News Roundup Friday 24th August 2018
News Roundup Friday 24th August 2018
A Scottish inheritance tax regime would bring its own problems
Writing in the Scotsman, Colin Henderson, a partner at Anderson Strathern, argues that the SNP’s call for IHT to be devolved overlooks how difficult it would be to establish a taxpayer’s domicile and how different levels of IHT in Scotland the rest of the UK might incentivise people to relocate. He refers to comments from the SNP’s Westminster treasury spokesperson, Alison Thewliss, earlier this month. She said: “The current system of inheritance is not fit for purpose, with loopholes allowing the wealthiest individuals to avoid paying their fair share.” If the SNP’s anger was directed at IHT relief for investments in shares, Mr Henderson continues, then although changing the rules here would bring in welcome revenue, it would risk reduced investment into small businesses just when they need it most.
Campaigns warn elderly of iTunes fraudsters
The Mirror reports on how an elderly lady was threatened with jail by conmen claiming to be from HMRC if she didn’t pay an “unpaid tax bill”. Margaret Smith was told unless she purchased over £1,000-worth of iTunes vouchers she would be arrested. She was in the process of transferring the voucher codes to the fraudster when her son intervened. Between the months of 1 April 2015 and 31 March 2018, victims lost more than £6,561,380 to gift card fraud, averaging at £579 per person, according to the National Fraud Intelligence Bureau (NFIB). Retailers such as Argos are now working with Action Fraud to raise awareness while HMRC and Apple have been issuing guidance.
Corporate avoidance costing $1trn a year
A report by campaign group Health Poverty Action claims countries including the UK are “diverting” funds from ordinary people to corporations by granting subsidies, cutting taxes and “allowing them to engage in tax dodging”. They say this costs countries $1trn a year, $500bn of which is corporate tax avoidance. Separate research from Janus Henderson found firms around the world paid a record £390bn in dividends to shareholders between April and June this year.
Daily Mirror, Page: 44
Online trading tax is a dumb idea
Writing in City AM, Brian Monteith, the director of communications at Global Britain and a former member of the Scottish parliament, says the introduction of a so-called “Amazon Tax” on online retailers would be like “putting a 5p tax on emails to try and encourage everyone to write and post letters.” The idea that such a tax would save the high street is fallacious, says Monteith, while tech firms and consumers would only try to get around paying it. “Retailers who do not adapt, embrace, and innovate will, outside niche markets, go to the wall,” he continues, adding: “Rather than being smart, an online trading tax is dumb.”
City AM, Page: 16
Labour market growth can pay for higher spending
The Mail’s Alex Brummer wonders why the Institute for Fiscal Studies chief Paul Johnson always calls for tax increases to pay for more investment into public services. Brummer says it is more people in jobs that is improving tax receipts and improving public finances.
Daily Mail, Page: 37
Tax regime has evolved to keep North Sea basin competitive
Michael Tholen at Oil & Gas UK warns that hiking taxes on North Sea firms “would smack of short-termism and cause irreversible damage to the future of this long-term industry.”
Government targets £100bn Brexit boost to exports
Liam Fox will today unveil plans to boost exports by £100bn a year with a new export strategy designed to exploit the opportunities Brexit brings and give British companies a competitive edge over international rivals. The International Trade Secretary will say that Britain is “punching above our weight but below our potential” and that businesses have “nothing to fear and everything to gain” from “having faith in their own abilities to sell British goods and services overseas”. Dr Fox wants the UK to increase exports from 30% to 35% of GDP and make Britain a “21st century exporting superpower”. The Federation of Small Businesses, the CBI, the British Chambers of Commerce and the Institute of Directors all welcomed the move. Mike Cherry of the FSB said: “The clock is ticking. If the Government doesn’t act quickly and introduce financial incentives there is a risk the current uncertainty will h ave a serious and detrimental impact on the growth of small businesses.”
Superfast broadband rollout benefitting SMEs
A new report has calculated that SMEs located in areas to have benefitted from the Government’s rollout of superfast broadband services have enjoyed a combined £9bn increase in turnover since receiving the boost to their internet speed. In the Ipsos Mori-produced report on the impact of the super-fast rollout between 2012 and 2016, the Department for Digital, Culture, Media and Sport also declares a £690m net increase in GVA to the UK economy, 9,000 fewer Jobseekers’ Allowance claimants and 2,500 fewer long-term benefits claimants, with 49,000 new jobs created overall. There is also a claim that every £1 invested in the rollout has delivered a benefit of £12.28 for businesses.
Time to overhaul rates system
The Government has been accused of “choking off” challenges from small companies crippled by tax increases after making the business rates appeal process so arduous. Official figures show an 86% drop in the number of appeals registered in England between April 1 last year – when business premises were revalued – and this June. Mike Cherry, national chairman at the Federation of Small Businesses, said the appeals platform “places a huge administrative burden on small firms […] The solution is for a radical overhaul of unfair tax that small businesses struggle to navigate when things go wrong.”
Daily Mirror, Page: 37
Small firms could get more from Neds
A study by the ACCA and law firm TLT has found that small businesses are missing out by not having non-executive directors to advise them, or if they do, they are failing to get the best from them. Failure to formally set out what is wanted from advisers, followed by inadequate assessment of the value they contribute, is a widespread problem, the research said.
Government scrutiny of Carillion inadequate
In an interview with Channel 4’s Dispatches, former auditor general Sir John Bourn described Carillion as “like a Ponzi scheme” because it was “taking small contracts as a way of keeping the bigger contracts going.” He also told the programme that the Government should not have continued to give the outsourcing giant contracts after it issued an £845m profits warning in July 2017. Robin Ellison, chairman of Carillion Pension Trustees, also spoke with Dispatches, recalling the poor attitude of finance director Richard Adam to the pension scheme. Carillion’s collapse left £1.2bn unpaid to sub-contractors and an £800m pension deficit. Writing in the Sun, Liam Halligan says the public are being taken for mugs while accountants rake in millions from administrations. Halligan notes that the Financial Reporting Council was deemed “timid” by one Parliamentary probe i nto Carillion’s collapse but points out that the regulator has launched an investigation into KPMG’s work for the company.
The Daily Telegraph The Sun, Page: 10
Flagship House of Fraser store saved
House of Fraser’s flagship Oxford Street store, one of 31 previously earmarked to close, will remain open, as part of Mike Ashley’s plans to turn the company into the “Harrods of the high street”. James Keany of CBRE, the real estate services and investment firm advising Sports Direct regarding House of Fraser properties, said: “This deal only happened because all parties realised it was better to keep the store open and fully operational.
The Independent Evening Standard The Guardian, Page: 25 Daily Mail, Page: 65 The Daily Telegraph, Business, Page: 31 The Scotsman, Page: 33
Capita hires Butcher as new CFO
British outsourcing company Capita has poached Go-Ahead Group finance chief Patrick Butcher to become its new CFO. Mr Butcher will replace Nick Greatorex.
Travel agency insolvencies fall 30% in five years
Analysis by Moore Stephens shows that the number of travel agency and tour operators going insolvent has fallen 30% over a five-year period. The firm said the rise of the internet over the past 20 years has thinned out the weaker businesses.
Speakman new finance chief at Keller
Michael Speakman has been hired as finance chief at geotechnical engineer Keller Group.
Daily Mail, Page: 63
Rates changes “ill-considered and poorly timed”
Retail leaders have warned the Scottish Government to row back on plans to introduce rates hikes on out-of-town and online retailers saying it would add “unpredictability and complexity” to the rates system and add further costs. Scottish Retail Consortium director David Lonsdale said: “The ill-considered and poorly timed proposals for an out-of-town rates levy are an unnecessary distraction.” He added: “Adding an additional tax, on what at this stage appear arbitrary geographical considerations, will do nothing to help struggling town centres.”
The Scotsman, Page: 16
Housing slump sends stamp-duty revenues down 10%
The number of houses being bought and sold edged further down last month, with residential transactions 3.2% lower in July 2018 compared with the same month last year, according to the latest HMRC data. This meant stamp duty revenue fell to £3.91bn in the four months to July, 10% down on the same period last year.
Daily Mail City AM, Page: 11 The Times, Page: 2
Haldane: AI could lead to widespread unemployment
Andy Haldane, a member of the Bank of England’s rate-setting committee, has warned that artificial intelligence threatens UK employment even more than previous industrial revolutions. He said that he had seen a widespread “hollowing out” of the jobs market, rising inequality, social tension and many people struggling to make a living. Mr Haldane added that it was important to learn the “lessons of history” and ensure that people were given the training to take advantage of the new jobs that would become available. His comments were echoed by Tabitha Goldstaub, chair of the newly formed Artificial Intelligence Council, who said that the challenge was ensuring that people were ready for change and that the focus was on creating the new jobs of the future to replace those that would disappear.
British households more upbeat over finances
A new survey has revealed that although British households are the most upbeat about their finances since early 2015, pessimism about how they will fare over the next 12 months is the greatest since March 2017, fuelled by Brexit uncertainty and higher living costs. IHS Markit said its monthly Household Finance Index rose in August to its second-highest level since it was launched nine years ago at 45.9, up from 45.0 in July. Meanwhile, research from Citizens Advice shows that British households owe almost £19bn in utility bills, missed council tax payments and overpaid benefits. The charity said missed bill payments had now overtaken credit card troubles as the key money problem faced by consumers.
The Times, Page: 36 The Guardian, Page: 25 Daily Mail Yorkshire Post, Page: 7
UK posts biggest July government surplus since 2000
The government ran a £2bn July budget surplus, the biggest since 2000, the Office for National Statistics has said, with taxes on income and wealth up 6.4% on last year. Borrowing was down to £12.8bn in the first four months of this financial year from £21.3bn in the same period a year ago – the lowest figure since 2002. However, the Office for Budget Responsibility said, “one-off factors, such as changes in timing to payments to the EU and a levelling off in inflation-linked bond payments, flattered the figures”. John Hawksworth, chief economist at PwC, said that, while some of the recent improvement had been partly due to temporary factors, “there also seems to be a continued underlying improvement in the overall public finances”.
Financial Times, Page: 1 The Daily Telegraph, Business, Page: 31 Financial Times, Page: 2 The Times, Page: 2 The Guardian, Page: 25 Daily Mail, Page: 14 Daily Mirror, Page: 2 The Independent, Page: 65 City AM, Page: 2 Yorkshire Post, Page: 4
Imran Khan calls on Pakistan’s wealthy to pay more taxes
Pakistan’s new prime minister Imran Khan has appealed to the country’s elite to pay more taxes. Less than 1% of the population files income tax. In his inaugural speech, he said: “It is your responsibility to pay taxes. Think of this as a jihad, that you need to pay tax for the betterment of your country.”
The Independent The Times, Page: 26
Time to act on gender equality
Writing in the Yorkshire Post, Solat Chaudhry of the National Centre for Diversity, says it is time for government and business to deliver on eradicating the “injustice” of the gender pay gap. He cites figures from Grant Thornton showing that companies with more women in top positions achieve 16% higher return on sales and a 26% better return on invested capital. “Strengthening transparency on gender pay will help to reinforce the business, moral and societal case for industry, and hopefully accelerate culture change,” concludes Mr Chaudhry.
Yorkshire Post, Page: 13
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