NEWS MIDWEEK TO 11th DECEMBER 2019
NEWS MIDWEEK TO 11th DECEMBER 2019
TAX NEWS MIDWEEK TO 11th DECEMBER 2019
Comment: The full gamut of business taxes need reform
Graham Ruddick in the Times advocates for a “fundamental review of business taxes” citing analysis by PwC which found that since 2005 the corporation tax paid by Britain’s largest businesses has fallen by 32% while other taxes, including national insurance contributions and business rates, have risen by 86%. Ruddick goes on to point out that the proportion of tax that Britain raises from property, including business rates, council tax and stamp duty, stands at 12.3%, twice the average in the OECD and the highest in the EU. But reform of business rates is pointless in isolation, argues Ruddick, who calls for changes to be part of wider reform in how businesses are taxed.
UK investors owed billions in Swiss PPI scandal
HMRC could miss out on a windfall of nearly £2bn due to around 200,000 investors failing to make claims from a long-running Swiss banking scandal, lawyers have warned. In 2012 Swiss courts ruled that banks in the country had been unlawfully charging hidden fees on savers and ordered them to return the cash, in echoes of the UK’s PPI scandal. But a deadline has been set for the end of this year, and around £4.68bn remains unclaimed by investors in the UK, according to litigation funding firm Liti-Link. The average amount owed to British investors is thought to be around £23,400. Hubert Schwarzler, chief executive of Liti-Link, said: “We urge anyone who has invested in Swiss banks over the last decade to contact Liti-Link as soon as possible. It might be the difference between getting a surprise Christmas bonus, or starting the New Year out of pocket.”
Daily Express, Page: 45 The I, Page: 38 Yorkshire Post, Page: 2
Business calls for reform of health taxation
The Working Well consortium, which includes John Lewis, Unilever, Siemens and Tesco, is looking at ways to lobby the next government to make occupational health services tax exempt.
Caudwell: Wealthy will leave Britain if Labour wins
Labour’s John McDonnell faced off with Phones4U billionaire John Caudwell during a radio show yesterday, with the shadow chancellor defending his party’s rhetoric on the wealthy. Mr Caudwell said that Labour’s approach to business “frightens the living daylights out of me” and warned that “nearly every wealthy person” he knows is thinking of leaving Britain if Labour wins on Thursday. He dismissed Mr McDonnell’s claims that the “existing system is collapsing around our ears” and added that he had paid over £300m in taxes and spent “at least 60% or 70% of my waking hours on charitable purposes.” Labour’s message was divisive, Caudwell argued, adding that he would not start a business under a Corbyn-led Labour government. Mr Caudwell later told the Telegraph McDonnell was a “wolf in sheep’s clothing” while financial advisers from deVere Group and Calib rate Law told the paper an exodus of “the country’s most successful and wealthiest individuals” was realistic and that concern among high net worth individuals was “unprecedented”. Former CBI head Lord Digby Jones added that if he were an entrepreneur in Britain he would be “frightened”. Finally, Sir Charles Dunstone, the co-founder of Carphone Warehouse, tells the paper that he expects the pound to plummet and a flight of capital if Labour win.
UK tax burden highest for 50 years
The tax burden in the UK will be the highest since the post-war period whoever wins the general election, the Taxpayers’ Alliance has warned. The group’s John O’Connell said: “As it stands, both potential PMs will be whacking up taxes to higher rates than any of their post-war predecessors from their respective parties. Corbyn’s hikes would be enough even to make Wilson wince. But while it’s true that the biggest tax rises have historically come under Labour leaders, today’s Tories are giving them a run for their money.” Elsewhere, the Guardian reports that claims in the Daily Mail that Labour plans to “scrap the capital gains tax exemption on main homes” were false. The proposal was raised but also rejected in a report written for Labour.
The Sun, Page: 2 Daily Express, Page: 6 The Guardian, Page: 8
Dyson rejects claims of cynical farming investment
In a letter to the Times, Sir James Dyson refutes claims he has invested in farmland to avoid inheritance tax. He says his group has invested £100m and created 147 jobs, supporting a further 500 indirectly, in improving neglected farmland and infrastructure.
The Times, Page: 28
HMRC drops further £5m from Rangers tax claim
HMRC’s claim against the company which owned Rangers has fallen again, according to the latest report from liquidators BDO. It shows a drop from an initial estimate of £94m to just over £67m. This time there is a drop of £5.2m relating to VAT and PAYE. The final HMRC bill is still being disputed. The bill currently includes a claim of £48m over the use of EBTs, a figure that BDO continues to dispute, with a resolution not expected until next year. The dispute, which does not relate to the current Rangers FC, involves the way some players were being paid from 2001 to 2009 by the company that then owned Rangers, and the tax that was not being paid on that income.
BBC News The Scotsman, Page: 64
Half a million chase taxman for rebates
Figures from Royal London show almost half a million people had to chase HMRC for overpaid income tax in the past tax year, with changes to taxable benefits and switching jobs the chief reasons for overpayments. Becky O’Connor, a personal finance specialist at the insurer, said: “This goes to show it’s a good idea not to assume the taxman is always right about what it says you owe.”
Daily Mail, Page: 49
CORPORATE NEWS MIDWEEK TO 11th DECEMBER 2019
Three alerts in row can prove fatal
In Scotland 17% of companies have de-listed within a year of issuing three or more successive profit warnings, according to a report by EY. In analysis spanning 20 years, the firm found the third consecutive profit warning to be a “bruising or even a knockout blow” for listed businesses. Colin Dempster, EY’s head of restructuring for Scotland said: “Our figures demonstrate that profit warnings can increase dramatically when companies don’t have time or agility to adjust to rapid changes in the economy.”
The Press and Journal, Page: 32
Soak.com appoints BDO to find a new buyer
Bathroom retailer Soak.com has hired BDO to oversee a second sale process, following its disposal by plumbing and heating supplier Ferguson, which is listed on the London Stock Exchange. The company has been owned by former Boohoo executive Christopher Bale since March, according to company filings.
Saga to sell care business
Saga has hired Grant Thornton to help with the sale of its care businesses amid fears activist US hedge fund Elliott Advisers could engineer a break-up of the firm.
City AM, Page: 5
Chilango planning to shut restaurants
Chilango is expected to launch a company voluntary arrangement (CVA) proposal this morning to allow it to re-open rent negotiations with landlords, as the embattled Mexican chain struggles with cash-flow issues. Chilango, which is in talks with restructuring firm RSM to shore up its business, is proposing to enter a CVA to exit “non-trading leases” for dormant sites, on which it had planned to develop restaurants and “restructure the company’s debt”. The firm is already over two months late posting its accounts on Companies House and the proposals would require the backing of the company’s creditors, which include 1,500 small “burrito bonds” investors.
The Daily Telegraph, Business, Page: 4 City AM The I, Page: 42
Warning for Buzzfeed after accounts deadline missed
Online media group Buzzfeed UK has been issued with a warning notice after failing to file its accounts with Companies House. Accounts for 2018 were due at the end of September. A spokesperson for the company said accounts would be filed “soon” but did not specify when.
The Independent, Page: 54
New CFO at Provident Financial
Provident Financial has hired Neeraj Kapur as its new CFO. Mr Kapur, who holds the same role at specialist lender Secure Trust, will replace Simon Thomas.
St Andrews hotel sold to Hong Kong firm
EY has advised Hong Kong-based property company Great Century in its acquisition of St Andrews Bay Development, the holding company for Fairmont St Andrews, one of Scotland’s most prestigious hotels. It was bought from California-based property investor Kennedy Wilson.
The Scotsman, Page: 20
Lord Saatchi quits board of M&C Saatchi
Maurice Saatchi has stepped down as executive director of advertising agency M&C Saatchi with fellow board members Lord Dobbs, Sir Michael Peat and Lorna Tilbian also departing. The moves come after a split in the company over its direction a week after it admitted an accounting error discovered in the summer would cost the company £11.6m, rather than the £6.4m initially estimated. PwC was brought to conduct a review and found the company had been wrongly bringing forward revenues for up to five years. Shares have fallen two-thirds since the accounting problems emerged.
Insolvency giant expects retail wreckage to continue
Underlining shaky consumer confidence amid the growth in online retailing, Ric Traynor, executive chairman of restructuring and insolvency firm Begbies Traynor, has suggested that there is little sign that the High Street carnage is softening. He also said retail sector woes would likely continue to hit landlords in the property sector. The firm reported revenue growth of 21% to £33.8m for the six months to October31, with profit before tax growth of 280% to £1.9m due to “favourable conditions in the UK insolvency market”.
City AM, Page: 5
Premier Foods makes interim CFO permanent
Mr Kipling owner Premier Foods has appointed Duncan Leggett as its permanent chief financial officer. He took on the role on an interim basis in August, replacing former finance chief Alistair Murray amid a crumby period for the firm.
Co-founders step in to save Swoon
Furniture retailer Swoon has agreed a pre-pack administration following a sale process run by KPMG. Co-founders Brian Harrison and Debbie Williamson have now taken control of the firm.
The Daily Telegraph, Business, Page: 3
SMEs NEWS MIDWEEK TO 11th DECEMBER 2019
Directors working past retirement age
Small business owners are working well into their sixties with one in five aged 66 or over, according to UHY Hacker Young, which has released a report detailing how work patterns have shifted over the years. The study also shows that individuals are becoming less likely to stay in one job for long periods of time, with the average worker changing their job every five years. James Price, of UHY Hacker Young, adds that the outcome of Brexit could make it more difficult for directors to sell a small business quickly.
Daily Express, Page: 45 Daily Star, Page: 20 The I, Page: 40 Yorkshire Post, Page: 5
Small builders hit by housing market uncertainty
Research by Price Bailey has found that more small housebuilders have gone out of business in the most recent 12-month period than at any point since 2015, with 343 lost in the year to September due to stagnating house prices and rises in both raw materials and labour costs. “Subdued activity in London and the South East and falling prices as people defer purchases due to Brexit uncertainty have all taken their toll,” said the firm’s Paul Pittman.
The Times, Page: 42 The Sun, Page: 27 Yorkshire Post, Page: 15
Firms waiting twice as long for payment
A survey by Market Finance has found that SMEs had to wait an average of 23 days to receive their money in 2019, up from 12 days in 2018. However, there was a slight improvement in the number of invoices paid on time, with 39% of invoices paid late in 2019, up from 43% in 2018. Bilal Mahmood, external relations director at Market Finance, said: “It’s great to see that fewer invoices were paid late in 2019 but worryingly, those that were paid late took twice as long.” He added: “Late payment practices harm business cash flow, hampers investment and, in extreme cases, can risk business solvency.”
City AM, Page: 17
Small traders in line for Christmas shopping boost
A preference among consumers for shopping locally will give small businesses a £4.4bn boost this Christmas, according to Direct Line for Business, which claims £140.4m will be spent at independent retailers every day this month.
Daily Mirror, Page: 21 City AM, Page: 11
Lloyds ordered to reopen HBOS fraud scheme
Lloyds Banking Group has agreed to restart a compensation scheme for businesses affected by the HBOS fraud scandal after an independent review found “serious shortcomings”. Sir Ross Cranston, a retired High Court judge, said that “claims to direct and consequential loss must be reassessed” as he accused Lloyds of an “unacceptable denial of responsibility”. Six people were convicted in 2017 for a scam which saw consultants linked with an HBOS turnaround unit in Reading conspire with employees to profit from destroying hundreds of small businesses. A spokesman for the Financial Conduct Authority, which was responsible for launching the inquiry, said: “We are disappointed that, after such a long period of time, the consequences of the HBOS Reading fraud for customers have not yet been properly remediated.” Lloyds boss Antonio Horta-Osorio apologised for the flaws in the process.
EMPLOYMENT NEWS MIDWEEK TO 11th DECEMBER 2019
Employers await more detail on Johnson’s immigration plans
Business leaders have complained that Boris Johnson’s plan for a points-based migration system puts too much emphasis on “the brightest and best” at the expense of workers with low-level skills. The CBI’s Matthew Fell says these workers are in high demand in a range of industries and the proposals have left businesses “nervous”. But Madeleine Sumption, director of the Migration Observatory at the University of Oxford, said the proposals were “relatively mainstream” and what would be expected “in relatively high-income countries that don’t have free movement”.
Financial Times, Page: 3 The Independent The Guardian, Page: 6
UK apprenticeship levy’s low take-up highlighted by survey
A survey by Grant Thornton has found that 45% of the companies required to put money aside under the apprenticeship levy have yet to spend the cash available to them for workplace training.
Prepare for working differently with tech
PwC partner Charles Bowman says in a letter to City AM that more must be done to encourage people across all age groups to prepare for new ways of working that may be brought about by advances in technology. “Scrolling and swiping may come naturally to those who’ve grown up in the digital age, but it does not give someone the required mindset. More needs to be done to help people in schools, at work, and in broader society – including the older generation – so no one gets left behind,” writes Bowman.
City AM, Page: 22
PENSIONS NEWS MIDWEEK TO 11th DECEMBER 2019
Majority of construction workers remain outside of pension scheme
The trade union Unite says that a Freedom of Information request to the Department for Work and Pensions shows that just 23% of construction workers are enrolled in a workplace pension. The union said it was a “major failure” of the Government’s auto-enrolment pension scheme. Unite assistant general secretary Gail Cartmail added: “Until rampant casualisation and bogus self-employment are tackled in the construction industry, workers are not going to be eligible or prepared to register for a workplace pension.”
The I Daily Star
Savers turn to riskier investments as allowances fall
Following a reduction in the lifetime allowance, thousands of savers are putting cash into alternative investments such as Venture Capital Trusts, the Telegraph reports. Figures from HMRC show nearly 20,000 investors put £716m into these schemes in 2017-18. Nathan Long of investment firm Hargreaves Lansdown commented: “These investments are not for the faint-hearted, so while they’ll be right for some higher earners, many could be being forced to opt for a higher risk strategy for tax reasons. Given this will have the added benefit of directing money into small start-up companies, it’s unclear if this will be a particular worry for the Government.”
PROPERTY NEWS MIDWEEK TO 11th DECEMBER 2019
High rates killed off Italian eateries, says Oliver
Jamie Oliver has blamed business rates for the collapse of his restaurant business, arguing on Radio 2 that some of the rates “went up 40% in two years and I think possibly we’d still be hanging in there now if it wasn’t for that.”
Daily Mirror, Page: 21 Daily Express, Page: 25
ECONOMY NEWS MIDWEEK TO 11th DECEMBER 2019
Output falls to 17-month low while business costs bite
Output across the UK’s services and manufacturing sectors fell in November, pushing BDO‘s output index to its lowest level in 17 months. Commenting on the results, Peter Hemington, partner at BDO, said: “November’s figures mark the end of a disappointing year for UK businesses. All indices have been driven down by continued political uncertainty and a worsening global economic climate.” Meanwhile, the British Chambers of Commerce (BCC) has warned that corporate investment would shrink both this year and next, citing Brexit uncertainty and the costs associated with doing business in the UK. The BCC’s director general Adam Marshall calls in a piece in City AM for a reduction in costs for business, arguing that the “cumulative price tag for homegrown policies, including higher business rates, the apprenticeship levy, the immigration skills charge, insurance premium tax, pensions auto-enrolment, Making Ta x Digital and so many others has grown higher and higher.”
City AM, Page: 11, 20 The Times, Page: 37 The Scotsman, Page: 35 The I, Page: 8 Yorkshire Post, Page: 1
Labour vows Budget ‘to end austerity’ in first 100 days
The shadow chancellor will promise to deliver a Budget to “end austerity”, in a speech setting out Labour’s priorities for its first 100 days in government. John McDonnell will detail plans for “democratic control” of newly nationalised water and energy firms, including installing boards run by members of the public and new People’s Assemblies created to hold these boards to account. If Labour wins the election, Mr McDonnell vows to set up a National Transformation Fund Unit before Christmas and create a new National Investment Bank, regional development banks and a Post Bank.
BBC News The Times, Page: 8
Hiring intention slumps to seven-year low
New survey data analysed by Manpower Group show hiring intentions are at their lowest since 2012 with optimism among UK employers driven down by signs of a slowing global economy, the General Election and a lack of clarity about Brexit. Chris Gray, director of Manpower Group UK, said these concerns led many firms to put hiring plans “on ice”. The survey found the normally buoyant market for workers in London’s financial sector had tightened since the summer, especially among accountancy and law firms.
The Guardian, Page: 32 City AM, Page: 7
UK economy stagnates ahead of general election
The economy suffered its weakest three months since early 2009 with ONS data showing growth flat in October after two months of declines. The ONS said: “Increases across the services sector [were] offset by falls in manufacturing with factories continuing the weak performance seen since April. Construction also declined across the last three months with a notable drop in house building and infrastructure in October.” John Hawksworth, chief economist at PwC, blamed Brexit-related uncertainty for the economy’s “loss of momentum”. He said: “Growth seems likely to remain subdued through the rest of 2019, but we would hope for a gradual revival in activity over the course of 2020 if current political and economic uncertainties ease. Our main scenario is for 1% GDP growth in 2020 assuming an orderly Brexit.”
UK trade deficit widens after no-deal stockpiling
A rush of stockpiling to hedge against a possible no-deal Brexit on October 31st led imports to rise 6.2% in the month, pushing the trade deficit to £5.2bn from £1.9bn in September, according to the Office for National Statistics (ONS). Meanwhile, demand for British exports remains depressed as overseas firms resist adjusting their supply chains to include UK suppliers before they know what’s happening with Brexit.
INTERNATIONAL NEWS MIDWEEK TO 11th DECEMBER 2019
Greeks forced to spend digitally
Greeks will be fined if they do not spend 30% of their income electronically as the new government moves to stamp out tax evasion. Individuals that fail to meet the target will be hit with a 22% fine on the shortfall. A study by the Institute for Applied Economic Research in 2017 found that Greece had the largest shadow economy in the world, being equivalent to 22% of GDP.
The Daily Telegraph, Business, Page: 1
OTHER NEWS MIDWEEK TO 11th DECEMBER 2019
Johnson hints at scrapping licence fee
Boris Johnson has raised the prospect of scrapping the BBC licence fee, suggesting it was becoming harder to justify funding “a particular set of TV and radio channels” by “what is effectively a general tax”. The PM also hinted at ending the corporation’s power to prosecute non-payers describing the enforcement regime as “heavy handed”.
Sheeran pays £4.5m in tax
Ed Sheeran was paying £12,328 a day in tax last year, the Star reports, on earnings of £32.6m. The singer recorded profit of £23.7m and paid himself a dividend of £17.1m. The paper congratulates Sheeran for not following the example of other celebrities and using an offshore haven to avoid tax.
Daily Star, Page: 13
Contact Paul Southward.