News Roundup Friday 13th July 2018
News Roundup Friday 13th July 2018
Freelancers hit with bill for £1bn
The Times reports that a total of 20,919 contractors have told HMRC that their true earnings were disguised for years in avoidance schemes. Freelance workers including IT professionals and NHS locums are amongst those who allowed their financial affairs to be managed by offshore-based umbrella schemes, which collected their wages on their behalf and then paid them in “non-repayable loans” that hid their NI and income tax liabilities. The freelancers who have so far admitted taking part in the schemes are believed to owe HMRC an average of £50,000 each in underpaid tax, meaning they will have to collectively repay about £1bn.
IHT delays can cost beneficiaries dear
John McArthur, Head of Tax at Gillespie Macandrew, notes that the amount of relief given for gifts to charities exceeded both the cost of agricultural and business property relief by almost £150m each, and that the main reliefs against inheritance tax cost the Exchequer just over $5.6bn. He argues: “Unless the government find a simpler, easier and more streamlined system for collecting Inheritance Tax, the system cannot cope with any increase in the number of estates subject to Inheritance Tax”.
Tax haven needs attention
The Guardian’s Oliver Bullough profiles the tax haven of Nevis, which has been criticised for doubling down on secrecy at a time when other tax havens are becoming more transparent.
The Guardian, Journal, Page: 8-11
SMEs urged to go global
A new ACCA survey of SMEs and accounting practices around the world has found that a quarter of UK small businesses are not currently participating in international trade. The report found that 45% of firms were deterred from international trade activity by a lack of understanding of foreign regulations, while 30% said foreign customs duties and tariffs were a problem. Identifying customers in international markets (26%) and foreign exchange (26%) also represented significant challenges to small businesses. Ben Baruch, head of SME policy at ACCA, commented: “It’s imperative that UK policymakers find ways to address this problem in the coming months if UK businesses are to remain competitive in the global market after we exit the European Union”.
200,000 businesses face court over unpaid tax
Nearly 200,000 businesses were taken to court for failing to pay their business rates last year, a Freedom of Information request has revealed. Analysts attribute the high figures to an “ever increasing” tax burden on businesses: including inflationary rises and limits on downward bill relief for struggling businesses, with rates rising a further 3.5% from this April. The ICAEW has urged the government to lower rates, calling businesses “easy targets” and an “increasingly easy source of government revenue.”
MPs call for small firm bank dispute tribunal
Banks that mistreat small businesses are “too big to take to court” and should be held to account by a tribunal, the all-party MP group on banking has said. It has urged the Government to legislate to set up an independent tribunal to judge on disputes between companies and their lenders.
The Daily Telegraph, Business, Page: 3 City AM, Page: 8
US regulator to examine auditors’ ‘going concern’ reporting
The PCAOB is to examine whether market intervention is necessary to strengthen investor confidence in auditors’ “going concern” statements, amid criticism of the Big Four’s audit work.
Economists reject Labour’s plan for BoE productivity target
A proposal by Labour to give the Bank of England a new target of boosting productivity by 3% per year has been roundly rejected by economists. A survey of more than 50 academics by Chicago Booth found none who supported the idea.
Alexa, pay my taxes…
HMRC has announced a partnership with Amazon to allow taxpayers to ask their Echo smart home device for guidance when completing applications for tax credits such as child benefit. Angela MacDonald, HMRC’s Director General for Customer Services, said: “Alexa can help customers find out about what to do when they receive a renewal pack, how to change their circumstances, or how to find out about payment information”. George Bull, of RSM, said he welcomed any additional ways of applying for tax credits but had concerns over the data security of an Alexa device.
Wealthy splash out on luxuries
According to the YouGov Affluent Perspective study, the proportion of households with an income of £100,000 or more who have bought luxury items in the last year has increased to 69%, from 56% last year. At the same time, only 13% of the households said they were confident in the global economy.
Contact Paul Southward if you have any queries.