More News Roundup Thursday 28th March 2019
More News Roundup Thursday 28th March 2019
Retrospective charge risks wellbeing of thousands, say MPs
The All-Party Parliamentary Loan Charge Group has accused the Treasury of producing a report that is not a “genuine review” of the controversial loan charge policy. The loan charge is a charge on all payroll remuneration through loans made since 1999, in the form of a 45% charge on all loan payments in that time. The loan charge poses a risk to the wellbeing of thousands of people, the APPG said. In a statement, the APPG added: “The loan charge is a retrospective charge that comes into effect in April this year and overrides existing statutory protections, allowing HMRC to go back and demand tax for arrangements that were legal.” A Treasury spokesman said: “HMRC has never approved these schemes and they have never worked. The report goes further than agreed, detailing the impact of the policy on individuals and measures to support vulnerable taxpayers with large bills to pay.”
Yorkshire Post, Business, Page: 1
HMRC wins £40m battle against tax avoidance promoters
HMRC has won a legal case over tax avoidance scheme promoter Hyrax Resourcing Ltd which will help the tax authority collect over £40m in unpaid taxes. The victory over Hyrax means the promoter now has to disclose the details of their tax avoidance scheme to HMRC, along with the names and addresses of 1,180 high earners who used it. If the company fails to do so it risks a penalty of nearly £6m as well as £5,000 per day for not fully disclosing the scheme. The tribunal judge agreed with HMRC’s argument that Hyrax was the successor to a previous tax avoidance scheme, called K2, which was used by celebrity comedian Jimmy Carr and others in 2012 and which the then prime minister, David Cameron, described as “morally wrong”. HMRC said it was currently pursing users of the K2 scheme through litigation.
Press Release Financial Times, Page: 2
May unveils compensation for servicemen in Scotland hit by higher SNP taxes
Armed Forces personnel based in Scotland hit by the SNP’s income tax “hikes” in the coming financial year will be compensated, the Prime Minister has announced. Derek Mackay, the SNP’s Finance Minister, has frozen the salary threshold for higher rate income tax at £43,430, whereas it will rise to £50,000 in the rest of the UK. Around 7,000 servicemen will benefit from Theresa May’s move and the Ministry of Defence has increased the maximum mitigation payment from £1,500 in the current year to £2,200.
The Daily Telegraph The Scotsman, Page: 8
Seven million cigarette smuggling plot smashed
A lorry driver has been jailed after he was caught smuggling more than seven million illegal cigarettes into the UK. Polish driver Mariusz Piotr Gorny tried to smuggle cigarettes worth £2.1m in unpaid duty through the Port of Dover, an investigation by HMRC revealed.
Goals Soccer Centres suspends trading amid VAT concerns
Football pitch operator Goals Soccer Centres has suspended trading in its shares following a “substantial misdeclaration of VAT” totalling approximately £12m. The London-listed firm, which counts Sports Direct as its biggest shareholder, said that “historical accounting errors” meant it could not be clear on its exact financial position and that it intends to “enter into discussions with HMRC immediately” amid discussions with lenders to agree new facilities. BDO replaced KPMG as its auditor in June 2018 and, along with Martin Johnson as interim chief financial officer, is undertaking an investigation into the company’s accounts. Tax experts from RSM Tenon have also reportedly been drafted in to help.
LC&F victims must be allowed compensation, Jim Armitage says
The Standard’s Jim Armitage suggests that London Capital & Finance bondholders who bought in after September must now be allowed to appeal to regulators for compensation. Though the Financial Conduct Authority did not regulate LCF’s bonds, he writes, surely there is a case to be made that a regulated entity was mis-selling on an industrial scale – opening up potential claims with the Financial Services Compensation Scheme. According to administrator Smith & Williamson’s report, LCF continued taking the public’s money three months after it had stopped paying interest.
Footwear chain steps up with LK Bennett offer
The Dune Group has reportedly tabled an offer to buy premium fashion chain LK Bennett, after it fell into administration a few weeks ago. Administrator Ernst & Young, which has already reduced the number of employees at the brand’s head office and closed five stores, resulting in around 55 job losses, is expected to choose a buyer for the firm this week.
New warning over catastrophic effects of late payments
Fresh data gathered by Begbies Traynor show 115,000 British businesses waited an average of 57 days for payment last year, with more than 1,000 of these entering insolvency as a result. The study revealed that 34% of the 1,000 companies entering insolvency in 2018 had debtor days in excess of 57 days, while 15% waited for longer than 86 days to receive payments. Ken Pattullo, managing partner at Begbies Traynor in Scotland, warned: “The worrying growth of late payments must be addressed if we are to help businesses, and the UK economy, grow. Otherwise, the knock-on effects will spiral out of control.”
The Scotsman, Page: 37
Small business confidence falls to 15-month low
The Telegraph’s latest Business Tracker has found that small company confidence has plummeted amid the uncertainty over Brexit. The tracker revealed that 24% of tweets from 25,000 British enterprises and entrepreneurs contained a pessimistic sentiment, with 9% of them being positive. After removing the 67% of tweets that were opinion-neutral it means that there was three times as much pessimism than optimism among the community, at 73% to 27% respectively.
The Daily Telegraph, Business, Page: 8
Proportionality must be at the heart of UK business regulation
Anthony Robinson, head of policy & communications at the Quoted Companies Alliance, considers sentiment among UK SMEs since 2011 and how to facilitate an environment for smaller companies to flourish and grow going forward. Mr Robinson says a “big part of this is ensuring that rules and regulations are proportionate to the size of companies they impact,” something the Financial Reporting Council’s replacement will do, he adds.
ESpark rolls out Bermuda hub
Scottish-headquartered business accelerator Entrepreneurial Spark has launched its 20th hub, in Bermuda. Entrepreneurial Spark, better known as ESpark, transferred its UK accelerator network to Royal Bank of Scotland to be run in-house last year. The new hub, dubbed Ignite Bermuda, is co-founded by KPMG and New Venture Holdings.
The Scotsman, Page: 37
MPs consider inquiry into bosses’ pensions
The Work and Pensions select committee is considering launching an inquiry into executive pensions following criticism of a string of deals for company bosses. Committee chairman Frank Field said a decision on a probe had yet to be made but if “voluntary measures to curb bosses’ pensions are proving easy to game, then Parliament ought to be asking whether the government needs to step in.”
Business confidence slumps
A survey of 600 employers by the Recruitment and Employment Confederation has found that business confidence in the British economy has plunged further as employers scale back hiring and investment plans. Some 49% of UK employers expressed concern about the availability of permanent-hire candidates, with a lack of engineers and health and social care workers causing most concern. Meanwhile, 35% of employers intending to hire temporary workers expressed concern about a lack of agency staff having the necessary skills they require. REC chief executive Neil Carberry commented: “For months, businesses have told us that they were concerned about the general outlook for the economy. It is clear to us that this concern is now closer to home.”
Government advertises for bankruptcy expert for universities
The Government is to appoint a bankruptcy specialist amid growing fears of universities going bust, something the Times’ Rosemary Bennett says indicates universities will not be bailed out if they get into trouble.
Contact Paul Southward.