Huge dividends for Ferrero family as firm shifts UK profits overseas

Italian chocolate mogul Giovanni Ferrero, worth an estimated £24bn, is paying himself and his family a €642m (£542m) dividend. The Guardian points out that Ferrero Rocher paid less than £500,000 in UK taxes over the last decade while the Ferrero family took €2bn in dividends over the period. Robert Leach, a tax accountant, said: “Ferrero Rocher appears to be shifting its profits overseas to reduce its UK tax liability. The company is shifting the profits to Luxembourg and shifting that to Monaco – where there are no taxes. The UK company accounts show that Ferrero has not broken even for many years. No parent company would keep a loss-making company going year after year, the fact that Ferrero Group is doing so is in effect an admission that it is exporting profits.” Labour MP Rachel Reeves commented: “The government needs to stop sitting on its hands and act to stop firms diverting potential UK tax revenues to offshore destinations.”

The Guardian, Page: 4 Daily Mail, Page: 16

Nick Clegg urges Chancellor to hold off on digital tax

Former Liberal Democrat leader Sir Nick Clegg has come under fire after urging the Chancellor to hold off on taxing tech multinationals and wait instead for an international agreement to be thrashed out. Sir Nick, now employed by Facebook, was mocked by Tory MP Neil O’Brien, who joked: “2013 Nick Clegg: ‘When Google goes to extraordinary lengths to avoid paying its taxes, I say it’s wrong.’ “2020 Nick Clegg: Let’s not be too hasty lads”. Clegg said a patchwork of legislation would not be a sustainable solution. But Labour peer Andrew Adonis, said: “Of course Facebook should pay its fair share in tax and it doesn’t remotely at the moment. I don’t much approve of Sir Nick Clegg lecturing us from California that he should get a tax break at the expense of the NHS and UK based companies.”

The Sun, Page: 22 Daily Mirror, Page: 6

Three million yet to file tax return

HMRC has said over three million people have yet to file their tax return with just one week to go before the final deadline. Those who miss it face an initial £100 penalty, rising by an additional £10 a day after three months. Over 700,000 people missed the deadline last year and HMRC expects a similar number to do so this time round. Angela MacDonald, HMRC Director General of Customer Services, said: “We’re here to help customers get their tax right, and have put in place a range of help from online services, webinars and videos, to customer service helplines, webchats and social media channels. We know completing a tax return can be confusing at times, so please do get in touch if you’re still concerned about how to file, or about paying what you owe.” Charles Calkin offers some tips on submitting returns in the FT.

The Guardian, Page: 46 Press Release Financial Times, Money, Page: 5 The Sun, Page: 40

Bank chiefs want post-Brexit tax cuts

International banks are lobbying the UK government hoping that Brexit will bring respite from taxes such as the bank levy and the bank surcharge. Banks are calling on Chancellor Sajid Javid to prove the “global Britain” boast and convince them to remain in the UK. They are using offers from Paris and elsewhere as leverage, the Telegraph reports.

The Daily Telegraph, Page: 29

Property sellers face reduced tax deadline

From April 6th, property sellers will need to submit a one-off return to HMRC and pay any CGT due within 30 days, rather than the current 10 to 22 months from the sale.

Financial Times, Money, Page: 3


Denise Coates tops Tax List 2020

The second edition of The Sunday Times Tax List has been published, with Harry Potter author JK Rowling, inventor Sir James Dyson and the pub tycoon Tim Martin named among 50 individuals and families who have together paid almost £2.5bn of tax in a year. Denise Coates and family, who run the gambling company Bet365, top the list with an estimated tax bill of £276m for 2018-19 – almost twice as much as any other entry on the list. Second are Stephen Rubin and family who run fashion and sportswear giant Pentland: £143.9m; Leonie Schroder and family of the fund management firm of the same name are third with a tax bill of £116.8m. Sir James Dyson and family are the fourth biggest contributors at £103m; the Duke of Westminster comes in at 7th with £69.3m; Lord Anthony Bamford and family (10th) – £58m; Sports Direct founder Mike Ashley (13th) £54.8m and JK Rowling is 19th with a liability of £48. 6m. JD Wetherspoon founder Tim Martin (33rd) paid an estimated £29.9m. Explaining how the figures were calculated, the Sunday Times states: “It is possible that many of those on our list have sought to reduce their tax bills by offsetting the costs of their philanthropy or other legitimate expenses against their tax bills. But it is more likely that they are paying more tax than we can prove.” The List is now drawn up to include employers’ national insurance contributions, bringing businesses with large numbers of employees into the Tax List for the first time. Last year’s inaugural List prompted some companies to include more detail in their financial statements to improve their standing, the paper points out.

The Sunday Times, Page: 1 The Sunday Times The Sunday Times, Page: 30

Beware new CGT rules on property sales

Katherine Denham warns in the Sunday Times that people relocating or stuck in a chain when moving house risk being caught by changes in CGT rules in April that will see the amount of time homeowners have to sell their existing property halved from 18 months to nine before triggering a tax bill. Nimesh Shah of Blick Rothenberg comments: “Nine months is an incredibly short period. When the government consulted on this matter, many commented that the new rules should not be introduced and the current 18-month time frame was fit for purpose, but they pushed ahead with the change. It feels like another tax change aimed at property to raise revenue for the Treasury.” Additionally, from April, people paying CGT have just 30 days to calculate the tax owed following a property sale.

The Sunday Times, Business, Page: 11

Stressed-out taxpayers prone to scams

The Observer warns that with pressure building for the self-employed to submit their tax returns they risk becoming more susceptible to scams promising rebates. Scammers may also threaten their target with prison for fraud or claim their bank account could be frozen if they don’t pay a fine. Consumers are advised that if they receive a phone call from someone purporting to be from HMRC, they should end the call and phone back on a verified number. Check the HMRC website or use the number on a letter you have received in the past.

The Observer, Page: 66

US warns Britain over DST

US Treasury Secretary Steven Mnuchin has repeated his threat to retaliate if the UK introduces a digital services tax (DST). Speaking to an audience at Chatham House, Mnuchin said the tax is “discriminatory” and would be in violation of tax treaties. An editorial in the Observer hopes the pressure from the UK will help spur the US to agree to OECD proposals when they are eventually put forward.

The Observer, Page: 8, 64 The Independent, Page: 5

Tax tricks of Britain’s wealthiest

The Sunday Times’ David Byers lists some of the means by which Britain’s wealthy could be reducing their tax bills. Using relief for investments in start-ups; putting savings in a trust, using investment bonds and buying wine and classic cars are some of the methods Byers details.

The Sunday Times, Business, Page: 11



Lloyds to set aside £500m for HBOS fraud victims

Lloyds Banking Group is rumoured to be ready to set aside an additional £500m to pay compensation for victims of the HBOS Reading fraud. Corrupt bankers at HBOS Reading colluded with rogue advisers to destroy small businesses for profit between 2003 and 2007. A review by Sir Ross Cranston found the bank’s original redress scheme, which paid out £102m, had “serious shortcomings”. Lloyds said it will work with victims, regulators and MPs to finalise plans for a new compensation scheme to be announced within weeks.

The Mail on Sunday, Page: 98

Start-up grant fraud “pervasive”

The Sunday Times details how local enterprise partnerships and other bodies are distributing government funds to support small businesses without adequate oversight. Former KPMG accountant Andrea Reynolds, who now runs Swoop Funding, found in 2014 that the government was losing £4bn on administration costs and £2bn on grant fraud. The paper says once complex grant application forms are completed, “accountability can be minimal.” Reynolds says the problem of companies cheating remains “pervasive”.

The Sunday Times, Business, Page: 9



Amazon scores £3m business rates rebate from council

Amazon has won a £3m business rates rebate from Cannock Chase Council after successfully arguing that the mezzanine areas in one of its warehouses should not be classified as “relevant” facility space – the basis on which rates are calculated per square meter. Deputy leader of the council Gordon Alcott said that Amazon was a “highly valued employer” but that the reduction in rates was a “major blow”. National chairman of the Federation of Small Business Mike Cherry said Amazon was in a position to “wage a costly legal case against an unfair business rates bill”. “The story is completely different for small firms that do not have the resources or time to fight cases where they feel they are being unfairly charged,” he said. “Instead, they are left to wrestle with the broken check, challenge, appeal system.”

The Daily Telegraph, Page: 29 Daily Mail, Page: 107 Daily Mirror, Page: 6

Triples all round – pubs to get £1,000 tax cut

Sajid Javid has announced a cut to business rates on pubs with as many as 18,000 in line for a £1,000 reduction in their bill. The chancellor said the new relief would start in April for small pubs “in a fresh demonstration of the government’s support for communities up and down the country”. The relief is on top of previously announced plans to slash the bills of small shops and pubs by 50%. The Treasury said that those eligible for both reliefs would get up to £13,500 off their annual bills.

The Times, Page: 50 Daily Express, Page: 8 Daily Mirror, Page: 2 The I, Page: 4 Yorkshire Post, Page: 2



City watchdog urged to probe pension advice

The FT reports that the Financial Conduct Authority (FCA) is planning to write to 1,841 financial advisers about “potential harm” in their defined benefit transfer advice. This equates to 76% of the firms advising individuals between 2015 and 2018. Mick McAteer, a co-director of the Financial Inclusion Centre think-tank is calling for a “full-scale inquiry”. He adds: “I had thought multibillion-pound mis-selling scandals belonged in the past, but clearly this is not the case.” The news follows concerns raised by the outgoing chief executive of the FCA, Andrew Bailey, who fears retirees who have accessed their pensions since the rules were changed in 2015 will be left dangerously exposed to a potential correction in the stock markets.

Financial Times, Page: 1 The Daily Telegraph



Glitch means self-employed could lose out on pension rights

Experts are warning that thousands of self-employed people could miss out on future state pensions and benefits because they unwittingly omit to pay Class 2 NICs when filing their tax return. If an individual has not properly registered as self-employed a message can appear from HMRC that says they do not need to pay the contributions, but failure to make the payments means they lose their full entitlement to a state pension. Caroline Miskin, a tax manager at the ICAEW says: “It is a system that is not fit for purpose. Potentially people could lose all their entitlement to their state pension. Our concern is that for people who are not represented by an agent may not spot the fact that they haven’t been charged the contributions and then potentially they run the risk of not noticing until they come to claim benefits which might not be until they reach retirement age and they suddenly find that they don’t have a national insurance record.”

The Guardian, Page: 50

Will pension tax relief be axed?

The Times asks whether pension tax relief will be axed in the March budget. Hargreaves Lansdown’s Tom McPhail says pension tax relief should be scrapped altogether, pointing out that it costs more than £50bn a year. Pensions consultant John Ralfe suggests the introduction of a flat rate of tax relief for all workplace pension schemes – both defined contribution and defined benefit.

The Times



Hawkin’s Bazaar collapses

Toy and gadget retail chain Hawkin’s Bazaar has fallen into administration, putting 177 jobs at risk. The retailer’s website has been suspended but its 20 stores will remain open for the time being. According to Tom Straw, a partner at Moorfields Advisory, the small business had suffered from a challenging Christmas period for toy sales. Mr Straw said: “Hawkin’s Bazaar is a retail brand with a strong heritage both on the high street and online. Unfortunately, despite making changes to appeal to the shift in modern buying patterns, the retailer still struggled to compete with online retailers such as Amazon.”

The Guardian, Page: 46 The Times, Page: 52 Daily Mail Daily Star, Page: 17 Yorkshire Post, Page: 10 I, Page: 78

Flybe asks for £100m loan

The owners of Flybe are asking the UK government for a £100m loan to hold the company over for the winter just a week after securing a deferral to its £100m tax bill. The move follows assurances from the Chancellor that help provided to Flybe did not constitute state aid. Acceding to this request is expected to anger rival airlines further. Michael O’Leary, chief executive of Ryanair, has already said he would sue for breaches of competition law and state aid rules.

The Times, Page: 51 Financial Times, Page: 14 The Daily Telegraph, Page: 30 Daily Mail, Page: 10 The Daily Telegraph, Page: 29


New boss starts to break up Saga

The listed insurance and travel group Saga has hired Duff & Phelps to carry out the sale of its Titan Travel arm as it comes under pressure from activist investors. The group has also called in Grant Thornton to sell its live-in care brands Patricia White’s and Country Cousins, according to reports.

The Mail on Sunday, Page: 96

Flybe asks airports for more time to pay

Troubled regional airline Flybe is asking airports to provide it with more time to pay outstanding landing fees. The move comes as the firm also tries to persuade the government to lend it £100m. It has already had a £100m air passenger duty bill deferred by HMRC.

The Sunday Telegraph, Business, Page: 1



Output grew at the fastest rate for 16 months in January

The UK composite purchasing managers’ index (PMI) compiled by IHS Markit shows manufacturing and services saw their best month for more than a year in January. The IHS Markit/CIPS PMI for services showed the sector returning to growth for the first time since August 2019, rising to 52.9 from the previous month’s 50.0. Any score above 50 indicates expansion. Manufacturing continued to contract, but at a slower pace. Its PMI reading rose to 49.8 from December’s 47.5. The EY Item Club said the survey “indicates that the economy has gained significant initial benefit from reduced uncertainties following December’s decisive election result”. But its chief economic adviser, Howard Archer, warned the survey, “could possibly exaggerate the rebound in January after overplaying some of the earlier weakness.”

BBC News Daily Mail, Page: 109 The Guardian, Page: 44 The Sun, Page: 46

Eurozone makes weak start to the year

The IHS Markit eurozone purchasing managers’ index reveals a decline in the services sector in January offset a nascent recovery among manufacturers, leaving the index unchanged at 50.9.

Financial Times, Page: 6


Analysts revise GDP growth up

The EY ITEM Club will on Monday publish an updated forecast for Britain’s economy predicting GDP growth of 1.2% over the course of 2020, compared to its previous prediction of 1% in November. Despite the clarity the Conservatives’ election victory has brought, EY will warn that there are still question marks over the nature of the UK and EU’s future relationship.

Sunday Express, Page: 44



Johnson: Britain will be a global, trail-blazing country

Boris Johnson will this week use a series of events to promote Brexit Britain, declaring that the UK will become a “global, trail-blazing country” over the next decade as he urges the entire country to “look ahead with confidence”. The government is to launch a new ‘Ready to Trade’ campaign on February 1st, the day after Brexit day. The international advertising push “seeks to deepen our relationships with future global partners”, Downing Street said. Adverts will be placed in 17 cities across 13 countries outside the EU. A domestic campaign will also be launched on Monday urging UK businesses to check to see if they need to make any changes ahead of the transition period ending in December 2020.

The Sunday Telegraph Sunday Express, Page: 1, 4-5 The Mail on Sunday

Contact Paul Southward.

Paul Southward