News Roundup Friday 1st March 2019
News Roundup Friday 1st March 2019
Overseas earners urged not to sign HMRC forms
HMRC has been writing to tens of thousands of people with overseas bank accounts and investments warning them of the risk of prosecution if they “make a false statement or complete a false certificate” in relation to their “UK tax liabilities from offshore income or gains anywhere in the world”. Tax specialists say the bullying letters risk “leaving people open to criminal investigation if error or oversight was ever found in their tax affairs.” Tax barrister Patrick Cannon says: “I absolutely wouldn’t sign this,” adding: “It is a real imposition and very unprofessional of HMRC.” Dawn Register, partner at BDO, said the letters should be taken seriously as they were based on data received from abroad: “I would say don’t ignore this letter but don’t sign it either.” She adds: “Obviously if tax is due they should declare it, but still not sign the forms. The threat of cri minal investigation isn’t usually used unless someone is under investigation so it is unusual and worrying to see it here.”
Barclays and Bank of Ireland sued for £180m over tax-avoidance scheme
The Bank of Ireland and Barclays are being sued as part of a £180m lawsuit brought by investors in the Eclipse film financing scheme the banks were involved in. HMRC ruled that the vehicle was a tax-avoidance scheme. David Greene, senior partner of law firm Edwin Coe, said: “Letters before action have been sent to Barclays and Bank of Ireland spelling out the case against them.” Nick Wood, of Newport Tax Management, which is representing more than 400 of the investors, said: “These schemes appeared to be legitimate but were often little more than get-rich-quick schemes for the bankers and promoters.”
City AM, Page: 5 The I, Page: 11
Spanish tax authorities target Shakira for £12.4m
A Spanish court is investigating popstar Shakira for possibly evading €14.5m (£12.4m) in taxes. Prosecutors allege she did not pay tax in Spain from 2012 to 2014 and used firms in tax havens to hide income. They have called on her to testify in June.
The Daily Telegraph, Page: 14 Daily Star, Page: 14 The Times, Page: 37 The Guardian, Page: 28
Five tonnes of suspected illicit tobacco seized in Glasgow
An estimated five tonnes of suspected illicit tobacco has been seized by HMRC in Glasgow, worth an estimated £1.5m in lost duty and taxes. Four people were arrested and charged with Excise Duty fraud in the operation.
Press Release The Scotsman, Page: 2
UK backs international progress on digital services tax, says Stride
Mel Stride has said European Union plans for a digital services tax are not yet ready stating that divisions remained across Europe on the issue. The Financial Secretary to the Treasury said the UK would continue to play its part in moving discussions along adding that Britain’s own digital services tax is an interim measure. Mr Stride’s comments come as the Treasury’s consultation on the UK digital services tax came to an end. Without revealing what had been proposed, he said big tech firms “”just want something sorted, which is fair and reasonable and proportionate, and that demonstrates to the man or woman down at the Dog and Duck that they pay fair taxes under a fair international tax regime.”
The Daily Telegraph, Business, Page: 5
Business owners urged to prepare for no deal
HMRC is urging business owners to prepare now for a no-deal Brexit, highlighting three steps they should take to ensure their businesses can continue to trade with the EU. Firstly they need to register for an Economic Operator and Registration Identification (EORI) number, which HMRC says only 17% of businesses have so far done. Then, businesses need to consider how they want to make customs declarations – which usually means using a customs agent. For businesses that import goods into the UK from the EU using roll on roll off locations, they can take a third step and register for new Transitional Simplified Procedures (TSP). TSP will allow businesses to import without having to make a full customs declaration at the border and postpone paying any import duties. For imports using other locations, and for exports, standard customs declarations will apply. Financial Secretary to the Treasury Mel Stride MP said: “We want businesses to be abl e continue trading with minimal disruption in any scenario […] Step by step advice can be accessed via GOV.UK – the help is there, we just need business owners to take action.”
MPs told of suicide of father targeted with loan charge
A panel of MPs investigating the “loan charge” heard yesterday how a father facing a possible six-figure bill died by suicide. HMRC is targeting contractors who used loan-based tax avoidance schemes, deemed illegal in 2016. Approximately 50,000 people will be hit by a charge over their use of the schemes dating back to 1999 but the “retrospective” tax grab has been heavily criticised. The Treasury has agreed to review the impact of the policy, which is due to be published by the end of March, but HMRC has said the legislation remains unchanged.
HMRC urges UK taxpayers to reveal their offshore assets
The FT picks up on news that HMRC is warning people with overseas income of the risk of prosecution if they “complete a false certificate” in relation to their tax liabilities.
Hope springs for business banking competition
The Times’ Katherine Griffiths considers the wisdom of handing £280m to challenger banks Metro, Starling, Clear Bank and Tide to help boost small business lending. Royal Bank of Scotland is footing the bill as a state aid penalty from Brussels and Ms Griffiths says there is not enough transparency over how the winners were chosen. However, for the banks to be successful, she says, it will be key to offer better incentives such as accountancy and payroll services alongside advantages offered by open banking reforms and simplified processes.
Small business sentiment dips into negative territory
The latest Daily Telegraph Business Tracker shows small business sentiment down for the third month in a row. The Tracker, which examined the Twitter posts of 25,000 British enterprises and entrepreneurs, found a lack of clarity around Brexit was the main reason for gloom among downbeat posters. Mike Cherry, chairman of the FSB, commented: “Outside the Westminster bubble, small businesses want an end to the Brexit stalemate – they’re trying to get on with the job and need politicians to come together and do the same.”
The Daily Telegraph, Business, Page: 8
Confusion holding British SMEs back
New small businesses are often overwhelmed by regulation, according to research by Xero, with two-thirds admitting to having almost no financial experience or business education prior to launch. HMRC’s upcoming Making Tax Digital legislation is only adding to the burden., but Xero’s Gary Turner says once business owners get on top of their finances they are likely to prosper more quickly. Sarah Willingham, BBC Dragon and entrepreneur, calls for the business community to “rally together to ensure that small businesses are educated – after all, legislation is not there to kneecap business, it is there to fuel growth.”
SMEs need more support – Truss
Liz Truss, the Treasury Chief Secretary, has said that Britain is risking its economic future by pandering to big business and ignoring start-ups. Ms Truss said the government must review the £20bn handed to big firms annually. She has also called for simpler taxes, less planning red-tape and more official emphasis on the internet. Ms Truss said: “I don’t want to see Government money used to protect old industry and stop new industry starting.”
The Sun, Page: 2
WEALTH MANAGEMENT NEWS
St James’s Place eyes baby boomer cash
St James’s Place increased pre-tax profits by 14% to £186m last year and reported net inflows for the year of £10.3bn. Costs rose for an IT upgrade and the company spent heavily on training new advisers as the group positions itself for an inheritance tax bonanza. The wealth manager’s CEO Andrew Croft warned of an adviser shortfall just as the baby boomer generation – “the wealthiest population that the country’s ever had” – passes huge fortunes to their children.
Land value taxation urged
Peter Reilly of the Labour Land Campaign, a voluntary group which advocates a more equitable distribution of land values among communities, argues that land value taxation (LVT) would reduce land speculation, increase the supply of land on the market for housing and lower land prices. “LVT is cheap to administer and is difficult to avoid or evade. LVT should replace all other property taxes, which are deeply regressive and penalise small businesses. This will help address the inevitable growth in wealth inequality,” he asserts.
The Independent, Page: 36
PERSONAL FINANCE NEWS
Cut back on luxuries Millennials, and become an Isa millionaire
Millennials have been told that they could be millionaires by the time they are 65 if they make full use of various Isas. Investment firm AJ Bell found a 22-year-old saving £78 a month could accumulate £1,009,523 by the age of 65 if they did not touch the money. However, it assumes annual returns after charges of 10% a year. Personal finance analyst Laura Suter suggested millennials could save £78 a month by cutting back on takeaways, making a lunch at home instead of buying shop-bought, or cutting out gym membership.
The Daily Telegraph, Page: 10
Savings fall to record low
Data from UK Finance shows the average person put aside just £50 over the 12 months to January with total bank and building society deposits climbing by just 0.4% over the year to a total of £838.3bn.
Chance for a trust revival?
A Government consultation on reforming the trust system closes this week, reports the Telegraph’s Sam Brodbeck, who hopes the review’s focus on “transparency, fairness and simplicity” might help rescue the reputation of trusts, which he says have been “unfairly lumped in with complex offshore arrangements.”
New owner sacks Patisserie Valerie bosses
The boss of Patisserie Valerie and its group commercial director have been sacked by new owner Causeway Capital Partners. Steve Francis and Rhys Iley were due to invest in the business alongside the Irish private equity firm, which two weeks ago bought 96 of Patisserie Valerie’s 121 cafés after an auction run by KPMG.
No-deal impact assessment published
The Government has published its assessment of the impact of a no-deal Brexit on business and trade. The report said, “some food prices are likely to increase” and customs checks could cost business £13bn a year in a no-deal scenario. It also said there was “little evidence that businesses are preparing in earnest”. The Government repeated analysis suggesting a no-deal scenario could leave the UK economy 6.3% to 9% smaller after 15 years, compared to what it would have been. It said the worst-hit areas economically in a no-deal scenario would be Wales (-8.1%), Scotland (-8.0%), Northern Ireland (-9.1%) and the north east (-10.5%). The document also revealed that slightly more than two-thirds of the Government’s most critical preparation projects – and fewer than 85% overall – were “on track” for completion in time for 29 March.
Fresh concerns over skilled worker shortage
A new study by the Recruitment and Employment Confederation has found that an increasing number of employers are worried about a shortage of skilled workers amid falling confidence in the economy. The poll of about 600 recruiters found growing concerns over the availability of skilled staff, especially in engineering, technical, social care and hospitality. REC chief executive Neil Carberry said the survey showed beyond any doubt that uncertainty was “damaging for job creation”.
The Scotsman, Page: 35 The I, Page: 62 The Times
Shop price inflation increases
The British Retail Consortium has reported that shop price inflation in February rose to 0.7%, its highest level since March 2013 and up from 0.4% in January. Prices for clothes, consumer goods and other non-food items increased for the first time in six years, with retailers passing on higher costs that built up recent years on the back of Brexit, the falling pound and higher oil prices. Elsewhere, French Duncan has warned the extent of retailers in Scotland going under likely marks the “tip of the iceberg”. The firm found that 615 Scottish retailers have gone bust over the last ten years.
UK secures post-Brexit membership of WTO procurement pact
The World Trade Organization has agreed the UK can join its Government Procurement Agreement as a non-EU member, protecting access for British businesses to a market worth as much as £1.3trn. Liam Fox, the international trade secretary, hailed the news as an “important win for British diplomacy” while Allie Renison at the Institute of Directors commented: “Whether in defence, construction, or healthcare, being shut out of lucrative government contracts around the world would have been a big backwards blow to British companies, large and small.”
Eurozone economic sentiment weakens
The European Commission’s monthly economic sentiment index has fallen for the eighth consecutive month as the bloc continued to be plagued by weaker industry and construction confidence. The EC survey also revealed a drop in UK economic sentiment, which fell below the benchmark 100 points to its lowest since February 2013. The fall was led by a sharp decline in sentiment in the services sector, while confidence also fell among industrial and construction firms.
Wealth gap widening
ONS data shows that income inequality between the richest and poorest in the UK widened last year, with the wealthiest fifth of the population seeing incomes rise by 4.7% while the average income of the poorest fifth shrunk by 1.6%. The growing gap is a reversal of the trend seen in the past decade. The rise among the top earners was driven by improvements in pay, while the fall in income among the poorest came from a squeeze in benefits.
Finance professionals the most desirable workers in London
The Inner Circle has found that finance workers are the most popular professionals in London. The dating app said both men and women in the sector were “right-swiped” more than any other with men making up over a quarter of all London swipes on the app and women a fifth.
Accountants among top gym users
Research from PureGym into the UK’s fittest professions found people with jobs using science and numbers work out more than any other. Almost a third of researchers and accountants go to the gym on average four to six times a week; construction workers make just over three visits a week while health and social care workers manage the least workouts at just once a week or less on average.
Daily Mirror, Page: 49
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