News Roundup Friday 18th January 2019
News Roundup Friday 18th January 2019
Nutritional brownie maker wins VAT case
Nutritional bar maker Pulsin has won a court battle with HMRC over whether the brownies that it makes are cakes or confectionary. Tribunal Judge Amanda Brown decided in favour of Pulsin after sampling the brownies. She said that although they could be considered confectionary, this did not exclude them from being cakes. Pulsin said that it had wrongly been paying VAT on the products for four years and is now entitled to claw back £300,000.
How to reduce IHT bills ‘without selling the family home’
Harry Brennan provides tips for passing property on after death without “lumping” families with hefty tax bills. He details guaranteed and reviewable whole-of-life insurance policies, borrowing against property to create a debt in the estate, which would reduce the tax liability, and, despite it being “fiendishly complicated,” placing property into trust, among several ways to reduce inheritance tax bills.
M&S misses tax break
The Mirror reports that Marks & Spencer has been denied a £430,000 tax saving on nine of 16 branches in England and Wales it this week earmarked for closure. The stores should have seen their business rates bill fall sharply but missed out due to transitional relief.
Daily Mirror, Page: 50
Patisserie Valerie accounting scandal worse than thought
The owner of Patisserie Valerie says an accounting scandal uncovered October was worse than it thought, with an investigation revealing “extensive” misstatement of its accounts and “very significant manipulation of the balance sheet and profit and loss accounts”. The chain said work carried out by its forensic accountants, which the Telegraph reports are believed to be PwC, shows profitability and cash flow were overstated and “materially below” figures announced in October. The matter saw finance director Chris Marsh, who is being investigated by the Serious Fraud Office and the Financial Reporting Council (FRC), arrested. Patisserie Valerie’s auditors Grant Thornton are also under investigation by the FRC. Patisserie Holdings has appointed RSM as auditors and says it has “hired KPMG to assist it in a review of all options in order to recover from the devastatin g effects of the fraud, and to preserve value for its stakeholders.”
Daily Mail, Page: 77 Financial Times, Page: 15 The Times, Page: 37 The Guardian, Page: 37 The Daily Telegraph, Business, Page: 1 Daily Express, Page: 46 Daily Mirror, Page: 50 City AM, Page: 1 Sky News BBC News
McDonalds stripped of Big Mac trademark
Following a successful legal challenge by an Irish family-owned restaurant chain Supermacs, the European Union has stripped US food giant McDonalds of its trademark on “Big Mac” burgers in Europe. The EUIPO ruled that “the evidence is insufficient to establish genuine use of the trade mark” on Big Macs by McDonalds across the territory. Pat McDonagh, Supermac’s managing director, said: “It’s a unique victory when you take on the golden arches and win. This is a victory for all small businesses. It prevents bigger companies from hoarding trademarks with no intention of using them.”
The Independent, Page: 17 BBC News The Guardian, Page: 34
Lloyds to lend firms £18bn
Lloyds Banking Group says it will lend £18bn to British businesses this year, with the cash set to support entrepreneurs looking to start new companies, micro-businesses seeking to grow and small firms planning to trade internationally for the first time. Lloyds says it has increased net lending to SMEs by 34% since 2011.
The Sun, Page: 47
Business rates leading to closures, says M&S boss
M&S chief executive Steve Rowe has said punishing business rates have directly contributed to the High Street’s struggles as the retailer revealed its latest round of store closures. M&S said it would shut another 17 shops as it seeks to cut costs, putting over 1,000 jobs at risk. So far it has closed 30 out of a total of 100 shops earmarked for closure.
Daily Mail, Page: 67
House price growth flat
House price growth remained relatively flat in the year to November, according to official figures from the Land Registry and the ONS. Average house prices across the UK climbed by 2.8%, rising from 2.7% annual growth in October 2018. The ONS said the average UK house price was £230,630 in October, falling by 0.1% month-on-month. Kevin Roberts, director of the Legal & General Mortgage Club, said: “The ongoing political uncertainty is clearly causing some buyers and sellers to take a wait-and-see approach when it comes to the property market.”
DWP removes pension credit
The Government has been accused of sneaking out a change to pensions credits amid the Brexit turmoil after it removed a top-up worth £7,000 a year from elderly couples where only one partner is over the state pension age. In the statement, Guy Opperman, the pensions minister, argued: “Pension credit is designed to provide long-term support for pensioner households who are no longer economically active. It is not designed to support working age claimants.”
The Independent, Page: 11 The Guardian, Page: 16 Daily Mail, Page: 20
Failure to claim child benefit could hit some pensions
Katherine Denham details how opting out of claiming child benefits could have repercussions, when some stay-at-home parents won’t be entitled to a full state pension when they reach retirement age. Stephen Lowe, group communications director at Just Group, explains: “Unless they register for child benefits, a parent who takes time off work to look after children will lose the National Insurance credits needed to qualify for state pension, so failing to claim could prove costly in later life.” Former pensions minister and director of policy at Royal London, Steve Webb, urges HMRC to relax the “draconian rules on backdating” so people can do something to put things right: “Relying on new parents to study child benefit forms handed to them in a bundle of paperwork straight after a birth is simply not working,” he says.
Inflation falls to lowest level in nearly two years
The ONS has said that the UK inflation rate fell to 2.1% in December, down from 2.3% the previous month. The CPI figure was the lowest in nearly two years, pushed down by petrol price falls. Mike Hardie, head of inflation at the ONS, said: “Inflation eased mainly due to a big fall in petrol, with oil prices tumbling in recent months.” PwC economist Mike Jakeman said the data will not change Bank of England thinking, saying the BoE “will not make any changes to its monetary policy until more is known about the outcome of Brexit.” He added: “The central bank would like to be able to raise interest rates from their current very low levels, but a lack of price pressure and a weakening economy means this is not viable.”
Brexit uncertainty affects consumer spending
Research from Visa and IHS Markit reveals that consumer spending fell by 1% in December compared to the same month a year earlier. Annabel Fiddes, principal economist at IHS Markit, commented: “The sustained fall in expenditure throughout the fourth quarter of 2018 coincides with a marked drop in consumer confidence, as uncertainty around the UK’s impending exit from the EU continues to dampen sentiment.”
Revenue staff accidentally paid too much
HMRC employees accidentally paid themselves £1.3m extra last year with nearly 250 members of staff finding payments amounting to more than £1,000 in their pay packets. Officials insisted the number of people receiving over-payments represented a tiny fraction of their workforce.
Daily Star, Page: 11
Firms in war on plastic
Writing in the Telegraph, Dan Thomas and Linda Ellett, who lead KPMG‘s corporate and consumer practices respectively, look at the debate on the use of plastics and how companies are addressing the issue. They highlight that 40 large UK businesses have joined the Government, trade associations and campaigners to form the UK Plastics Pact. They also note that that KPMG is talking to businesses looking at artificial intelligence to help meet their recycling targets.
The Daily Telegraph, Business, Page: 4
Contact Paul Southward if you have any queries.