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

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