Category Archives: News Roundup

NEWS FOR THE WEEK ENDING FRIDAY 24th JANUARY 2020


NEWS FOR THE WEEK ENDING FRIDAY 24th JANUARY 2020

NEWS ROUNDUP

TAX NEWS FOR THE WEEK ENDING FRIDAY 24th JANUARY 2020

THURSDAY

Publicis boss weighs into digital tax row

Maurice Levy, chairman of the French media giant Publicis, has hit out at multinational digital companies saying they shouldn’t benefit from infrastructure and consumers in countries without paying tax there. Levy told CNBC at the World Economic Forum in Davos that firms such as Google, Amazon and Facebook need to be taxed fairly in order to tackle the “unfair advantage” they have. His comments come as US Treasury Secretary Steve Mnuchin warned of tariffs on car exports from the EU if France and the UK went ahead with unilateral digital services taxes. The OECD advised the UK to “hold fire” on its proposed levy warning that it could create a “cacophony and a mess” and that a global solution needed to be found. Sajid Javid, the Chancellor, has insisted the UK will press ahead with its plans, putting Boris Johnson’s government on a collision course with the US.

City AM, Page: 1 The Times, Page: 1, 2 The Daily Telegraph, Business, Page: 1 Financial Times, Page: 1 The Guardian, Page: 14 Daily Mail, Page: 8 The Sun, Page: 18

Philanthropy no substitute for taxes, say wealthy celebs

More than 120 wealthy celebrities and business people have written an open letter calling for the world’s rich to pay more taxes to ensure societies were provided with adequate funding. Signatories included Richard Curtis, the screenwriter; Simon Pegg, the actor; Abigail Disney, the film-maker; Julian Richer, of retailer Richer Sounds; Richard Reed, co-founder of Innocent Drinks; and Paul Polman, former chief executive of Unilever. In their letter they say: “There are two kinds of wealthy people: those who prefer taxes and those who prefer pitchforks. We prefer taxes. And we believe that, upon reflection, you will as well.” They go on to describe philanthropy as “an inadequate substitute for government investment” and claim tax avoidance had reached “epidemic proportions”. Simon Pegg explains his position in a piece for the Times.

The Times, Page: 8 The Times, Page: 28 The Daily Telegraph, Business, Page: 4

Carbon taxes a hot topic at Davos

Davos saw proposals for a series of new carbon-related taxes yesterday. Prince Charles suggested increased subsidies for green industries and more punitive taxes on pollution; the European Commission president, Ursula von der Leyen, warned China and other large fossil fuel producers they could face a CO2 tax on imports. Back in the UK, the Government’s climate change advisers have recommended increased taxes on air travel and incentives for farmers to plant trees.

The Times, Page: 8 Financial Times, Page: 4 The Daily Telegraph, Business, Page: 4 The Daily Telegraph, Business, Page: 1 The Times, Page: 2 Daily Mail, Page: 15

Johnson hopes to cut taxes for poorest

Boris Johnson last night repeated his desire to cut taxes for lower-income households. During a “People’s PMQs” session broadcast from Downing Street on Facebook, the PM said his government had already announced a cut in National Insurance and was lifting the Living Wage by the biggest ever amount. He added: “I believe strongly in helping people on low incomes, making sure they are properly paid. We want to move to a high-wage, high-skill economy uniting and levelling up across the whole of the UK.”

Daily Express, Page: 1, 8

FRIDAY

Off-Payroll workers in the private sector – Do you qualify for small company exemption?

Here is a quick guide to the rules for qualifying as a small company: –

Off-Payroll Small Company

US and France agree deal on digital tax

The US yesterday dropped its insistence that any international digital taxation agreement should be optional, bringing to an end a tussle between the US and France and paving the way for a global deal in 2020. The secretary-general of the OECD, Angel Gurría, said the negotiating process was back “on track” and he hoped countries would make progress in the next phase of negotiations in Paris next week. But Paris insists digital companies in France will pay their due taxes in 2020 despite allowing more time for an international solution. An FT editorial contends that the UK should join France and implement its own digital tax but suspend the collection of revenue while a deal with the OECD is thrashed out. Elsewhere, the Telegraph’s Jeremy Warner rails at the design of the digital services tax, arguing that shifting the basis for the tax from profit to revenues fails the key tests a new tax should pass: that it be “fair, equitable, simple, transparent and economically efficient.”

Financial Times, Page: 4 Financial Times, Page: 10 The Times, Page: 40 The Daily Telegraph, Page: 17 The Guardian, Page: 14-15, 36

HMRC spearheads worldwide tax fraud probe

HMRC has helped spearhead a global day of action against the suspected tax evasion and money laundering of more than £200m in the UK alone. The action occurred as part of a series of investigations with allies into a Central American financial institution, whose products and services are believed to be facilitating tax evasion and money laundering for customers across the globe. It is believed that through this institution, a number of clients are using a sophisticated system to conceal and transfer wealth anonymously, to evade their tax obligations and launder the proceeds of crime. This is the first major operational activity for the Joint Chiefs of Global Tax Enforcement (J5), which was established to tackle international tax crime and money laundering.

Press Release

Millionaires accused of hypocrisy after pleas for higher tax

Former Unilever boss Paul Polman, Innocent Smoothies co-founder Richard Reed and US real estate developer Jeff Gural all signed a letter calling for higher taxes on millionaires and billionaires yesterday. But they have been accused of hypocrisy by campaigners who say they previously sought specific tax breaks for their businesses. The letter was also signed by actor Simon Pegg, director Richard Curtis, heiress Abigail Disney and Julian Richer, founder of UK record chain Richer Sounds. The plea elicited this response from Matthew Lesh, head of research at the Adam Smith Institute: “We’ve all had enough of millionaires lecturing the rest of us about not paying enough tax. If these hypocrites really want to pay more, the Treasury will happily take their spare dosh.”

The Daily Telegraph, Business, Page: 1 The Times, Page: 28

Welsh minister criticises UK government over NHS pension measure

Vaughan Gething, the health minister for Wales, has said the government’s decision to cover the pension tax bills of doctors in England had left the Welsh executive with “no option” but to offer the same.

Financial Times, Page: 3

CORPORATE NEWS FOR THE WEEK ENDING FRIDAY 24th JANUARY 2020

THURSDAY

Ted Baker warns of £58m writedown on inventory error

Ted Baker shares fell about 10% yesterday after the retailer revealed that an independent review by Deloitte found it had overstated its stock by £58m – more than double previous estimates. Ted Baker now expects to report full-year profits as low as £5m for 2019, down 90% on the year before. No explanation for the stock mis-valuation was given. City AM notes that Ted Baker’s auditor, KPMG, had previously concluded the misstatements were too small to affect the accounts. The Financial Reporting Council fined KPMG £2m in 2018 for misconduct relating to its work for Ted Baker in 2013 and 2014. City AM goes on to list other recent accounting blunders at Goals Soccer Centres, M&C Saatchi, Superdry, Patisserie Valerie, Metro Bank and RSM. The Mail’s Alex Brummer says this latest accounting blunder means the “case for the Government getting on with the audit reforms proposed by Sir Donald Brydon and Sir John Kingman is overwhelming.”

Financial Times, Page: 17 The Guardian, Page: 36 Daily Mail, Page: 78, 79 The Times, Page: 45 The Daily Telegraph, Business, Page: 1 City AM, Page: 8 The Independent, Page: 56 Daily Express, Page: 45 The Sun, Page: 45 Daily Mirror, Page: 45 The I, Page: 43 Yorkshire Post, Business, Page: 8

Sage reports strong revenue growth

Sage reported revenue growth of 6.7% in the three months ending 31 December triggering a near 5% rise in its shares yesterday. “We have sustained last year’s growth momentum into the first quarter of the 2020 financial year, as we continue to focus on driving recurring revenue through the transition to cloud-based subscription services,” said chief financial officer Jonathan Howell.

City AM The Daily Telegraph, Business, Page: 7

FRIDAY

Sector ‘overcapacity’ takes Handmade Burger Co. into administration

Casual dining chain Handmade Burger Co. has fallen into administration, taking over 280 jobs with it. Following falling sales at the burger chain, all 18 restaurants have closed. Leonard Curtis was appointed as administrator of The Burger Chain Limited on Thursday morning, after unsuccessful attempts to secure a sale of the business. Joint administrator David Griffiths comments: “The casual dining market in the UK has experienced significant challenges over the last four years, largely as a result of overcapacity in the sector, which has resulted in a significant number of insolvencies.

The Times, Page: 43 The Daily Telegraph, Business, Page: 7 City AM The Sun, Page: 49 The Scotsman, Page: 33

Jingye proposes 500 job cuts at British Steel

Up to 500 jobs will go at British Steel after the Chinese firm acquiring the business made an agreement with unions. Jingye’s proposals will now be sent to British Steel staff for final sign-off. EY is managing the sale alongside the official receiver.

The Daily Telegraph, Business, Page: 3 The Guardian, Page: 37

Interiors group calls in administrators

Glasgow-headquartered interior design group Houseology is understood to have called in restructuring experts at Leonard Curtis, with 23 staff being made redundant with immediate effect.

The Scotsman, Page: 32

SMEs NEWS FOR THE WEEK ENDING FRIDAY 24th JANUARY 2020

FRIDAY

RBS sets aside £1bn for female entrepreneurs

Alison Rose is today launching a £1bn fund to support women entrepreneurs. The Royal Bank of Scotland CEO has set a target for the bank to help create 50,000 businesses in the next three years. Before she got the top job at RBS, Ms Rose conducted a government-backed review into funding for female entrepreneurs finding less than 1% of all venture capital funding goes to female business owners. “It doesn’t matter what gender an entrepreneur is,” she said. “But if there are barriers in the way, we should do something about it.”

Daily Mail, Page: 75

EMPLOYMENT NEWS FOR THE WEEK ENDING FRIDAY 24th JANUARY 2020

THURSDAY

Mental health support pays off, says Deloitte

Deloitte has urged firms to intervene earlier to help employees with mental health problems. A survey by the firm suggests the total cost to UK businesses in terms of lost productivity and staff turnover is as much as £45bn annually, a rise of 16% since 2016. Deloitte added that firms get £5 back in financial benefit for every £1 they spend helping employees with mental health problems. Vice-chairwoman Rebecca George said: “As our ways of working evolve, so do expectations of employers about how we should support our people. This analysis shows very clearly that it pays for employers to provide mental health support at work and that early intervention is vital, for those experiencing poor mental health and employers alike.”

The Press and Journal, Page: 31

FRIDAY

Offer from business to develop immigration plan rejected

Attempts by business lobby groups to influence the design of the UK’s new immigration system have been rejected by Boris Johnson. The CBI, British Chambers of Commerce, the Federation of Small Businesses and Make UK – and about 30 trade associations offered to help the Government to create a new system. They specifically called for a two-year “temporary visa route” that would allow low-skilled migrants to continue to enter the country after December 31st. But a senior government source said: “Our new immigration system will be open to top talent from across the world, but business lobby groups should stop lobbying for unlimited labour from the EU and instead focus on investing and levelling up the existing workforce.”

The Times, Page: 15 The Daily Telegraph, Page: 12 The I, Page: 13

PENSIONS NEWS FOR THE WEEK ENDING FRIDAY 24th JANUARY 2020

THURSDAY

Savers warned about drawing on pensions early

A record 7,683 savers dipped into their pension as soon as they could in the second quarter of 2019 – up 10% on last year. The total number of 55-year-olds who decided to draw down on their pension for a regular income increased to 29,700 in the 12 months to the end of June 2019, up nearly 3,000 on the same period the year before. Campaigners are warning that savers risk running out of money in later life by making injudicious use of the “pension freedom” rules. They also trigger a cut in the maximum annual contribution that can be made with tax breaks, which falls 90% from £40,000 to £4,000.

The Daily Telegraph

FRIDAY

Bailey fears fall in asset values

Financial Conduct Authority chief executive Andrew Bailey has warned that Britons have become far more exposed to a fall in asset prices, partly because of changes to pension rules. Speaking on an internal FCA podcast, the incoming Bank of England governor said that increased exposure to asset values had been accompanied by declining understanding of the fallout from a decline in prices, saying that the issue was “one of the things that worries me most”. Equity markets have been on a bull run stretching back to 2009 while average UK house prices are near record highs, and Mr Bailey said many people were planning their retirement income based on assumptions on asset values that may prove to be overly optimistic.

The Times FT Adviser

Hargreaves reports measured approach to pension withdrawals

Customer data compiled by Hargreaves Lansdown has found that the majority of people investing their pension to live off it in retirement are taking a measured approach to withdrawals. About 45% have simply opted to take all or some of their 25% tax free cash – as a result they are not falling foul of a tax rule limiting people making additional withdrawals to paying in just £4,000 a year. Of those who do start drawing an income, just two out of five start immediately. Among those who wait, 40% put it off for at least half a year.

Daily Mail

ECONOMY NEWS FOR THE WEEK ENDING FRIDAY 24th JANUARY 2020

THURSDAY

UK borrowing falls

UK government borrowing in December was less than expected, at £4.8bn, and down £0.2bn compared to the same month a year earlier, according to the latest figures from the Office for National Statistics (ONS). As chancellor Sajid Javid prepares to boost spending in his March Budget, for the financial year so far – March to December – UK government borrowing stood 8% higher than a year earlier at £54.6bn. Overall public debt was £1.82tn at the end of 2019, an increase of £35.5bn on December 2018, while corporate tax receipts dipped 3.4% year on year, the biggest drop since 2012/13. PwC chief economist John Hawksworth said: “If current trends continue, the Chancellor should have some room for manoeuvre in his Budget in March, particularly in terms of increasing planned infrastructure spending.”

City AM, Page: 2 Daily Mail, Page: 81 The Times, Page: 40 The Daily Telegraph

UK manufacturers upbeat amid poor figures, CBI says

New orders among UK manufacturers fell at their fastest pace since the financial crisis in the three months to January, according to the Confederation of British Industry’s (CBI) latest survey. Its confidence gauge however, the difference between businesses reporting higher rather than lower optimism, recorded its biggest swing since the survey began in 1958 – taking confidence to its highest level for almost six years. “It looks promising,” said Howard Archer, chief economist at the EY Item Club. “This is all good news for the Chancellor. The economy certainly seems to be picking up.”

Financial Times, Page: 2 The Daily Telegraph Daily Mail, Page: 81

FRIDAY

Sajid Javid tries to calm nerves over post-Brexit rules

The Chancellor has tried to reassure businesses concerned about the UK shifting away from EU rules after Brexit by saying Britain would only diverge when it was in the best interests of industry. Sajid Javid told UK chief executives at a Davos lunch that although the UK could not be a rule taker, for democratic reasons, “it doesn’t mean we will diverge for the sake of it”. Carolyn Fairbairn, CBI director-general, welcomed the clarification adding that the Conservative’s decisive general election victory had been a boost to confidence.

Financial Times, Page: 3 BBC News The Guardian, Page: 14

INTERNATIONAL NEWS FOR THE WEEK ENDING FRIDAY 24th JANUARY 2020

THURSDAY

Isabel dos Santos scandal claims PwC scalp

PwC ’s head of tax in charge of Portugal, Angola and Cape Verde has quit following revelations of PwC’s links with Isabel dos Santos, the daughter of the former PM of Angola. Ms Dos Santos is accused of siphoning billions from the country.

The Daily Telegraph, Business, Page: 3

OTHER NEWS FOR THE WEEK ENDING FRIDAY 24th JANUARY 2020

THURSDAY

Brussels to hold financial services hostage under equivalence regime

The Telegraph reports that the European Commission has drawn up a list of UK financial services that could have access to the EU market removed as Brussels seeks to leverage equivalence rules in negotiations with Britain. The paper suggests that by “pinpointing specific industries and sparing others, the EU would be able to ensure its continued access to vital clearing services and global capital markets”.

The Daily Telegraph

FRIDAY

Chancellor launches search for new OBR chief

Sajid Javid has launched the search for the next head of the Office for Budget Responsibility (OBR) as Robert Chote’s tenure draws to an end. The UK’s budget watchdog was formed in 2010 by George Osborne to ensure the government stuck to its spending and borrowing rules.

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

Contact Paul Southward.

Paul Southward


NEWS FOR THE MIDWEEK TO 22nd JANUARY 2020


NEWS FOR THE MIDWEEK TO 22nd JANUARY 2020

NEWS ROUNDUP

TAX NEWS FOR THE MIDWEEK TO 22nd JANUARY 2020

MONDAY

Firms’ cashflow boosted by holding onto tax

The Times’ Patrick Hosking details how delaying passing tax they have collected onto the taxman is a vital part of many firms’ cashflow. He notes that about £400bn a year of taxes and duties paid by consumers and employees are actually collected by businesses, highlighting that income tax through PAYE raises £16bn, VAT raises £15bn, and excise duties pull in £50bn. While each tax has different rules and schedules for delivery to HMRC, in most cases businesses hold the money for anything from a fortnight to four months. Mr Hosking says that while no-one – including the taxman – “has the first clue as to the overall cost to the public purse or the cashflow advantage it gives business … a simple back-of-the-envelope calculation suggests it could be very large.” John Cullinane, policy director at the Chartered Institute of Taxation, says the time-to-pay initiative h as allowed many companies to defer passing on taxes well beyond official deadlines.

The Times, Page: 38

Tax warning for overseas operations

Writing in the Press and Journal, Helen Brown of Anderson Anderson & Brown, looks at the tax implications for firms working in an overseas territory – noting that they must comply with the local tax laws. She advises that consideration should be given to whether there is a double tax treaty in place between the UK and the relevant country.

The Press and Journal, the Business, Page: 12

TUESDAY

Apple boss calls for tax system overhaul

Apple chief executive Tim Cook says the global corporate tax system needs to be overhauled. With the Organisation for Economic Cooperation and Development (OECD) pushing for reform that would see large tech firms pay tax in regions where they serve customers rather than booking profit in low-tax countries, Mr Cook said: “I think logically everybody knows it needs to be rehauled, I would certainly be the last person to say that the current system or the past system was the perfect system.” He said he is “hopeful and optimistic” the OECD will deliver a workable reform, adding: “It’s very complex to know how to tax a multinational… We desperately want it to be fair.”

City AM, Page: 3

Pension tax system review call

In a letter to the Times, Hargreaves Lansdown’s head of policy, Tom McPhail, says the Government “should abandon its attempts to find a quick fix” to issues with the pension allowance taper, saying that the pension tax system “is a bloated, inefficient mess”. He argues that it “fails to work effectively in so many different ways that only a comprehensive rethink will do”, before urging the Chancellor to announce a review of pension taxation in the Budget on March 11.

The Times, Page: 24

UK recruiters warn of damage from freelance tax reforms

A group of leading recruitment companies have written to Chancellor Sajid Javid, warning that changes to tax rules for off-payroll workers will hit their industry and could increase tax avoidance.

Financial Times, Page: 2

Taxman publishes list of bizarre excuses and expenses claims

In a timely reminder of the upcoming deadline for submitting your 2018/19 self-assessment tax returns on 31st January 2020, the taxman reminds us of the failed excuses and expenses claims:-

HMRC rubbish excuses

WEDNESDAY

Digital tax closes the door on US trade deal

Donald Trump said the US was looking forward to striking a trade deal with the UK, during his speech in Davos, praising Boris Johnson as a ”wonderful new PM”. However, US Treasury secretary Steve Mnuchin made it patently clear that the UK would face retaliatory trade sanctions if it persists with plans for a digital tax on US tech giants. The Telegraph’s Ambrose Evans-Pritchard says: “Britain’s decision to push its own tax in defiance of the US at this pivotal juncture of the Brexit talks seems extraordinarily ill-judged.” The warning from the US comes as France postponed its plans for a digital tax in return for a suspension of retaliatory tariffs on exports to the US. A spokesman for Boris Johnson said: “Britain wants a global solution on taxing digital firms.”

The Daily Telegraph, Business, Page: 5 Financial Times, Page: 1 The Times, Page: 12 The Guardian, Page: 33 City AM, Page: 2

Avoid fines for late returns if possible

More than a billion pounds in fines for filing tax returns late were avoided by taxpayers between 2012 and 2018 after they convinced HMRC to waive the charges, the Telegraph reports. But as the deadline looms for the 2018-19 tax year, accountants warn taxpayers to submit on time, even if they have a reasonable excuse for filing late. Zena Hanks, of Saffery Champness, said: “The appeals process is no quick-fix solution, and the procedure can embroil the taxpayer for years, with an uncertain outcome hanging over their head.”

The Daily Telegraph

Ireland faces “devastating impact” from CCCTB

Ireland is facing massive reductions in tax receipts at a time when spending is increasing at a rate deemed unsustainable by the Irish Fiscal Advisory Council (IFAC). Up to 60% of corporate tax revenues could be wiped out if international tax rules were changed – such as the European Commission’s proposed common consolidated corporate tax base (CCCTB), which would mean that multinationals paid corporate tax based on where they generated revenues.

The Daily Telegraph, Business, Page: 8

CORPORATE NEWS FOR THE MIDWEEK TO 22nd JANUARY 2020

MONDAY

Game firm claims £38m tax relief despite huge profits

Developer Rockstar North benefitted from £38m in video games tax relief last year, despite US-based parent company TakeTwo Interactive reporting profits of $333m. The firm, which made 2013’s Grand Theft Auto V – which is the most successful entertainment product of all time, having made more than $6bn – received the rebate under the Government’s video games tax relief scheme. Think-tank TaxWatch last year calculated that Rockstar had effectively paid no corporation tax in 10 years since it legally claimed the tax relief. TaxWatch has urged the Government to reconsider the scheme, with the think-tank’s George Turner saying the policy is not meeting its objectives, adding: “The idea that 40% of the relief would be claimed by one company is clearly absurd.” Rockstar said the relief was a “proven success” and had “directly resulted” in the firm “significantly increasing its investment in the UK”.

The Daily Telegraph

Department store to make insolvency decision

Department store chain Beales, which has been seeking a buyer since December and is looking to negotiate reduced rents on its stores, is said to be close to collapse. The chain, which recently appointed KPMG to assess “strategic and financing options” to “deliver a sustainable business model for the future”, will hold a board meeting today where it will make a decision on whether to call in administrators, with a source telling the Times the chain is “more likely than not” to do so.

The Daily Telegraph, Business, Page: 1 The Times, Page: 39 City AM, Page: 4

Restructuring firm sees £1m Links of London fees

Restructuring firm Gordon Brothers, which was drafted in to work with administrators at Deloitte after jeweller Links of London collapsed in October, is set to pick up almost £1m for helping to shut Links’ 28 UK stores and seven concessions. An administrators’ report estimates the fee at £890,000 plus tax. Deloitte, which was unable to find bidders for the business, has sold £5.3m of stock but said it is unclear if there would be any money left for unsecured creditors.

The Daily Telegraph

PE firms’ overseas assets up 50%

BDO research shows that UK private equity firms acquired £25.7bn of international businesses in the 12 months to 31 August 2019, a 50% increase on the £17.1bn recorded the year before, while £7.9bn of UK companies were snapped up in the same period. Jamie Austin, head of private equity at BDO, comments: “Accessing faster growth in other economies – even relatively close to home in Eastern Europe and the Baltics – can provide a substantial boost to returns.”

City AM, Page: 6

TUESDAY

Bosses back Britain

A PwC poll of almost 1,600 CEOs places the UK as the fourth most important country for international firms, behind only the US, China and Germany. The poll shows that bosses in Germany, France and Italy see the UK as being as attractive now as it was in 2015, with “a notable uptick since last year”. Almost one in four French bosses cite the UK as one of their three main growth markets, as do one in five American chief executives. Business Secretary Andrea Leadsom welcomed the study, saying: “It’s excellent to see such confidence in the UK.” Kevin Ellis, chairman of PwC UK, said: “The findings provide timely perspective on the UK’s standing as a place to invest and do business. Viewed against the turbulent global backdrop, the UK is a beacon of relative stability”. Writing in City AM, Mr Ellis says the UK should look to “capitalise on our key characteristics,” saying &ld quo;maintaining an open and globalised economy is crucial, as is an effective tax system.”

The Daily Telegraph, Business, Page: 1 The Times, Page: 1 Financial Times, Page: 1 The Guardian, Page: 38 Daily Mail, Page: 74 The Sun, Page: 43 City AM, Page: 1, 15

Beales falls into administration

Department store chain Beales entered administration yesterday, having failed to secure a buyer, leaving over 1,000 jobs at risk. KPMG has been appointed as administrator and the firm’s 23 stores will continue to trade while it assesses options for the business. Will Wright, partner at KPMG and joint administrator, commented: “With the impact of high rents and rates exacerbated by disappointing trading over the Christmas period, and extensive discussions around additional investment proving unsuccessful, there were no other available options but to place the company into administration.”

The Times, Page: 31 Financial Times, Page: 19 The Daily Telegraph, Business, Page: 1 The I, Page: 40 The Guardian, Page: 9 Daily Mail, Page: 73 Daily Mirror, Page: 16 Daily Express, Page: 47 The Independent, Page: 18 The Sun, Page: 43 City AM , Page: 6

Auditor raises concerns over Infrastrata

Auditor PKF has raised concerns about the finances of Infrastrata, the firm that saved the Harland and Wolff shipyard. PKF said the firm lost £1.2m last year and needs to bring in new funding to meet spending commitments, saying this raises questions over its future.

The Daily Telegraph, Business, Page: 8

M&C Saatchi looks to reassure investors

M&C Saatchi, which revealed an accounting scandal last year, has told investors it had a net cash position of at least £15m at the end of last year, saying this was ahead of expectations. The accounting issues prompted a PwC probe which saw the advertising group admit to £11.6m in accounting errors.

The Times, Page: 41

SMEs NEWS FOR THE MIDWEEK TO 22nd JANUARY 2020

MONDAY

SMEs plan to spend £1.7bn

A survey by finance firm Together has found that British SMEs are set to invest £1.7bn over the next two years, with subsiding Brexit uncertainty seeing firms more willing to spend. The poll saw a quarter of SME bosses say they will look to expand their premises, while 23% expect to hire new staff. With the decisive election outcome offering more certainty, 42% of SMEs are now optimistic about their prospects, compared with just 8% who would have been optimistic if the uncertainty had continued. Andrew Charnley of Together said: “The investment taps can now be turned back on.”

Daily Star, Page: 2 Daily Express, Page: 45

TUESDAY

Late payer crackdown

Lord Mendelsohn will today introduce a bill intended to tackle late payment of commercial debts and ban “predatory” practices, such as charges for being on supplier lists. It will also seek to strengthen the powers of the Small Business Commissioner, giving the watchdog the power to hand out fines.

The Times, Page: 40

WEDNESDAY

Small firms miss out on tax breaks

Research by digital bookkeeping app Receipt Bank has found that half of business owners feel overwhelmed by the amount of paperwork they need to deal with, and one in five say this slows their growth. A further 33% have suffered a financial loss from not filing all the paperwork demanded by HMRC while a quarter didn’t know that claiming business expenses could help to reduce their corporation tax bills. Rebecca Freeman, accountant at Receipt Bank, said: “Tax breaks exist to help small businesses invest and grow. Those that forgo their entitlements are putting themselves at a competitive disadvantage.”

Daily Mirror, Page: 33

EMPLOYMENT NEWS FOR THE MIDWEEK TO 22nd JANUARY 2020

TUESDAY

Investors want to know about staff treatment

A report from the Financial Reporting Council shows that investors want to know more about how companies treat their workers, saying they “overwhelmingly support” improved disclosure of workplace matters, including wages and working conditions. The watchdog says reporting on such matters needs to improve, advising that firms should view their workforce as “a strategic asset”.

The Times, Page: 40

WEDNESDAY

UK employment hits record high

The latest data from the Office for National Statistics (ONS) reveals the strongest jobs growth in almost a year, pushing the employment rate to a new record. The unemployment rate held at 3.8%, its lowest since the 1970s, but the number of people in work rose by 208,000. In the September to November period, the employment rate hit a record high of 76.3%, the ONS said, up 0.5 percentage points on the previous quarter. When bonuses were stripped out, pay growth slowed to 3.4% in the three months to November.

City AM, Page: 1 Financial Times

PROPERTY NEWS FOR THE MIDWEEK TO 22nd JANUARY 2020

TUESDAY

Demand could push up City space rent

Deloitte real estate’s crane survey shows that the number of construction starts for new office buildings in central London has fallen to the lowest level in five years. This however, has not correlated with a dip in demand, with JLL figures showing the volume of leasing deals in central London totalled about 11.6m sq ft in 2019, up on the 11.5m sq ft leased the previous year. JLL foresees this leading to record rents for the best sites, saying the best City spaces could be let at £90 per sq ft – a £5 per sq ft increase on the current price.

The Times, Page: 39

PENSIONS NEWS FOR THE MIDWEEK TO 22nd JANUARY 2020

WEDNESDAY

FCA warns advisers over pension transfers

The Financial Conduct Authority has warned financial advisers that they must do more to stop consumers being harmed by unsuitable advice, investment scams and excessive fees. In a ‘Dear CEO’ letter to advisers published yesterday, the regulator said it was seeing an increasing number of cases where the actions of firms were resulting in “significant harm to consumers’ financial well-being”. The FCA highlighted the failure of advisers to reduce the number of people being persuaded to transfer out of valuable defined-benefit pension plans. “We remain concerned firms are recommending large numbers of consumers transfer out of their DB pension schemes despite our stance that transfers are likely to be unsuitable for most clients,” it said. Tom McPhail, of Hargreaves Lansdown, said the FCA is “sensitive” over the issue of DB transfers following questions around its “regulatory shortcomings” in this area.

Financial Times The Times, Page: 38 The Daily Telegraph City AM FT Adviser

Economists say state pension age must rise

Credit Suisse economists have warned that the state pension age must rise dramatically to reduce pressure on a creaking benefits system. With life expectancy increasing among developed nations, analysts say benefits for those who retire early must be removed and governments should pay bonuses to workers who delay retirement.

The Daily Telegraph

INTERNATIONAL NEWS FOR THE MIDWEEK TO 22nd JANUARY 2020

MONDAY

Poland’s finance minister set for tax battle with Airbnb

Tadeusz Koscinski, Poland’s new finance minister, has called for US-based property rental site Airbnb to pay tax on the revenues it earns in the country.

Financial Times, Page: 6

TUESDAY

France signals breakthrough in US digital tax talks

French president Emmanuel Macron says he has had a “great discussion” with US president Donald Trump on digital tax, easing fears that a spat over the levy could result in a trade war.

Financial Times

ECONOMY NEWS FOR THE MIDWEEK TO 22nd JANUARY 2020

MONDAY

A third of listed retailers warn on profits

Analysis shows that a third of retailers were forced to put out profit warnings in 2019, with 32 listed firms in the FTSE Retailer index doing so. The report, from EY, notes that the figure is down 11% on the 36 recorded in 2018. So far in 2020, four firms have issued profit warnings – the same number that did so in the whole of Q4 2019. EY’s Lisa Ashe said the sector has been hit by “intense promotional activity”, with prices cut to attract customers.

Daily Mail, Page: 78

TUESDAY

IMF downgrades global growth forecast

A report from the International Monetary Fund (IMF) predicts that economic growth in Britain is set to be sluggish over the next two years, with a forecast that GDP will grow 1.4% in 2020 and 1.5% in 2021. The IMF says the forecast “assumes an orderly exit from the European Union at the end of January followed by a gradual transition.” The report suggests the eurozone will see a slightly lower rate of growth, with an increase of 1.3% this year and 1.4% next, while global growth is expected to be 3.3% in 2020 and 3.4% in 2021. Looking at 2019, the IMF expects global growth to come in at 2.9%, lower than its previous prediction of 3%. It predicts that UK GDP rose 1.3% over the last 12 months.

The Times, Page: 1 Financial Times, Page: 1 The Daily Telegraph, Business, Page: 1 Daily Mail, Page: 74 The Independent, Page: 50 City AM, Page: 2 Evening Standard

Household optimism hits 12-month high

A IHS Markit survey has found that UK households became more upbeat about their finances in January, with optimism hitting a one-year high. Households saw living-cost inflation dip in January, while incomes from employment continued to grow. The conclusive election result seen in December and the clarity it brings in regard to Brexit are among drivers of the optimism, with Joe Hayes, economist at IHS Markit, saying: “Latest survey data certainly show some post-election bounce for UK household.” The poll also reveals that 23% of people expect the Bank of England’s next move on interest rates will be a cut, up from 19% in December.

City AM

WEDNESDAY

Carney: Businesses must plan for a green transition

Mark Carney has warned businesses to plan for a transition to a green economy or face extinction. Speaking at the World Economic Forum’s meeting in Davos, the outgoing Bank of England Governor said: “From where I sit, there is a fundamental reshaping of the system under way … It means not just profitability going down, it means companies going out of business in sectors that have become sunset industries.”

The Times, Page: 13

The power of UK financial services

A report from the City of London Corporation and PwC outlines how the City continues to dominate other financial centres. Lord mayor of the City of London William Russell said: “Ten days away from our formal exit from the EU, this important report reiterates the UK’s strengths in financial and professional services. It is essential we continue to reaffirm why firms should come here to do business.”

City AM, Page: 5

OTHER NEWS FOR THE MIDWEEK TO 22nd JANUARY 2020

MONDAY

Fox calls for state deals

Former International Trade Secretary Liam Fox believes the Prime Minister should negotiate trade deals with individual US states while working toward a post-Brexit free trade agreement with America. On an free trade agreement Dr Fox says regulatory autonomy after Brexit will be key to removing long-standing trade barriers. He points to a mutual recognition agreement negotiated by the Government between the Institute for Chartered Accountants of Scotland and two US accountancy bodies, a deal which made professional qualifications in each country compatible with each other.

The Daily Telegraph, Page: 12

Tea plan targets Blue Monday

The Express looks at the day dubbed Blue Monday – with today, the third Monday in January, said to be the most depressing day of the year due to factors such as winter weather and Christmas credit card bills. Kelly Feehan from CABA, a charity supporting the wellbeing of chartered accountants, said: “It can sometimes feel like a long and difficult month to get through.” In a bid to help alleviate the stresses, the Samaritans will hand out teabags at railway stations, with its Brew Monday campaign hoping to encourage conversation on the strain some people are under.

Daily Express, Page: 9

TUESDAY

Increase in workplace fraud

Analysis by KPMG shows the number of cases involving embezzlement more than doubled last year. With 369 court cases involving alleged fraud in 2019, 74 saw employees and management staff accused of trying to cheat their bosses out of £46m – up on 2018’s 34 cases totalling £22m.

Yorkshire Post, Page: 5 The Press and Journal, Page: 31

WEDNESDAY

Goldman joins move to regions

Goldman Sachs is looking for a new office outside London in which to create a technology hub. The US bank’s search for a regional base comes after PwC opened its largest regional office in Birmingham this month. Simon Bedford, partner at Deloitte Real Estate, said professional services firms were among those growing their businesses in the regions, attracted partly by the graduates who have decided to stay put rather than move to London.

The Times, Page: 36

Contact Paul Southward.

Paul Southward


NEWS TO FRIDAY 17th JANUARY 2020


NEWS TO FRIDAY 17th JANUARY 2020

NEWS ROUNDUP

TAX NEWS TO FRIDAY 17th JANUARY 2020

THURSDAY

Treasury plots tax windfall for higher earners

The Times’ Chris Smyth reports that the Treasury could be set to hand tax relief to those earning more than £110,000. The proposal comes with ministers looking for ways to prevent doctors being hit with huge bills, with those exceeding the figure facing more stringent taxes on their contributions. This has seen senior consultants turning down extra work for fear it will drive them over the threshold. It is understood that the Treasury has proposed raising the “cliff edge” threshold from £110,000 to £150,000 at which pension contributions are counted as earnings and lower tax-free allowances start to kick in. Paul Johnson, director of the Institute for Fiscal Studies, said it was hard to estimate exactly how much the change would cost, saying that the present rules were overly complex. He comments: “A more fundamental review both of the tax system and public sector pensions would be welcome.”

The Times, Page: 1

1m set to file tax returns close to deadline day

Data from tax return software provider GoSimpleTax suggests that around a million self-employed taxpayers are expected to file their annual tax returns in the final 72 hours before the January 31 deadline. The firm points to figures showing that one in 10 freelancers waited until deadline day to file their returns last year. The Telegraph, which notes guidance suggesting it is better to submit returns on time even if they contain errors than to hand them in late and incur penalties, details five changes for people submitting returns this month for the 2018/19 tax year. These include an increase in the personal allowance; an increase in the income tax threshold; and a reduction in the amount of dividend income that can be earned from investments held outside of an Isa.

The Daily Telegraph

Morse warns over advisers and loan schemes

Yorkshire Post deputy business editor Greg Wright looks at the role of professional advisers, saying that Sir Amyas Morse – who led the review into the loan charge – has spoken out over those marketing loan schemes. Mr Wright says that while much of the criticism over the loan charge has been centered on HMRC, Sir Amyas believes a new strategy is needed to examine intermediaries and their role in the loan charge saga. Sir Amyas said: “A key driver of ongoing scheme usage is a limited number of promoters and professional advisers who are selling schemes in spite of knowing that they will not deliver the tax benefits being promised.”

Yorkshire Post, Business, Page: 6

Carlaw pledges tax cuts

Jackson Carlaw, the front runner in the Scottish Conservative leadership contest, has launched his campaign by pledging to prioritise income tax cuts for middle earners. He said he wanted to cut bills for those earning between £26,000 and £45,000 but has refused to extend the priority tax cut pledge to those earning more than £45,000. He said: “Scots earning £26,000 are not Scotland’s affluent elite…Yet it is from that modest threshold that Scots begin an accelerated ladder of higher taxation.”

The Daily Telegraph The Scotsman

FRIDAY

Pension tax rethink worth ‘hundreds of millions’

With the Treasury reportedly considering plans to raise the point at which restrictions to the pensions annual allowance kick in by £40,000 to £150,000, former pensions minister Sir Steve Webb has said such a move would hand “hundreds of millions in tax relief to tens of thousands of people”. Sir Steve says the tapered annual allowance is a “bad tax and bad law”, which “you just have to get rid of”. He added that the UK has a “really complicated” tax system and that the tapered annual allowance is “unpredictable, capricious and has cliff edges.” Analysts say the mooted change would mostly affect those paying the 45% top rate of income tax. HMRC figures show that the number of pension savers paying tax after breaching the annual allowance limit reached a record high in the 2017/18 tax year, with £812m of pension contributions made in excess of the allowance. Commenting on the proposed rethink, former shadow pensions minister Gregg McClymont, of The People’s Pension, urged ministers to hold a “long awaited and much needed” comprehensive review of the way pensions tax operates. If the Treasury agrees the overhaul, an announcement is expected by Chancellor Sajid Javid in the Budget in March.

The Daily Telegraph, Page: 4 Daily Mail, Page: 26 The I, Page: 8 Daily Express

Firms hit by tax relief confusion

Research of 500 businesses by digital bookkeeping app Receipt Bank shows that many are overwhelmed by the amount of paperwork they face, with 29% saying they have lost money due to issues with HMRC documents. A fifth said confusion over paperwork means they have missed out on tax relief, with directors saying their businesses have lost an average of £17,907 each due to confusion over the relief. Almost half said they don’t believe they have made all the claims their business is entitled to and a quarter did not know that claiming business expenses could reduce their corporation tax bills.

Daily Mail Daily Star

Opinion: CGT rethink would revitalise public markets

Jeremy Warner in the Telegraph suggests Chancellor Sajid Javid should consider reform of capital gains tax, proposing that investment in publicly listed companies up to a ceiling of £250m of market value at the time of purchase could be made CGT free. This, he feels, would revitalise public markets and “attract investment away from bigger, established companies and into smaller, up-and-coming ones”. Mr Warner notes that CGT is not a huge source of revenue for the Government, accounting for little more than 1% of the total take.

The Daily Telegraph, Page: 17

Javid to put his stamp on duty?

The Times’ Carol Lewis looks at what, if any, changes Chancellor Sajid Javid could deliver for stamp duty in his Budget, noting that a 3% surcharge on non-resident buyers has previously been pledged, while the Prime Minister has also said abolishing stamp duty below £500,000 was an aim. Sean Randall, a partner at Blick Rothenberg and chairman of the industry’s Stamp Taxes Practitioners Group, says this will be a “tax light” budget, with any bigger changes held back until the Government has been in power for a year. Richard Morley, a partner at BDO, offers guidance on “transitional rules” for cases where a change in duty occurs between a person exchanging and completing on a property deal, while Adrian Benosiglio of RSM UK notes confusion centered around the 3% surcharge on second homes

The Times, Bricks and Mortar, Page: 10

CORPORATE NEWS TO FRIDAY 17th JANUARY 2020

THURSDAY

Rivals question Flybe rescue

Rival operators are challenging the Government-backed rescue of Flybe which enables the struggling airline to delay handing over a £106m air passenger duty bill. While Business Secretary Andrea Leadsom defended the move to safeguard UK regional connectivity, Willie Walsh, the outgoing boss of British Airways owner IAG, called the deal a “blatant misuse of public funds”. IAG has filed a complaint to the EU, suggesting the rescue deal may have breached state aid rules, while Ryanair has written to Chancellor Sajid Javid to voice concerns.

The Daily Telegraph, Business, Page: 1 Financial Times The Guardian Page: 37 Daily Mirror, Page: 9 Daily Mail, Page: 19 The Sun, Page: 45 City AM, Page: 1

Amazon investment plans on course despite digital tax

Amazon says a 2% digital services tax expected to be introduced in March’s Budget will not hit its UK investment plans, but could increase costs for small firms using its sales and delivery platform.

Financial Times, Page: 3

Dealership in sales talks

Administrators for motor dealership Leven Cars Group say they are engaged in “advanced talks” over a possible sale of parts of the business. Leven last week appointed administrators at Leonard Curtis.

The Scotsman, Page: 37

Jeanswest in administration

KPMG has been appointed as voluntary administrator of Australian operations of clothing retailer Jeanswest.

The I, Page: 41

Analyst warns ‘ostrich shops’ over excuses

Writing in City AM, Mark Halstead of financial risk analysts Red Flag Alert looks at what he calls “ostrich shops” – the retailer’s burying their heads in the sand and relying on “a checklist of overused excuses” as to why they are struggling, pointing to factors such as business rates and the challenging retail market. Successful stores, he argues, are those focused on providing shoppers with experiences they “can’t get sat in front of a laptop.”

City AM, Page: 16

FRIDAY

Oliver starts again as administrators pore over failed firm

Guy Adams in the Daily Mail looks at Jamie Oliver’s decision to launch a new global food chain at a time when KPMG administrators are “poring over the wreckage” of his failed chain Jamie’s Italian, which collapsed last May. He notes that a KPMG report has named 288 people and firms that have potentially been left out of pocket and considers their possible reaction to the celebrity chef’s new venture.

Daily Mail, Page: 30

PROPERTY NEWS TO FRIDAY 17th JANUARY 2020

THURSDAY

House prices climb

Office for National Statistics data shows UK house prices increased at their fastest pace in two years in the year to November – even before a widely expected election bounce. Average prices were up 2.2% in November last year, compared to a 1.3% jump in the year to October. The average UK house price climbed to an all-time high of £235,000. PwC economist Jamie Durham comments: “Assuming everything goes smoothly during the transition period, and the economic environment remains resilient, we would expect house price growth to strengthen this year.”

City AM The Daily Telegraph

New mortgages fell in November

The number of first time buyer mortgages dropped in November last year, according to the latest figures by UK Finance, following a surge in house purchase activity in 2018. There were 30,620 new first-time buyer mortgages completed in the month, down 10.5% compared to the same month the year prior, while homemover mortgages dropped 10.6% year-on-year. The research also found that there were 6,300 new buy-to-let home purchase mortgages in November, a decline of 4.5%. Remortgages in the buy-to-let sector fell 5.1% to 15,000.

City AM

FRIDAY

£1bn cost of empty business rates relief

Analysis by the BBC shows that empty businesses mean councils in England lose out on around £1bn in revenue each year through tax relief for the vacant properties. The research shows that the North East and North West regions l ose the highest proportion of business rates income to empty units. The Treasury said it will announce a review of business rates “in due course.”

BBC News

Councils hit by business rates avoidance

Local Government Association (LGA) analysis suggests avoidance of business rates is costing local services an estimated £250m a year, with eight in ten local councils responsible for collecting business rates saying they do not have adequate powers to tackle the problem in their area. The LGA said councils need new legal powers to enter and inspect non-domestic properties to verify information and to request information from ratepayers and third parties. Richard Watts, chairman of the LGA’s Resources Board, said: “Too many businesses are exploiting loopholes and manipulating the system to avoid paying the tax they owe.”

Yorkshire Post, Page; 20

EMPLOYMENT NEWS TO FRIDAY 17th JANUARY 2020

THURSDAY

Businesses warned over settled status

Businesses are being urged to ensure European staff apply for settled status as soon as possible, or risk losing up to a fifth of their workforce. Analysis shows that a third of UK-based EU nationals have failed to secure their status. New research compiled by legal charity the AIRE Centre shows factory and construction jobs are particularly dependent on EU workers, accounting for 21% of the workforce. Retail and manufacturing could also struggle if EU workers leave the UK, with 50% of all EU nationals working in these industries. Meanwhile, the Guardian looks at the impact a reduction in EU workers would have on restaurants, citing a KPMG report for the British Hospitality Association which suggests that if free movement ends and no new immigration into the sector is allowed, the industry would need to recruit an additional 62,000 UK workers each year.

City AM The Guardian, G2, Page: 6

PM in apprenticeship levy pledge

Boris Johnson says the apprenticeship tax on companies will be overhauled to help poor white children “climb the ladder of opportunity”. With figures showing that white working-class boys are outperformed at every stage of education, MP Robert Halfon has called for reform of the levy to encourage firms to take on more apprentices from white working-class backgrounds. The Prime Minister said it was “absolutely right” that the apprenticeship levy could be better used to boost their prospects.

The Sun, Page: 2

FRIDAY

Millions at risk of unemployment or unsuitable work

The Local Government Association (LGA) has warned that millions of people in England risk being unemployed, or in work they are overqualified for, by 2030 because of a skills “mismatch”. A study found that almost 13m people with intermediate skills could be chasing 9m jobs by the next decade. It also shows that 5m low-skilled people could also be competing for 2m low-skilled jobs. The LGA has recommended that the Government devolve all back-to-work skills, apprenticeships, careers advice and business support schemes to local areas to improve the situation.

The Independent Yorkshire Post

SMEs NEWS TO FRIDAY 17th JANUARY 2020

FRIDAY

Small firms in poor regions lose out on loans

Analysis by business lender Iwoca suggests that small business lending has slipped in England’s most deprived areas. With lending to UK SMEs falling by 8% between 2014 and 2018, the country’s poorest regions are among the worst hit, with Blackpool – England’s most deprived area according to Government statistics – seeing a 31% fall. The analysis shows that SMEs in the wealthiest areas of England were able to borrow £41bn more than those in the poorest parts.

Daily Mail, Page: 81

Tech tax could hit small businesses, Amazon warns

Amazon’s UK boss has warned that the new 2% digital services tax could impact small UK businesses. Douglas Gurr, Amazon’s UK country manager, said the tax would not impact plans to create new jobs and open more distribution hubs but cautioned that the retail giant could offload the additional costs by raising charges for the small businesses that use its platform.

City AM, Page: 6

ECONOMY NEWS TO FRIDAY 17th JANUARY 2020

THURSDAY

Inflation falls in December

Inflation fell to its lowest for more than three years in December. The rate dropped to 1.3% last month, down from 1.5% in November, with December’s inflation rate the lowest since November 2016. Analysts suggest the data increases the chances of a cut to interest rates, with inflation below the Bank of England’s (BoE) target of 2%. Melissa Davies, an economist at stock broker Redburn, said: “Very soft UK inflation data for December leaves the door wide open for a Bank of England rate cut on 30 January.” Michael Saunders, one of the rate setters on the BoE’s Monetary Policy Committee, has called for interest rates to be cut to combat the risk of the UK getting stuck in a “low inflation trap.” Mr Saunders, who voted for cuts in November and December, said: “It probably will be appropriate to maintain an expansionary monetary policy stance and possibly to cut rates further, in order to reduce risks of a sustained undershoot of the 2% inflation target”. Yael Selfin, chief economist at KPMG, said lower inflation put a cut “back on the menu”.

BBC News The Daily Telegraph Financial Times, Page: 25 Daily Mail The I, Page: 43 City AM Yorkshire Post, Page: 6

FRIDAY

Credit for companies at lowest since 2008

The Bank of England’s (BoE) credit conditions survey shows that the amount of credit made available to corporates fell for the sixth successive quarter in Q4 2019. It fell to minus 9.2 in Q4, down from minus 3.5 in Q3, marking the fastest rate of decline since Q4 2008. The balance for expected demand for credit for capital investment over the next three months fell to minus 27.4 from minus 18.5, the weakest since Q1 2009. Howard Archer, chief economic advisor at EY Item Club , suggested that lenders had been concerned about domestic political uncertainty and a struggling economy. He said: “This was likely to weigh down on business activity and profitability, thereby making businesses less attractive and more risky to lend to.”

The Daily Telegraph, Business, Page: 1 City AM

Record low retail sector health

The health of the retail sector hit a record low last year, with the Retail Health Index published by KPMG and Ipsos reaching a record low of 74 in 2019 – the worst result since the tracker was established in 2006. The report says the “golden quarter” of Christmas trading did not deliver a strong enough rebound to negate a difficult year for the sector. The index score is expected to remain at 74 in the first quarter of 2020.

City AM, Page: 4

OTHER NEWS TO FRIDAY 17th JANUARY 2020

THURSDAY

Survey highlights financial ignorance

A new survey on personal finance from Vanquis, the credit card and loan provider, has found that only one in three British people know the rate of VAT and fewer know how much you can invest in an Isa. The survey also found that 80% of people could not identify the correct definition of an annual percentage rate (APR) and nine in ten did not know the rate of NI contributions for an employed, basic-rate taxpayer. The question which stumped the most people was how much can usually be borrowed on a mortgage as a multiple of income – with only 5% correctly identifying the figure as 4.5 times the borrower’s earnings.

The Times, Page: 20

Food for thought for savers

People looking to save money could pass up take-away meals, with research from KPMG showing that more than a third of people cutting costs said they were having fewer – saving £451 a year per person.

The Sun, Mrs Crunch, Page: 1

FRIDAY

KPMG calls for Budget to drive regional growth

A new report from KPMG suggests improving transport connectivity in the North is “imperative” and argues that the upcoming Budget offers a crucial opportunity to lift regional growth. It suggests that significant investment in regional transport and broadband connectivity will help link more economic areas outside London and the South East together. Yael Selfin, chief economist at KPMG UK and author of the report, said: “The Budget in March will offer the Government an opportunity to address the regional disparities in the UK, but if it is to make a long-lasting difference, it will need to be focused on the right areas.”

Yorkshire Post, Page; 18

Russian parliament backs tax chief for PM

Russia’s parliament has approved former tax chief Mikhail Mishustin as the country’s new Prime Minister. Mr Mishus tin has led the Federal Tax Service since 2010 and has been lauded for reforms that saw the removal of much of the system’s red tape.

The Daily Telegraph, Page: 15 The Times, Page: 30 The Guardian Financial Times, Page: 1

Contact Paul Southward.

Paul Southward


NEWS FOR THE MIDWEEK TO 15th JANUARY 2020


NEWS FOR THE MIDWEEK TO 15th JANUARY 2020

NEWS ROUNDUP

TAX NEWS FOR THE MIDWEEK TO 15th JANUARY 2020

MONDAY

Time your divorce according to tax year, lawyers urge

Solicitors are urging couples planning on divorcing to wait for a few more months to benefit from tax advantages. Starting proceedings in January leaves you very little time before April 5 to finalise a settlement and transfer assets to your spouse or civil partner free of any capital gains tax liability. You must pay if you transfer assets to your ex-partner once your relationship legally ends and the tax year expires without evidence of co-habitation during that period. Caroline Wright of Helen Pidgeon Solicitors said: “Ideally you would separate at the beginning of a tax year.”

The Sunday Times, Money, Page: 12

Tax on big tech is just the start, says Cédric O

Cédric O, the French junior minister for digital affairs, has said France’s plans for a tax on multinational tech firms will go ahead regardless of threats of retaliation from the US. Known as the Gafa tax – an acronym for Google, Apple, Facebook and Amazon – the French legislation will impose a 3% levy on the annual revenues of the largest technology firms providing services to French consumers. But Mr O said France would be consider imposing other rules on such monopolies too, to combat hate speech, online commerce and threats to democracy.

The Guardian, Page: 32

TUESDAY

Legal loopholes to cut IHT

The Telegraph shares a story of reader who saved himself £400,000 in inheritance tax by rewriting his father’s will. Peter Hollick used a deed of variation to divert a seven-figure inheritance into a trust fund for his children and grandchildren. The device allows you to make alterations to someone’s final wishes within two years of their death, provided all executors agree and you can show the changes would be in line with the deceased best interests and wishes.

The Daily Telegraph

Netflix accused of profit shifting

Netflix moved between £250m and £330m of profits to tax havens in 2018, according to TaxWatch. Revenues paid by UK subscribers are sent to the Netherlands, where it then negotiates special tax deals, the think tank says. TaxWatch also says that two UK Netflix entities were given £611,000 tax relief on their productions over 2017-2018.

Daily Mirror, Page: 8

British offshore tax havens to share with Russia

Jersey, Guernsey and the Isle of Man will send details of Russian assets registered in their jurisdictions to Russian tax authorities, the I reports, despite London and Moscow having cancelled an agreement which facilitates the sharing of such financial information.

The I, Page: 41

Five reasons why you may need to file a tax return

BDO partner Dawn Register runs through a checklist of five reasons why people may need to file a tax return, even when they believe they don’t have to.

The Daily Telegraph

WEDNESDAY

HMRC set to make £70m from late tax returns

Analysis by SJD Accountancy suggests that HMRC is set to make at least £70m from fines related to late tax returns this year. With the January 31 deadline approaching, the firm has reminded those required to complete a self-assessment that even missing the cut-off by a single day could incur an automatic £100 fine. From each extra day of delays, the fine climbs by £10 to a maximum of £900. After six months, individuals can then receive another fine of £300 – or 5% of the tax they owe. After a year, if the return still hasn’t been submitted, another fine of £300 can be issued. Last year, 93% of tax returns were completed on time, while the number of people missing the deadline has hovered around the 700,000 mark in recent years. SJD Accountancy’s James Foster comments: “We know how hard individuals work in order to earn a living – and having to spend quite large amounts of money on late fees and fines isn’t ideal.” Meanwhile, Dawn Register, partner in tax dispute resolution at BDO, offers advice over tax returns in the Daily Mirror.

Daily Express Daily Mail, Page: 49 Daily Mirror, Page: 37

Mackay: Budget may be revisited

Scotland’s finance secretary Derek Mackay has said he may have to amend his budget if the UK Government sets different tax rates, with the Scottish budget to be announced on February 6, weeks before Chancellor Sajid Javid reveals his tax and spending plans on March 11. He said the UK Government is “leaving it to the last possible minute to do their own budget and that has caused a terrible impact for us.”

The Scotsman, Page: 6

Students targeted in scam

HMRC has warned that scammers are targeting students, with fraudsters pretending to be from the tax office and offering tax refunds via email in an attempt to gain personal information.

The Times, Page: 6

CORPORATE NEWS FOR THE MIDWEEK TO 15th JANUARY 2020

MONDAY

Controversial law firm goes bust

A law firm has gone bankrupt owing £6.3m to about 70 creditors, including barristers’ chambers used to fight its cases. Public Interest Lawyers also owes HMRC almost £152,000 in unpaid tax. The firm, led by solicitor Phil Shiner, attracted criticism from making millions from using legal aid to sue the Ministry of Defence over alleged war crimes by troops in Iraq. Mr Shiner was named solicitor of the year but was struck off three years ago after the Solicitors Regulation Authority found him guilty of professional misconduct of a “criminal standard”.

The Sun, Page: 35

Beales on verge of collapse

Beales, one of Britain’s oldest department stores, has warned that it could collapse into administration putting 1,000 jobs at risk. The company is in talks with landlords about reducing its rent and is also in talks with a rival and a venture capital firm about a possible sale. Beales brought in advisers at KPMG to lead a strategic review and explore different refinancing options last month.

BBC News Daily Mail The Guardian, Page: 12 City AM, Page: 6

Fintech drives up value of Aim deals

A total of £2.9bn was spent on Aim firms last year, up 32% on 2018, according to UHY Hacker Young. The increase was driven by investors’ appetite for fintech firms, which accounted for nearly a third of the deals.

The Daily Telegraph, Business, Page: 5 City AM, Page: 13

Flybe in rescue talks

EY is said to have been put on notice to handle an administration process for Flybe which is reportedly locked in rescue talks. More than 2,000 jobs are rat risk if additional financing cannot be arranged.

City AM, Page: 1

TUESDAY

Flybe in last-ditch talks to avoid collapse

Flybe is in talks with the government to defer a £106m air passenger duty bill for three years amid reports the airline is attempting to secure a rescue deal. Flybe is facing mounting losses and has put EY on alert to handle any administration process should the airline run out of cash. The company was rescued last year by a consortium led by Virgin Atlantic which paid £2.8m for the airline. More than 2,000 jobs are at risk if Flybe fails to strike a deal to secure funding. But its collapse would also be a blow to regional airports and the government’s hopes of improving regional connectivity.

The Daily Telegraph, Business, Page: 4 Financial Times, Page: 19 City AM, Page: 1 The Times, Page: 8

WEDNESDAY

Government agrees Flybe rescue deal

The Government has agreed a rescue plan for airline Flybe, with a repayment plan for a tax debt that is thought to exceed £100m agreed. Business Secretary Andrea Leadsom said the deal would keep the company operating. Flybe’s shareholders, which include Virgin Atlantic and Stobart Group, have agreed to put more money into the business. The Government also announced that taxes on domestic flights would be reviewed as part of the rescue deal.

The Daily Telegraph, Business, Page: 1 The Times, Page: 6 Financial Times, Page: 1 The Guardian, Page: 14 Daily Express, Page: 47 BBC News

Netflix responds to tax report

Netflix insists it “has always paid the taxes required” in the countries in which it operates. This comes after a report from TaxWatch suggested the firm moved between 250m-£330m in profits from international operations outside the US, including the UK, to low-tax jurisdictions such as the Netherlands. The analysis also shows that Netflix UK received a £51,000 rebate from the Government in 2018 and claimed £924,000 in tax relief as part of incentives designed to ensure Britain remains a competitive location for making productions. Shadow chancellor John McDonnell said the report shows “Netflix is ripping off our public services by channelling profits through tax havens.” He added: “What’s even worse is that Netflix is claiming tax reliefs in the UK at the same time as it’s channelling profits overseas.”

The Guardian, Page: 21

LOG ‘overstated’ value of holdings

Judge Clive Jones has said that London Oil & Gas (LOG), a firm at the centre of the London Capital & Finance scandal, “overvalued” a major asset on its balance sheet. The judge rejected former LOG director Elten Barker’s attempt to remove administrators Smith & Williamson from his old company. His lawyers argued that LOG should not be in administration since it could sell its shares in London-listed Independent Oil & Gas and pay off its debts, but Judge Jones said LOG’s valuation of the shares of £135.65m was “unsustainable”. In his High Court judgement he added: “The evidence leads to the conclusion that the balance sheet is unreliable because assets have been over-valued.”

Daily Mail, Page: 73 City AM, Page: 10

London floats hit decade-low

London’s initial public offering (IPO) market saw the quietest year for a decade in 2019, with a 56% year-on-year dip in listings, according to research by EY. Figures show 35 companies floated raising £5.9bn, down from 79 listings raising £9.5bn in 2018. The number of admissions to the junior Aim market also fell, from 35 in 2018 to 11 in 2019. IPOs registered globally fell 10% to 1,127 in 2019, with proceeds of $202bn (£155bn), a 2% decrease. Scott McCubbin of EY said that IPOs “remain an exit route for private equity”, highlighting that 53% of all IPO proceeds raised in London were from private equity backed companies, compared to a global average of 29%.

City AM

1 in 5 firms financially stressed

Research from KPMG shows that a fifth of businesses are financially stressed, with more than 1,000 at risk of insolvency. The analysis looked at factors such as profitability, cashflow and debt leverage at 27,000 businesses with revenues above £10m over the past five years, finding that around 5,400 were stressed. KPMG’s Blair Nimmo commented: “Without action, stress can very quickly turn into distress. ”

The Sun, Page: 45

All eyes on Future FD’s pay vote

Publishing firm Future is bracing itself for shareholder criticism at its annual general meeting next month after influential proxy adviser Glass Lewis urged investors to vote down the firm’s executive pay policy. Future’s remuneration report outlines a base salary increase of more than 27% for finance director Penny Ladkin-Brand, who is set to take home £3.9m overall in 2020. Almost a third of shareholders voted against last year’s pay report.

City AM

SMEs NEWS FOR THE MIDWEEK TO 15th JANUARY 2020

MONDAY

Small businesses wary of open banking

A survey by the Federation of Small Businesses has found that two-thirds of smaller firms would not consider sharing banking data with other financial service providers, with 40% thinking it is unsafe and 37% “unsure of the benefits” it could bring. The FSB said although such reticence is understandable, it was holding up progress in open banking and depriving those firms of the benefit of having invoices, cash flow, payroll, utilities and tax data in the same place. Elsewhere, Paul Galligan, the chief executive of bills switching service Bionic and the former boss of Comparethemarket.com, has called on the Government to allow energy, insurance and telecoms firms to share customer information so small firms can significantly reduce their bills. Galligan said an open banking-style system across the sectors would “help SMEs cut the red tape and fight the faff”. Research by Bionic showed SMEs are overpaying by almost £9bn a year on ove rheads and unnecessary administration.

City AM, Page: 10 The I, Page: 40 Daily Express, Page: 49 Daily Mail The Press and Journal, Page: 29 Yorkshire Post, Page: 15

P2P funds will trim investor’s profits when contingency funds dry up

The Sunday Times’ Kate Palmer reports that peer-to-peer funds have nearly emptied their safeguard funds – used to reduce investor losses by covering bad debts on loans. RateSetter and Zopa have paid out nearly £30m between them and Ms Palmer says when the funds run dry investors who have earned a return on their loans will have their profits trimmed in order to refill the pot. Ms Palmer points out that Funding Circle is the only major peer-to-peer lender that has never had a provision fund, claiming that its model spreads the risk.

The Sunday Times

New company formations hit record levels in 2019

The Centre for Entrepreneurs will this week release data gleaned from Companies House showing a record 681,704 new businesses started in 2019, up 2.8% on the previous year. London was the No 1 place for starting a business, while Leicester, Glasgow and Bristol all saw sharp increases in the number of companies formed. The number of new tech start-ups was 43,765 while 14,259 takeaway food shops and mobile food stands were established.

The Sunday Times

WEDNESDAY

Taxpayer cash pumped into aimless business aid

The National Audit Office (NAO) says taxpayers have contributed £17bn a year into business support schemes which are often poorly designed, badly monitored and not well co-ordinated. The NAO said: “Most of the schemes we assessed lacked measurable and time-bound objectives.” It noted that of almost 1,500 criteria used by the Department for Business, Energy and Industrial Strategy (BEIS) to monitor schemes, only 136 were used by more than one programme – making it difficult to compare. The NAO said the British Business Bank, which was set up by BEIS to support small businesses with access to finance, has run its programmes effectively, successfully boosting financing for small firms by £13.9bn since its launch in 2014.

The Daily Telegraph, Business, Page: 3

PERSONAL FINANCE NEWS FOR THE MIDWEEK TO 15th JANUARY 2020

WEDNESDAY

Little incentive for banks to raise SEARs

With the Financial Conduct Authority propos ing that providers could be forced set a new Single Easy Access Rate (SEAR) across their easy access accounts and cash Isas to give savers a better deal, PwC’s financial services risk and regulation director Sarah Nield has said that while this will give long-standing customers a rate uplift, customer loyalty gives banks little incentive to increase SEARs. She comments: “Savvy rate chasers will be able to switch between introductory rates, but must do this annually. Even the most proactive would find that hard graft. ”

Daily Express, Page: 30

PROPERTY NEWS FOR THE MIDWEEK TO 15th JANUARY 2020

WEDNESDAY

Frasers Group urges PM to reform business rates system

Mike Ashley’s Frasers Group, formerly known as Sports Direct, has written a letter to Boris Johnson urging the Government to reform the business rates scheme, claiming it results in some stores “paying the incorrect amount of rates”. The letter from Frasers Group finance chief Chris Wootton added that the company is not “seeking an instantaneous revision of rates” but said if retailers could see “light at the end of the tunnel” they could subsidise loss making stores until changes are made. The letter follows a warning by Mr Ashley which warned that more House of Fraser stores will be forced to close unless the “broken and unworkable” business rates system is tackled, saying his company can wait “months, not years” for reform.

City AM

PENSIONS NEWS FOR THE MIDWEEK TO 15th JANUARY 2020

MONDAY

Pension funds could boost SME investment by £12bn a year

The Mail on Sunday interviews Business Growth Fund (BGF) chief Stephen Welton who is calling on Boris Johnson’s government to help spur the entrepreneurial spirit. BGF believes at least £5bn extra – and possibly as much as £12bn – could be invested in small, growing companies every year. But the only way to unlock this amount of cash is to change the rules to allow pension funds to invest in small companies not listed on stock markets. Unlike the Woodford scandal, pension fund money would be long-term, says Welton, who adds that the saga will have made wealth managers wary.

The Mail on Sunday

TUESDAY

Hundreds fail to report pension tax charge

Royal London has published advice for people completing their tax return this January. It follows a freedom of information request by the firm which reveals that just over 1,004 people in the 2016/17 financial year failed to report that a pension tax charge had been paid on their behalf by their occupational pension scheme. Royal London said that, as the number of people affected by ‘scheme pays’ has grown since 2016/17, it is likely that thousands of people are now failing to report this information. Steve Webb, director of policy at Royal London comments: “Filling in your tax return can be challenging enough, but the complexity of the rules around pension tax relief for higher earners is a particular nightmare. The good news is that some higher earners can claim additional tax relief provided that they put the right information on their tax return. But others need to make sure they report contributions in excess of their annual al lowance and pay the tax due now.”

Daily Express Actuarial Post International Adviser Pensions Age

Low-paid workers at risk of losing full state pension

Steve Webb, director of policy with Royal London, predicts that up to 1m workers could lose their eligibility for state pension credits if the lower earnings limit is increased.

Financial Times

ECONOMY NEWS FOR THE MIDWEEK TO 15th JANUARY 2020

MONDAY

Optimism increases among British financial firms

A survey carried out by PwC and the CBI reveals optimism among the UK’s financial services companies has risen for the first time in almost three years. Sentiment in the sector improved at the end of last year, for the first time since March 2017, while a positive balance of 8% of firms said they were more optimistic than three months ago. A balance of 14% of businesses expect volumes to grow in the opening three months of 2020, the strongest result since 2018. However, a balance of 19% warned of falling volumes in the final quarter of 2019, the worst since 2012. Separately, BDO’s Optimism Index showed no significant change in business confidence. Partner Peter Hemington said: “We’ve seen in the past that post-election changes in optimism take a while to feed through, even where the result is decisive as this.” Finally, a survey from trade finance provider Stenn found just under half of UK firms think the country will go into recession this year.

The Times, Page; 40 Daily Mail, Page: 70 The Scotsman, Page: 24 Yorkshire Post, Page: 15 City AM, Page: 12

Another BoE rate setter backs a cut

Gertjan Vlieghe, an external member of the Bank of England’s Monetary Policy Committee, has joined Silvana Tenreyro, another policy setter, in saying that a cut in the cost of borrowing may be required if economic data fails to improve. The Bank’s next decision on interest rates is due on 30th January. Separately, figures from NatWest and stats firm IHS Markit reveal London was the only British region where output grew in December, with firms hiring at the fastest rate since July.

The Daily Telegraph Financial Times The Guardian, Page: 40 City AM, Page: 1, 2

Central-bank easing triggers record corporate bond issuance

Companies across the world sold over $2.5tn of corporate bonds in 2019, encouraged by central banks lowering interest rates, but policymakers are now concerned about the soaring levels of debt.

Financial Times

TUESDAY

UK economy contracted in November

Figures from the Office for National Statistics (ONS) show that the UK economy shrank 0.3% in November on the previous month, less than the 0% growth forecast by economists, while in the three months to November GDP grew by just 0.9% on the same period the year before – its weakest pace of annual growth since the spring of 2012. The ONS figures show that November’s manufacturing output was down 1.7% while services were also down 0.3%. However, construction grew by 1.9% compared with October. The UK’s trade balance hit a record high surplus of £4bn in November and the three months to November saw the surplus stand at £1.1bn – the second consecutive quarter in the black. The next two weeks will see the release of key survey data which will be crucial to Bank of England policymakers as they consider whether to cut rates. Howard Archer, chief economic advisor to the EY Item Club, said the survey findings would be “highly influential”.

The Daily Telegraph The Daily Telegraph Financial Times, Page: 1 Financial Times, Page: 13 The Times City AM The Guardian, Page: 33 Daily Mirror, Page: 44

WEDNESDAY

Credit card spending hits £6.6bn over Xmas

TSB research shows that Britons spent £6.6bn on credit cards over the festive period – an average of £435 each. Analysis shows that one in five people with a loan or card are concerned about meeting their repayments, while just over half worry about money at least monthly. TSB’s Craig Bundell urges those with debt problems to create a budget, saying: “If your credit card interest is too high, look at the best balance transfer offers, or consolidate debts with a personal loan.”

Daily Express, Page: 29

Scottish sales up 0.4%

The Scottish Retail Consortium-KPMG Scottish Retail Sales Monitor shows sales north of the Border grew by 0.4% last month compared with December 2018. Looking at the year-on-year change over November and December, sales declined by 0.9% year-on-year and, when adjusted for deflation of 0.4% over the two months, the real-terms decline was 0.5%.

The Press and Journal, Page: 31

SPORT NEWS FOR THE MIDWEEK TO 15th JANUARY 2020

TUESDAY

Barcelona tops football’s rich list for first time

Arsenal have fallen out of the world top ten for earnings for the first time in nearly 20 years, according to financial analysis from Deloitte, while Manchester United are expected to be overtaken by either Liverpool or Manchester City at the end of the season for revenue. Barcelona were the biggest earners last season, topping Deloitte’s Money League for the first time, with Real Madrid second and United third.

Financial Times, Page: 13 The Times, Page: 63 Daily Mail, Page: 86 The I, Page: 55 The Guardian, Page: 51 Daily Express, Page: 56

OTHER NEWS FOR THE MIDWEEK TO 15th JANUARY 2020

MONDAY

Gender pay transparency could drive down wages

Economists studying gender transparency laws in Denmark suggest laws designed to encourage companies to reduce the wage gap between men and women appear to have hit productivity and overall average pay. A paper from the Centre for Economic Policy Research found legislation did very little to help narrow the gender pay gap, but productivity did fall compared with control firms, possibly driven by reduced morale after learning about the pay gap and the subsequent fall in wages for male workers. The impact of lower productivity on profits was offset by squeezing wages, which fell 2.8% on average.

The Daily Telegraph

WEDNESDAY

Harry, Meghan and Canadian tax

BBC News considers the Duke and Duchess of Sussex’s plans to step back as senior royals, noting the tax implications if they opt to assume permanent residency in Canada. If they do – or they spend 183 days in a tax year in the country – then Canada will consider them resident for tax purposes.

BBC News

Contact Paul Southward.

Paul Southward


News to Friday 10th January 2020


News to Friday 10th January 2020

NEWS ROUNDUP

TAX News to Friday 10th January 2020

THURSDAY

Scots paid £750m more in income tax following SNP tax changes

Workers in Scotland paid almost £750m more in income tax in 2018/19 than they did the year before following an overhaul of the tax system by the SNP. A National Audit Office report confirmed Scotland’s estimated income tax revenue was around £11.7bn in 2018/19, compared to £10.9bn the previous year. Critics say the changes make Scotland the highest-taxed part of the UK. But a Scottish Government spokeswoman said: “Under our progressive approach, 55% of Scottish income taxpayers pay less income tax than people living in the rest of the UK, whilst raising additional revenue to support our economy and invest in the delivery of first-class public services. Whilst higher-earning taxpayers are asked to pay more, we are able to provide the widest set of free-to-access public services anywhere in the UK.”

The Herald

Irish should ignore EU tax demands, says Sugar

Alan Sugar has said Ireland should ignore Brussels and set its corporation tax rate how it pleases if the EU tries to harmonise tax rates. The businessman said the country should follow France’s example and simply do what it wants regardless of EU rules. Speaking at the Pendulum Summit in Dublin, Mr Sugar said that if Ireland was forced to raise its corporation tax from the current rate of 12.5%, he felt it would still remain an attractive place to do business, as long as levels did not rise above British rates. He also said Ireland could benefit after Brexit from companies moving there to gain access to the single market.

RTÉ

FRIDAY

Business beware HMRC’s latest focus

Andrew Sackey, partner and head of tax fraud investigation at Pinsent Masons, explains how HMRC’s investigations into non-compliance have progress since 2010 when the UK’s tax administration undertook a Spending Review, which boosted funding for criminal investigators. Periodic improvements in enforcement work since have seen revenue from prosecutions rise sharply and the scope of targets broaden. In 2020, there are already more than twice as many corporates and wealthy individuals under criminal investigation as there were ongoing criminal prosecutions of any type in 2010, says Sackey, adding that with HMRC’s Offshore, Corporate and Wealthy compliance division (OCW) now prosecuting corporates for failing to prevent tax evasion by employees or agents, businesses “would be well advised to ensure that their tax governance and compliance measures cover the unique risks posed by the new corporate compliance landscape.”

The Scotsman, Page: 36

Former head of tax at Freshfields charged over illegal rebate scandal

Ulf Johannemann, the former head of global tax at Freshfields Bruckhaus Deringer, has been formally charged over his alleged involvement in a fraudulent reclaim of €383m tax which was never paid to the German state. Dividend stripping, or cum-ex trading, involved using a now closed legal loophole to claim tax credits for both buyers and sellers of shares by buying shares just before their dividends expired and then selling them on straight away.

City AM Financial Times, Page: 14

CORPORATE News to Friday 10th January 2020

THURSDAY

Ted Baker’s lenders appoint advisers

Sky News reports that struggling fashion retailer Ted Baker’s banking syndicate, which includes Barclays and Royal Bank of Scotland, have appointed restructuring experts from FTI Consulting to undertake an independent business review (IBR). FTI’s IBR is expected to take several weeks to conclude and could result in the lenders further tightening the terms on which they provide debt to the fashion retailer, according to the news agency. Last year, the company announced that an accounting error had led it to overstate the value of its stock by up to £25m. Deloitte and lawyers from Freshfields Bruckhaus Deringer have been brought in to investigate the matter. Sky News says that Deloitte’s probe into the accounting error may ultimately provide awkward reading for KPMG, Ted Baker’s auditor since 2002, noting that in 2018, KPMG was fined £3m by the Financial Reporting Council for breaching the watchdog’s ethical standards in relation to non-audit services provided to the fashion retailer.

Sky News Reuters UK The Guardian, Page: 37 City AM, Page: 3

Luxury dealer collapses into administration

Almost 140 staff at specialist motor dealer Leven Car Company are facing an uncertain future after the business entered administration. Administrators at Leonard Curtis Business Rescue & Recovery were hired earlier this week following an internal company review.

The Scotsman, Page: 39

FRIDAY

Northern Rail could be nationalised ‘within months’, says Shapps

The transport secretary has warned that Northern Rail could be nationalised within months as its operator, Arriva Rail North, rapidly runs out of funds. Grant Shapps said he will either accept Arriva’s plan for reduced services under a new contract or the state will take over as an operator of last resort.

Financial Times The Daily Telegraph, Page: 8 City AM The Guardian, Page: 7

M&A deal value rises by £15bn in 2019

Financial firms completed £39.8bn worth of deals last year, up from £24.9bn in 2018, according to data from EY. The £15bn increase in M&A deals came despite the number of deals falling from 236 to 211.

City AM

SMEs News to Friday 10th January 2020

THURSDAY

SMEs owed £50bn in late payments

New research from digital banking platform Tide revealed that UK SMEs are chasing an estimated £50bn in late payments with the average small business chasing five outstanding invoices at once, wasting an hour and a half every day. London-based businesses are the hardest hit with an average of seven invoices outstanding. Oliver Prill, Tide’s chief executive, said: “It has been known for a while now that late payments are crippling SMEs, with the government having tried a number of times to address the issue. It is however shocking to see exactly how much time SMEs, and particularly the self-employed are wasting by having to chase clients to pay promptly. Cash flow is crucial for SMEs, and just a few late payments can tip them into danger of becoming insolvent.”

City AM, Page: 8

PROPERTY News to Friday 10th January 2020

THURSDAY

Halifax reports 4% rise in house prices for 2019

UK house prices rose 4% in 2019, according to Halifax, as a December bounce saw the average property’s value jump 1.2%, or £4,000 – the largest monthly rise since February 2007. The Halifax index, based on the lender’s own mortgage approvals, showed the average house price climbed £9,136 last year to £238,963, but the bank said that it only expected “modest” rises in the year ahead. Halifax managing director Russell Galley said: “Looking ahead, longer-term issues such as the shortage of homes for sale and low levels of house-building will continue to limit supply, while the ongoing challenges faced by prospective buyers in raising deposits will serve to constrain demand.” The bank has forecast gains of 1 to 3% for house prices in 2020.

The Daily Telegraph The Times The Guardian City AM Daily Mail

Options tighten for retailers

Shoe Zone boss Anthony Smith has attacked the lack of government action to reform business rates, decrying Boris Johnson’s promised rate cut for small businesses as “shameful” and “total rubbish”. Meanwhile, Deloitte has warned of more retail failures this year as landlords continue to push back against company voluntary arrangements (CVAs). Dan Butters, head of restructuring services at Deloitte, said: “We believe that this increase in administrations in December 2019 may be a sign of things to come in 2020 as retailers are left with fewer options to restructure.”

The Times, Page: 43 The Sun, Page: 45 City AM, Page: 5

PENSIONS News to Friday 10th January 2020

THURSDAY

Chess body pressed to drop grandmaster in pensions row

The English Chess Federation is being urged to part ways with Simon Williams, a Grand Master linked to a pension “liberation” scheme that left some investors with hefty tax bills.

Financial Times, Page: 2

WEALTH MANAGEMENT News to Friday 10th January 2020

FRIDAY

Vanguard plans to launch UK investment service

The Financial Conduct Authority has given US fund management group Vanguard the green light to begin providing investment advice in the UK. In a message to clients, Vanguard’s head of Europe Sean Hagerty revealed the firm has obtained approval from the FCA to provide retail advice and is “exploring the launch of a direct to consumer financial advice offer in the UK”. He stressed that the new service was in its early stages and “there is not currently a timescale for bringing a proposition to market”. Vanguard has offered professional investment products in the UK since 2009, where it manages a total of £87bn.

Financial Times, Page: 1 City AM, Page: 7 Investment Trust Insider Financial News

ECONOMY News to Friday 10th January 2020

THURSDAY

UK productivity rises slightly after year of contraction

Official figures released yesterday by the Office for National Statistics (ONS) show output per hour worked – the standard measure of productivity – grew only marginally in the third quarter of 2019 following four successive quarters of contraction. In the services sector, which accounts for 80% of the economy, output per hour rose by 0.1%. Productivity in the construction sector was up by 5.7% while manufacturing productivity fell by 1.9%. “Although productivity grew on the year, the underlying picture is of sustained weakness since 2008, with growth over the past year being only a third of the average over the past 10 years or so,” said Katherine Kent, head of productivity at ONS. Alex Tuckett, senior economist at PwC, said: “Without sustained productivity growth, recent improvements in real wage growth are unlikely to be sustainable. This will require increased investment by both business and government, notably in transport infrastructure, upskilling staff and innovation.”

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

British retail suffers worst year on record

Sales fell for the first time since records began in 1995, according to figures from KPMG and the British Retail Consortium (BRC). Total retail sales in stores and online fell by 0.1% in 2019. Helen Dickinson, chief executive of the consortium, said that 2019 had been “the first year to show an overall decline in retail sales. This was reflected in the CVAs, shop closures and job losses the industry suffered. Twice the UK faced the prospect of a no-deal Brexit, as well as political instability that concluded in a December general election – further weakening demand for the festive period.”

The Times, Page: 42 Financial Times, Page: 3 The Daily Telegraph, Business, Page: 3 The Guardian, Page: 37 Daily Mail, Page: 85 The Sun, Page: 45 City AM, Page: 5

FRIDAY

Business confidence hits record high

Business sentiment among finance chiefs has risen sharply following the Conservatives’ election victory, according to the latest Deloitte CFO survey. Over half (53%) of respondents were more optimistic than three months earlier, up from 9% in the previous quarter. The figures represent the biggest jump in confidence since Deloitte started the survey 11 years ago. Some 38% said they expected UK businesses to increase capital expenditure over the next year, up from just 6% during the previous period, and 27% said they expect hiring to rise next year, up from 3% during the last quarter. A separate study by the Recruitment and Employment Confederation and KPMG echoed the sentiment, with permanent appointments rising for the first time in a year, while temporary billings rose faster.

The Times, Page: 37 The Daily Telegraph, Business, Page: 1 Daily Mail, Page: 82

Mark Carney hints of upcoming rate cut

The Bank of England’s outgoing chief, Mark Carney, has suggested that UK interest rates could soon be cut in order to bolster the economy amid slow growth. This resulted in the pound falling 0.6% against the dollar to $1.3016 in early London trading on Thursday. Meanwhile, the euro saw a 0.5% rise against sterling. The Bank has previously predicted that the new year will see a boost to the economy as Brexit uncertainty was eased following the election result, however the new comments hint that the Bank is not currently as confident in a Brexit bounce. Carney said that the bank’s Monetary Policy Committee has been debating “over the relative merits of near term stimulus to reinforce the expected recovery in UK growth and inflation.” He added: “There are downside risks from global growth and the possibility that uncertainties over future trading relationships could rema in entrenched”.

Financial Times Daily Mail Daily Express, Page: 13

OTHER News to Friday 10th January 2020

THURSDAY

World Bank warns of global debt crisis

The World Bank has warned that the latest wave of debt accumulation is the largest since the 1970s and that a small recovery in world output predicted for 2020 “is largely predicated on a rebound in a small group of large emerging market and developing economies, most of which are emerging from deep recessions or sharp slowdowns”. Total emerging and developing economy debt reached almost 170% of GDP in 2018 – or $55tn (£42tn) – an increase of 54 percentage points since 2010. The debt mountain leaves economies vulnerable to an unexpected spike in interest rates, the World Bank said, warning “the three previous waves of debt accumulation in debt have ended badly”.

The Daily Telegraph The Guardian

Contact Paul Southward.

Paul Southward


NEWS FOR THE MIDWEEK TO 8th JANUARY 2020


NEWS FOR THE MIDWEEK TO 8th JANUARY 2020

NEWS ROUNDUP

TAX NEWS FOR THE MIDWEEK TO 8th JANUARY 2020

TUESDAY

Finance firms contribute record taxes

The financial services and banking industries paid a record £75.5bn in taxes last year, according to a report by PwC for the City Of London Corporation. The total was up on the previous year’s £75bn and comprised of £33.4bn in direct taxes, including corporation tax and business rates, and £42.1bn collected from employees and customers. Taxes from the sector made up 10.5% of the Treasury’s entire tax take. Andrew Kail, PwC’s head of financial services, said: “It’s important we look closely at our tax system to ensure it is fit for new ways of working and doing business while optimising the competitiveness of the sector post-Brexit.” The report added that financial services firms employ 1.1m people across the country – around 3% of all UK employment.

Daily Mail, Page: 74 The Times, Page: 42 The Independent, Page: 54 The Sun, Page: 43 The I, Page: 41 City AM, Page: 1 Yorkshire Post, Business, Page: 5

News Corp wins VAT dispute with HMRC

Rupert Murdoch’s newspaper group News Corp has won a landmark legal case against HMRC over whether the Times’ digital edition should be subject to VAT. The Upper Tribunal yesterday agreed that online editions of the Times and the Sunday Times should not be subject to a 20% VAT charge because their websites are only updated four times a day – meaning they met the legal definition of a newspaper. Philip Munn, a tax partner at RSM, said the ruling could have far-reaching effects other parts of the economy: “Over the last few years people have been switching from printed matter to digital, so this ruling could have quite profound effects on a number of other products which enjoy zero-rating when they are provided in hard copy, such as books and maps.”

The Guardian City AM, Page: 15

Edinburgh joins Slough and London as top spot for tax avoiders

A report from UHY Hacker Young reveals that Slough is the top spot for UK tax avoiders with 47 people per 100,000 admitting to underpaying tax from offshore investments last year. London came second with 39 while Edinburgh was the only location outside the Home Counties in the top five. The Scottish city scored 30 per 100,000 – the UK average was 17. UHY Hacker Young said individuals in these areas are likely to fall into higher income tax brackets and would, therefore, be tempted to keep more of their income or assets offshore. The firm’s chairman, Colin Wright, commented: “The growing resources at HMRC’s disposal means there is nowhere to hide for taxpayers with undeclared offshore interests. It, therefore, makes a lot of financial sense to make a disclosure as this can reduce penalties from up to 200% of unpaid tax to less than 100%.”

The Scotsman, Page: 11

WEDNESDAY

Government to review IR35 rollout

The government is to review the rollout of the controversial IR35 tax plan, which is due to take effect in April 2020 to prevent workers from disguising themselves as freelance contractors as a way to pay less tax. The government said the review, to be concluded by mid-February, would engage with individuals and businesses on their experiences of the implementations of the reforms and that it would also launch a separate review to explore how it can better support the self-employed. Mike Cherry, chairman of the Federation of Small Businesses, called for a delay to the rollout of the new rules in the light of the review: “This important review presents an opportunity to reassess our flawed off-payroll legislation,” he said. His view was echoed by Tej Parikh, chief economist at the Institute of Directors, who added: “It’s not immediately clear how any new steps to smooth the process could take effect in time for A pril. Firms and contractors have already been impaired by the looming deadline and lack of clarity around the rules.” The CBI, the ATT and the ICAEW also backed a delay.

The Daily Telegraph, Business, Page: 1 Financial Times, Page: 3 The Times, Page: 36 City AM, Page: 3

Penalties for breaching minimum wage laws too soft

A report from the Resolution Foundation argues that national minimum wage legislation is not being enforced strongly enough after a rise in reports of non-compliance were recorded following a steady decline for 15 years. In 2016, one in five workers were being underpaid but the figure is now one in four. Researchers at the think tank pointed out that although HMRC can levy penalties worth up to 200% of wage arrears for noncompliance, the average in 2017-18 was about 90% – not enough to serve as a deterrent. Lindsay Judge, senior policy analyst at the Resolution Foundation, said: “As the government plans to increase the legal wage floor it is essential to strengthen the incentives for firms to comply. The government can act by encouraging HMRC to take a tougher line with minimum wage offenders and giving it the power to levy larger financial penalties.”

The Times, Page: 36 The Daily Telegraph, Business, Page: 8 The Guardian, Page: 7

Britons could still be hit by stealth taxes this year

Hargreaves Lansdown personal finance analyst Sarah Coles has warned that workers could yet pay out more tax despite the Conservatives’ promise not to increase key tax rates. Ms Coles says with income tax thresholds being frozen until April 2021 and rises in council tax and price rises on fuel and alcohol, Britons could fork out £1,000 more in tax than they expect to this year. Ms Coles urged taxpayers to take advantage of allowances such as Isas and pension contributions.

Daily Express, Page: 27

Do accountants care about tax avoidance?

The Times quotes Richard Murphy, director of Tax Research UK who complains that the ICAEW’s new code of ethics fails to mention tax avoidance. The paper notes that it was only last month when Sir Amyas Morse, former chief executive of the National Audit Office, warned in his report on the loan charge that there remained a “market of unscrupulous tax advisers”. Mr Murphy asks: “When will accountants take tax avoidance seriously?”

The Times, Page: 38

CORPORATE NEWS FOR THE MIDWEEK TO 8th JANUARY 2020

MONDAY

CVAs failing to save stores

A report from commercial property adviser Colliers suggests that CVAs are failing to prevent retailers having to shut up shop, with the restructuring tool often merely delaying the inevitable. Figures show that of 23 large CVAs entered into by businesses since 2016, 13 of the companies have since gone into administration, including BHS, Supercuts and Mothercare. David Fox, co-head of retail agency at Colliers, said: “CVAs were designed to help struggling businesses, but they do nothing to address high debt levels, which often require restructuring, refinancing or a debt write-off.” Ashley Armstrong in the Times says that the “rapid rise” of CVAs has led to hostilities between some retailers and property owners, with struggling firms seeking rent cuts before the end of their contracts. Will Wright, head of regional restructuring at KPMG, comments: “By definition you are dealing with an insolvent company and therefore you would expect a high degree of failure, but that doesn’t mean you shouldn’t give a company the opportunity to fix its fortunes.”

The Times, Page: 38

Hotel closures up 66%

Research by UHY Hacker Young shows that UK hotel insolvencies hit a five-year high in 2019, rising by 60% to 144. A decline in the number of overseas tourists drove a fall in demand, as did a dip in the number of business conferences and growth in the popularity of staycations – with increased competition from firms such as Airbnb also a factor. Peter Kubik, of UHY Hacker Young, comments: “Hotels – many of which are lagging behind in their use of technology – are going to have to quickly bring themselves up to speed.”

The Daily Telegraph, Page: 2 The Guardian, Page: 41 Daily Express, Page: 44 The Sun, Page: 26 City AM, Page: 4

A point on purpose

Rupert Dean, co-founder of co-working office x+why, looks at purpose-driven capitalism. He cites research from Harvard Business Review Analytics and EY‘s Beacon Institute which shows that companies focusing on purpose to drive performance see higher profitability, while a PwC study suggests millennials who have a strong connection to the purpose and culture of their organisation are 5.3 times more likely to stay there.

City AM, Page: 19

TUESDAY

Chilango creditors back rescue plan

Chilango’s creditors and shareholders have backed a rescue package to keep the struggling Mexican restaurant chain afloat. Gordon Thomson, a director at RSM, which has been working with Chilango on the company voluntary arrangement, said the approval of the proposals “ensures the business is well structured to develop further.”

City AM

Creditors of Jamie’s Italian set to lose most of £80m owed

A progress report from KPMG, the administrators of Jamie Oliver’s failed Italian restaurant chain, states that creditors will lose most of the £80m they are owed after the company’s collapse last May.

Financial Times, Page: 13 The Guardian

WEDNESDAY

Doubts over South Western’s future

Deloitte has said that South Western Railway (SWR) faces “material uncertainty” over whether it can continue operating and is at risk of being nationalised by the Department for Transport (DfT). The operator’s auditor cast doubts over the progress of talks with the DfT regarding strikes, timetable bungles and track upgrades. SWR is run by First Group.

The Daily Telegraph, Business, Page: 1 The Times, Page: 2 The Guardian, Page: 8 City AM, Page: 6 Daily Mail, Page: 2

Kantar hires Ian Griffiths as new FD

ITV executive Ian Griffiths has moved to Kantar as the market research firm’s new CFO. Mr Griffiths will take up the new role on 16th January. He has served as COO and CFO at ITV since 2017.

City AM, Page: 19

INDUSTRY NEWS FOR THE MIDWEEK TO 8th JANUARY 2020

MONDAY

Standards board calls for new reporting rules

The International Accounting Standards Board has proposed new financial reporting rules that would see operating profit strictly defined, with analysis showing at least nine different definitions in a sample of 100 companies analysed.

Financial Times, Ft Fm, Page: 3

What 2020 may hold

Looking ahead to what the next 12 months may bring, Mark Kleinman says momentum behind reform of the audit sector will gather pace but is unlikely to follow the path regulators are currently mapping. He suggests a proposal for joint audits of listed companies’ books will be formally scrapped, while “a more robust separation” of the Big Four’s audit and consulting arms will be approved.

City AM, Page: 13

SMEs NEWS FOR THE MIDWEEK TO 8th JANUARY 2020

MONDAY

1,200 SMEs seek loans over Christmas

Data from loan firm Iwoca shows that more than 1,200 small business owners applied for a loan between Christmas and New Year’s Day, with almost 300 applications across Christmas Eve, Christmas Day and Boxing Day and 135 applications on New Year’s Day. Iwoca notes that applications between Christmas Eve and New Year’s Day were up 5% on the same period last year. It also revealed that in H1 2019, 55% of small businesses applied for finance out of hours, with a third of applications coming at weekends. Seema Desai, chief operating officer at the company, said that with SME owners facing “ever-increasing demands on their time,” demand for finance outside of traditional banking hours is climbing as firms “seek greater flexibility in how they access financial support.”

Daily Express, Page: 44 The I, Page: 41

Fake reviews hit small firms

Research from the Federation of Small Business (FSB) suggests small firms are being hit by fake reviews being posted online. Small businesses also warned that sudden changes to terms and conditions are hampering their online efforts. FSB boss Mike Cherry said: “Businesses are using the online opportunities being offered to grow their firms. But huge difficulties lie ahead. Crucial to small firms are websites like eBay, Amazon and Facebook which are central to advertising, sales and exporting aims. However, small businesses’ use of online platforms is not without problems and still too many encounter problems such as fake or malicious reviews, problems with intellectual property and sudden delisting of their products.”

Daily Mail, Page: 2 The I, Page: 40 The Scotsman, Page: 34 The Sun, Page: 2

Financial admin keeps microbusiness bosses awake

A third of microbusiness owners say their personal lives are affected by the volume of financial administrative tasks they face, with research from Starling Bank showing that such firms spend the equivalent of ten weeks every year sorting out their finances. The study saw 11% of microbusiness owners say the matter had left them sleepless, while one in twenty said that it had made them ill.

The Times, Page: 44

WEDNESDAY

Suppliers worst hit by Jamie’s Italian collapse

Jamie Oliver has been criticised over the collapse of his Italian restaurant chain which left investors and suppliers £80m out of pocket. Suppliers including butchers and fishmongers are owed six-figure sums. Mike Cherry, chairman of the Federation of Small Businesses, said: “Small businesses further down a supply chain are often the last in line to get anything back when a large business goes under. Sadly many of these businesses that are left out of pocket will not be able to recover and will go under themselves.”

Daily Mail, Page: 7

PROPERTY NEWS FOR THE MIDWEEK TO 8th JANUARY 2020

WEDNESDAY

Reforms push landlords from market

A survey by insurance broker Simply Business has found that 26% of landlords are planning to sell at least one property this year due to regulation changes and tax hikes. Just 13% said they would expand their portfolio in 2020.

City AM, Page: 9

PERSONAL FINANCE NEWS FOR THE MIDWEEK TO 8th JANUARY 2020

WEDNESDAY

Savers piled into UK funds after Tory victory

British savers ploughed £153m into equity funds on the day the general election results were announced and a further £181m when markets opened the following Monday, according to Calastone. The firm said it was the biggest increase in investment since it started collecting data in 2015. Investors poured a net total of £1bn into UK-focused funds in December, more than double the previous largest monthly inflow in July 2015. Edward Glyn, head of global markets at Calastone, said the removal of the threat of a Jeremy Corbyn-led Labour government released pent-up demand as did bringing an end to the Brexit deadlock.

The Daily Telegraph

REGULATION NEWS FOR THE MIDWEEK TO 8th JANUARY 2020

MONDAY

Operational risk ‘increasing’ due to rise in City watchdogs

UK Finance says regulation of the City since the banking crisis has been counterproductive, increasing systemic risk, driving up compliance costs and delivering overlapping initiatives from watchdogs with no overarching strategy.

Financial Times

PENSIONS NEWS FOR THE MIDWEEK TO 8th JANUARY 2020

MONDAY

Treasury the ‘biggest barrier to pensions policy’

Former pensions minister Sir Steve Webb has described the Treasury as a “barrier to pensions policy”, saying it is “shocking” that it has resisted reforms that would boost pension savings but would require upfront tax relief on individuals’ income. Sir Steve, a director of policy at Royal London, commented: “It is shocking that the biggest barrier to pension policy is the Treasury. Because every time you put a pound in a pension, they miss out on some tax today.” A Treasury spokesman told the Telegraph: “We want people to save into a pension for their future … We restrict tax relief available for the highest earners to get the balance right between encouraging saving and managing government finances.”

The Daily Telegraph

WEDNESDAY

HMRC failed to warn savers over rogue schemes

The Mail continues with its campaign for the victims of pension transfer scams who, along with the employers, were duped into moving their savings into dodgy schemes because they were easily registered with HMRC and the Pensions Regulator. The paper lists a series of blunders by HMRC which allowed fraudsters to continue to target savers despite concerns having been raised – in one instance even after investigators had arrested the fraudsters running the schemes.

Daily Mail, Page: 36

EMPLOYMENT NEWS FOR THE MIDWEEK TO 8th JANUARY 2020

MONDAY

Fewer jobs for school leavers and graduates

An Institute of Student Employers (ISE) survey reveals that employers are planning to recruit far fewer school leavers and graduates than they were a year ago. The ISE report shows that employers are planning to increase graduate recruitment by just 3%, compared with the 18% rise in graduate vacancies predicted this time last year. Growth in the number of apprenticeship and school leaver programme vacancies has slowed to 2% from 7% last year.

The Guardian, Page: 43

INTERNATIONAL NEWS FOR THE MIDWEEK TO 8th JANUARY 2020

MONDAY

Europe will hit back if Trump punishes France for tax on Big Tech, warns Paris

France has warned the US that trying to impose “highly disproportionate” trade tariffs in response to France’s digital tax would “deeply and durably affect the transatlantic relationship” and prompt EU retaliation.

Financial Times, Page: 1

WEDNESDAY

IMF chief urges tax and spend changes to tackle inequality

Kristalina Georgieva, the managing director of the International Monetary Fund, has said the better off should pay higher marginal rates of tax to help close the gap between rich and poor. “Tackling inequality requires a rethink”, Georgieva said in a blog. She added: “Despite the political difficulty of implementing reforms, the payoffs for growth and productivity are worth the effort. Progressive taxation is a key component of effective fiscal policy. At the top of the income distribution, our research shows that marginal tax rates can be raised without sacrificing economic growth.” Tax and spending should also have a gender dimension, she said. “While many countries recognise the need for gender equality – governments can use gender budgeting to structure spending and taxation in ways to advance gender equality even further – increasing women’s participation in the work force and, in turn, boosting growth and stability.”

The Guardian, Page: 39

France and US seek to resolve digital tax dispute

Bruno Le Maire, the French finance minister and US Treasury secretary, Steven Mnuchin have agreed to redouble efforts to resolve a trade dispute revolving around a new French digital tax targeting big technology companies. The US launched a probe into the French plans and Washington has threatened similar inquiries into the digital services tax models of Austria, Italy, and Turkey. Britain could be next with a 2% sales tax set to be imposed in the Spring. Britain and France have both said they favour a solution tabled by the OECD, which could bring forward an preliminary agreement this year.

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

Ireland braces for public spending dispute in election campaign

Irish politicians are debating future spending plans keeping in mind the tax revenues the country has enjoyed from multinationals will not last for much longer.

Financial Times, Page: 7

ECONOMY NEWS FOR THE MIDWEEK TO 8th JANUARY 2020

TUESDAY

‘Boris bounce’ boosts economy

Business confidence picked up following the general election, according to the IHS Markit/CIPS purchasing managers’ index (PMI) survey, which also suggested that the increased clarity over Brexit brought by Boris Johnson helped to boost the UK economy. The services industry recorded a PMI of 50 in December, up from 49.3 in November, a reading which although does not return the sector to growth did stop it from contracting. Employment too picked up, new orders increased and firms’ optimism for the future climbed in the month.

Financial Times The Daily Telegraph, Business, Page: 3 The Times Daily Express Daily Mail The Guardian, Page: 33 The Sun, Page: 43

Sajid Javid sets March 11 date for Budget to ‘level up’ UK regions

The Chancellor will today confirm the 11th March as the date for a tax-and-spend Budget designed to begin a promised “levelling up” of economic performance across the UK. It is understood that Sajid Javid will announce a shake-up of the way the Treasury allocates investment in an attempt to even up spending between the regions.

Financial Times, Page: 2 The Times, Page: 10 The Guardian Daily Mail

WEDNESDAY

Britain will be “the winner” after Brexit, says Blackstone

Equity strategists at asset manager Blackstone predict that the pound will rally after Brexit and stock markets will rise once a deal has been secured. The UK being the winner from its divorce from the EU is one of ten “surprise” outcomes for 2020 predicted by Blackstone’s private wealth chairman Byron Wien. Of all European markets, only Britain will outperform the United States and Asia, Blackstone said.

The Times, Page: 35

OTHER NEWS FOR THE MIDWEEK TO 8th JANUARY 2020

MONDAY

Top bosses earn average worker’s annual wage by today

By 5pm today the bosses of FTSE 100 companies will have earned as much as the average worker does in a year, research by the Chartered Institute of Personnel and Development (CIPD) and the High Pay Centre shows. The average FTSE 100 chief executive was paid £3.46m in 2018, equivalent to £901.30 an hour. This is 117 times the £29,559 annual salary of the average full-time worker. The report comes in a year when publicly listed firms with more than 250 UK employees must, for the first time, disclose the ratio between CEO pay and that of their average worker. Business Secretary Andrea Leadsom said reform to the UK’s “world-leading legislation” will increase transparency and “ensure companies cannot shy away from required reporting on executive pay.”

The Daily Telegraph The Guardian, Page: 41 Financial Times Yorkshire Post, Page: 2

TUESDAY

Restaurant bosses plea for wine tax cut

A group of London restaurant bosses, including Jeremy King, whose Corbin & King empire runs the Wolseley and the Delaunay, and Mark Derry, chief executive of Brasserie Bar Co, have written to Government Exchequer Secretary Simon Clarke MP calling for a cut to wine taxes to help the struggling hospitality sector provide consumers with some much needed relief. They say duty on wine has risen 12% since 2014, compared with 2% for spirits and a 0.2% fall for beer.

Evening Standard

WEDNESDAY

Central banks running low on ways to fight recession, warns Mark Carney

The outgoing Bank of England Governor has warned that central banks were running out of the ammunition needed to combat a downturn. Mark Carney said the global economy is heading towards a “liquidity trap” that would undermine central banks’ efforts to avoid a future recession.

Financial Times, Page: 1 The Daily Telegraph

Contact Paul Southward.

Paul Southward


News from the end of 2019


News from the end of 2019

NEWS ROUNDUP

TAX News from the end of 2019

Student loan system reforms ahead

The education secretary is set to announced a major revamp of the student loans system that will see students and graduates able to access their account online. Graduates will be able to manage up-to-date information about their loan balance – a major complaint has been infrequent data sharing between the Student Loans Company (SLC) and HMRC which often led to graduates overpaying their loan. The taxman and SLC will exchange information on repayments weekly rather than annually. Gavin Williamson said: “These changes will make it easier for students to understand their balance, manage their loan and avoid over-repaying.”

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

Tax perks for civil partners

With mixed-sex couples able to enter into civil partnerships as of today, several papers note that they will have similar rights and entitlements as married couples, such as marriage allowance tax relief and exemption from inheritance tax.

The Times, Page: 9 Daily Express, Page: 4 The I, Page: 11 The Sun, Page: 8

PENSIONS News from the end of 2019

Victims of pension scams targeted by HMRC

Up to £10bn has been lost by thousands of people who have invested in apparently legitimate pensions schemes, the Mail reports. Many of the rogue schemes were enrolled with HMRC and the Pensions Regulator and employers such as the MoD, the NHS and Royal Mail approved transfers because they too considered them safe. Now, the Mail reveals, those victims are being pursued by HMRC because the schemes broke tax laws. The paper identified 8,000 victims from 105 schemes, but a Pensions Regulator source said the full number is probably over 100,000. Campaigners say changes to the registration system for trustees under Tony Blair’s government in 2006 made it a “scammers’ paradise” – HMRC enrolment could be secured online in minutes with virtually no checks.

Daily Mail, Page: 1, 4-5 The Sun, Page: 13

Veterans hit by pensions scam

The Mail’s Tom Kelly reveals that forces veterans have lost nest eggs worth up to £50,000 due to a Government-sanctioned pension scam. He says the issue stems from simplification of pension legislation by the Government in 2006, saying rogue financiers were able to register retirement schemes with the authorities with virtually no checks. The report follows a Mail investigation which found that tens of thousands of pensioners have lost up to £10bn between them in a wider pension mis-selling scandal. An editorial in the paper says its rogue pensions investigation points to “troubling” conduct by the taxman, suggesting that HMRC not only “gave unscrupulous pension providers a cloak of legitimacy by approving them” but also let their schemes remain open for months despite launching criminal investigations. It argues that while HMRC did not create the scandal, “through complacency and inco mpetence, it allowed it to flourish” adding: “It should atone.”

Daily Mail, Page: 10, 14 The Sun, Page: 6

Pension scam response questioned

The Mail’s Alex Brummer looks at the treatment of pension scam victims, saying not only have workers “been cheated out of their pensions” after “incompetent” checks by HMRC made them vulnerable to scammers, they are now also being hounded by the taxman for alleged unpaid bills. He argues that while the conduct of some HMRC-approved providers is “appalling in its own right,” HMRC’s response is “truly scandalous” and has seen it “turn the fire on the victims.” Mr Brummer suggests that HMRC “too often targets local businesses and entrepreneurs struggling with the bureaucracy of tax returns”, while big corporations are “treated with velvet gloves”. “If ever there were a moment for a wide-ranging inquiry into Britain’s tax authority, it is now,” he adds. He goes on to suggest that trustees of public sector pension schemes who co-operate d with pension advisers are at “the core of the current scandal”, insisting that the Financial Conduct Authority should have been keeping a tighter rein on firms offering advice.

Daily Mail, Page: 11

SMEs News from the end of 2019

Government needs to deliver to put small firms back on track

Several papers pick up on the news that the Federation of Small Businesses’ (FSB) confidence index plunged to an eight-year low during the fourth quarter amid concerns over political uncertainty, the direction of global trade and rising employment costs. Director of external affairs and advocacy Craig Beaumont comments: “This quarter, the added uncertainty that accompanies a general election made it even harder for small firms to plan, hire and increase profits. They say that the night is darkest before the dawn, and small firms will be hoping that holds true. The incoming government has made some very positive commitments to the small business community – particularly where connectivity, employment costs, business rates and late payments are concerned – it now needs to deliver. We must secure a pro-business future trading arrangement with the EU, one that protects the three t’s: trade, talent and transition.”

The Times, Page: 41 The Independent, Page: 50 The Guardian, Page: 39 The Scotsman, Page: 34

Incredulity over McEwan’s CBE

Anger over the CBE awarded to Ross McEwan, the former boss of Royal Bank of Scotland, has grown with MPs and small business groups describing the honour as “astounding” and “absurd”. Hundreds of small businesses accuse the lender’s Global Restructuring Group unit of wrecking their lives in the aftermath of the financial crisis. Kevin Hollinrake, the Conservative MP and chairman of the all-party parliamentary group on fair business banking, commented: “I don’t think anyone who has been involved in UK banking should be offered or accept an honour at least until a truly independent system of redress has been established to compensate victims.”

The Times, Page: 35

High Street Task Force breaks ground

Boris Johnson’s promised £1bn fund for struggling towns will begin to be dispersed with the first 14 towns to be named today. The Government’s new “High Street Task Force” will give each town £25m of training, support and access to research designed to give small businesses an edge. The Conservatives have also pledged to cut small retailers’ business rates by 50% from April. However, Lib Dem MP Ed Davey said the measures would be “ineffective” and called for the removal of “tax advantages” for the big online companies, which were “killing our high streets”.

Daily Mirror, Page: 5

McEwan CBE raises questions

Ben Marlow in the Telegraph questions the decision to award former RBS CEO Ross McEwan a CBE, saying the primary case against his inclusion on the honours list is his handling of the bank’s “disgraceful” treatment of SME business customers. He argues that while Mr McEwan was not responsible for the behaviour of the bank’s defunct Global Restructuring Group (GRG), RBS’ handling of the affair under McEwan “was pretty lousy”. Mr Marlow notes that while Mr McEwan had claimed that GRG rescued “the vast majority” of firms it worked with, he was “forced into a humiliating about-turn” when it emerged that 80% of small businesses it dealt with went bust or remained in a terrible state.

The Daily Telegraph, Business, Page: 26

PROPERTY News from the end of 2019

House prices soared over last 20 years

UK house prices have more than trebled over the last 20 years, according to new research by Halifax, with London property enjoying increases of 239% – from £157,453 to £533,437. An average home in the UK would have cost £91,199 at the end of the last millennium and £279,997 today, Halifax says. Greater London and East Anglia share top spot for biggest percentage jumps in first home prices, rising by 284%, though Newham has seen increases of 429% and Waltham Forest 418% over the last decade. Every region saw houses at least double in value, although residents in Northern Ireland, Scotland and the North of England saw the smallest increases over the period.

Daily Mail

Mortgage approvals rise

Mortgage approvals increased 6.8% to 43,700 in November, according to UK Finance data, the highest level in almost two years. Remortgage approvals soared 12.7% while gross mortgage lending dipped 3.3% last month compared to the same month last year.

City AM

ECONOMY News from the end of 2019

Managers perk up about 2020 prospects

The Chartered Management Institute has reported that many managers expect a pay rise next year and 61% expressed optimism about the prospects for their organisation in the year ahead. However, optimism about the UK economy has risen only slightly, from 25% to 29%. Chief executive Ann Francke said: “It’s good news that our members are positive on issues like salary increases and job security but it is concerning to see so few respond positively about the outlook on the economy. This should act as a trigger for the Government to invest in management and leadership skills in order to turbo-charge the economy and restore the confidence of British businesses.”

The Guardian, Page: 39 Daily Express, Page: 42 The Sun, Page: 8

Researchers predict more woe for the high street

An end-of-year report from the Centre for Retail Research says 61 shops closed every working day on Britain’s high streets during 2019 with over 2,750 jobs lost every week. The total number of shops shutting rose by 1,490 to 16,073 during the year, up from the 14,583 shops in 2018. The Centre’s director Professor Joshua Bamfield predicts a further 9% rise in closures in 2020. He said: “The commercial pressures of higher labour costs, business rates and relatively weak demand will continue to undercut profits and force the weakest companies to close stores or enter administration.”

The I, Page: 4 The Guardian, Page: 27 The Times, Page: 38

Credit card borrowing slows

Growth in borrowing on credit cards slowed in November, according to industry body UK Finance, with the amount borrowed just 2.2% higher than a year earlier and the lowest increase since 2014. Overall consumer credit growth, which also includes borrowing through personal loans, overdrafts and car finance, fell to 4%, the lowest level in seven months. Howard Archer, of the EY Item Club, said the dip ties in with evidence of slower consumer activity and surveys pointing to weak confidence. “It remains to be seen what impact the recent decisive general election result and now certain UK exit from the EU on 31 January with Boris Johnson’s deal has on consumer behaviour,” he commented.

The Daily Telegraph

Exports up by £26bn

Official data from HMRC shows that British exports rose by more than £26bn last year, with the overseas market for UK goods and services worth £673bn in the 12 months to last September. Exports to the US and Japan were up by around 9%, while those to China rose by nearly 14%. Separate figures show that foreign direct investment into UK businesses surpassed £1.5trn for the first time last year.

Daily Express, Page: 8

Think-tank predicts rise in sales

The KPMG/Ipsos Retail Think Tank has predicted that retail sales will increase in 2020, as consumers find confidence following the general election. However, the biggest supermarket chains will be under more pressure in 2020 as their share of food spending shrinks. The think-tank said that trading deal negotiations with the EU and elsewhere will “undoubtedly” cause many retailers to review their supply chains to avoid potentially damaging disruption, but that this will create an opportunity to focus on local manufacturing, sourcing and food production.

Financial Times The Scotsman, Page: 30 The Sun, Page: 41

OTHER News from the end of 2019

Household energy bills up by 40% in 5 years

New research shows that the average household is paying 40% more for gas and electricity than they were five years ago. Overall household bills have grown by £2,707 a year over the period, according to the study by comparethemarket.com. The price comparison website’s annual survey of the cost of heating and lighting a home, paying for buildings and contents insurance and car cover found that bills have increased by more than three times the rate of inflation since 2015.

The Times, Page: 13

Northedge on words that described 2019

Richard Northedge looks at some of the words and phrases that caught his eye over 2019, including KPMG’s “Project Zebra” and audit firms moving from having “clients” to an “audited company or entity” to demonstrate independence. Northedge also notes that the Financial Reporting Council is transforming into the Audit, Reporting & Governance Authority.

The Daily Telegraph, Page: 29

Contact Paul Southward.

Paul Southward's News Roundup


NEWS FROM THE WEEKEND 23rd DECEMBER 2019


NEWS ROUNDUP

TAX NEWS FROM THE WEEKEND 23rd DECEMBER 2019

SATURDAY

Government reveals loan charge rethink

The Government has made a number of concessions that reduce the impact of the controversial loan charge, an initiative designed to tackle tax avoidance. The charge will now no longer apply to anyone who entered into disguised remuneration schemes before December 2010, and nor will it apply to people who declared they had made use of the schemes in any tax year before the policy came into effect. Whereas those liable for payments had previously faced having to pay HMRC back taxes in one go, the Government has announced that they will now be able to spread their repayments over the next three years. With many people having already made repayments ahead of the January 2020 deadline, it was confirmed that those who have made settlements for years where the charge no longer applies will be refunded. The concessions on the charge follow an independent review that was commissioned by the Chancellor and led by Sir Amyas Morse, a for mer head of the National Audit Office, who concluded that the charge had gone “too far”. Sir Amyas welcomed the Government’s decision to follow his recommendations, saying it brings the loan charge “back into line with the wider tax system.” Campaigners the Loan Charge Action Group commented: “This is a big step forward, with a clear commitment that this dreadful law will be changed.”

The Daily Telegraph, Page: 31 The Times, Page: 2 Daily Mail, Page: 37 Financial Times, Page: 1

Couples urged to act on tax allowance

Couples have been urged to act to ensure they secure tax rebates they may be entitled to. Pointing to the perks of the Marriage Allowance, which allows a person to transfer some of their personal allowance to their spouse, Sean McCann of NFU Mutual notes that couples who have not claimed it but want to backdate a claim to cover the last four years do not have long to do S o as HMRC will stop accepting claims for 2015/16 in April.

Daily Express

Britain is a world champion in pointless regulation

Camilla Cavendish, former head of the Downing Street policy unit, looks at regulation and red tape in the UK, suggesting a drive for tax simplification is among issues ministers should address.

Financial Times, Page: 10

SUNDAY

Sir John Redwood urges Chancellor to review IR35

Sir John Redwood has demanded that the new Conservative government honours its pledge to review IR35 tax rules in support of contractors in their battle to overturn the legislation before it hits the private sector on April 6. The Wokingham MP published an open letter to Chancellor Sajid Javid stating that a number of major firms have already ended IR35 arrangements as the new rules were too complex and placed extra administrative burden on employers. According to Harvey Nash recruitment agency, one in five businesses in the UK are considering no longer employing off-payroll workers when the new rules are introduced, with GlaxoSmithKline, Barclays, RBS, Lloyds and HSBC already announcing the decision.

The Register

Voters want Corbyn’s agenda dumped by Labour

A BMG poll for the Independent reveals that roughly double the number of voters want Labour to shift away from Jeremy Corbyn’s policies than want to see the party continue with them. The survey found nearly half of those with a view want Labour to ditch its policy on tax, public spending and national security, compared with about 27% who are in favour. By contrast, the party’s position on healthcare and climate change is slightly more popular than unpopular. The Independent suggests those leadership contenders most likely to move to the centre are also the most unlikely to be chosen by the left-wing membership. Separately, the Sunday Telegraph says while Labour is unlikely to move back to the centre just yet, Boris Johnson has the chance to “make and win the case for democratic capitalism”. His next steps should be “to join the dots between Brexit and economic policy – to deregulate, create fre e ports in ‘left behind’ towns, cut taxes and really liberate the housing market by slashing stamp duty,” the paper asserts.

The Independent The Sunday Telegraph, Page: 17

Use of R&D tax credits set to increase

The Sunday Times’ Peter Evans looks at how the Conservatives could boost investment by increasing R&D tax credits and broadening out the range of businesses that can claim them, such as cloud computing and data firms. However, many industries fear boosting the tax credit system will not make up for the loss of access to EU research programmes and experts, such as Thomas Hayden at Moore Kingston Smith, warn expanding the system to allow companies to claim for spending on cloud computing infrastructure could mean an inadvertent subsidy for Amazon. The Conservatives have promised to increase R&D tax credits for big companies from 12% to 13%, a move experts say should boost engineering and scientific companies and their supply chains of smaller businesses.

The Sunday Times, Business, Page: 9

HMRC’s data mining system leads to more questioning

HMRC’s Connect system has led to an increase in self-assessment taxpayers being questioned by the taxman on a variety of issues. Lucy Brennan, a partner at Saffery Champness, says more clients are receiving letters asking them to double check details and she expects the trend to continue: “It knows more about us than ever before.” Connect automatically collates information on taxpayers from dozens of sources, but other experts tell the Sunday Times HMRC inspectors cannot cope with the scale of information they are receiving from Connect so letters are sent out “on a scattergun basis” to scare people into correcting errors.

The Sunday Times, Business, Page: 11

MONDAY

Seven ways to gift to the grandchildren this Christmas

The Telegraph lists a variety of ways people can cut their tax bill while giving to their grandchildren. Families can gift money to children to help pay for important life events, such as weddings; bare trusts can be set up, one benefit of which is that the money is taxed as if it belonged to the child; excess income can be gifted to grandchildren free of IHT and can be any amount, providing they are regular. Additionally, an investment bond can also tap into a grandchild’s unused personal allowance and will be IHT-exempt providing the grandparent lives for seven years after gifting it. A child’s pension can also be contributed to, as can a deposit on a house, while smaller gifts of up to £250 are another way of passing on wealth tax-free.

The Daily Telegraph

Rise in firms liquidated due to unpaid tax

More businesses were forced by HMRC to liquidate in the 12 months to September than at any point over the past four years, data reveals. Over 4,300 winding-up petitions were filed against British businesses, a 6% rise on last year. Lucienne Parry, a partner at Moore, which compiled the data, said: “Once a winding-up order has been made by the court, there is little that can be done by the business to prevent liquidation, unless you can pay the tax bill. Banks also tend to freeze the company’s bank account during this process, putting a stop to all trading.”

Daily Express, Page: 42 The I, Page: 40

CORPORATE NEWS FROM THE WEEKEND 23rd DECEMBER 2019

SUNDAY

The death of the department store

The Sunday Times looks at the slow demise of department stores on Britain’s high streets, noting that Beales has called in KPMG to conduct an urgent review. The retailer has 22 stores and thousands of jobs are at risk. Elsewhere, Sports Direct boss Mike Ashley has said more House of Fraser stores will be forced to shut unless there is a fundamental review of business rates.

The Sunday Times, Business, Page: 6 The Observer, Page: 63

SMEs NEWS FROM THE WEEKEND 23rd DECEMBER 2019

SATURDAY

Lloyds makes offers to HBOS victims

Lloyds Banking Group has offered additional payments of £35,000 to each of the 191 small business customers who were victims of fraud in the HBOS Reading scandal. The £1bn fraud saw bankers and business consultants exploiting reckless credit policies to steal from the bank, damaging a number of SMEs, with some folding. The lender reassessed victims’ claims after a review of its handling of a compensation scheme found “serious shortcomings”, saying Lloyds blamed victims rather than the fraudsters for damage to the companies – and took an “overly adversarial approach in its assessment of claims”. The Financial Conduct Authority has said failings identified in retired High Court Judge Sir Ross Cranston’s review must be addressed quickly, adding that senior management must explain how and why the issues occurred. With Lloyds offering to review each case again, Nikki Turner, director of the SME Alliance, comments: “I think it’s a positive step to have people at the top of the bank right up to the CEO being actively involved in the process … I hope it will encourage other CEOs to engage with complainants.”

The Times, Page: 56 Financial Times, Page: 2 Daily Mail

SUNDAY

Purbeck predicts HMRC rule changes to boost P2P lending

Purbeck Insurance Services has predicted that P2P business lending will benefit from tighter credit terms and new insolvency rules next year. In its 2020 trend report, Purbeck said it expects P2P lending to increasingly fill funding gaps for businesses and to help launch many new start-ups. This comes as HMRC will become a preferred creditor in business insolvency for some tax debts in April 2020, which is expected to result in traditional lenders considering their risk exposure, which will in turn result in a rise in support for P2P services. Purbeck managing director Todd Davison said: “Small businesses have reason to be optimistic for the year ahead”.

P2P Finance News

MONDAY

Majority of SMEs back investment and tax pledges

A survey by the Federation of Small Businesses found that seven in 10 smaller companies backed the Government’s pledge for a £5bn investment in broadband, while two-thirds were in favour of plans to widen a discount on national insurance bills.

The Daily Telegraph, Business, Page: 27

EMPLOYMENT NEWS FROM THE WEEKEND 23rd DECEMBER 2019

MONDAY

Tories must live up to promises to workers

The Trades Union Congress (TUC) claims workers, including those from areas which previously voted Labour, want the Conservatives to stick to their promises on pay and taxation. A survey by the TUC found workers want the same level of protection guaranteed by the EU, higher tax rates for people earning more than £80,000 a year, a ban on zero-hours contracts and a £10 minimum wage. Frances O’Grady, the TUC’s general secretary, said: “The prime minister has no more excuses. Voters expect him to protect and strengthen rights at work. And they want him to get on with investing in our public services and boosting wages.”

The Times, Page: 39

PROPERTY NEWS FROM THE WEEKEND 23rd DECEMBER 2019

SATURDAY

London set for more flexible offices

More flexible office space is set to be created in London and companies such as WeWork and Spaces which offer these types of office could represent 20% of leases in central London by 2030, according to CBRE. The real estate firm estimates occupancy of flexible offices could grow to 34m sq ft in the City and West End by 2030, up from 9.9m sq ft now. Stewart Smith, managing director of Flex at CBRE, said: “As employees begin to expect a more holistic office experience, employers are becoming more willing to pay for these in order to attract and retain talent.”

City AM

Reader stumped by stamp duty

The Times carries advice to a reader who submits a query regarding liability for stamp duty on a second property, with Adrian Benosiglio of RSM and David Hannah, the chief executive at Cornerstone, providing input.

The Times, Page: 67

INTERNATIONAL NEWS FROM THE WEEKEND 23rd DECEMBER 2019

SATURDAY

Colombia approves tax reforms despite protests

The Colombian government has approved tax reforms that will cut the corporate tax rate from 33% to 30% by 2022 and VAT rebates for the poorest 20% of the population.

Financial Times, Page: 6

MONDAY

Warren’s wealth tax will not reduce inequality, says economist

Leading US economist Edward Wolff has said Elizabeth Warren’s planned tax on wealth would have a “minuscule” impact on inequality. The Democratic presidential candidate has proposed a 2% annual tax on wealth above $50m, rising to 3% above $1bn. The tax would raise an estimated $303bn from billionaires but have barely any effect at all on reducing inequality because it is such a small share of the total $84trn of US household wealth.

The Daily Telegraph, Page: 29
BREXIT NEWS FROM THE WEEKEND 23rd DECEMBER 2019

MONDAY

More shocks on the way for Brexit gloomsters

Roger Bootle argues against the “gloomsters” who claim Boris Johnson will never secure a trade deal with the EU by the end of next year, stating that it is eminently feasible given the starting point of zero trade barriers and regulatory alignment. Besides, continues Bootle, there is no reason why some matters cannot be negotiated later. Moreover, the UK should be desperate to get away from the EU’s regulatory regime, which is partly responsible for the bloc’s “comparative economic failure.” The chairman of Capital Economics concludes that Remainers are set for more shocks as they realise the UK economy is going to thrive without preserving close regulatory alignment with the EU.

The Daily Telegraph, Page: 28

PERSONAL FINANCE NEWS FROM THE WEEKEND 23rd DECEMBER 2019

MONDAY

Perks of the investment gift

The Telegraph suggests people should consider buying their loved ones shares in the companies that make the products they love, instead of the good themselves. This way, the paper says, they may also benefit from juicy discounts. such as Mulberry’s 20% off when you own 500 shares, or Chapel Down’s 25% discount when you own 2,000 or more. The paper goes on to cite the Share Centre’s Andy Parsons, who says shareholder perks are becoming harder to come by and warns investors not to pick

ECONOMY NEWS FROM THE WEEKEND 23rd DECEMBER 2019

SATURDAY

GDP grows in Q3

GDP grew by 0.4% in the third quarter, according to a revised official estimate. The Office of National Statistics said this was higher than the expected 0.3% but “an underlying slowing” of the economy reflected high domestic and global uncertainty. The economy was stagnant in the three months to October. Services output grew 0.2% and this was offset by 0.7% and 0.3% declines in production and construction output respectively. Export growth reduced the current account deficit to £15.9bn in the third quarter, compared with £24.2bn in Q2. Commenting on the Q3 figures – and an estimate of 0.1% growth in Q4 – Howard Archer at EY Item Club said he expected overall GDP growth of 1.3% for the year. Capital Economics economist Andrew Wishart says that as Brexit uncertainty “looks set to persist,” the economy is likely to grow by about 1% next year and then 1.8% in 2021. Separate figures from the ONS show Government borrowing continued to rise last month, as public expenditure increased. The budget deficit – the gap between tax revenue and government spending – was £5.6bn in November, marking a £300m increase on the same month a year ago.

The Times The Guardian, Page: 42 City AM

Shoppers set to splash out

With consumers set to snap up last-minute gifts during the final shopping weekend before Christmas, it is estimated that £1.7bn will be spent today. Many stores will be cutting prices, with Deloitte analysis finding discounts ranging from 8% to 78% – and it expects the average to exceed 50 % by Christmas Eve. With retailers offering deals to lure in customers, Lisa Hooker, consumer markets leader at PwC, says: “We expect to see significantly higher promotional levels this weekend and a bumper Boxing Day sale for patient consumers.” PwC has predicted that people are planning to shop later and spend less this Christmas, in part because there is one less shopping weekend between Black Friday and Christmas Day this year.

Daily Mirror, Page: 11 Daily Mail, Page: 6 The Guardian, Page: 34 The I, Page: 23 The Scotsman, Page: 4 Daily Star, Page: 4 The Press and Journal, Page: 15

SUNDAY

Woody says get ready for Brexit boom

The Sunday Express reports that Robert “Woody” Johnson, the US ambassador to the UK, has said Boris Johnson’s election victory paves the way for a huge boost in trade between the two countries. The UK now had “an amazing opportunity” and should get ready for the “Roaring Twenties” with a trade deal with the US set to bring a Brexit boom, he declared.

Sunday Express, Page: 1, 4

MONDAY

UK business confidence highest for three years

A survey by the Institute of Directors (IoD) reveals business confidence is at its highest for three years. The poll of members following the election recorded the IoD’s main confidence measure at 21%, up from -18% in November and the highest figure since the 2016 EU referendum. However, concern over the long-term relationship between the UK and the EU remains a cause for worry. Tej Parikh, the chief economist at the IoD, said: “Britain’s directors will be entering 2020 with a little more festive cheer than might have been expected only a few weeks ago.” A net balance of 18% expected their investment levels to increase, but higher costs were also predicted. The IoD said Conservative pledges to reform business rates and expand the R&D tax credit regime helped boost sentiment. Brexit-backing regions reported the strongest rise in confidence., hitting 71% in the North East of England and 40% in the West Midlands compared to 1 1% in London.

The Guardian, Page: 36 The Daily Telegraph, Business, Page: 27 Daily Mail, Page: 59 Yorkshire Post, Page: 15

North-South divide emerges among manufacturers

A new report from Make UK and BDO reveals a booming manufacturing industry in London and the South-east, which is now second only to the North-west, while the West Midlands is suffering with traditional industries such as car-making having been hit by both structural and economic shifts. The south has benefited from the global growth in investment in technologies such as robotics and artificial intelligence, Make UK said, and is on course to become the biggest manufacturing region in the UK if trends continue. Stephen Phipson, chief executive of Make UK, comments: “There is now a clear two-speed economy in manufacturing performance with London and the south east at full speed – while some other regions are stuck in first or second gear.”

Financial Times, Page: 2 The Times, Page: 35 Daily Express, Page: 42 The I, Page: 11

Web retailers hurt by severe discounting

More than 9,000 internet retailers are suffering from financial distress amid savage discounting, steep return costs and stiff competition, insolvency firm Begbies Traynor has warned. This is up 65% over the past three years. Julie Palmer, a partner at the firm, said: “The competition online is ferocious but the rewards for those that succeed, such as Boohoo, are huge.” Elsewhere, Deloitte says average discounts on the high street are set to exceed 50% by Christmas Eve for the first time as stores try to tempt shoppers in.

The Times, Page: 35 The Daily Telegraph, Page: 8

OTHER NEWS FROM THE WEEKEND 23rd DECEMBER 2019

SATURDAY

BoE appoints Bailey

Chancellor Sajid Javid has named Financial Conduct Authority (FCA) chief executive Andrew Bailey as the next governor of the Bank of England (BoE). He will take over from Mark Carney on March 16. Mr Javid said Mr Bailey, who spent 30 years at the BoE before his time at the FCA, was the “stand-out candidate in a competitive field.” Mr Bailey, a former BoE deputy governor, said that he was honoured to take the role, “particularly at such a critical time for the nation as we leave the European Union”.

The Times The Guardian, Page: 2 Daily Mail, Page: 91 The I, Page: 70 The Independent, Page: 15

SUNDAY

Accountants offered Isle of Man incentives

Emigrate considers the appeal of the Isle of Man for accountants, highlighting perks, wages and tax breaks that may lure those looking to take advantage of the island’s shortage of accountancy staff. Those taking up residence on the island can expect a refund of the first 12 months of NI payments, totalling up to £4,000 dependent on salary levels, while full-time salaries are typically 14% higher than UK averages.

Emigrate

The UK’s most unattractive jobs

A survey carried out by PlayOJO has identified the 12 most unattractive jobs in the UK, with sewerage workers topping the poll with 34% of the vote. Accountants came in 12th, with 2% of votes in a survey asking what is the least sexy profession.

Wales Online

Contact Paul Southward – TAX CONSULTANT.

Paul Southward's News Roundup

SEASONS GREETINGS FROM KSK

WISHING YOU A PROSPEROUS 2020!


NEWS FOR THE MIDWEEK TO FRIDAY 20th DECEMBER 2019


NEWS FOR THE MIDWEEK TO FRIDAY 20th DECEMBER 2019

NEWS ROUNDUP

TAX NEWS FOR THE MIDWEEK TO FRIDAY 20th DECEMBER 2019

FRIDAY

No tax shift

In a summary of Government plans outlined in the Queen’s Speech, the Guardian notes that rates of VAT, income tax or national insurance are not set to be increased.

The Guardian, Page: 6

NEWS ROUNDUP

CORPORATE NEWS FOR THE MIDWEEK TO FRIDAY 20th DECEMBER 2019

WEDNESDAY

Shell paid no UK corporate income tax last year

Oil and gas firm Royal Dutch Shell, which saw pre-tax profits of nearly $731m on UK revenues of $108bn, paid no corporate income tax in the UK in 2018 thanks to refunds linked to the decommissioning of North Sea oil platforms. Shell also revealed that it did not pay any corporate income tax in the Netherlands last year, apart from at a joint venture with ExxonMobil, as profit was offset with losses from previous years. Globally, Shell last year paid a total of $10.1bn in corporate income tax.

The Daily Telegraph Financial Times, Page: 1

Bookseller falls into administration

The Book People has instructed PwC, which was already handling an auction for the bookseller, to manage its insolvency process. Its private equity owner Endless had been attempting to secure a sale of the company and a number of credible parties had expressed an interest. No redundancies will be made while administrators continue to search for a buyer. Toby Underwood, restructuring partner for PwC, stressed: “The intention is to fulfil and deliver all customer orders received and accepted.

The Guardian, Page: 39 The Daily Telegraph, Business, Page: 7 The I, Page: 39 The Times, Page: 52 Daily Mail, Page: 69 The Sun, Page: 47 City AM, Page: 9

Beales for sale?

Department store chain Beales has appointed KPMG to conduct a strategic review of the firm, including a potential sale, which could lead to its exit from a number of stores and see it attempt to renegotiate rents with landlords.

Daily Mail, Page: 69 The Independent, Page: 51 Daily Express, Page: 47 The I, Page: 40 The Scotsman, Page: 35 Yorkshire Post, Page: 20 City AM

Vapour Lounge snapped up

E-cigarette device and accessories firm Red Box Vape is to buy Scottish group Vapour Lounge. Coates & Partners acted as lead adviser in the deal.

The Scotsman, Page: 35

Hospital firm hit by debt claim

Private hospital firm NMC Health saw more than £1.8bn wiped from its value after hedge fund Muddy Waters accused the company of understating its debt by about £242m. Muddy Waters claims NMC failed to properly report leases in its 2018 accounts associated with hospital operator Aspen Healthcare. Muddy Waters also said NMC’s relationship with auditor EY “raised flags”.

The Daily Telegraph, Business, Page: 1

THURSDAY

European IPO proceeds dip

Research by PwC shows that proceeds from European IPOs fell 36% this year, with Brexit uncertainty and issues regarding US-China trade relations among factors driving the decline. Analysis shows that European IPOs raised €22.1bn in 2019, down on the €34.5bn generated last year. There were just 105 new market listings this year, compared to 195 in the previous twelve months. PwC’s Peter Whelan said: “We are now seeing progress in both US-China trade relations and the UK election result, which has given a clear steer to the markets concerning Brexit. This provides a positive backdrop to the IPO markets as we go into 2020.”

The Scotsman, Page: 37

NMC Health hits back at Muddy Waters

NMC Health has hit back at Muddy Waters after the short seller published a report raising “serious doubts” about the healthcare operator’s finances. Muddy Waters’ research note suggested NMC’s reported cash balances “could be materially overstated,” while its margins appear “too good to be true” compared to peers. It also questioned the three different senior individual EY auditors NMC has had in four years, saying “we understand that engagement partners generally serve for five to seven years”. NMC Health issued a statement saying Muddy Waters’ claims “appear principally unfounded,” saying that it will investigate “assertions, insinuations and accusations” in the report, adding that they appear to be “baseless and misleading.”

The Times, Page: 46 City AM

Staffline accounts issue claims CFO scalp

Recruiter Staffline has restated last year’s earnings and confirmed the resignation of chief financial officer Mike Watts, who has been replaced by temporary CFO Daniel Quint. The board said profit may have been overstated by £4m in 2018 following a further review of accounts and also cut full-year adjusted operating profit for 2019 to £10m-£12m, down from £17m.

City AM Evening Standard

Bury avoid winding-up petition

A winding-up petition against football club Bury was dismissed by judge Sally Barber yesterday, with the Insolvency and Companies Court told that Bury and owner Steve Dale had settled an outstanding debt with HMRC. Bury have entered into a CVA to address other debts, with the agreement being investigated by the Insolvency Practitioners Association.

The Times, Page: 70 The Guardian, Page: 47 BBC News

Jaguar Land Rover saves Bowler from administration

Jaguar Land Rover has bought niche off-road car manufacturer Bowler out of administration, saving the jobs of Bowler’s 26 permanent staff. Founded in 1985, Bowler builds small numbers of hand-built vehicles for rallies and off-road racing.

The Daily Telegraph

FRIDAY

Banks to prioritise cost-cutting

EY ‘s banking outlook for 2020 suggests costs need to fall by a third for banks to achieve the industry standard return on equity of 12%, with the analysis suggesting cost-cutting will remain the number one priority for banks in 2020. The report predicts that, with resiliency at the centre of their thinking, banks will continue to focus on upgrading or replacing legacy systems.

The Daily Telegraph, Business, Page: 5

Government offers lifeline for steel deal

The Telegraph reports that the Government has discussed offering taxpayer-backed support to Chinese firm Jingye to help secure its purchase of British Steel. Business Secretary Andrea Leadsom and business minister Nadhim Zahawi have met Jingye representatives to discuss a funding package worth more than £100m. A Department for Business spokesman said it is continuing to work with Jingye and the Official Receiver over the deal.

The Daily Telegraph, Business, Page: 8

Bakery assets acquired

An unspecified number of redundancies have been made at Poundbakery, with several stores earmarked for closure after its owner went into administration. Grant Thornton’s Sarah O’Toole and Jason Bell were appointed joint administrators to Sayers The Bakers and the business assets have been acquired by Karen Wood, who has formed a new company which will be run by the former management team.

Yorkshire Post, Page: 14

SMEs NEWS FOR THE MIDWEEK TO FRIDAY 20th DECEMBER 2019

WEDNESDAY

SME leaders unsure on tax relief

Research commissioned by digital bookkeeper app Receipt Bank shows that while 92% of SME owners claim to understand the UK’s tax relief system, many are not claiming as much as they could. The study, which polled around 500 small business leaders, found that around six in ten did not know they could claim for relief on medical insurance or pension payments for employees, while just under half (47%) were unaware they could claim for staff training and 68% did not know claims could be made for staff events. The study also found that over than half of limited company bosses were unaware they could claim back money if their office was based in their home, with a similar proportion unaware charity donations, mileage and legal fees are also tax deductible. The poll saw 15% of respondents say they have not claimed for tax relief in the past due to a lack of understanding of financial jargon.

Daily Mirror

THURSDAY

Business rates set to be cut

The Government is set to announce a cut in business rates in today’s Queen’s Speech, a move that that will benefit hundreds of thousands of small businesses. Standard retailer discounts will rise from 33% to 50% in April, at a cost of around £320m. The tax break will apply to all independent shops, pubs restaurants and cafes in England with a rateable value below £51,000, with these accounting for around 90% of the total. The tax break will be worth up to £12,500 a year. A review of the business rates regime is expected to take place following the Budget. On the business rates relief, Chancellor Sajid Javid said: “We want to reinvigorate communities up and down our great country, helping people put the heart back into the places they call home.”

The Times, Page: 8 Daily Mail, Page: 1 The Independent The Sun

Small businesses see rates cut

The Government has confirmed that small businesses will see their business rates reduced next year. A bill announced in the Queen’s Speech will deliver a 50% discount that is aimed at retailers and will also benefit restaurants and pubs, while independent cinemas and music venues will qualify for the rate relief for the first time. Ministers say nine in ten independent firms will qualify for the relief, which is available to those with a rateable value below £51,000 and will deliver a saving of up to £12,500. The rate relief will cost the Treasury £770m next year, with the current 33% discount accounting for £450m, with a further £320m needed to top it up to 50%. The Government says the measures detailed yesterday will help firms ahead of a “fundamental review” of business rates that is due to begin in the spring. The Mail notes that the rate relief does not help large r retailers, who claim the tax gives an unfair advantage to online retailers.

The Independent, Page: 55 Daily Mail Daily Mirror

EMPLOYMENT NEWS FOR THE MIDWEEK TO FRIDAY 20th DECEMBER 2019

THURSDAY

Bradford leads on salary growth

Figures from job search engine Adzuna show that Bradford, which PwC recently named as the UK’s most improved city, has seen the biggest growth in advertised salaries of any major city, with a 3.6% increase this year.

Yorkshire Post, Business, Page: 1

FRIDAY

Hiring confidence at 3-year low

Data from the Recruitment and Employment Confederation’s (REC) Jobs Outlook report shows that hiring confidence has dropped to a net minus eight – its lowest point since the survey started in 2016, with uncertainty surrounding Brexit and the election seeing firms pause hiring plans. Neil Carberry, chief executive of the REC, said: “Many employers have been sitting on their hands for the past few months, putting off hiring until the outlook was clearer. Now that some of the fog has lifted, both business and the new government can put their plans into action.”

City AM, Page: 5

Work ahead

The Sun’s Jane Hamilton looks ahead to what to expect from the jobs market in the coming decade, noting that Sky, Amazon, PwC, Goldman Sachs and Microsoft are all investing heavily in recruitment, with a combined 1,556 vacancies in December.

The Sun, Page: 67

LEGAL NEWS FOR THE MIDWEEK TO FRIDAY 20th DECEMBER 2019

WEDNESDAY

Data dump prompts scam warning

Cyber security firm Mimecast has warned over scams that see fraudsters posing as HMRC to steal personal information. The firm has uncovered an open database of victims’ personal data, with the dump – which included names, addresses, bank details, usernames, passwords and credit card details – found to be linked to an HMRC-related scam.

Daily Mirror, Page: 36

FINANCIAL SERVICES NEWS FOR THE MIDWEEK TO FRIDAY 20th DECEMBER 2019

WEDNESDAY

Financial services exports up £3.8bn

A report from The City UK shows that British net exports of financial and related professional services grew almost 5% in 2018, climbing £3.8bn to hit £82.8bn. The research shows that financial services accounted for £1.1bn of the increase, while £2.7bn came from related sectors such as legal services, accounting and management consultancy. Trade Secretary Liz Truss commented: “The financial services sector is a bedrock of the UK’s trade and economic growth.” She pledged that the Government will “ensure our fantastic professional services will continue to lead around the world.”

City AM, Page: 1

PROPERTY NEWS FOR THE MIDWEEK TO FRIDAY 20th DECEMBER 2019

WEDNESDAY

First-time buyer mortgage approvals up

There were 32,260 new first-time buyer mortgages completed in October, according to research from UK Finance, 2.8% more than the same month last year. The number of home-mover mortgages completed in the month increased 4.2% on the same month last year, reaching 33,370, though the number of buy-to-let home purchase mortgages slipped 1.5% to 6,600. There were 18,910 new remortgages with additional borrowing, down 20.8%, while the number of new remortgages without additional borrowing also fell by 20%.

City AM

THURSDAY

House price growth slows

House price growth has slowed to a seven-year low. Values were up 0.7% in the year to October, down from the 1.3% growth recorded in September and marking the slowest rate since September 2012. On a monthly basis, values decreased 0.7% between September and October. The figures from the Office for National Statistics show that the average UK house price was £233,000 in October, a £2,000 increase on the typical price a year ago.

City AM

FRIDAY

Halifax predicts low price growth in 2020

Halifax expects house price growth to remain subdued at between 1% and 3% in 2020, saying that increases will remain low in a market where young buyers are held back by large deposit requirements. Halifax’s forecast for 2019 had suggested prices would rise by 2% and 4%, with prices subsequently climbing 2.1% over the year to November 2019. Russell Galley, Halifax’s managing director, said 2019 saw modest price growth supported by falling mortgage rates and a low volume of houses for sale, which “helped to underpin a degree of resilience in the market.” Prospects for 2020 appear “a bit brighter”, he added, “with uncertainty in the economy falling back somewhat, transactions volumes anticipated to pick up and further price increases made possible by growth in households’ real incomes.” Halifax’s estimates follow reports from the Royal Institution of Chartered Surveyors, which expects transaction levels to be flat and prices to climb by 2%, and Rightmove, which also foresees a 2% increase.

The Guardian

Stamp duty cut for downsizers urged

Ministers are being urged to reform stamp duty amid concerns it is stopping older homeowners moving to a smaller property, which in turn makes it harder for buyers to get a foot on the property ladder. Office for National Statistics data highlighted by estate agent Savills shows 4m elderly people live alone and 3.6m over-65s have at least two spare bedrooms. A YouGov study in 2018 found 22% of over 65s would be more likely to move if stamp duty was lower. Spencer McCarthy of Churchill Retirement Living has suggested a one-off stamp duty exemption for older people looking to downsize, while Jeff Bromage of Saga says it has “repeatedly called” for one stamp-duty-free move if people “right-size.”

The Daily Telegraph, Business, Page: 3

ECONOMY NEWS FOR THE MIDWEEK TO FRIDAY 20th DECEMBER 2019

WEDNESDAY

Unemployment hits 44-year low

UK unemployment dropped to its lowest level in 44 years in the three months to October. The number of people claiming unemployment benefits decreased by 13,000 to 1.28m for the quarter, Office for National Statistics (ONS) figures show. The overall rate of unemployment held flat at 3.8%, while the unemployment rate for women fell to a record low of 3.5%. The number of people in work increased by 24,000 to 32.8m, while the proportion of people in employment was flat at 76.2%, with 27.7m people in paid employment. The ONS data also revealed that average total pay increased by 3.2% in the quarter, slowing from 3.6%. Job vacancies fell by 20,000 to 794,000 in October, marking the tenth consecutive month of declines and the first time in more than two years that the figure slipped below 800,000. Jing Teow, an economist at PwC, said the data shows that the labour market “remains fairly resilient despite the uncertain economic and political environment,” adding: “However, there are signs that the labour market is cooling, partly as a result of the rise in real wages and unemployment falling to near record lows.”

The Daily Telegraph The Guardian, Page: 39 Daily Express, Page: 10 City AM Evening Standard

Pound plunges on no-deal fear

The pound saw its losses double yesterday, plunging 1.4% against the dollar and euro alike to hit $1.3166 and €1.1803 respectively, impacted by a weaker than forecast wage growth reading and the returning threat of a no-deal Brexit. Sterling is now below the level it was at going into the general election after rallying above $1.35 on Friday.

Financial Times The Daily Telegraph The Times, Page: 43 BBC News Daily Mail The Independent Daily Mirror Daily Express

Factory output falls

Factory output fell at the fastest pace since the financial crisis in the past three months, a CBI report shows. The survey found 41% of manufacturers reported order books to be below normal levels compared to only 13% who reported above normal. CBI deputy chief economist Anna Leach said businesses will want the Prime Minister “to break the cycle of uncertainty” and are looking for commitment to getting the UK economy “fighting fit as it prepares to leave the EU.” EY Item Club‘s Howard Archer said the CBI survey had “little to inspire hopes”.

Daily Express, Page: 47 City AM, Page: 9

THURSDAY

Inflation steady at 1.5%

UK inflation held at 1.5% in November, with the Consumer Prices Index at the same level as that recorded in October. Despite falling short of a Bank of England’s target of 2%, the figure came in higher than the forecasted 1.4%. Mike Hardie, head of inflation at the Office for National Statistics, said: “The headline rate of inflation remained steady with prices rising across a variety of goods and services.” Yael Selfin, chief economist at KPMG, said: “Inflation is expected to remain well below the Bank of England’s target in 2020, thanks to price caps set on regulated utilities and a stronger pound, giving the Bank of England some room to act if the economy wobbles a little next year. The Bank may wish to secure a pre-emptive cut in rates, either in February or May, if recent economic weakness proves more persistent.”

The Daily Telegraph, Business, Page: 4 The Times, Page: 44 Daily Mail, Page: 75 The Sun, Page: 53 The Guardian City AM

FRIDAY

BoE holds interest rates

The Bank of England (BoE) has held interest rates at 0.75% as it warned there was little chance of significant economic growth this quarter. The BoE’s Monetary Policy Committee (MPC) voted 7-2 in favour of maintaining the rate, as it did at its previous meeting in November. The monetary policymakers did point out that both sterling and the FTSE had rallied in the last month, with the pound’s exchange rate appreciating by around 2%. Jonathan Haskel and Michael Saunders voted to cut rates by 0.25%, citing the weakness of the economy as reason to reduce the rate 0.5%. The BoE says it expects GDP to grow by 0.1% in Q4, while the 0.3% growth in Q3 was “a little weaker” than the MPC expected at its November meeting. It added that while some company spending plans put on hold since the EU referendum could be reinstated by the end of next year, uncertainty over the future trade deal with the EU could continue to weigh on the economy. The MPC expects inflation to remain below its 2% target next year.

The Guardian Financial Times, Page: 2 City AM, Page: 5 BBC News

Retail sales slip in November

Figures from the Office for National Statistics show that retail sales fell in November, with the amount spent in the three months to November down 0.3% compared to the previous three months. The analysis, which was adjusted to account for Black Friday falling later than last year, shows 0.5% less was spent in November than in October. This marks the fourth consecutive month without growth – the longest such run since the data started being collected 23 years ago. Shoppers also purchased less, with sales volumes down 0.4% on a quarter-by-quarter basis and 0.6% month-on-month. Lisa Hooker, consumer markets leader at PwC, said “all eyes will be on next month’s numbers, which will include both Black Friday and the critical run up to Christmas”.

Daily Mail, Page: 75 Financial Times The Scotsman, Page: 5 City AM

UK economic divide mounts as London pulls further ahead

ONS data shows a widening of the economic divide between London and the rest of the UK, although the West Midlands and the East of England were the best performing regions in terms of per capita output growth.

Financial Times

Yorkshire ranks high for economic growth

Grant Thornton ‘s Sustainable Growth Index suggests that Yorkshire performed well for economic growth and job creation, but was weaker on more socially-focused criteria.

Yorkshire Post, Page: 14

OTHER NEWS FOR THE MIDWEEK TO FRIDAY 20th DECEMBER 2019

WEDNESDAY

Millennials expect firms to contribute to causes

City AM looks at company values and culture, citing a KPMG poll which suggests more than 60% of millennials expect their employers to contribute to a social cause.

City AM, Page: 18

THURSDAY

PM can ‘turbocharge’ tech industry

Robin Pagnamenta in the Telegraph considers ways the Government could “turbocharge Britain’s technology industry,” citing KPMG research which places Britain third in a global ranking of the most promising countries for technology breakthroughs with global impact.

The Daily Telegraph, Business, Page: 2

FRIDAY

Talking tech as investment hits record

Robin Pagnamenta in the Telegraph looks at investment in new technology, noting that UK investment into tech companies hit a record £9bn this year – more than any other European country. He cites analysis by KPMG which ranks London third in the world as a technology innovation hub, while the UK as a whole ranks fourth behind the US, China and India.

The Daily Telegraph, Business, Page: 5

A taxing time for Santa

Katie Grant looks at tax changes that come into force in April 2020, exploring what a shift in taxation rules for self-employed contractors will mean for Santa and his workforce. From April, if a worker is deemed to be an employee for tax purposes, the obligation to withhold PAYE and national insurance moves to the employer. Blick Rothenberg says an assessment of every worker’s status will need to be carried out. Ms Grant quips that the rule-changes are “a further unwelcome development for Father Christmas”, who has faced continued uncertainty over the impact of Brexit on the movement of goods and on his Lapland-born workforce.

The I, Page: 13

Contact Paul Southward.

Paul Southward's News Roundup


News for mid-week to 17th December 2019


News for mid-week to 17th December 2019

NEWS ROUNDUP

TAX News for mid-week to 17th December 2019

MONDAY

UK IHT double EU average

Inheritance tax rates in the UK are more than double the average EU rate, according to research by UHY Hacker Young. The analysis shows that people in the UK pay an average of 23.9% in inheritance tax when passing on an estate worth £2.4m compared to 10.3% in the EU.

The I, Page: 43

Taxes could help drive regeneration

Roger Bootle, chairman of Capital Economics, looks at the likely economic policy of the new Conservative government, saying you cannot boost “economic dynamism” by continuing with a “punitive and inefficient” tax system. On encouraging businesses to contribute to the regeneration of formerly depressed areas, Mr Bootle says reduced tax rates could help. He adds that “if things go well, there is the scope for both a substantial increase in public spending and judicious tax cuts.”

The Daily Telegraph, Business, Page: 2

Relief at risk?

Jill Walker of Anderson Anderson & Brown looks at entrepreneurs’ relief, saying the “holy grail of tax reliefs” has seen the qualifying conditions become more stringent since it was launched in 2008 and suggests it could be “subject to significant change if not withdrawn altogether” in the next Budget. She adds that investors’ relief could also be at risk.

The Press and Journal, The Business, Page: 5

TUESDAY

OBR report hits tax plans?

The Office for Budget Responsibility (OBR) says government borrowing will increase by around £20bn a year due to accounting changes. Its updated forecasts show that the budget deficit will be £33.3bn by 2023/24, up from a previous estimate of £13.5bn. Much of the difference between the new total and one issued in March stems from changes to the way student loans are assessed, with them treated as spending now where they had been treated as such when they failed to be repaid. The OBR has also rectified a £4bn a year error that underestimated corporation tax receipts. Experts have warned that the public finance forecasts have reduced the scope for significant tax cuts in the new government’s budget. Jack Leslie, of the Resolution Foundation, said: “Even a small deterioration to the economic outlook or plans to cut taxes would see the Chancellor at serious risk of breaking his brand new fiscal rules”. “Looking ahead, tax rises rather than tax cuts will be needed if those fiscal rules are to be combined with rolling back the impact of austerity over the course of the new parliament,” he added. Thomas Pugh, an economist at Capital Economics, said: “The recent deterioration in the economic and fiscal backdrop will all but eliminate any remaining headroom, preventing Boris Johnson from announcing any unfunded tax cuts in the budget.”

The Guardian, Page: 33 The Times, Page: 41 The Daily Telegraph Daily Mail, Page: 69 The Sun, Page: 2 City AM

LEGAL News for mid-week to 17th December 2019

TUESDAY

Ex-Serco directors charged over false accounting

The Serious Fraud Office has charged former Serco executives Nicholas Woods and Simon Marshall with fraud by false representation and false accounting over representations made to the Ministry of Justice (MoJ). Mr Woods, the former finance director of Serco Home Affairs, has also been charged with false accounting in relation to the accounts of Serco subsidiary Serco Geografix. Serco was fined £19.2m in July as part of a deferred prosecution deal after it overcharged the MoJ for an electronic tagging contract. The Financial Reporting Council fined Deloitte £4.2m in July over misconduct in relation to its audit work on Serco Geografix in 2011 and 2012, finding that the firm and audit partner Helen George had failed to act in accordance with the principle of professional competence and due care.

The Times, Page: 39 The Daily Telegraph, Business, Page: 3 Financial Times, Page: 19 The Independent, Page: 18 Daily Mail, Page: 70 The Guardian, Page: 14 The Sun, Page: 45 City AM, Page: 4

Fraudsters must repay £20m

Five fraudsters have been ordered to pay back more than £20m after conning investors in Britain’s biggest tax fraud. The men, who were jailed for fraud in 2017, stole at least £20m and laundered it via bank accounts and secret trusts – and also failed to pay about £6.5m in tax. Failure to repay the money could see them face further time in prison.

The Times, Page: 19

CORPORATE News for mid-week to 17th December 2019

MONDAY

How the wheels came off at Eddie Stobart

The FT looks at Eddie Stobart, highlighting a “troubled” relationship with former auditor KPMG and claims the haulage company has yet to supply replacement PwC with key financial documents.

Financial Times, Page: 13

Buyer: Steel deal not set to collapse

Jingye Group, the Chinese company that agreed to buy British Steel has denied reports that the rescue deal is on the brink of collapse, saying it is confident that it will secure regulatory approvals for the deal in the new year. EY is working with the official receiver to manage the sale of British Steel.

The Times, Page: 41 The Guardian, Page: 37 Daily Mail, Page: 70 Daily Mirror, Page: 12 City AM, Page: 4

Auditor issues distracted Sports Direct mangers

Looking ahead to Sports Direct’s interim report, Tom Rees in the Telegraph says the attention of its management team has been diverted in recent months by the exit of long-term auditor Grant Thornton.

The Daily Telegraph, Business, Page: 7

TUESDAY

Sports Direct working with Belgium over tax bill

Sports Direct says it is working with Belgium tax authorities over a €674m tax demand, the disclosure of which delayed the release of its full-year results earlier this year. The retailer said it did not expect the potential bill to lead to “material liabilities” after it brought in accountants from PwC to carry out a review, saying neither the accountants or Belgian lawyers “found any evidence that VAT had been underpaid”. The firm made the statement in an update that saw it confirm RSM as its new auditor, having parted ways with Grant Thornton. Sports Direct owner Mike Ashley used the meeting to warn that more House of Fraser stores will be forced to shut unless the Government undertakes a fundamental review of the business rates system, which he described as “broken and unworkable”. Mr Ashley said the rates system is “clearly helping to kill much of what remains of the UK high street.”

The Guardian, Page: 35 Financial Times, Page: 19 The Times, Page: 40 The Independent, Page: 55 Daily Express, Page: 48 Daily Mail, Page: 69 The Sun, Page: 45 City AM, Page: 9

Thomas Cook went bust with liabilities of £9bn

An Insolvency Service report on the failure of Thomas Cook shows it collapsed with total liabilities of £9bn, owing £585m to customers and £45m to employees, with £5.7bn owed to other group companies and £1.7bn owed to banks and other lenders. The report refers to 26 Thomas Cook Group companies which were wound up on September 23, with a second report to focus on a further 27 UK companies in the group which were wound up on November 8. The notice to creditors shows that between £176m and £244m has been recouped through selling off Thomas Cook assets.

Daily Mail, Page: 71 The Times, Page: 44 The Guardian, Page: 33 Daily Express, Page: 48 The Sun, Page: 29 City AM

Beales in refinancing talks

Department store chain Beales has reportedly drafted in advisers as it looks to explore potential refinancing options, with KPMG to lead a review that could see the retailer negotiate rent reductions with some of the owners of its 22 stores.

City AM, Page: 13

SMEs News for mid-week to 17th December 2019

TUESDAY

PM urged to offer clarity to businesses

Dr Adam Marshall, director general at the British Chambers of Commerce, says the Government must seek to “reduce uncertainty, reinvigorate our stagnant economy, build new infrastructure, boost skills and lower the cost of doing business.” In a letter to the Prime Minister carried in the Telegraph, he says the Conservative manifesto was not clear on how these aims would be met, insisting that businesses want clarity on the “concrete action” ministers will take to do so. Calling for “action to move beyond the Brexit impasse,” Dr Marshall says there must be a “clear commitment to boosting business here at home.” Noting that almost three quarters of SMEs report they are experiencing recruitment difficulties, he calls for “proper funding” for educational routes to employment, incentivising of job-related training, and an immigration system that prioritises the economy.

The Daily Telegraph, Business, Page: 2

Pizza boss calls for rate reform

David Page, executive chairman of pizza chain Franco Manca’s owner Fulham Shore, has urged the Government to reform business rates in a bid to save the high street. He says there is need for greater clarity in the rates system and urged ministers to clear the backlog of complaints over bills. He said: “We’ve got rate appeals going on all over the place. It can take years. It can’t be right. I am not sure that smaller businesses can wait that long.”

The Daily Telegraph, Business, Page:

PROPERTY News for mid-week to 17th December 2019

MONDAY

House prices to climb 2% in 2020

Analysis by Rightmove suggests house prices will climb by 2% next year, with a lack of choice for potential buyers likely to drive the increase. Miles Shipside, director at the property portal, said: “Rightmove measures the prices of 95% of property coming to market, and we predict that buyers and sellers will on average see a 2% rise in those prices by the end of 2020.” Data from the property website shows that the number of sales agreed so far in 2019 is down by 3% on 2018, while the number of properties coming to market has fallen by 8%. The typical asking price of a UK home is currently £300,025 – 0.9% down on November’s average.

Daily Mail The Independent

EMPLOYMENT News for mid-week to 17th December 2019

MONDAY

UK trails rivals on AI patents

A new report suggests that while Britain is a leader in academic research related to AI, it falls short of rivals in converting this into intellectual property. Britain is the fourth-largest producer of published AI research papers, submitting more conference papers than any other European country between 2015 and 2018, but ranks just sixth for AI patents published. Considering the findings of the 2019 AI Index report, the Telegraph cites PwC research showing that 46% of people think they will see their jobs change due to automation in the next 10 years, with 36% saying their job will be “significantly impacted”.

The Daily Telegraph, Business, Page: 4

TUESDAY

Letter: Ministers must boost workforce’s skills

In a letter to the Evening Standard, Andrew Harding, chief executive – management accounting, at the Chartered Institute of Management Accountants, says the Conservative government’s pledge to establish a right to retrain must be taken as an opportunity to boost productivity and social mobility. Citing an Industrial Strategy Council estimate that 20% of the workforce will lack the skills needed for their jobs by 2030, he calls for investment in digital transformation and creating a “well-trained and tech-savvy workforce able to leverage emerging technologies.” Mr Harding, who notes a Tory commitment to establishing a £3bn national skills fund, urges ministers to review national education and skills policies, in particular the apprenticeships programme.

Evening Standard

Workers concerned by automation but look to adapt

Research from PwC shows that 45% of Scottish employees are worried about being replaced by technology compared to a rate of 38% across the UK. The study found that many workers are keen to reskill and adapt to a move toward automation. Stewart Wilson, head of government and public sector of PwC in Scotland, said: “It is reassuring to see that so many people working in Scotland today both recognise the role that automation is going to play, and that they are keen to develop new skills in response to this.”

The Scotsman, Page: 13 The Press and Journal, Page: 33

INTERNATIONAL News for mid-week to 17th December 2019

MONDAY

Charity and the super-rich

Ahmed Twaij in the Independent looks at charity pledges made by the wealthy following reports that Jeff Bezos, CEO and founder of Amazon, pledged to donate $98.5m to support homeless people across the US. He considers issues including whether a progressive taxation system should be implemented to redistribute wealth to support certain causes via more than just handouts. On US tax policy, Mr Twaij says tax breaks for the wealthy have shifted inequality from “a wealth gap to a full-on abyss”.

The Independent, Page: 41

ECONOMY News for mid-week to 17th December 2019

MONDAY

BoE set to hold interest rate

The Bank of England is this week expected to hold interest rates at 0.75%. The nine-member monetary policy committee will announce its decision on Thursday and is not expected to alter the rate, despite pressure from some quarters for a further quarter-point cut. Last month’s meeting saw committee members Michael Saunders and Jonathan Haskel call for a 0.25% cut, with it suggested that they will reiterate this stance at Thursday’s meeting.

City AM

TUESDAY

Manufacturing output dips

Overall UK manufacturing output dropped to 48.5 in December, according to IHS Markit’s composite purchasing managers’ index (PMI), down from 49.3 the previous month to a 41-month low. Any reading below 50 on the index indicates a contraction. The fall in manufacturing output was the fastest since July 2012. Services data also fell short of forecasts, coming in at 49 compared to an expected 49.5. The decline follows a fall in November, with the sector seeing consecutive monthly declines for the first time since 2009. “December’s PMI survey data sadly lacked festive cheer, indicating that the economy contracted for the third time in the past four months,” said IHS Markit chief business economist Chris Williamson.

Daily Mail, Page: 69 City AM Financial Times

Global economy set for modest growth

PwC estimates that the global economy will grow by 3.5% next year. Its latest economic outlook report suggests US economic activity is likely to expand by about 2%, with the eurozone expected to grow at half that rate, while China’s economy will expand by 6%. Barret Kupelian, senior economist at PwC, said: “In 2020 we expect to see continued integration of the global economy but at a significantly slower pace.” Globalisation, he adds, “will give way to ‘slowbalisation’.”

The Times, Page: 47

Shoppers boosted by bargains

Deloitte analysis shows that clothing retailers are offering bigger than ever pre-Christmas discounts, with the study suggesting average price cuts could exceed 50% by Christmas Eve for the first time. Deloitte looked at more than 800,000 products online and in store and found that pre-Christmas discounting is currently at 43.8%. Jason Gordon, lead consumer analytics partner at Deloitte, said: “Retailers have faced a challenging year as consumer confidence has continued to fall amidst macroeconomic uncertainties,” adding that the introduction of Black Friday in recent years means consumers have come to expect an increasing amount of pre-Christmas discounting.

The Guardian, Page: 14 The Times, Page: 5 Daily Mirror, Page: 11 Daily Express, Page: 10 City AM, Page: 3

OTHER News for mid-week to 17th December 2019

MONDAY

Liquidity, Brexit and job cuts spell tricky 2020 for fund groups

A feature in the FT looks at the prospects for the fund management industry next year, with PwC’s Oliver Weber and David Yim, a partner at KPMG, among those offering insight.

Financial Times, FT Fm, Page: 6

TUESDAY

BoE: Banks could withstand economic crisis

UK banks are well-equipped to withstand recessions and a decline in GDP, with all major lenders passing the Bank of England’s (BoE) stress testing. The BoE report says banks could keep lending even if UK GDP dropped by 4.7%, global GDP declined by 2.6%, bank rates hit 4% and unemployment rose to 9.2%. While the analysis found that losses on corporate exposures are higher than in previous tests – “reflecting some deterioration in asset quality and a more severe global scenario” – the BoE said the banks and building societies assessed “remain above their hurdle rates.” The central bank is increasing capital requirements for banks by doubling the size of the countercyclical capital buffer from 1% of risky assets to 2%. Rob Smith, a partner at KPMG, said the test results “will no doubt be reassuring for UK banks, their customers and shareholders” but added: “Investors won’t miss the warning that in order to survive these stresses dividends dropped to near zero.”

The Times, Page: 42 The Guardian Financial Times, Page: 2 City AM Metro

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