News Roundup Friday 2nd August 2019
News Roundup Friday 2nd August 2019
HMRC warned over anxiety caused by loan charge administration
MPs on the Treasury sub-committee have said HMRC’s attempts to claw back money from those who used “disguised remuneration schemes” has caused “widespread anxiety and distrust”. The committee criticised HMRC’s “retrospective” loan charge policy which campaigners have linked to as many as five suicides. John Mann, Treasury subcommittee chair, said: “Setting aside the policy, HMRC’s administrative approach to the payment of large unexpected tax bills has been sensible. The delay, however, in clarifying payment terms for those wanting to settle their past use of such schemes has caused widespread anxiety and distrust.”
The Sun, Page: 2 The Daily Telegraph, Page: 2 Yorkshire Post, Page: 4
HMRC told to be “fair and consistent” when fining large companies
A report compiled by the Treasury select committee urges HMRC to be consistent when targeting large firms in tax disputes. Law firms told MPs they did not think HMRC went easy on big companies, rather it took a harder line and was “inflexible”, often forcing resolution through the courts rather than settlement. KPMG told the committee HMRC increasingly put inaccuracies down to “deliberate” behaviour, resulting in higher fines and reputational damage. An HMRC spokesman said: “We make sure that large businesses, just like everyone else, pay all the taxes due under UK law. Large businesses are responsible for around 40% of the UK’s total tax receipts.”
The Daily Telegraph, Business, Page: 29
Self-employed face ‘fiasco’ HMRC glitch
Self-employed people potentially face tax bills twice as high as expected next year due to a “glitch” in HM Revenue & Customs’ tax return system not including payment on account information – which is due imminently. HMRC has said that no one would be charged interest for paying late because of its error – though those who can’t pay in January are vulnerable to interest charges. Nimesh Shah of Blick Rothenberg described the situation as a “total fiasco” and Moore Stephens’ Lucienne Parry said the issue was also causing concern for those who choose to use tax refunds to offset these payments.
One in ten keep assets offshore
HMRC has revealed that one in ten taxpayers in Britain has offshore financial interests after it received information through the new Common Reporting Standard, which allows more than 100 countries to exchange financial data automatically. The taxman told the Treasury select committee it had received information about 5.67m offshore accounts in the past year and had written to tens of thousands of people who may owe tax.
The Times, Page: 14
Guillaume hits out at Trump in wine tax rant
French agriculture minister Didier Guillaume has called Donald Trump’s threat to tax French wine “completely moronic” and “absurd”. The US President made the threat last week in response to French plans for a tax on the revenue of large digital firms – a move that would hit the likes of Google, Amazon, Facebook and Apple. Mr Guillaume said Trumps tit-for-tat reaction was “completely stupid” before adding: “American wine is not better than French wine.”
BBC News The I, Page: 24
Poland scraps income tax to halt brain drain
Poland is to scrap income tax for workers under the age of 26 who earn less than £18,500 a year in an attempt to lure emigrants home.
More UK firms in ‘significant distress’
The number of UK businesses facing “significant distress” has increased, according to Begbies Traynor’s latest Red Flag Alert index, with 14% of all UK businesses – 484,000 – indicating they were experiencing significant distress at the end of June. The retail, property and leisure industries are being hit hardest, due to what Begbies described as the continuing economic and political uncertainty facing Britain, and the average debt of insolvent companies has more than doubled – from £29,873 in 2016 to £66,226. The number of firms reporting critical financial distress also rose by 5% year-on-year. According to Insolvency Service figures, corporate insolvencies have reached their highest level in more than five years, rising 11% in Q2 compared with the same period last year. Martin McTague, policy and advocacy chairman for the FSB, called the latest figures “hugely concerning”.
Deal making slumps in Yorkshire
Private equity investment in Yorkshire businesses fell by 59% in the first six months of 2019, with just 11 deals completing in comparison to 27 in the second half of 2018, according to a new survey from KPMG.
Yorkshire Post, Page: 17
PERSONAL FINANCE NEWS
Young people see 10-fold rise in bankruptcy
Individual insolvencies are at their highest quarterly level since 2010, with 30,936 people filing for bankruptcy, debt relief orders or individual voluntary arrangements, according to Insolvency Service data. “The situation is still serious for the UK’s personal finances,” said Duncan Swift, president of insolvency and restructuring trade body R3. “Money worries are a fact of life for millions.” Meanwhile, analysis of the data by RSM found that rising self-employment and easily-obtainable credit has pushed Generation Z into debt with the number of young people going bankrupt increasing 10-fold in three years. Under-25s now make up 6.5% of all personal insolvencies, up from 1% three years ago.
FCA set to ban contingent charging by pensions advisers
The Financial Conduct Authority is to consult on a ban on pensions advisers operating a “contingent charging” model, under which they get paid only if their client follows their advice to transfer a “defined benefit” pension. Contingent charging is estimated to cost consumers £2bn a year. The FCA’s Christopher Woolard said: “We want to ensure people receive suitable advice and drive down the number giving up defined pensions when it is not in their interests.” Stuart Bradbury, pensions director at PwC, said: “Contingent charging has become more common because many find the upfront cost of advice to be prohibitive.”
Majority of Scots back new taxes on holiday lets
A YouGov survey commissioned by 38 Degrees has found that 84% of Scots would back new taxes on short-term lets such as Airbnb. A majority, 64%, also supported ring-fencing most of the money raised to improve local housing. Currently, while private landlords have to register with local authorities, there is no such requirement for those who run holiday lets and take bookings through third parties like Airbnb. Campaigners have called on the Scottish Government to let councils limit the number of holiday lets, introduce new taxes and require landlords to register.
Glasgow Evening Times The Herald, Page: 4
Households remain upbeat as wages continue to rise
Consumers remain optimistic about their financial situation despite worries about the economy, according to GfK’s latest survey, with a sustained rise in real wages countering concerns over Brexit. However, households’ confidence did not extend to the wider economy, with the overall index for July standing at minus 11, albeit up from minus 13 last month.
Pound falls again on no-deal fears
The pound has continued to fall on currency markets amid fears of a no-deal Brexit, hitting a fresh two-year low of $1.2120 against the dollar on Tuesday before recovering some ground. Sterling also slid against the euro, falling to €1.0881 at one point.
Profoundly low interest rates are here to stay
Robin Harding considers the consequences of permanently low global interest rates in the FT, suggesting it is “time to stop waiting for rates to recover and face the world as we find it.”
No-deal Brexit would tip Germany into recession
Analysis by Blick Rothenberg shows Germany would fall into recession in the event of a no-deal Brexit, with the loss of 200,000 jobs and 1% of GDP.
The I, Page: 41
Contact Paul Southward.