HMRC is considering taking action against courier firm Hermes after a whistleblower told MP Frank Field that managers “coerced” employees to mislead tax inspectors when they questioned staff over pay last year. Mr Field has forwarded the allegations to HMRC, saying: “Hermes appears to have coerced its management staff into supplying information to HMRC that is untrue and which offers an inaccurate representation of the couriers’ employment relationship with the company.” Hermes said: “All employees were asked to cooperate fully with HMRC as we are confident in our operating model,” adding that it urged managers to tell staff “to be open and honest with HMRC”.
The Guardian, Page: 12
Fewer dark corners for dirty money to hide in
The FT backs moves to increase transparency of companies registered in UK overseas territories, adding that the “fight against dirty money” needs to be “backed up by government enforcement.”
US buyout group KKR is scrapping its partnership structure in favour of becoming a corporation following Republican tax reforms. The move will mean it pays higher taxes, but its simpler structure is expected to increase demand for its shares.
The number of retailers in financial distress is up 21% on last year, according to insolvency firm Begbies Traynor‘s Red Flag Alert research for the first quarter, which warns that almost 43,000 businesses are struggling. “The UK high street has been having a torrid time of late, with the Beast from the East, growing competition from online rivals, higher staff costs, rising business rates and declining consumer spending, pushing many retailers to the point of no return,” said Julie Palmer, partner and retail expert at Begbies Traynor. While food retailers saw a less sharp increase (11%) in ‘significant’ financial distress, general retailers endured the largest increase (25%) to 30,668 companies.
City AM Daily Mirror, Page: 58 The Times, Page: 40 The Sun, Page: 49
HoF in pensions talks with regulators
House of Fraser is in discussions with The Pension Regulator and the Pension Protection Fund following the announcement that China’s C.banner is buying a 51% stake in the retailer. House of Fraser has two pension schemes with around 4,000 members. It had assets of £705.1m and liabilities of £608.2m to March this year. The department store has approached the PPF in the hope of gaining approval for its CVA plans.
A Lloyds Banking Group team in Leeds formed earlier this year to stop the movement of money taken by scammers and shut down their ability to shift the cash has already frozen £1m from fraudsters trying to trick people into receiving and transferring cash. The success of the scheme is such that the bank plans to share its secrets with its rivals, Paul Davis, the firm’s retail fraud director, said.
NIESR predicts 2% base rate by 2020
The National Institute of Economic and Social Research has predicted that the Bank of England will only raise interest rates every six months for the next two years, starting this August. This will see rates hit 2% by the end of 2020, up from 0.5% now. The institute added that there had been “some welcome and tentative signs of a recovery” in productivity in the second half of last year but assumed this would remain at a subdued level of less than 1.5% each year over the medium term. The NIESR has downgraded GDP growth for this year to 1.4% from a previous estimate of 1.9% because of weak performance in the first quarter. GDP growth in the eurozone has peaked, NIESR believes, predicting a slowdown from 2.5% in 2017 to 2.3% this year, 1.9% in 2019 and an average of 1.4% from 2020 to 2024.
The IHS Markit/CIPS services purchasing managers’ index rose only slightly to 52.8 in April, potentially lowering the chances of an interest rate increase next week. “The disappointing services data will add to expectations that the MPC will take its finger firmly off the rate hike trigger,” said Chris Williamson, chief business economist at IHS Markit.
Brussels issues warning over Trump’s trade policies
The European Union has claimed that US tax cuts and the rise of protectionist policies around the world are putting economic growth in the eurozone under threat. However, European Commission economists left their GDP forecasts unchanged from February with the bloc expected to expand at 2.3% in 2018 and 2% in 2019.