News Roundup Friday 26th April 2019
News Roundup Friday 26th April 2019
Buy-to-let shift hits stamp duty but boosts CGT
The Government’s tightening up on buy-to-let investing has led stamp duty receipts to fall by £1bn, according to HMRC, the largest drop since the financial crisis. Tax take from stamp duty fell to £11.9bn in 2018/19, from £12.9bn the previous year, following the three percentage point surcharge on second homes introduced in 2016 and the exemption for most first-time buyers. Meanwhile, a squeeze on returns has seen a number of buy-to-let owners selling up, triggering an 18.6% rise in capital gains tax payments, which hit a record £9.2bn in the financial year 2018/19.
Hammond: Grumbling high-payers show tax policy is right
Chancellor Philip Hammond has warned that covering the cost of caring for Britain’s ageing population will see taxes rise in the coming years. Suggesting that high earners are set to see bigger bills from the taxman, he told MPs on the Treasury Committee: “The trick in any tax system is to get the balance right. If taxpayers who are paying large amounts of tax weren’t grumbling we wouldn’t have got it right.” “Equally if they were all deserting the country and moving outside the jurisdiction we wouldn’t have got it right,” Mr Hammond added.
The Daily Telegraph, Page: 4 Daily Mail, Page: 23
Paul Southward added “see the next story below!”
Billionaire would exit UK over Corbyn’s tax plan
John Caudwell, the billionaire founder of Phones4u, says he will leave the UK if Jeremy Corbyn’s Labour get into power as “they don’t seem to understand that if you tax the rich, there’s a level of threshold.” Labour has declared an ambition to increase the income tax rate to 45% for those earning more than £80,000 a year and to 50% for those earning more than £123,000.
It is never too soon to take advice on IHT planning, Paul Southward says “you can knock tens of thousands of pounds of your estate bill with a bit of advanced planning”.
HMRC to accept online complaints
HMRC is to allow taxpayers to complain online. Until now, those contacting the Adjudicators Office (AO) had to write in or use a helpline that has faced criticism for subjecting callers to long waiting times. Nicky Morgan MP, chair of the Treasury Committee, earlier this month wrote to HMRC to question why taxpayers are unable to contact the AO by email. In response, the Revenue says it will provide an email contact facility – or other form of secure digital channel – by this Autumn at the latest. Commenting on HMRC’s announcement, Mrs Morgan said: “Whilst it is astonishing in this day and age to say this, HMRC’s long-overdue commitment to provide a digital channel for the public to contact the AO is welcome.”
The Daily Telegraph, Page: 10 The Sun, Page: 47 City AM
Employees could be on the hook for employers’ loan charge debt
Companies which settle disguised remuneration debts may be able to recoup the money from the employees involved, despite Government claims that three-quarters of money collected through the loan charge will come from employers. Meanwhile, Philip Hammond has spoken out over a report into HMRC’s handling of the loan charge, saying staff supporting MPs investigating claims that a crackdown has driven people to bankruptcy and suicide had been “involved in the promotion of these avoidance schemes”. He asked whether it is “appropriate and whether it any way affects the ability of the House to carry out its work.”
Financial Times The Times, Page: 46
Clubs block accountant plan
Clubs in football’s Championship have voted against a plan to enable accountants to independently review other clubs’ finances. A majority of clubs rejected the proposal, with a senior executive saying: “The English Football League finance team did such a superb presentation on their processes and policies that everyone realised it was totally unnecessary to question their work.”
Daily Mail, Page: 84 The Daily Telegraph, Sport, Page: 7
Small firms downbeat as Brexit uncertainty remains
The Daily Telegraph Business Tracker suggests sentiment at small firms remains very low, with analysis of Twitter posts from 25,000 British enterprises and entrepreneurs between March 26 and April 22 showing that 23% were pessimistic, while 13% were positive. Stripping out posts that were opinion-neutral, 64% of firms were downbeat and 36% were upbeat. Mike Cherry, chairman of the Federation of Small Businesses, has called for an end to the “dithering and delay” over Brexit, saying: “Unless we get a consensus, a further extension only creates more uncertainty, which is driving firms to despair.”
The Daily Telegraph, Business, Page: 8
Stamp duty keeps people in homes
A poll by Yopa shows that while more than a quarter of homeowners wished they lived somewhere else, half of those with a desire to move said they could not afford to because of stamp duty.
Daily Express, Page: 6
Government borrowing falls to 17-year low
UK public borrowing fell to £24.7bn between April 2018 and March 2019, according to the Office for National Statistics (ONS), £17.2bn less than the previous financial year and its lowest level for 17 years. Public sector net debt at the end of March grew by £22.1bn year on year to £1.8tn excluding public sector banks. Central government receipts rose 5% year on year, but corporation tax dropped 2.6% while income and capital gains tax grew 6.4%. John Hawksworth at PwC said growth has been “relatively ‘tax-rich’ … which has played a key role in bringing the budget deficit down to more sustainable levels.” Howard Archer, chief economic adviser to the EY Item Club, commented that it is “notable” that in the budget for 2018/19 held in November 2017 the budget deficit had been seen at £39.5bn, while the actual outturn of £24.7bn was 37.5% lower than originally expected.
Contact Paul Southward.