News Roundup Friday 14th September 2018
News Roundup Friday 14th September 2018
HMRC will use social media to pinpoint tax evaders
HMRC has said it will “observe, monitor, record and retain internet data”, including blogs and social networking sites, to detect tax evasion. The guidance on criminal investigations for tax offences also mentions other ‘open source’ internet sources which HMRC will monitor such as news reports, internet sites, Companies House and land registry records. “The guidance confirms what we already know – that HMRC plugs huge amounts of data into its state of the art ‘Connect’ computer system to identify those who may not be paying the tax they should,” said Steven Porter a tax disputes expert at Pinsent Masons.
Self-employed fearing tax rises
The Times’ James Hurley says last week’s cancellation of a long-promised tax relief for the self-employed has caused unrest amongst those who work for themselves. Andy Chamberlain, deputy director of policy at the Association of Independent Professionals and the Self-Employed, comments: “There’s a feeling that the government does not want people to strike out on their own, which is somewhat counter-intuitive for [a Tory administration].” Craig Beaumont, director of external affairs at the Federation of Small Businesses, adds: “There’s this sense that since a lot of money needs to be raised, small businesses and the self-employed are a soft target.”
Boris’s tax cuts plea rejected
The government has brushed off demands from Boris Johnson for sweeping tax cuts to boost Britain’s economy. A spokesman for the Prime Minister commented “I can point to this Government’s record of cutting taxes for hard-working households.”
Daily Express, Page: 5
Oil tax breaks could be scrapped
The oil industry has urged the Treasury not to raise North Sea taxes, despite the resurgence in prices. Ministers are said to be considering reversing some of the significant tax breaks introduced in 2015, when oil prices crashed.
HMRC fraud team collects £5bn in extra tax
HMRC’s Fraud Investigation Service (FIS) has collected £5.47bn in 2018, according to Pinsent Masons. The figure represents a 7% increase on last year and follows political pressure to increase the number of successful tax prosecutions in both the UK and abroad. In July of this year, HMRC published a consultation document, focusing on changes that could simplify the process of accessing taxpayer information through third parties, such as accountants, retailers, and social media platforms. The report suggested that the removal of having to go through a tribunal before securing this third-party information would help with increasing the efficiency of the process.
Labour budgeting for 15 years in power
Labour’s John McDonnell has said the party is preparing for a 15-year stretch in government, with plans to spend £500bn in the first 10 years. The shadow chancellor said Labour’s spending commitments would be funded by increasing taxes on the top 5% of earners, rises in corporation tax, a tax on financial transactions in the City of London and tackling “industrial scale” tax avoidance and evasion. He also claimed the measures were backed by the CBI, although the lobby group has distanced itself from Mr McDonnell’s comments.
Boris tax cut promise is ‘sheer folly’
The Times’ Daniel Finkelstein pours scorn on Boris Johnson’s suggestion of sweeping tax cuts to boost the economy. He says the idea that tax cuts pay for themselves is “seductive, but false” and that the Conservative Party needs to offer more to voters.
Thinktank proposes asset tax for over-65s
The Social Market Foundation has said homeowners and people with substantial savings should face a one-off “asset tax” of £30,000 when they reach 65 to fund England’s care system for the elderly. The thinktank estimates such a charge would raise £7bn a year and enable care in residential settings and in people’s homes to be delivered free, rather than based on a means test as now. It argued that it was not fair to force people of working age to pay more tax to fund care for older people. The Social Market Foundation said that the charge of £30,000 should be levied on anyone with assets worth more than £150,000 and paid when they turned 65 or deferred until their death.
Archbishop of Canterbury attacks tax-avoiding Amazon
The Archbishop of Canterbury has attacked Amazon over its tax affairs, accusing the internet giant of denying funds to health, education and defence. Justin Welby won a standing ovation at the TUC conference for rounding on companies that were “paying almost nothing in tax” and “leached off the taxpayer”.
Lower taxes must be part of the mix
In a letter to the Times, Tom Clougherty, head of tax at the Centre for Policy Studies, says sustainably lower taxes on work, investment and profit must be part of Britain’s growth agenda.
Concerns for small firms after railway arches sale
Network Rail has agreed to the £1.5bn sale of over 5,000 railway arches that are home to shops and small businesses around the country. It said the proceeds of the sale to Blackstone Group and Telereal Trillium would help fund railway upgrades. However, the Labour party has called for the deal to be halted, saying that the “highly irresponsible” transaction risked damaging thousands of SMEs. Campaign group Guardians of the Arches also warned the sale would lead to higher rents for tenants.
Funding for Brightpay
HG Capital Trust has made a £15.4m investment in Brightpay, the technology company that develops accountancy and payroll software for SMEs in Ireland and the UK.
The Times, Page: 52
Battered by business rates
The Mail steps up its campaign for an overhaul of business rates by focussing on the impact that the levy has had on the Devon town of Sidmouth. According to research compiled for PwC, an average of 16 High Street stores across the UK closed every day in 2017, meaning an estimated 8,400 shops have closed since the rates were revalued last April. According to the PwC data, there were substantially more closures in the second half of last year after changes to business rates led to higher bills for more than half a million shops, restaurants and pubs.
Daily Mail, Page: 36, 41
FCA closes book on mis-selling scandal
The Financial Conduct Authority has said banks will face no further action over interest rate swap mis-selling. The improper sale of complicated interest rate derivatives led to the collapse of many small businesses and ranks as the second most expensive banking scandal behind payment protection insurance.
Labour warned against RBS lending plans
A former Permanent Secretary to the Treasury has warned Labour against using the taxpayer’s stake in Royal Bank of Scotland to direct lending to the British economy. Sir Nicholas Macpherson said Labour’s policy suggestion that RBS would be ordered to lend to small businesses using government funds would be “corrosive” for banks and taxpayers.
The Guardian, Page: 41
Finance firms could gain from VAT loophole
Philip Hammond is facing a multibillion-pound hole in his budget projections as City businesses use Brexit to reduce their tax bills. Treasury officials have warned that unless there is a change to the law after Britain leaves the EU, the government could lose £7bn in corporate VAT receipts. It is feared that after Brexit firms could take advantage of a loophole allowing financial services businesses to claim back domestic VAT for the services they provide to individuals and companies outside the EU.
Union calls for Carillion criminal investigation
The Unite union has called for a criminal investigation into the collapse of Carillion, claiming that the probe being launched by the Insolvency Service was “too little too late”.
Daily Mirror, Page: 43
Publisher faces insolvency proceedings
The viral publisher Unilad faces insolvency proceedings in the High Court next week after HMRC issued a winding-up petition against its parent company.
The Guardian, Page: 19 The Business Desk
Government urges pension schemes to be ‘socially responsible’
New government regulations will require trustees of pension schemes to disclose where people’s savings are going. Using internet dashboard-type tools, pension scheme members will be able to see whether investments take into mind environmental concerns, are managed with poor corporate governance or socially harmful practices.
PERSONAL FINANCE NEWS
Bonuses for low-wage workers who save
HMRC has launched a new savings scheme which could benefit up to 4m people on low incomes. Investors will receive 50p from the Government for every £1 they pay in to the Help to Save scheme. Up to £50 a month can be paid in over four years, with a maximum saving of £2,400 resulting in an overall bonus of £1,200.
Daily Mail, Page: 4 Yorkshire Post, Page: 6
Divorcing spouses unaware of pension entitlements
A charity has argued that women going through a divorce should be given the right to see the size of their husband’s pension pot. Age UK says thousands of women are being left worse off in retirement because they are not made aware of their legal entitlement to their husband’s private pension as part of the divorce process.
The Daily Telegraph, Page: 1 Daily Mirror, Page: 26
Busy accountants help lift economy, ONS says
The UK economy grew by 0.3% in July, and by 0.6% over the three months to July, according to the ONS, the fastest pace in almost a year. “The dominant service sector again led economic growth in the month of July with engineers, accountants and lawyers all enjoying a busy period, backed up by growth in construction, which hit another record high level,” said Rob Kent-Smith from the ONS. John Hawksworth, chief economist at PwC, said the latest data justified the decision to raise rates last month, while Yael Selfin, chief economist at KPMG UK, added: “Uncertainties a nd risks around Brexit are likely to make the Bank of England particularly cautious during the critical months ahead”.
Wages growth hits three-year high
ONS data shows wages, excluding bonuses, rose at their fastest pace for three years during the three months to July. The 2.9% increase was only the second time since July 2015 that the level has been reached, and earnings have now outstripped inflation for four months.
Wages yet to reach pre-crash levels
Annual wages have failed to recover since the financial crash, according to the Institute for Fiscal Studies. The institute’s analysis shows median annual earnings were £23,327 last year, 3.2% lower than in 2008 when the average wage was £24,088. People in their 20s and 30s have been hit hardest. People in their thirties are the worst hit in terms of pay, with median earnings 7% lower than in 2008, while pay for those in their twenties is 5% lower.
The Guardian, Page: 41 The Independent, Page: 61 The Sun, Page: 22
Bain sets aside fees from South Africa tax authority work
US consultancy Bain will set aside more than $10m in fees from South Africa’s tax authority after evidence that its advice on a restructuring was used to pursue a political vendetta.
Financial Times, Page: 16 The Independent, Page: 62
Global tax agencies have largest US companies in their sights
A report by Baker McKenzie estimates that global tax authorities are currently scrutinising an estimated $75bn of capital held by the largest US companies.
ING CFO quits after laundering scandal
Koos Timmermans, the CFO of Dutch bank ING, has resigned following a money laundering scandal that led to a huge fine for the bank.
The Independent, Page: 54
Tax break for exotic dancer
An exotic dancer has won a tax appeal over her skimpy stage outfits. Gemma Daniels, who worked at Stringfellows in London, was told to pay £10,500 by HMRC after it ruled that she could not claim for travel and clothing as tax-deductible. However, a judge decided that her ‘naughty nurse and schoolgirl’ outfits could be deemed expenses as they were not suitable outside of work.
Metro Daily Mirror, Page: 17 The I, Page: 11
Hammond delays budget date
Philip Hammond has postponed naming a date for the autumn budget. The chancellor wants to avoid the budget clashing with the final stage of the Brexit negotiations and has put the Office for Budget Responsibility on standby.
Treasury needs more accountants
The Institute for Government has criticised the Treasury’s model of hiring generalists, arguing that it needs “more of the people managing public spending to be qualified in finance, accountancy or both.” The IFG also claimed Treasury officials are “too young and inexperienced” to make good decisions about where best to spend taxpayers’ money. The average age of a Treasury official is 31 and one in four leaves the department every year, it noted.
ACCA welcomes city mayors
ACCA chief executive Helen Brand says the election of the UK’s six city mayors could not have come at a more important time, allowing for a more high profile, bigger-picture approach to regional issues.
City AM, Page: 15
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