News Roundup Friday 28th June 2019

NEWS ROUNDUP

TAX NEWS

CGT take hits £9.2bn

Figures show that the capital gains tax (CGT) take has hit a record level, with the Government taking £9.2bn in 2018/19. This marks an 18% increase on the year before. The Telegraph’s Harry Brennan says much of the increase has been attributed to a “squeeze” on the buy-to-let sector, with experts saying a change coming into force in 2020 that will force landlords to pay their tax bills within 30 days of selling a property could drive the CGT take up even further. With current rules giving landlords until January 31 to settle due taxes, NFU Mutual’s Sean McCann says: “HMRC clearly sees the opportunity to increase the CGT take by targeting landlords and is introducing new rules to collect the revenue earlier.” Mr Brennan notes that the CGT allowance increased this tax year from £11,700 to £12,000. He also highlights that buy-to-let investors face CGT rates of 18% or 28%, depending on their tax status and their gains, while those selling other assets see rates of either 10% or 18%.

The Daily Telegraph

Surge in expat landlords declaring BTL income

Data obtained via a Freedom of Information request shows that the number of landlords living overseas who have declared taxable income to HMRC has risen from 246 to 397 in the past year, a 61% increase. Moore Stephens attributes this in part to campaign from the Revenue which saw people living abroad who may have British tax liabilities contacted, with those who do not respond to the letters risking penalties. Lucy Brennan at Saffery Champness comments: “Compliant taxpayers should have nothing to worry about by HMRC’s letters.” Jonathan Green, of Moore Stephens, said: “More and more landlords are starting to approach HMRC to avoid the risk of being hit with heavy sanctions further down the line.” HMRC netted £560m from investigations into British taxpayers with offshore assets and income in 2018/19, a 14% increase on the £490m pulled in over 2017/18 and a 72% increase on 2016/17’s £325m.

The Daily Telegraph Financial Times, Page: 2

Boris adds NIC pledge to tax plan

Boris Johnson yesterday amended his tax plans, with the Conservative leadership candidate saying that as well as raising the 40% income tax threshold to £80,000, he would also increase the national insurance contribution threshold, which currently kicks in at earnings of £8,632, to help lower earners. Mr Johnson, who did not detail how much he plans to increase the NIC threshold by, said: “We will bring forward a tax proposal … that begins by lifting thresholds for those on lowest pay.” The Institute for Fiscal Studies has calculated that that raising it by £1,000 would take 600,000 workers out of NICs and cost around £3bn a year.

The Times, Page: 6

Planning errors driving up IHT bills

HMRC figures show that the average inheritance tax bill hit £200,000 last year, up from £141,000 five years earlier. The IHT take generated a record £5.4bn, the analysis shows. Financial planning errors, such as failing to complete forms and neglecting tax-free allowances, mean thousands of families are paying unnecessary IHT bills, says the Express’ Harvey Jones, who goes on to offer advice on planning a financial legacy.

Daily Express, Page: 30

Refund demand sees payout delays

Data from HMRC has shown that of the 43,187 people who applied for a stamp duty refund in the 2018/19 tax year, 8,588 had to wait longer than 15 working days due to demand.

Daily Mail, Page: 46

FINANCE NEWS

Scottish corporate finance valuations climb

PwC analysis shows that the average valuation of a corporate finance deal in Scotland is on the rise. Jon Shelley, the firm’s head of corporate finance in Scotland, says that while ongoing economic uncertainty has seen the overall number of deals being completed fall in the last year, the typical transaction value is up. PwC figures show that the overall number of deals completed in the year to 2018 saw a year-on-year drop of about 25%, but it came after a “high bar” set in 2017, with the market indexing around 10% down over a ten-year average.

The Scotsman, Page: 35

Challenger competition could see better rates

KPMG forecasts that the closure of two prominent Bank of England (BoE) funding initiatives – the Term Funding Scheme and Funding for Lending Scheme – could force challenger banks in the UK to “radically rethink” their offerings in order to secure investment. The firm’s Challenger Banks: Opportunities and Challenges report, released today, says this could deliver better deals for consumers, with firms competing on rates. The report says the end of the BoE schemes means challenger banks must find alternative sources for finance, with KPMG expecting focus to turn toward the instant access savings market, which represents around 55% of UK deposits.

The Scotsman, Page: 37

SMEs NEWS

LSE chief: SMEs need greater finance awareness

The London Stock Exchange Group’s annual report on the fastest growing UK companies suggests that dynamic growth companies are thriving, despite political and economic uncertainty. Firms in the report have created almost 96,000 jobs over the past two-years, a 39% increase on the total reported in last year’s offering. Nikhil Rathi, chief executive of London Stock Exchange, says SMEs, which account for 60% of all private sector employment and generate over 50% of all private sector turnover, “drive growth, innovation and job creation and are the lifeblood of the British economy.” Writing in the Telegraph, he points to research by the British Business Bank (BBB) that he says highlights the need for greater awareness of smaller firms’ financing options. The BBB report shows that 56% of SMEs are not aware of venture capital, equity crowdfunding and angel investment and have not considered using equity finance. It also found that 36% of SMEs sought external finance in 2018, a dip on the 44% recorded in 2012.

The Daily Telegraph, Business, Page: 8

CORPORATE NEWS

Brexit uncertainty hits MBOs

Research by BDO shows that the number of management buyouts (MBOs) in the UK fell by 23% to 74 in the past year. “Lack of clarity over the terms of Brexit led to some hesitancy among management teams that are planning MBOs,” BDO said. “This has made them slightly less willing to execute deals at multiples that owners are looking for.” BDO associate director Ish Alg added: “Despite the decline in number of MBOs, we have not seen any reduction in capital waiting to be committed to the UK. Once uncertainty subsides, we expect MBOs to recover.”

City AM, Page: 12

Women’s football kicks on

The I looks at the climate for women’s football, highlighting that “forward-thinking sponsors” have been drawn to the game. Izzy Wray of Deloitte notes that UEFA’s decision to unbundle the commercial rights from men and women’s football “opened up a pathway for brands with a specific interest to enter the market, having been previously shut off.” Deloitte analysis shows that while 60% of women’s football teams in major leagues have shirt sponsors that are different to those for the men at the same club, this could be close to 100% by the next World Cup.

I, Page: 26

Sir Gary refuses to face expenses probe

Former Welcome To Yorkshire chief executive Sir Gary Verity refused to be interviewed for two investigations into expense claims and bullying, with BDO and solicitors Clarion probing a series of allegations.

Yorkshire Post, Page: 1

LEGAL NEWS

Critics round on Credit Suisse for suing UK over bonus tax

Credit Suisse is suing HMRC over £239m of bonus taxes paid through a one-off levy during the financial crisis, arguing that some rivals avoided it due to the timing of bonus payouts.

Financial Times, Page: 1

ECONOMY NEWS

UK retail endures biggest hit in a decade

UK retail sales fell at their fastest pace in over 10 years in June, according to the Confederation of British Industry (CBI). The CBI survey indicated that 58% of retailers said sales volumes were lower in June than a year ago, while just 16% said they were higher. This meant the balance of reported sales fell to minus 42, the lowest level since March 2009. Alpesh Paleja, principal economist at the CBI, attributed some of the decline to a surge in sales last June that was prompted by a heatwave and the start of the World Cup. He added: “Conditions on the High Street remain challenging. Retailers are having to continually compete for the attention of value-conscious shoppers, in the age of digital disruption.” The CBI report comes as EY Item Club identified signs of wavering consumer confidence, saying that consumer spending growth was likely to slow from 1.8% in 2018 to 1.6% in 2019 and 1.7% in 2020.

The Times, Page: 43 The Daily Telegraph, Page: 4 Daily Mail, Page: 66 Financial Times Daily Mirror, Page: 38 City AM
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