News Roundup Friday 10th May 2019

NEWS ROUNDUP

TAX NEWS

Landlords could face 100% tax rate

The Institute of Economic Affairs says buy-to-let property owners are being unfairly blamed for the housing crisis, saying recent tax changes for landlords defied “any basic economic analysis”. Its report says that in some instances new tax rules will see landlords face an effective tax rate of more than 100% after 2021. New rules will see landlords limited to a 20% tax credit after tax is calculated, whereas previous rules enabled investors to offset their mortgage interest payments before calculating their income tax bill. The report suggests that the Government should roll back changes to stamp duty and mortgage relief, saying they have made the tax system “more complex and less economically coherent”.

The Daily Telegraph

CBI boss says rates harm regions

CBI chair John Allan has called for a reform of the business rates system, arguing it is “entrenching regional inequalities”. Speaking in London today, he will tell business leaders that revaluations of property do not occur often enough to keep pace with regional economic cycles. This means firms in some areas are paying excessive rates during a period of downturn. Mr Allan also will call for an independent review of the system and describe the rates as a “uniquely damaging tax”.

The Times, Page: 36 Financial Times, Page: 2 The Guardian, Page: 32 Daily Mail, Page: 16 Daily Mirror, Page: 38

Labour’s plans for universal basic income require tax rise

A report commissioned by shadow chancellor John McDonnell suggests a universal minimum flat-rate income would require new taxes, suggesting land-value environmental levies could be rolled out to fund the policy.

Financial Times, Page: 3

US authorities could tax Royal baby

US tax authorities could have a claim to Prince Harry and Meghan Markle’s baby’s inheritance if he retains his US citizenship, which automatically passes to him from his mother, with it believed that the Duchess of Sussex has retained her US citizenship. The US taxes its citizens worldwide, on all income, regardless of where they live. Paul Miller, of New York-based Miller & Company, said he would be surprised if the child’s royal status granted it a US tax exemption.

The Daily Telegraph Daily Mail, Page: 1

Half of tax accounts not checked

A poll by the Post Office has found that almost half of UK workers have never checked their personal tax account, despite a third saying they wish they had a better understanding of their tax.

I, Page: 40

Should entrepreneurs pay more tax when they sell their business?

Alice Ross asks whether there should be a tax aimed at entrepreneurs selling their companies, considering whether sales of £100m could be subject to a rate exceeding the 20% flat rate of CGT.

Financial Times

FINANCIAL SERVICES NEWS

FCA seeks changes to mortgage advice rules

The Financial Conduct Authority (FCA) will force financial advisers to explain themselves if they do not offer homebuyers the cheapest mortgage available. The proposals, outlined in a consultation paper on improving mortgage advice and standards, will also see the FCA change its guidance to clarify what should be considered financial advice by lenders or brokers. UK Finance said that the proposals “provide helpful clarity on the boundary between execution-only sales channels and mortgage advice”.

The Times Financial Times

CORPORATE NEWS

Fraud focus

With Kraft Heinz this week confirming that it will have to restate nearly three years of results after an internal inquiry found accounting errors, Ashley Armstrong in the Telegraph looks at fraud. She cites sources in the accountancy industry who suggest companies in struggling sectors face bigger risks as employees feel pressure to meet expectations despite a more challenging backdrop. She also points to a PwC survey of 7,200 global organisations, where 49% said they were a victim of crime and economic fraud last year, noting that the firm’s Didier Lavion said it “should be much higher”.

The Daily Telegraph, Business, Page: 2

Select nears collapse

Fashion retailer Select is expected to collapse into administration today, with Quantuma set to oversee the administration.

The Guardian, Page: 34

Green seeks landlord deals

The Mail reports that Arcadia boss Sir Philip Green hopes to do a deal with landlords ahead of a rent bill in June and is eyeing a CVA which would cut costs at 2,500 stores to avoid mass closures. It adds that he has drafted in advisers from Deloitte.

Daily Mail, Page: 68

ECONOMY NEWS

Sales up but Easter distorts picture

Data from KPMG and the British Retail Consortium shows that consumer spending rose in the three months to the end of April, with like-for-like sales up 0.7% compared to the same period in 2018, while April’s sales were up 4.1% on April 2018’s – with like-for-like sales up 3.7%. Analysts warned that the year-on-year comparison was distorted by a later Easter, noting that sales were up by 0.4% on two years ago, with Easter falling in April in 2017 and this year, but in March last year. Meanwhile, Howard Archer, chief economic adviser at EY Item Club, commented on consumer confidence surveys for April, saying they indicate that consumers are “currently reluctant to make big-ticket purchases despite the delaying of Brexit. Additionally, it is by no means certain that the recent improvement in consumer spending power will continue.”

The Times, Page: 36 Financial Times, Page: 2 The Guardian, Page: 32 I, Page: 38

OTHER NEWS

Ellis lauds the UK’s strengths

Writing in the Telegraph, PwC’s Kevin Ellis calls for a focus on the UK’s strengths as a competitive place for business, and as a fair and trusted one, despite uncertainty driven by Brexit. He cites a PwC research paper by Blair Sheppard, the dean emeritus of Duke University’s business school, which identifies assists the UK boats: a unique geographic position and role as an international broker and convener; a university system which punches above its weight; a reputation for stability; its central role in the global financial system; and its openness as a place to live.

The Daily Telegraph, Business, Page: 2

Contact Paul Southward.

Paul Southward