News Roundup Friday 17th May 2019
News Roundup Friday 17th May 2019
Welsh workers given Scottish tax rates
Workers in Wales have paid the wrong amount of tax after mistakenly being assigned Scottish tax rates, with people earning £12,501 to £14,549 underpaying as the Scottish rate is 19% while in Wales it is 20%. Income tax was devolved to the Welsh Government in April, but Welsh Minister for Finance Rebecca Evans said HMRC has revealed that some workers were wrongly given the “S” code, which applies to Scotland. HMRC says the problem stems from employers inputting the wrong tax code. The Welsh Assembly’s finance committee chairman Llyr Gruffydd said HMRC was aware there could have been issues, saying there had been assurances that “the lessons from the devolution of income tax powers to Scotland, where there were similar issues, had been soundly learned and would be put into effect.”
Robot tax ‘bad for business,’ Minister warns
Business Minster Andrew Stephenson has warned against taxing robots and automation to better support investment and boost productivity, jobs and pay. “We need more robots, we need more automation, we need to incentivise businesses to invest and become more productive,” he told the Business, Energy and Industrial Strategy Committee, adding: “We are actively looking at what further incentives can be provided. There is R&D tax credits, there are capital allowances, there are various things the Government is doing to incentivise businesses to invest in working in a more productive, smarter way.”
BMA warns over pensions and tax
The British Medical Association (BMA) says the workforce of military doctors is likely to be hit by pension rules which have seen the highest earning doctors face large tax bills. Reforms introduced in 2016 have seen some doctors stop working as their tax payments are exceeding the amount of money going into their pension pots, while others are cutting back on overtime as higher earnings drive up their taxes. Dr Chaand Nagpaul, chair of BMA council, said: “There remains no sign of a plan from ministers that will prevent doctors from receiving prohibitively high tax bills which could deter them from working longer hours or taking the decision to retire early. This will exacerbate an already worrying shortage of military doctors.”
Daily Mail, Page: 28
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Study calls for SME tax rethink
Andy Street, Mayor of the West Midlands, has called on the Government to cut taxes on small businesses, saying a low and simple flat tax could boost the economy. A study by Nick King, head of business at the Centre for Policy Studies, suggests that many people believe the Government is not on the side of small businesses, with 62% of small firms’ bosses saying this is the case. The report suggests small firms with turnover of less than £1m should be able to choose to pay a flat tax on their turnover, opting out of corporation tax, employers’ national insurance, VAT and business rates. Mr Street said the plan serves as “a significant simplification of the tax landscape for small firms, and a dramatic reduction in their reporting and administration burden”. Home Secretary Sajid Javid will launch the report, saying it “shows how bureaucracy and paperwork are stifling the growth of our small businesses.”
The Times, Page: 36 Daily Mail, Page: 21 The Daily Telegraph, Business, Page: 1 Daily Mirror, Page: 6 City AM, Page: 6
Millennials look to small firms
A poll by Vistaprint shows that millennials are more than twice as likely to shop with small businesses than older peers, with a quarter planning to shop more with smaller operations this year compared to just one in ten baby boomers.
Employee ownership ‘a laudable succession plan’
Elizabeth Burden in the Times looks at Julian Richer’s decision to give control of his retail chain Richer Sounds to an employee trust. Roger Barker, head of corporate governance at the Institute of Directors, comments: “Setting up an employee-owned trust is a laudable succession plan and it’s right to encourage such schemes through tax incentives,” while Matthew Emms, a partner at BDO, notes that he has seen a “real upturn” in interest in employee ownership in recent times. Ms Burden highlights the tax benefits of such a model.
Cobham in £70m tax settlement
Aerospace and defence group Cobham has settled a “significant, previously disclosed and long-running” tax dispute with the UK Government, agreeing almost £70m in one-off payments. The deal sees a one-off net tax payment of £55m in the first half of the current year, along with a one-off interest payment of £14m.
I, Page: 42 Financial Times, Page: 20
Jonathan Davis of Saffery Champness has provided fundraising and financial advice to food technology business Authenticate Information Systems, which has secured a new funding round of £2.3m.
Yorkshire Post, Business, Page: 4
German authorities raid banks in offshore tax fraud probe
Eleven banks and eight private homes and offices across Germany have been raided by police and tax investigators as part of a wide-ranging investigation into tax evasion. The eight individuals under investigation are alleged to have founded companies in offshore tax havens aided by a former British Virgin Islands branch of Deutsche Bank.
Financial Times, Page: 16 The Guardian
Europe sees growth
GDP growth in the EU rose to 0.5% quarter-on-quarter in Q1 2019, after growing 0.3% in the previous quarter, figures from Eurostat show. The UK economy grew 0.5% while Germany saw growth of 0.4%. Italy escaped recession by posting quarter-on-quarter growth of 0.2% in the first three months of 2019, while Spain led the way among Europe’s largest economies, with 0.7% quarterly growth. Across the Eurozone, the growth rate hit 0.4% quarter-on-quarter, up on the 0.2% recorded in the last three months of 2018.
City AM, Page: 13
Bank boss warns on housing and uncertainty
David Duffy, the boss of Clydesdale and Yorkshire Banking Group, has warned that Brexit uncertainty and a weak housing market could hurt the economy in years to come.
The Daily Telegraph, Business, Page: 7
Ethical lapses hit CEOs
A PwC study has found that ethical lapses cost more CEO’s their position than financial performance or boardroom struggles last year, with 39% forced out due to allegations of unethical behaviour, such as fraud, bribery and sexual misdemeanours. The survey of the 2,500 biggest firms found 17.5%, or around 440, got a new boss in 2018, marking an all-time high. Just 4.9% of the new bosses were female, down from the record 6% seen in 2017.
Daily Mail, Page: 70 I, Page: 40 Financial Times
Contact Paul Southward.