services shows small companies are experiencing a decline in sales and increasing costs with a third deciding not to invest in their business in the final quarter of 2018, up from 20% in Q4 2017. The invoice finance provider said that “many SMEs are feeling the full brunt of political uncertainty on the Brexit issue” and a “no deal would cause confidence to fall further still”. Bibby added that confidence and investment intentions are expected to fall in the first quarter of 2019 compared with the end of last year.

The Times, Page: 35 Daily Mail, Page: 60 City AM, Page: 6

PENSIONS NEWS

Scottish employers must pay in more from April

Scottish business owners are facing a 3% increase in mandatory pension contributions from April 6. Where employers make the minimum 3% contribution, employees will have to add 5% in pension auto-enrolment contributions to ensure the minimum 8% total is met, up from the existing provision of 2% for employers and 3% for staff. Linda Kelly, head of payroll at French Duncan, warns businesses to “act immediately to ensure that their systems are adjusted to increase the payments from the start of April.”

The Press and Journal, Page: 33

Hospices face pension pain

Government plans to increase employers’ pension contributions in the health sector will hurt charity hospices and care homes, according to Hospice UK CEO Tracey Bleakley. NHS Trusts will get extra cash to deal with the increase, but other health sector employers will not. The increase from 14.3% to 20.6% from this April will lead to £30m in extra costs for hospices across the UK, Bleakley says.

Daily Mirror, Page: 18

ECONOMY NEWS

Moody’s: UK’s reputation for competence in danger

Moody’s has warned that failure to strike a Brexit deal with the EU would undermine investor confidence in the UK. “From a sovereign credit perspective, if you leave the EU without a deal, that is a sign that something institutionally has quite profoundly failed. It is a sign of institutional weakness if we end up with this,” said Sarah Carlson, a government debt specialist at Moody’s. She added that extended Article 50 does not solve the problem, rather this prolongs uncertainty. However, Ms Carlson added: “There are fundamental strengths of the UK that are not going to go away as a result of Brexit. This is still a large, very flexible, competitive economy.”

The Daily Telegraph

Consumer confidence falls

Consumer confidence has dropped to its lowest level in 18 months during the final three months of last year, according to the Deloitte Consumer Tracker. Confidence fell two points to -9% compared with the previous quarter with Brexit uncertainty outweighing the benefits of low unemployment and rising real wages. Ian Stewart, the Deloitte chief economist, said: “Work may be easier to find than for decades and pay may be rising, but today’s decline in confidence shows that consumers’ spirits are heavily influenced by expectations.”

The Times, Page: 35 The Daily Telegraph, Business, Page: 6 The Independent, Page: 63 City AM, Page: 3

OTHER NEWS

Craft beer boom

The craft beer sector is continuing its boom, according to UHY Hacker Young, which found that 430 breweries opened in 2017, compared with just over 100 in 2009.

The I, Page: 40 Daily Mail, Page: 60

Contact Paul Southward if you have any queries.

Paul Southward


News Roundup Monday 28th January 2019


News Roundup Monday 28th January 2019

NEWS ROUNDUP

TAX NEWS

SELF-ASSESSMENT TAX RETURNS

Only four days left to submit your 2017/18 self-assessment tax return to HM Revenue & Customs.  Don’t panic contact us.

Accountants report catalogue of errors in run-up to deadline

HMRC is making some serious errors as taxpayers rush to file their returns before the deadline, the Times reports. Just days after the tax office was forced to apologise to more than 650 people it sent £100 late penalty fines to it has been revealed that HMRC is mixing up English and Scottish taxpayers. The Institute of Chartered Accountants of Scotland along with firms such as BDO and Johnston Carmichael have identified hundreds of cases where people have been wrongly designated. Meanwhile, the ACCA and the ICAEW have received reports of paper returns not being processed accurately and pages being omitted. Chas Roy-Chowdhury, the head of taxation at the ACCA comments: “HMRC is prone to mistakes and we need to level the playing field. A government department should not have a one-way ticket to penalise taxpayers when we can get no recompense when it makes a mistake.”

The Times, Page: 59 The Times

HMRC hosts VIP hotline for politicians

HMRC runs a secret hotline for politicians and civil servants who call for advice on their tax returns, the Standard reveals. The special line is answered within seconds by officials while ordinary taxpayers are forced to waste up to 30 minutes listening to recorded messages and answering computerised questions. MPs are given a private number that goes to Public Department 1, a special office in Wales, which services four lines for the queries. An HMRC spokesman said: “We ensure the security of all our customer’s information, but a small number are at a heightened level of risk. This includes customers whose personal safety could be compromised. We protect these records by restricting access to a small number of appropriately authorised staff. As only certain staff are authorised to access these records we need to have a separate phone line for handling their queries.”

Evening Standard The Daily Telegraph, Page: 2 Daily Mail, Page: 16 The Sun, Page: 2

HMRC told to delete voice data

Over 160,000 people have told HMRC to delete biometric data it gathered during phone calls. The tax authority has so far captured the voice data of about seven million callers since launching its Voice ID system in 2017, but originally gave people no easy way to opt out. Privacy group Big Brother Watch said people had been “railroaded into a mass ID scheme by the back door”. Big Brother Watch said it had reported HMRC to the Information Commissioner’s Office (ICO), suggesting it had broken data protection law.

BBC News

Truss makes pitch to young voters

Liz Truss has asserted that Jeremy Corbyn’s appeal to the young is waning as they realise they face high taxes under a Labour government led by him. The chief secretary to the Treasury said 18- to 24-year-olds are “the most self-starting, business-minded generation ever and all Corbyn offers is high taxes and more state control.” Ms Truss added: “It’s Conservatives, not Labour, that will help young people fulfil their ambition and turbocharge the economy as we leave the EU.”

The I, Page: 7 Daily Mail, Page: 10

Living in the shadow of a tax scandal

The FT reports on the anguish faced by contractors battling HMRC over loan-based remuneration schemes, which were targeted by George Osborne in 2016, and have left some facing massive tax bills.

Financial Times, Money, Page: 8-10

UK’s 50 highest taxpayers revealed

The Sunday Times has drawn up a ranking of the UK’s top taxpayers estimating the tax due on business profits, share sales, dividends, house purchases and personal income. Stephen Rubin – who owns a majority stake in JD Sports – and his family are top of the list paying an estimated £181.6m in tax for the 2017/18 financial year. Denise Coates, the Bet365 boss, with her brother John and father Peter, comes in second paying £156m, followed by Sir James Dyson and family paying £127.8m. According to the Sunday Times, the 50 entries paid nearly £2bn in UK tax last year. The paper said that, when calculating tax liability, it did not include tax paid overseas in its calculations. It added that just 28 of the 145 billionaires and 18 of the 855 millionaires on last year’s Sunday Times Rich List are featured in the tax list.

The Sunday Times, Page: 7 The Sunday Times, Magazine, Page: 23-31

Fears over Corbyn led Dyson to flee

The Sunday Times alleges that a Dyson insider believes Sir James’ decision to move the company’s HQ to Singapore was partly due to the growing threat of a Jeremy Corbyn-led Labour government. “A general election is not out of the question, nor a Corbyn victory, and James and Jeremy Corbyn have diametrically opposed views on business,” the source said. Elsewhere, the Observer’s Jamie Doward talks to tax expert Richard Murphy about how Dyson could benefit from developing intellectual property for its electric cars in Singapore rather than in Britain, but overall the tax efficiencies of the move are negligible. Murphy goes on to explain how difficult it would be for the UK to emulate Singapore’s tax policies post-Brexit because of the different way revenues are raised. However, he adds that “there is an increased risk that companies will leave for even lower-taxed locations, which we cannot emu late without abandoning the NHS, state pensions or state education.”

The Sunday Times, Business, Page: 1 The Observer, Page: 14

Investors sue HSBC’s private bank over Ingenious investments

Hundreds of high-profile investors in Ingenious Media are suing HSBC’s private bank claiming it knew cash borrowed from the bank by Ingenious to top up investments was not really being invested in film schemes. The schemes promised investors tax relief by putting their money into British film and video game productions, with losses written off against their tax bills, but HMRC deemed them illegal. The claimants say HSBC “dishonestly assisted” Ingenious.

The Sunday Times, Business, Page: 1

Time to stop taxing elderly workers, says Parsons

Veteran BBC Radio presenter Nicholas Parsons has said people over 85 who are still working should not have to pay tax on their pension income. In an interview for the Sunday Times Mr Parsons says: “I am not saying at age 65. But once you get to 85 or 90 they should say: ‘Well, you have been paying into the system for years. From now on, we won’t tax you.'”

The Sunday Times, Page: 7

Labour plan “excessive pay levy”

A Parliamentary debate on FTSE100 company pay ratios heard how Labour plans to introduce an “excessive pay levy” on those who earn £330,000 a year or more. The warning from shadow business minister Laura Pidcock came after a Mail on Sunday investigation revealed last weekend that top chief executives are being paid as much as 1,000 times more than the average wage of their employees.

The Mail on Sunday, Page: 100

CORPORATE NEWS

Barclays chiefs ‘laid misleading trail’

The trial of four senior Barclays executives has heard that the defendants allegedly laid a “misleading audit trail” when sealing a deal with Qatar during the financial crisis to avoid being “rumbled” and ending up in jail. The Serious Fraud Office alleges that four defendants, including John Varley, the bank’s chief executive at the time, secretly paid £322m to Qatar in return for its investment in two capital calls. The SFO says that “advisory services agreements”, or ASAs, struck with Qatar at the time were just a “smokescreen” to funnel extra money to the Gulf state.

The Times, Page: 49 The Daily Telegraph, Business, Page: 33 Financial Times, Page: 16

Patisserie Valerie report talks of fake invoices and ledgers

A report by PwC commissioned by the board of Patisserie Valerie has identified several finance staff and a supplier who were involved in the fraud that brought the company to its knees. Elsewhere, the Times’ Alistair Osborne says Luke Johnson has questions to answer over how he managed to miss the problems, which may have become apparent had he investigated unrealistic margins and suspicious sales figures.

Financial Times, Page: 1 The Times, Page: 51

Did Grant Thornton examine Patisserie Valerie’s accounting journals?

The Sunday Times picks up on a report from PwC into the accounting irregularities at Patisserie Valerie and notes how a source believes the café chain’s auditor at the time, Grant Thornton, may have failed to examine the company’s accounting journals – which show the names, dates and amounts of transactions for each shop. According to the Financial Times, the PwC review contains details of how the staff adjusted the ledgers to ensure turnover and margin remained constant. Meanwhile, Geoff Ho in the Sunday Express reveals that sources close to KPMG, the administrator for Patisserie Valerie, say creditors are unlikely to get back all of their money, even if the business is rescued. He notes that the Financial Reporting Council is investigating Grant Thornton over the issue and cites Phil Harris, portfolio manager at EdenTree Investment Management, who states: “A thorough investigation is required into how this listed, and recently floated company, could have passed a detailed audit process.”

The Sunday Times, Business, Page: 3 Sunday Express, Page: 53

PROPERTY NEWS

Councils’ property investments breaching Cipfa code

The Observer carries a feature looking at councils’ investment in retail property. The amount spent by English local authorities on investment properties increased from £76.4m in 2014-15 to £1.8bn in 2017-18. With concerns about the state of the property sector as Brexit approaches, Lord Oakeshott, chair of Olim Property, warned: “The whole thing is a mess. Councils are being loaned vast amounts of money by Government, which is being invested in property. It’s a hell of a gamble that these councils are taking, and this is not what councils should be doing”. The Chartered Institute of Public Finance and Accountancy (Cipfa) has warned councils not to expose public funds to “unnecessary or unquantified risk” when borrowing to invest in commercial property. “Where the scale of commercial investments including property are not proportionate to the resources of the authority, this is unlikely to be consistent with the requirements of ‘the Cipfa prudential code’,” it said.

The Observer, Page: 52

PENSIONS NEWS

Pension freedoms enjoyed by 1m

Over a million people have embraced pension freedoms since the 2015 reforms, accessing savings of over £23bn, according to new figures. Aviva said despite initial fears of a “dash for cash”, withdrawal payments have consistently been averaging less than £4,000. Elsewhere, Steven Cameron, pensions director at Aegon, said: “The freedoms have changed the way people think about retirement and are enabling the rise of a more flexible transition into retirement whereby people start accessing some retirement savings to support a reduced working pattern.”

The I, Page: 65 The Sun, Page: 11 The Scotsman, Page: 3 Yorkshire Post, Page: 5

Doctors unfairly hit by pension allowances, says BMA

The British Medical Association is urging the government to lift the annual pensions allowance for thousands of its members, arguing that medics are unfairly hit by cuts to tax relief.

Financial Times, Money, Page: 4

Pension firms face massive compensation claims

Thousands of complaints have been lodged with law firms and the Financial Ombudsman Service over self-invested personal pensions (Sipps), the Sunday Times reports. Pension firms are facing claims for compensation totalling hundreds of millions of pounds from savers who invested in high-risk schemes that went wrong. Law firms Hugh James and Wixted are jointly representing 176 claimants against one firm with claims totalling £8m-£9m while APJ Solicitors says it is dealing with over 1,400 complaints worth more than £50m against pension firms.

The Sunday Times, Business, Page: 13

Pension limits – the benefits of opting out or taking a hit

New analysis from Royal London suggests it is still worth paying into a pension even if savers are exceeding the limits and facing high tax charges for doing so. Annual and lifetime limits on tax-efficient retirement savings have been reduced in recent years and many savers exit or stop contributing to their scheme to avoid charges. However, opting out can sometimes mean members no longer qualify for any life insurance included in a scheme while dependants may be eligible to receive a pension if a saver dies while a member. Clare Moffat from Royal London said: “There is nothing inherently wrong in paying one of these charges. Be aware of the potential impact leaving a scheme might have on your long-term retirement planning.”

The Sunday Telegraph, Business, Page: 10 The Mail on Sunday, Page: 61

INTERNATIONAL NEWS

Juncker under fire over crime blind spot freeport

Jean-Claude Juncker is being urged to act on accusations that the Luxembourg freeport set up under his leadership of the country is a conduit for illicit funds, tax evasion or the proceeds of criminal activity. The facility acts as a holding pen for valuables but is exempt from Luxembourg’s usual tax and customs requirements. In a letter to Mr Juncker seen by the Telegraph, Dr Wolf Klinz, a German MEP, warned that Le Freeport Luxembourg represented a “blind spot” of the EU’s efforts to boost financial transparency and tackle crime. Dr Klinz, a member of the EU Special Committee on Financial Crimes, Tax Evasion and Tax Avoidance, also raised concerns about the “dubious and highly problematic reputational profiles of Le Freeport’s private shareholders”.

The Sunday Telegraph, Page: 1, 6

PERSONAL FINANCE NEWS

How the sandwich generation can beat financial struggle

The Telegraph examines how the “sandwich” generation – those in their 50s and 60s with elderly parents and children both needing financial support – might be able to alleviate some of the pressures. A recent study by the ONS showed that 1.3m people have a financial and care responsibility for both children and ageing parents and tax experts are now calling for more relief to help those struggling to realise the funds. The paper carries advice from experts on the most tax efficient ways to pass wealth down the generations and ensure grandparents are supported.

The Sunday Telegraph

SMEs NEWS

TSB could triple business with £120m award

TSB is aiming to triple its share of the small business banking market if it wins a £120m grant from Royal Bank of Scotland to promote competition. TSB already has 2% of the small business market, equating to about 100,000 customers, and hopes to add about 200,000.

The Times, Page: 52

MTD strains nerves of small firms

Peter Evans reports on the confusion around the Government’s Making Tax Digital programme in the Sunday Times. The policy has been beset by delays and complications and small businesses say it has coincided with a raft of other cost pressures. The ICAEW found in October that 40% of firms had no idea the change was coming while others criticise the timing – alongside high business rates, the apprenticeship levy, late payments and rises to the minimum wage, not to mention Brexit. Although some deadlines have been postponed, the requirement for companies to submit their VAT returns online (using government-approved software) from the start of April remain. Anita Monteith, of the ICAEW’s tax faculty, said the government had been heavy-handed in enforcing its new policy. “The problem is not so much the deadline as making it mandatory,” she added. “It should be something that businesses come to in time.”

The Sunday Times, Business, Page: 11

ECONOMY NEWS

Sterling up on hope no-deal will be avoided

The pound rose yesterday hitting a 13-month high against the euro as the City upped its bets that a no-deal Brexit would be avoided. However, the improved strength of sterling prevented the FTSE 100 from joining in a global stocks rally.

The Daily Telegraph, Page: 30 The Scotsman, Page: 36

UK growth eclipses eurozone

Official figures out this week are set to show the eurozone trailing behind Britain’s economy. City forecasters have pencilled in growth of 0.3% in the final quarter of 2018 for the UK, with the currency bloc’s economy growing by just 0.2%.

The Sunday Times

OTHER NEWS

Accountant stole £600k from singer

The accountant for X Factor winner James Arthur has been jailed for four years after swindling the singer out of £600,000. Mark Livermore, who worked at MGM Accountancy, stole the money to finance a gambling addiction. Livermore will now be banned by the Financial Reporting Council from future employment as an accountant, the Mail reports.

Daily Mail Evening Standard

UK firms ramp up no-deal preparations

The British Chambers of Commerce claims that UK companies are ramping up no-deal preparations with a handful even activating plans to move operations out of the country. Matt Griffith, director of policy at the BCC’s west of England branch, said: “Since the defeat for the prime minister’s deal, we have seen a sharp increase in companies taking actions to try and protect themselves from the worst effects of a no-deal Brexit. No deal has gone from being one of several possible scenarios to a firm date in the diary.”

The Observer, Page: 1, 7

Brexit costing £17bn a year, think tank asserts

Research from the Centre for European Reform estimates the UK economy is 2.3% smaller than it would have been had Britain voted to remain in the EU back in 2016. The think tank calculated that the reduced GDP was costing the UK’s public finances £17bn a year.

The Independent, Page: 1, 3
Contact Paul Southward if you have any queries.

Paul Southward


News Roundup Friday 25th January 2019


News Roundup Friday 25th January 2019

NEWS ROUNDUP

TAX NEWS

One in six people overpay tax

One in six people pays too much tax because of mistakes on forms sent to HMRC, a study by Which? has found. About 11.4m people are required to complete a tax return for the 2017-18 tax year, but Which? found 28% find them difficult, 16% made mistakes that resulted in overpayment and 25% had to get professional help.  Do not let yourself be one in six, contact Paul Southward today.

Daily Mirror, Page: 24

Brussels to sue UK over tax breaks for commodities traders

The European Commission is to sue the UK in Europe’s highest court, accusing it of creating a tax loophole for commodities traders that unfairly boosts the City of London.

Financial Times, Page: 1

Minister blasts Dyson

Business minister Claire Perry says there is a ‘future risk’ that Dyson will stop paying tax in the UK, following the company’s decision to relocate to Singapore. However, tax experts have said the move did not appear to be tax-driven, because Dyson has said it will still pay corporation tax on any UK-generated profits.

Daily Mail, Page: 22-23 The Daily Telegraph, Business, Page: 1 Financial Times, Page: 18

Polish PM attacks Ireland as tax haven

Leo Varadkar has been forced to defend Ireland’s stance on corporation tax after the Polish Prime Minister Mateusz Morawiecki said some nations were abusing “their taxation systems to the detriment of other countries”. Mr Morawiecki was speaking in support of the EU’s digital tax plan which Ireland has opposed claiming it breaches international treaty obligations. Mr Morawiecki said he was in favour of “eliminating all tax havens from Europe because this would bring a level playing field.” But Mr Varadkar hit back saying Ireland was “forever closing tax loopholes” like the Double Irish. He added that Ireland was opposed to the digital tax because it was based on turnover rather than profit. “The principle has to be that taxes are paid where they are created,” he said. The discussion on tax came amid clashes between European leaders on budget discipline.

Daily Express The Daily Telegraph, Business, Page: 5 Financial Times, Page: 7 City AM, Page: 5

Treasury fears online sales tax would breach EU state aid rules

The Treasury has ruled out an online sales tax to help high street shops because under the draft withdrawal agreement Britain has accepted “dynamic alignment” with Brussels on state-aid rules. The Times reports that Mel Stride, financial secretary to the Treasury, has written to Nicky Morgan, chairwoman of the Treasury select committee, to say there was a “high risk” that any such tax would breach the bloc’s state aid rules. Campaigners had urged the Government to introduce a sales tax to rebalance competition arguing online retailers had an advantage over traditional businesses due to the lower rates they need to pay.

The Times, Page: 2

EU takes UK to court over tax on commodities trading

The European Commission has referred the UK to the Court of Justice of the EU accusing it of failing to tax commodities traders in line with EU rules. A Commission spokesman said the UK had extended “the scope of a VAT derogation that applies a zero-rate to transactions carried out on certain commodity markets” since the derogation was notified to the Commission in 1977, “meaning that it is no longer limited to trading in the commodities as originally covered by the derogation.” The UK insists its approach is in line with EU rules.

Daily Express The Daily Telegraph, Business, Page: 7 The Times, Page: 45

Textile firms fined over pay

Clothing manufacturers have been forced to pay almost £90,000 to employees after failing to pay them the minimum wage, according to HMRC figures provided to the Environmental Audit Committee. Since 2012, HMRC has investigated 93 textile industry employers, and in 24 cases found arrears of £87,158 owed to staff. It said 14 investigations were ongoing. Mary Creagh, chair of the Committee, said payment of illegally low wages is “rife” in the UK’s textile industry and goes hand in hand with a “culture of fear and intimidation”.

Financial Times, Page: 2 Yorkshire Post, Page: 5

CORPORATE NEWS

Former Tesco FD cleared of accounting fraud

Tesco’s former UK finance director has said he was made a scapegoat for the retailer’s accounting scandal that wiped £1bn off the company’s value. Carl Rogberg was cleared yesterday of fraud and false accounting. It comes after a trial involving Tesco’s former UK boss Chris Bush, and John Scouler, a former commercial director collapsed last month after the judge at Southwark Crown Court ruled the evidence was too weak to put before the jury. Yesterday’s ruling ends the trial brought by the Serious Fraud Office over Tesco’s £250m profit black hole, which at the time, in 2014, caused the retailer’s market value to collapse by £2bn. It has also led legal experts to question Tesco’s decision to accept a deferred prosecution agreement (DPA) that allowed the retailer to avoid prosecution by paying a £129m fine to settle the case.

The Times, Page: 35-37 The Times The Times, Page: 36-37 The Daily Telegraph, Business, Page: 3 Financial Times, Page: 13 Financial Times, Page: 17 Daily Mail, Page: 75 The Guardian, Page: 37 The Independent, Page: 68 The Sun, Page: 47

Johnson unlikely to buy back Patisserie Valerie

Patisserie Holdings administrator KPMG has said it is confident of selling the Patisserie Valerie chain. However, former executive chairman Luke Johnson is unlikely to buy it back amid concerns about a potential backlash. Mr Johnson is said to have made at least £20m over the past 12 years from Patisserie Valerie, which plunged into administration on Tuesday with the loss of over 900 jobs. Meanwhile, veteran restaurateur David Scott, who sold his former business Druckers to Patisserie Valerie more than a decade ago, is said to be planning bid for most of the remaining 122 outlets.

The Daily Telegraph, Business, Page: 1 Financial Times, Page: 18 The Times, Page: 40 The Guardian, Page: 38

Patisserie Valerie pushing for rebate on overpaid tax

Patisserie Valerie is seeking a £16m rebate from the taxman claiming it paid corporation tax on profits that may not have existed. Meanwhile, the Times reports that HMRC raised concerns with parent company Patisserie Holdings that some of its invoices and cheques had been forged more than two years before the café chain revealed the alleged fraud that led to its collapse.

Financial Times, Page: 13 The Times, Page: 39 Daily Mail, Page: 80

REPORTING NEWS

Accounting slip at Metro Bank

Metro Bank has disclosed an accounting error that meant it did not have enough capital backing some of its commercial loans. The lender miscalculated the weighting for riskiness given to some of its commercial property and other specialist loans, meaning more money must be set aside to fund them.

The Daily Telegraph Financial Times, Page: 1 The Times, Page: 35, 38 The Guardian, Page: 39 The Sun, Page: 47 Daily Mail, Page: 76

Metro blunder prompts shake-up call

The ICAEW has called for an overhaul of the way lenders assess their loan books after an error that wiped more than £800m off the value of Metro Bank in one day. Metro’s shares fell by 39% on Wednesday when it disclosed it had mistakenly assigned risk weightings that were too low on some commercial property and buy-to -let loans. The ICAEW said the decisions that banks make about how much risk they should assign to loans should be subject to independent scrutiny by external auditors.

The Times, Page: 39 The Times, Page: 30

PENSIONS NEWS

200k parents could have pension affected by child benefit complexity

Figures provided to the Treasury Committee by HMRC show that of the 7.9m households in the UK receiving child benefit, around 200,000 could be missing out on entitlements that could boost their State pension.

The I Daily Mirror, Page: 8 Financial Times The Sun

ECONOMY NEWS

Scots business failures jump by fifth

The number of Scottish business failures in 2018 rose 21% year-on-year, from 780 to 945, according to analysis of the latest official figures from the Accountant in Bankruptcy (AiB). It marks the highest annual figure for corporate insolvencies since 2012 and is the fourth highest level ever recorded. Eileen Blackburn, head of restructuring and debt advisory at French Duncan, said: “That this is happening when interest rates are at historically low levels, when unemployment is at a record low and the economy is growing indicates something more fundamental is happening”.

The Scotsman, Page: 34 The Press and Journal, Page: 30

UK services exports to EU soar in the run-up to Brexit

Figures from the ONS reveal that in the first three quarters of 2018, UK services exports to the EU rose by 14% compared with the same period in 2016.

Financial Times

Household spend hits highest level since 2005

The amount households spent each week in 2018 climbed to £572.60, the highest level since 2005, according to the latest Family Spending Survey from the ONS. Households’ saving ratio fell to 3.9%, the lowest seen since records of that measure began in 1963. For all quarters in 2018, households were net borrowers. Separately, the latest Asda Income Tracker, produced with the Centre for Economics and Business Research, found that spending power was £11.37 a week higher compared with a year ago. The tracker charts the pay that households have left after taxes and basic living costs.

BBC News The Times, Page: 44

ECB warns eurozone at risk of further slowdown

The ECB has warned that a slowdown in the eurozone economy is showing signs of becoming long-lasting because of global trade tensions, Brexit and financial market volatility.

Financial Times The Times, Page: 45 The Daily Telegraph

OTHER NEWS

Utd beaten to top spot

Manchester United have been knocked off the top of the Football Money League and are now third behind Real Madrid and Barcelona. The findings, from Deloitte, reveal that the Premier League club generated €666m (£590m) in revenue last season, whereas Real and Barca brought in £665m and £611m respectively. A separate report by EY reveals Premier League clubs generated £3.3bn in tax revenue and contributed £7.6bn to the economy during the 2016-17 season.

The Sun, Page: 55 The I, Page: 52 Daily Star, Page: 17 City AM, Page: 19, 22 The Times, Page: 63

Accountants bored of dull definition

The ACCA has said accountants should not be dismissed as dull bean-counters, as it takes issue with the Oxford English Dictionary’s definition of the role. The organisation said it supports an effort by Gary Turner, the managing director of Xero, who claims that the word experts need to find a better definition of what being an accountant really means in 2019. The current definition lists an accountant as “a person whose job it is to keep or inspect financial accounts”. However, this “archaic” definition misses out the new role to advise companies on their accounts, says Turner.

City AM
OED can help alter perception of accounting

In a letter to City AM, Gary Turner, co-founder and managing director of Xero UK, says the Oxford English Dictionary (OED) should change its definition of the word “accountant”. He says that accountants today “don’t just crunch the numbers and observe financial operations. They advise business owners and fuel business objectives such as growth, improving efficiency, cost and productivity.” Mr Turner suggests the updated definition should read: “Accountant: a person whose job is to keep or inspect and advise on financial accounts”. He adds: “It’s time for accountants to be better represented in 2019, and the OED has the power to shake off the “archaic” perception of the industry and reflect how much the role has changed.”

City AM, Page: 18
Contact Paul Southward (not an accountant, but a tax and business adviser) if you have any queries.

Paul Southward


News Roundup Thursday 24th January 2019


News Roundup Thursday 24th January 2019

NEWS ROUNDUP

TAX NEWS

More footballers facing tax avoidance investigations

Increasing numbers of footballers are under investigation for tax avoidance by HMRC. The Revenue is now looking into the financial affairs of 173 players, 40 clubs and 38 agents, as it claws back £355m from the sport. The latest figures show an increase in the number of players and agents under investigation but fewer clubs. In October, HMRC was investigating 171 players, 44 clubs and 31 agents. The Financial Secretary to the Treasury, Mel Stride MP, said: “HMRC is clear that everyone must pay what they owe under the law – regardless of their wealth or status. The department’s work in the football industry is the latest demonstration of this ongoing effort and we look forward to continued co-operation with clubs and players throughout 2019.”

ITV News Daily Mail, Page: 72

HMRC apologises for late-payment errors

Tax officials have apologised for two mistakes over late-payment fines. Last weekend HMRC denied fining taxpayers for failing to submit their self-assessment returns online – even though the deadline is still almost two weeks away. But on Monday the taxman admitted that some people have been wrongly charged. It has promised to cancel the penalty charges and apologised for the error. Some 653 people who submitted their tax returns by the start of January were hit by the bogus late-payment penalty charges. They received letters from HMRC telling them they’d missed the deadline and so had to pay a penalty of £100, even though many had submitted returns almost a month ahead of the 31 January deadline.

BBC News The Times, Page: 1

HMRC’s digital agenda challenged

Sam Brodbeck, the Telegraph’s deputy personal finance editor, cautions against the government’s Making Tax Digital roll out, suggesting that “time and again” he has spotted “glaring errors” on HMRC guidance – notably for the notoriously complex stamp duty rules. This week, he adds, the Office of Tax Simplification even cautioned that an increased use of technology could cause taxpayers to “disengage from their responsibilities”.

The Daily Telegraph

CORPORATE NEWS

CEO pessimism grows

A PwC survey has revealed pessimism among chief executives has risen sharply in the past 12 months in light of rising protectionism and the deteriorating relationship between the US and China. The survey, marking the start of the World Economic Forum in Davos, showed a six-fold increase to 30% in the number of CEOs expecting global growth to slow during 2019. The percentage of UK business leaders expecting a global economic decline over the next 12 months has risen from 12% in 2018 to 34%. However, Britain’s CEOs showed little impact of being affected by Brexit uncertainty, with 61% of UK business leaders saying they expected to increase headcount in 2019. That was up from 54% last year and compared with 53% of CEOs globally. UK business executives were also optimistic about their organisation’s growth over the next 12 months, with 82% confident about their revenue prospects, in line with global responses.

The Guardian, Page: 27 The Times Financial Times, Page: 8 Daily Mail, Page: 62 The I, Page: 40 The Scotsman, Page: 35

Patisserie Valerie lenders could be wiped out

Lenders to Patisserie Valerie fear multimillion-pound loans will be almost completely wiped out by the potential collapse of the bakery chain. The Telegraph reports that HSBC and Barclays have no security over Patisserie Valerie’s assets, meaning that if is forced into insolvency, loans of almost £10m will rank no higher than suppliers and other creditors. As of yesterday, the chain was still locked in discussions with its lenders to extend a freeze on its debts which expired last week.

The Daily Telegraph, Business, Page: 1 The Times, Page; 36-37 The Independent, Page: 69 The I, Page: 43

Time for gender pay reporting to cover partners

In a letter to the FT, Deloitte’s Emma Codd calls on more firms to publish their mean and median “total earnings gap” – including the earnings of equity partners.

Financial Times, Page: 14

Patisserie Valerie enters administration

Patisserie Valerie has entered administration after the failure of rescue talks with banks. The café chain said it did not have enough money to meet its debts. Administrators from KPMG said 70 stores will close immediately, meaning a “significant number of redundancies”. KPMG’s administrators Blair Nimmo and David Costley-Wood said about 121 stores would continue to trade while a buyer is sought. In October, Patisserie Valerie uncovered “significant, and potentially fraudulent, accounting irregularities”. Last week, the company admitted its finances were in even worse shape than it had previously thought. It said forensic accountants had found “thousands of false entries into the company’s ledgers”. In a statement to the stock market yesterday, Patisserie Holdings said that as a “direct result of the significant fraud”, it had been unable to renew its bank facilities and “therefore regrettably, the business does not have sufficient funding to meet its liabilities”.

Financial Times, Page; 1 The Daily Telegraph, Business, Page: 1 The Times, Page: 2 The Times, Page: 35 Daily Mail, Page: 57 The Guardian, Page: 4 Sky News The Independent City AM, Page: 1, 3 Daily Express, Page: 47 Daily Mirror, Page: 38 The Scotsman, Page: 20 Yorkshire Post, Page: 6

FRC opens second investigation into KPMG’s Carillion audit

The Financial Reporting Council has opened a second investigation into how KPMG audited the books of collapsed construction company Carillion. The FRC said that KPMG “self-reported” additional material related to Carillion’s audit for year-end 2016. The audit for that year was one of 160 company audits in the FRC’s routine annual quality review. The watchdog said last year that it was investigating KPMG’s audits of Carillion for 2014-2017 and the conduct of two former finance directors, Richard Adam and Zafar Khan. Frank Field MP, chairman of the work and pensions committee, said that accusations of wrongdoing in the collapse of Carillion were “sadly no longer news” as he accused KPMG of “egregious wrongdoing at every stop on this gravy train.”

City AM, Page: 12 The Times, Page: 38 Daily Mail, Page: 58 The Sun, Page: 43 The I, Page: 38 The Scotsman, Page: 2 Yorkshire Post, Page: 5

SMEs NEWS

Fastest growing firms ‘hoovering up’ jobs from rivals

A report by the Enterprise Research Centre suggests Britain’s fastest-growing businesses could be contributing to job losses. A study of the performance of more than six million companies over a period of 17 years found that companies with the fastest employment growth tended to grow by “hoovering up” jobs from slower-growing businesses in the same region, in what the researchers called a “crowding-out competition effect”.

The Times

Small business lender secures £56m backing

Small business lender Marketinvoice has secured £56m in backing from investors in order to expand its platform. The firm raised £26m in equity from Barclays and Santander Innoventures, the venture capital division of the Spanish bank.

The Times

Hammond calls for tough disputes scheme

Chancellor Philip Hammond has called for a proposed redress scheme for small businesses to be toughened, saying the dispute service proposed by UK Finance must include a broad range of interests and not impose a compensation cap. In a letter to UK Finance chief executive Stephen Jones, Mr Hammond emphasised a need for a steering group put together to determine the details of the scheme to have “balanced representation” from banks and business representatives, saying it is “vital” that different perspectives are heard to ensure any schemes are “regarded as truly robust and independent.” Separately, shadow city minister Jonathan Reynolds writes in the Times that an independent tribunal would be a critical step towards creating a level playing field between small businesses and their banks.

Daily Mail The Times

INTERNATIONAL NEWS

Former banker convicted for selling tax data

A former UBS banker accused of selling information about wealthy tax evaders to German authorities has been convicted of economic espionage. The Swiss Federal Criminal Court sentenced the man to 40 months in prison on charges including money laundering, although he was acquitted of breaking banking secrecy laws. Prosecutors say that while working for UBS between 2002 and 2012, the banker illegally collected data about German account holders and sold the information for €1.15m.

Daily Mail

PROPERTY NEWS

Tax changes burst buy-to-let bubble

The Mail reports that tax changes and an uncertain market have seen tens of thousands abandon the buy-to-let industry, with the number of new landlords getting mortgages plummeting by 60% in the past decade. The introduction of an extra 3% stamp duty charge for anyone buying a property that was not their main home from April 2016 means that instead of paying £5,000 in tax on a £300,000 home, new landlords now have to pay £14,000. Separately, data analysis by Moneyfacts has found stamp duty is fuelling a boom in 10-year mortgages as families are choosing to stay put instead of taking the financial hit to move to bigger homes.

Daily Mail, Page: 33-34 The Daily Telegraph, Page: 6

MoJ has not assessed new probate costs

The Ministry of Justice (MoJ) has admitted that it has not carried out any assessments on the cost of administering probate for high value estates ahead of a change to the charging system. Lucy Frazer, the parliamentary under-secretary of state at the MoJ, and the MP in charge of pushing the proposals through Parliament, has admitted that the MoJ took no steps to work out how much it costs the courts to grant probate to estates valued at either £5,000, £50,000 or £2m.

The Daily Telegraph

ECONOMY NEWS

No-deal Brexit amongst biggest threats to growth

The IMF has warned that a no-deal Brexit and a sharper slowdown in China are the biggest risks to growth in the global economy in 2019. In a new report on the world economic outlook, the organisation also warns escalating trade tensions could undermine global economic growth. For the world economy, the IMF is now predicting growth of 3.5% in 2019. In October, it forecast 3.7%. The report predicts the UK’s GDP will grow by 1.5% this year, should it secure an agreement to leave the EU, and 1.6% in 2020.

Financial Times, Page: 8 The Times The Daily Telegraph BBC News Daily Mail, Page: 62 The Independent, Page: 66

Shrinkflation affects more than 200 products

Hundreds of products on supermarket shelves have been hit by shrinkflation, whereby a product shrinks in size but its price doesn’t. The ONS studied the price of 17,000 items between September 2015 and June 2017 and found 206 products in all categories had shrunk in size, while just 79 increased.

The Guardian The Daily Telegraph Financial Times

Employment highs could support rate rise

Employment rose to a record high (75.8%) in the three months to November, according to the ONS, which also revealed that wage growth had hit a 10-year peak – up 3.3% on last year to £527 per week. Samuel Tombs, chief economist at Pantheon Macroeconomics, said the rise in wages strengthens the case for an interest rate rise “even if the Brexit outlook remains uncertain”. Yael Selfin, chief economist at KPMG UK, cautioned: “The UK labour market could enter a perfect storm of declining worker availability and a tight domestic labour market.”

Financial Times, Page: 2 The Times, Page: 35 The Daily Telegraph, Business, Page: 1 The Guardian, Page: 29 Daily Mail, Page: 12

UK tops Europe for foreign direct investment

Analysis by Deloitte reveals the UK topped Europe for foreign direct investment (FDI) between 2015 and 2018. Around $140bn (£108bn) in capital was brought in across nearly 4,000 inward investment projects, more than second and third-placed Germany and France combined.

City AM, Page: 10

OTHER NEWS

Ronaldo agrees to €19m tax fine

Cristiano Ronaldo has agreed to a fine of almost £17m, and a suspended jail sentence, after being convicted of tax fraud in Spain. The Portugal international avoids prison as, under Spanish law, a first offender can serve anything less than a two-year sentence under probation.

The Daily Telegraph The Times, Page: 5 The Independent, Page: 85 Daily Mail, Page: 4 The Guardian, Page: 43 City AM, Page: 13

Gen Z fretting over finances

Generation Z are far more concerned about their finances this year compared to 2018, according to a study by NatWest. The bank’s research shows nearly half of 18-24 year olds expect tough financial times ahead with 44% saying the rising costs of essentials such as food and travel is the biggest financial concern.

Daily Mail
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Paul Southward


News Roundup Wednesday 23rd January 2019


News Roundup Wednesday 23rd January 2019

NEWS ROUNDUP

TAX NEWS

The taxman is ready for a no-deal Brexit

HMRC’s Jim Harra writes to the FT to state that the Revenue’s preparations for Brexit will not impact its ability to deliver the Making Tax Digital for VAT system in April.

Financial Times, Page: 10

SMEs NEWS

Access to finance a concern for small firms

The Federation of Small Businesses has warned that sluggish economic growth, weak consumer demand and higher interest rates on loans are damaging confidence among Britain’s small companies. In the group’s latest barometer of sentiment among small employers, six in ten companies said that the domestic economy was a significant barrier to growth, while more than one in three said that they were struggling to find skilled staff. The FSB’s survey of 1,064 small businesses suggests that confidence among small employers is at its lowest level since the wake of the financial crash in 2011. Access to finance remains a key concern. Three quarters of successful applicants for bank loans said that they had been offered a borrowing rate of 5% or more, a record for the survey, while the proportion of small companies applying for external finance in the first place remains low, at around one in eight. Mike Cherry, national chairman of the FSB, sa id: “With Brexit taking up all of the government’s bandwidth, there are a huge number of domestic business issues that are not being addressed. They include the longstanding barriers small firms face when trying to access new finance and the sky-high borrowing rates they’re often offered if an application is successful.”

The Times, Page: 45

CORPORATE NEWS

Patisserie Valerie on the brink

Patisserie Valerie could go bust as soon as today after a deal with its banks expired last week. The company’s biggest shareholder and chairman, Luke Johnson, is in talks to extend its cash lifeline from HSBC and Barclays. Otherwise there is a danger it could crash into administration, with KPMG having been appointed to review “all options” for the company’s future. The company managed to avoid administration at the end of last year after Johnson plugged it with £20m of his own money and opened a £15.7m share placing to large institutional investors.

BBC News The Daily Telegraph, Business, Page: 1 The Times, Page: 40 Daily Mail, Page: 66 The Guardian, Page: 11

Mike Ashley in talks to buy HMV

Sports Direct founder Mike Ashley has placed a bid to buy HMV. The music chain collapsed last month, its second administration in six years, risking 2,200 jobs at 125 stores. Administrator KPMG declined to comment on the reports but is expected to decide on a preferred bidder by the end of this week.

BBC News The Daily Telegraph The Guardian, Page: 4 Daily Mirror, Page: 9 City AM, Page: 1 The Times, Page: 38-39

ECONOMY NEWS

Tech sector growth slows

Business growth in the UK technology sector fell to its weakest level in three years at the end of 2018, according to a survey conducted by KPMG. The firm’s latest UK Tech Monitor report found that business activity growth for technology businesses slowed in the final three months of last year – its slowest rate of growth since the end of 2015. The report also revealed that operating expenses continue to rise sharply at UK technology businesses, although expenses did not rise as highly as the increase seen in 2017. A separate study by UHY Hacker Young has found UK businesses filed 11% of all global blockchain patents in 2017, ranking the country fourth in the world.

The Daily Telegraph, Business, Page: 4 The Scotsman, Page: 37

Dividends soar

Investors in UK companies received almost £100bn in payouts last year, the highest level in almost a decade. Dividends rose by 5.1% to £99.8bn in 2018, according to Link Asset Services.

Daily Mail, Page: 66

OTHER NEWS

World’s wealthiest grow richer

The fortunes of the world’s billionaires increased by £2bn a day last year, while 3.4bn people were forced to survive on less than £4.27 a day each. Oxfam’s Public Good or Private Wealth? study found only 26 billionaires were worth the same amount as the poorer half of the world last year. In 2017 it took 43 billionaires to match the poorer half. While the fortunes of the super-rich rose by 12% in 12 months, equivalent to £2.5bn a day, the wealth of the 3.8bn people in the poorer half fell by 11%.

The Times, Page: 39 Daily Mail, Page: 30 The Sun, Page: 12 The Guardian, Page: 9 Daily Mirror, Page: 2 The Independent, Page: 5 Daily Express, Page: 6

Two million workers have itch to quit

Research by Caba, the charity for the wellbeing of chartered accountants, has found that more than two million Britons are so unhappy at work that they think about quitting their job every day. Young workers are most tempted to walk out, with 12% of those aged 18 to 24 considering their future.

The Sun, Page: 8

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Paul Southward


News Roundup Tuesday 22nd January 2019


News Roundup Tuesday 22nd January 2019

NEWS ROUNDUP

TAX NEWS

HMRC sends late tax return fines before deadline

Blick Rothenberg has revealed that HMRC has sent some self-assessment taxpayers letters accusing them of not filing their returns on time and imposing a £100 penalty, despite a deadline of January 31. The firm’s Robert Pullen said HMRC attributed the matter to a system error affecting tax returns not yet submitted online. He added: “In all cases we are aware of, the penalties have been cancelled when requested without challenge but many taxpayers may be unaware of the timing error.” David Redfern, managing director of tax refund specialist DSR Tax Claims, said: “It is unclear how many taxpayers have been affected by this error, or whether HMRC intend to contact affected taxpayers to inform them that their tax bill is incorrect.” HMRC commented: “Nobody will be charged a penalty or additional interest due to this problem.”

The Times, Page: 2

Curse causes tax return delay

HMRC has revealed some of the stranger reasons people have given for why their self-assessment tax return was filed late. One taxpayer claimed they were delayed by a witch’s curse put on them by their mother-in-law, while another suggested a broken boiler left them too cold to type. One person said they were unable to submit paperwork on time as they had been busier than normal due to issues with their maids, with another saying they were hampered by being too short to reach a post box. The Revenue also detailed some of the more unique expense claims filed, including one for a music subscription so the taxpayer could listen while they work. HMRC’s Angela MacDonald said: “Help will always be provided for those who have a genuine excuse for not submitting their return on time but it’s unfair to the majority of honest taxpayers when others make bogus claims.” Meanwhile, Anne Ashworth in the Times looks at the compl exity of tax rules, saying it has increased “despite pledges that simplification was under way.”

The Daily Telegraph, Page: 2 Financial Times, Money, Page: 2 The Times, Page: 60 Daily Mail, Page: 40 Daily Star, Page: 2 The I, Page: 25 The Sun, Page: 38 Daily Mirror

Investors miss out on VCT tax benefits

The Times says that while investing in start-up businesses is growing in popularity, many investors are missing out on tax breaks available to those investing through Venture Capital Trusts (VCT), noting that those holding a VCT for five years can claim 30% tax relief and any capital gains and income are tax-free. HMRC figures show that 15,120 investors claimed VCT income tax relief in 2015-16, with 41% of claims for investments of £10,000 or less.

The Times, Page: 61

Britain’s richest man: Tax driving a billionaire exodus

Gopichand Hinduja, Britain’s richest man, has warned that the country’s wealthiest business people are leaving for other financial centres due to the UK’s tax policies. He said there “used to be a lot of ease of doing business” in the UK, but: “Now, with changes in tax – doms, non-doms – they have made so many complications that people don’t even know what returns they have to file.” He added that a number of billionaires he knows “have left London and become residents either in Dubai or Singapore or Lebanon.” Mr Hinduja, who told the Sunday Telegraph that his family, which runs the Hinduja Group of more than 50 international companies, has no plans to leave Britain, warned that changes in the personal and corporate tax regime, coupled with Brexit, have created uncertainty. He added: “Nowadays, for global business houses to operate from London, it’s difficult.” On what 2019 may hold, Mr Hinduja told the paper it “will be a very bumpy year economically but there is not going to be a recession.”

The Sunday Telegraph, Business and Money, Page: 1

Share slides can see IHT reclaimed

The Sunday Times’ Holly Black says families may be able to reclaim inheritance tax (IHT) paid on estates if the stock market performs badly, with overpayments potentially occurring if share prices dip before the inheritor has taken ownership. This occurs as IHT is calculated on the value of shares on the day the owner dies but the inheritor does no receive them immediately due to the time it takes for the estate to complete probate. Research by insurer NFU Mutual shows that the number of claims for IHT refunds jumps up in years when the FTSE 100 drops. It is also noted that executors can reclaim inheritance tax if the value of a house has fallen.

The Sunday Times, Business and Money, Page: 13

Taxing times under Corbyn?

The Mail on Sunday’s Jeff Prestridge considers the implications if Jeremy Corbyn’s Labour took power, saying it could deliver a “tax-raising, wealth-soaking government”. He advises that existing tax breaks should be taken advantage of as “generous allowances are unlikely to survive” under Mr Corbyn and John McDonnell. He also expects inheritance tax to become “more draconian” under Labour. Elsewhere, Tommy Stubbington and Benedict George in the Sunday Times say the super-rich are preparing to leave Britain if Jeremy Corbyn gets into power over fears about the tax regime his party may introduce. Douglas McWilliams, deputy chairman of the Centre for Economics and Business Research, comments: “You have to be very careful about scaring off too many of the biggest taxpayers.”

The Mail on Sunday, Page: 63 The Sunday Times, Business and Money, Page: 5

CORPORATE NEWS

Banks probed over Patisserie Holdings

The Times reports that the Financial Conduct Authority is investigating HSBC and Barclays over potential governance failings in their monitoring of current accounts and overdraft facilities for Patisserie Holdings. The paper says a report from PwC shows that funds were moved between two current accounts via cheques which would boost the bank balance of the Patisserie account temporarily at the end of the financial year before bouncing. Patisserie Holdings this week said potential fraud linked to accounting irregularities uncovered in October was more extensive than had been thought and that it has hired KPMG to carry out a “review of all options available”. Meanwhile, Patisserie Valerie has been seeking to secure a lifeline from its banks, with a standstill on its banking facilities due to expire last night.

The Times, Page: 49 The Guardian, Page: 33 Financial Times, Page: 17

AAT urges ministers to tackle pay offenders

The Association of Accounting Technicians has urged ministers to stop chasing businesses that inadvertently breach pay rules and concentrate instead on firms deliberately avoiding paying staff the national minimum wage. Phil Hall, the association’s head of public affairs and public policy, has written to Business Secretary Greg Clark saying that “national minimum wage legislation was rightly introduced to eradicate the worst cases of exploitation, but increasingly these technical breaches involve no form of exploitation, yet are being vigorously pursued by HMRC.”

The Times, Page: 53

Green in Arcadia review

Sir Philip Green has launched a review of his Arcadia retail empire, with it reported that advisers from Deloitte have been instructed to explore a plan involving store closures that could potentially see a CVA.

The Daily Telegraph, Page: 35

Patisserie boss’ loan outranks investors

The Sunday Telegraph reports that a £10m rescue loan from boss Luke Johnson will “outrank” Patisserie Valerie shareholders if the chain collapses into administration. The loan from Mr Johnson, made to parent company Patisserie Holdings, came alongside a £15m injection from ordinary shareholders when a £40m accounting black hole was identified in October. The firm, which has hired KPMG to explore “all options”, including an administration, this week reported that the accounting scandal was “significantly worse than first thought”. Chris Boxall, of shareholder Fundamental Asset Management, believes Patisserie Holdings is “now almost certain to go into administration.” The Sunday Times adds that Patisserie Valerie could go bust tomorrow if emergency talks between Mr Johnson and its banks fail.

The Sunday Telegraph, Business and Money, Page: 1 The Sunday Times, Business and Money, Page: 1

Failed firm sued

Failed household power supplier Economy Energy is being sued by three companies, including the National Grid, which says it is owed £12m for 300,000 smart meters. Following the firm’s collapse, administrators Grant Thornton say they are working with Ofgem and Ovo, who took on Economy’s 235,000 customers, to ensure any impact on customers is minimised.

The Mail on Sunday, Page: 27

PROPERTY NEWS

First-timers overtake movers

First-time buyers are dominating Britain’s housing market, as the level of current homeowners moving house fell the most in seven years, according to Lloyds Bank. It found that the number of homemovers fell by 4% last year from 2017, while the number of first-time buyers increased by 3%. It is the first year since 1995 that people buying their first home account for more of the market than homemovers, at 51% and 49% respectively. The cost of moving home is putting pressure on homemovers, said Andrew Mason of Lloyds Bank, with an average deposit now at just below £100,000, while stamp duty cuts and the Help to Buy scheme are helping out new buyers.

The Daily Telegraph

RICS instruction could hit retail sites

The Royal Institution for Chartered Surveyors has advised valuers to be “aware of the potential for significant changes in value” in retail properties, meaning valuations of high street shops and shopping centres could dip. The Sunday Times says the instruction could spur steeper declines in asset values for retail landlords. Reflecting on the climate for brick-and-mortar retailers, the paper notes that more than 20 struggling chains have instructed Deloitte to assess whether they are eligible for a CVA in the past two months.

The Sunday Times, Business and Money, Page: 1

INTERNATIONAL NEWS

Spain takes another step towards ‘Google tax’

The Spanish government has introduced a bill creating new taxes on digital services and financial transactions. The levies, which require parliamentary approval, are expected to bring in €2.05bn annually.

Financial Times

PENSIONS NEWS

Top civil servants have £907k pension pots

Analysis by the TaxPayers’ Alliance (TPA) shows that the most senior Government civil servants have an average pension pot of £907,273, a figure almost three time times the average private sector equivalent. Sir Simon McDonald, head of the Foreign and Commonwealth Office, has the largest pot among the 22 leaders of Government departments, at £1,858,000. John O’Connell, the chief executive of the TPA, said: “With the enormous liabilities for public sector pensions kept off the official debt figures, they must be reformed to make them more sustainable in the long-term, otherwise future generations will be footing the bill.”

The Sunday Telegraph, Page: 8

ECONOMY NEWS

December decline for goods sold

Figures from the Office for National Statistics show that consumers pulled back on spending in December, with Black Friday deals in November seeing some shoppers bring forward their Christmas spending. The quantity of goods bought last month fell by 0.9% compared with November, with all sectors except food and petrol declining. Figures for the three months to December showed that the quantity of goods bought dropped by 0.2%. Over the whole year, sales grew by 2.7% in 2018 – exceeding the 2% growth recorded over 2017. Howard Archer, chief economic adviser at the EY Item Club, said that the drop in December “pointed to Black Friday-related promotions primarily bringing retail purchases forward to November from December rather than lifting sales overall.” Ian Geddes of Deloitte, considering sales around the festive period, said December’s figures “clearly show some of the effects of heavy discounti ng from retailers.”

The Guardian, Page: 35 The Times, Page: 52

Profit warnings hit 17% of firms

A report from EY shows that 225 of companies on the London Stock Exchange and the AIM issued a total of 287 profit warnings among them last year. The total, which equals 16.8% of listed firms, is the second highest since 2009, when 232 firms issued a combined 281 profit alerts, with 2015 seeing 240 firms put out a total of 313 warnings. The analysis shows that of those issuing profit warnings in Q4 2018, 74% were doing so for the first time in 12 months – compared to 52% in Q1 2018. EY also found that when firms issued warnings during 2018’s fourth quarter, their shares fell by a record average of 22.6%. EY restructuring head Alan Hudson commented: “Investors, like many businesses, are positioning for the worst. Recent events have created further political and economic uncertainty and there is no let-up in the pace of structural change.”

The Observer, Page: 52 The Sunday Times, Business and Money, Page: 1 The Sunday Telegraph, Business and Money, Page: 1 Sunday Express, Page: 55 The Mail on Sunday, Page: 98

OTHER NEWS

Footballers face penalties

Footballers Cristiano Ronaldo and Xabi Alonso will both face trial in Madrid’s Provincial Court on Tuesday, with the former Real Madrid players accused of fiscal fraud. Ronaldo has already agreed a deal with Spanish authorities that will see him pay £16.9m and accept a two-year prison sentence over tax fraud – which will be served on probation. Prosecutors are calling for a five-year prison sentence and a £3.5m fine for Alonso.

Daily Mirror

Burke settles £565k tax bill

Singer Alexandra Burke has settled a £565,000 tax bill, with liquidators settling an “agreed liability” with HMRC over income tax and NI at her company Miss Contagious Limited.

The Sun, Page: 61

MoJ did not assess probate costs before fee increase

The Government took no steps to assess the cost of administering probate applications for high-value estates as it proposed increasing the cost of applying for probate by 3,770%, it has been revealed. MP Laurence Robertson asked what recent assessment of costs had been made, prompting Lucy Frazer, parliamentary under-secretary of state at the Ministry of Justice, to reveal: “While current probate fees are determined based on an assessment of unit costing at a service level, the Ministry of Justice has not made any assessment specifically on the costs to HM Courts and Tribunals Service of administering an application for probate.”

The Sunday Telegraph, Business and Money, Page: 10

Thinktank: Axe the DWP

Thinktank Demos has called on ministers to consider abolishing the Department for Work and Pensions. Its report suggests the DWP has struggled to help ill and disabled people out of poverty and calls for its responsibilities to be divided across other bodies, including HMRC taking on benefits and pensions. A DWP spokesperson described the report as “completely misguided.”

The Observer, Page: 20

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Paul Southward