News Roundup 14th March 2018
Hammond hails economic ‘turning point’
Philip Hammond has used his Spring Statement to set out a series of consultations on future policies, including a deeper look at how tech giants such as Google and Facebook are taxed. The Treasury will also consider forcing online platforms such as Airbnb to provide details of users’ income directly to HMRC , while large cash payments to tradesmen could be banned in a crackdown on the black economy. A consultation on extending current training tax relief to self-employed people and employees was also announced. Mr Hammond revealed that the next revaluation for business rates is being brought forward to 2021, after which the government will move to revaluations every three years. The move was welcomed by small business groups, along with indications that the government will take action on the culture of late payment. Other announcements included a rise in the National Living Wage, to £7.83 an hour in April. Regarding housing, Mr Hammond announced that 60,000 property buyers had so far benefited from the stamp duty relief introduced following last Autumn’s Budget. The chancellor told MPs growth was forecast to be 1.5% this year, up from 1.4% forecast by the OBR in November. He said the figures showed the UK economy had reached a turning point and there was “light at the end of the tunnel”.
Financial Times, Page: 1 Financial Times, Page: 4 Financial Times, Page: 4 The Times, Page: 16-17 The Times, Page: 17 The Daily Telegraph, Business, Page: 1 The Daily Telegraph, Business, Page: 3 The Guardian Daily Mail, Page: 11, 13 The Sun, Page: 6 The Independent, Page: 59 City AM, Page: 2-3 I, Page: 10 Daily Express, Page: 1, 55 The Sun, Page: 6 Yorkshire Post, Page: 4 The Scotsman, Page: 6-7 The Press and Journal, Page: 17
Download KSK’s summary of Philip Hammond’s Spring Statement here:-
Treasury set for windfall from SNP’s income tax hike
The OBR has predicted that the SNP’s introduction of higher income tax rates in Scotland will lead to the tax take south of the Border increasing. Projections published alongside Philip Hammond’s Spring Statement said the Treasury could expect to receive an extra £23m income tax next year if a small number of top rate taxpayers – “in the low tens” – migrated to the rest of the UK.
Some UK sectors have seen their taxes rise
In a letter to the FT, Kevin Nicholson, Head of Tax at PwC, notes that the financial services sector has seen its tax burden increase significantly over recent years.
Potholes and loopholes
Mail advises its readers of the various tax reliefs and penalties they need to know about in order to maximise their savings.
Daily Mail, Page: 44-45
DOWNLOAD 2018/19 TAX TABLES HERE:
Accountants face tighter rules on tax avoidance
EU finance ministers have agreed that accountants, bankers and lawyers will face penalties if they fail to report aggressive tax-avoidance schemes. Advisers who design cross-border schemes with tax-avoidance “hallmarks” will have to report the scheme’s details to national authorities within 30 days of their creation. Separately, EU finance ministers have added the Bahamas to the bloc’s tax blacklist, months after the British overseas territory was caught up in the Paradise Papers leak of offshore secrets.
Financial Times, Page; 16 The Guardian, Page: 29
Carillion collapse points to widespread accounting flaws
The credit ratings agency Moody’s says the collapse of Carillion has exposed serious flaws in the accounting for finance arrangements between companies and their suppliers. It said the growing use of reverse factoring arrangements are rarely disclosed by companies and the arrangements are only uncovered after extensive scrutiny. Moody’s noted that in Carillion’s case, while the balance sheet said that the group’s bank loans and overdrafts amounted to £148m, it is possible that as much as £498m was owed to banks under a reverse factoring arrangement that started in 2013.
Reporting improves with KAM disclosures
A report from the ACCA concludes that recent changes to international standards concerning key audit matters (KAM) have improved the quality of information available to investors, and had a positive impact on wider elements of financial reporting. The report, Key audit matters: unlocking the secrets of the audit, examined 560 audit reports across 11 countries that sported the new KAM disclosures as required by the IAASB. The analysis revealed KAMs have produced three key benefits since they began appearing in audit reports – better governance, better audit quality, and better corporate reporting.
UK plans enterprise fund to lure wealthy investors to back start-ups
The government is to launch a new Enterprise Investment Scheme fund to encourage support of early-stage UK start-ups. Four models of tax relief will be available to investors.
Buy-to-let bubble bursts
New taxes and limits on lending have curbed Britain’s buy-to-let housing boom. Bank of England figures show just 12.7% of mortgages in the final three months of 2017 went to buy-to-let borrowers, the lowest level since 2013.
The Daily Telegraph, Business, Page: 8
Small firms praise tax cuts
Optimism among small American businesses hit a 35-year high last month in response to President Trump’s tax cuts. The National Federation of Independent Business’s optimism index climbed to 107.6 in February, just short of the record of 108 set in 1983.
UK growth to be slowest in G20 this year
The OECD has said the UK economy will grow at a slower pace than any other advanced or emerging nation this year. The think-tank raised its UK growth forecast to 1.3% in 2018 amid a strengthening global recovery. This is up from an earlier projection of 1.2%, but is the weakest in the G20. The OECD said the world economy was on course to expand at an annual pace of 3.9% over the next two years. This is up from a forecast last November of 3.7% in 2018 and 3.6% in 2019. In the UK, the OECD said higher inflation would continue to squeeze household incomes, while weak business investment would continue to weigh on growth for the next two years.
Asset managers feeling confident
A survey by PwC shows global asset and wealth managers are confident about revenue growth in 2018, although slightly less so than last year. Some 87% of respondents were bullish on the year ahead, down from 92% in 2017. Chief executives at the firms named over-regulation, geopolitical uncertainty and tax changes as their biggest concerns.
City AM, Page: 6
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