News Roundup Friday 31st May 2019



New Advisory Fuel Rates from 1st June 2019

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Advisory Fuel Rates from 1st June 2019

HMRC targets big ticket evasion

HMRC figures show that 1,007 prosecutions related to tax evasion offences were launched last year. The Revenue, notes the I, is shifting to increasingly focus on “big-ticket” tax evasion cases involving businesses.

The I, Page: 42

Opinion: Loan charge move could boost next PM

Greg Wright in the Yorkshire Post considers how the next Prime Minister could get businesses on their side, suggesting that a suspension and review of the loan charge would be welcomed. He notes that critics have described the loan charge as retrospective and say it overrides taxpayer protections. He cites the All-Party Parliamentary Group on the Loan Charge, which said: “There will be many bankruptcies as a result of the loan charge, reducing the estimated tax take and hitting the real economy.”

Yorkshire Post, Business, Page: 2

UK biggest enabler of corporate tax dodging

An index published by the Tax Justice Network shows that the UK is the world’s biggest enabler of corporate tax dodging, with four of the top 10 countries allowing multinationals to avoid paying billions in tax on their profits shown to be British overseas territories. Topping the list was the British Virgin Islands, while the UK itself comes in thirteenth. Tax haven territories linked to Britain are responsible for around a third of the world’s corporate tax avoidance risk. Alex Cobham, chief executive at the Tax Justice Network, described the UK, Netherlands, Switzerland and Luxembourg as “the Axis of Avoidance” and warned that “a handful of the richest countries have waged a world tax war so corrosive, they’ve broken down the global corporate tax system beyond repair.”

Daily Mail, Page: 19 Daily Mirror, Page: 7 The Independent, Page: 16 I, Page: 5 Yorkshire Post, Page: 4

IHT take up 11% in April

Figures show that HMRC pulled in close to half a billion pounds in inheritance tax April – an increase of more than 11% on the previous year, while the Government’s total IHT haul hit a record high of £5.4bn in 2018/19. The Telegraph’s Sophie Smith and Harry Brennan look at a number of legitimate loopholes that people use to avoid paying the levy. Measures they highlight include: giving away gifts of up to £3,000, with this tax-free; downsizing and handing over cash, with IHT applying to assets held when a person dies or that were given away in the seven years before death; using a deed of variation; and investing in IHT-proof assets. They also note that a review by the Office for Tax Simplification could lead to a “radical shake-up” of IHT rules, with parents and grandparents who want to help younger generations onto the property ladder perhaps set for tax breaks.

The Daily Telegraph

Matt Hancock makes pro-business pitch for Tory leadership

Matt Hancock has told the FT that the amount paid in direct taxation should be reduced “as and when we can” and that tax breaks could help small businesses.

Financial Times, Page: 2

Think-tank: Income tax would boost council funds

The Institute for Fiscal Studies has suggested that councils could charge a local income tax to ease pressures which have seen spending on local services fall by 21% in a decade.

The Guardian, Page: 20 The Sun, Page: 6

Hammond to rebuke “reckless” Tory leadership candidates

Philip Hammond will argue against calls from Tory leadership candidates for “total liberalisation of the market” in a speech today. The Chancellor will argue that the Conservatives should focus on higher pay, not tax cuts and that “letting rip the forces of the free market doesn’t always work for all.” Mr Hammond’s speech comes on tax freedom day – the day when workers effectively stop earning money for the taxman and start earning money they can keep. His warning comes after Dominic Raab, Sajid Javid, Esther McVey, and Jeremy Hunt all promised tax cuts if they succeed Theresa May. Mr Javid yesterday said lower taxes should be “a priority for any government” and that it was “morally right” that workers should keep as much of their earnings as possible. Writing in the Telegraph, Tory MP Priti Patel points out that the tax burden is at a 50-year high and says the Tories “must go back to championing our beliefs in low taxes, free markets, the rule of law, property ownership and choice.”

The Daily Telegraph The Times, Page: 10 The Daily Telegraph, Page: 4 The Daily Telegraph, Page: 17 Daily Mirror, Page: 4

Freelance workers in the dark about IR35 tax reforms

A survey by Qdos has found 92% of contractors have not been contacted by their client or recruitment agency to discuss IR35 reforms, which come into force in April 2020. All companies, unless they have fewer than 50 workers or less than £10.2m annual turnover – will be required to assess the tax status of all contractors in order to determine whether they should be taxed as an employee or not. The study also revealed that found 59% of UK businesses were considering a blanket approach to managing the legislation because they did not have time to assess contractors individually. Seb Maley, Qdos chief executive, said: “Accurate IR35 decisions are made with joined-up thinking and input from each party in the supply chain. Therefore, we urge the businesses engaging contractors and the agencies placing these workers to start preparing for IR35 reform now, irrespective of any potential tweaks to the legislation.”

Financial Times Politics Home People Management

Ringleader of tax fraud trio jailed

The Nottingham ringleader of a trio of fraudsters, who spun a web of lies so that they could steal nearly £305,000 through various tax frauds, has been jailed. Chris May made false VAT repayment claims, lied about his income and made fraudulent claims for Tax Credits over a four-year period from 2010. Accomplices Frances May and Lea Reeve were given suspended sentences.

Press Release


New York overtakes London as top financial centre

Research from Duff & Phelps suggests London is losing its status as the world’s most important financial centre, losing ground to New York on the back of Brexit uncertainty. A poll asking 180 senior figures in asset management, private equity, hedge funds, banking and brokerage to name the key financial centre saw 17% less say London compared to a year ago, giving it a 36% share, while New York was up 10% to 52%. On what the future holds, 21% of respondents expect London to be the world’s financial centre in five years, with 44% predicting it would be New York. Duff & Phelps said: “Last year, Brexit cast a shadow of uncertainty over the United Kingdom’s economy; it has now escalated to a full-blown crisis.”

The Independent, Page: 57

Brexit uncertainty deepens gloom in services sector

Optimism in the business and professional services sector, which includes accountancy, worsened in the three months to May, with a CBI poll showing a net balance of -8% of companies feeling positive about their business situation. Sales volumes in business and professional services firms fell at the sharpest pace since August 2012, according to the survey of 129 businesses, while the CBI warned that volumes are likely to decline further in the next quarter.

The Times, Page: 40 Financial Times


Banking code to protect scam victims

A voluntary industry code that comes into force from today seeks to protect people tricked into transferring money to criminals. The new code aims to make sure customers making payments are not penalised – even in circumstances where their bank has done everything reasonably expected of it to protect the customer. The industry has committed to provide initial funding for no-blame situations until the end of 2019, with UK Finance saying the initial funding will provide the necessary time for the industry to work with regulators and ministers to deliver sustainable long-term funding for a reimbursement fund by January 2020. Providers which have reportedly committed to signing up to the code include Barclays, Lloyds Banking Group, HSBC, Metro Bank, Royal Bank of Scotland, NatWest, Santander and Nationwide.

BBC News The Independent, Page: 59 City AM

Warnings over credit card debts stepped up

People with long-standing debts on credit cards are receiving letters encouraging them to make more than the minimum payments. Rules set by the Financial Conduct Authority mean that many people will now be receiving a second reminder suggesting they speed up repayments. Providers could also suspend cards if borrowers fail to take action by March. The FCA imposed the rules after it emerged that providers had made large profits from their 3.3m UK customers in persistent debt. However, StepChange has raised concerns that the warnings may not be clear enough. The debt charity said that as letters from card providers varied, it was not always entirely clear to individuals what was going to happen by next March.

BBC News


Steel makers call for support

The Daily Telegraph’s Alan Tovey looks at calls for support for the steel industry, saying large players in the sector are calling for tax policies which discourage investment to be re-examined, with firms facing higher business rates if the pump money into steelworks. They are also urging ministers to reduce power costs, which are driven up by policies such as decarbonisation initiatives. This comes after British Steel was placed in compulsory liquidation and put in the hands of the Official Receiver.

The Daily Telegraph, Business, Page: 1

Real Madrid top valuation rankings

Real Madrid have topped KPMG‘s valuation rankings of Europe’s top football clubs, with an Enterprise Value (EV) of £2.9bn, pushing Manchester United, who hold an EV of £2.89bn, into second place. Bayern Munich are third (£2.43bn), Barcelona fourth (£2.41bn) and Manchester City in fifth (£2.1bn). The rankings are compiled using the latest publicly available financial statements for 38 European football clubs that meet the selection criteria, with ‘football-specific metrics’ also taken into account, namely: profitability, popularity, sporting potential, broadcasting rights and stadium ownership.

The Daily Telegraph, Business, Page: 1 The Scotsman, Page: 64

Tech sector drives buoyant M&A market

Jason Morris, who is head of deals in Scotland at PwC, says deal activity north of the Border is flourishing, describing the mergers and acquisitions market as “buoyant” and highlighting the performance of the tech sector. He said there is “a lot of private equity money, a lot of global infrastructure money, a lot of specialist investment finance that are all seeking a slightly better return than they would get elsewhere,” adding that this provides “huge fuel” for the deals market.

The Scotsman, Page: 35

Flagship to close

Sarah Butler in the Guardian reports that Sir Philip Green’s Arcadia Group will next week seek approval from creditors for a CVA. She highlights that Miss Selfridge’s flagship London store is set to close in July, with the site to be leased out to another retailer. Ms Butler cites a member of staff who says: “It’s one of our few profit-making stores but Green has said he can make more money by renting it out”.

The Guardian, Page: 34

British Steel attracting interest

The Official Receiver, who took control of British Steel after Government bailout talks failed, has revealed that more than 80 potential buyers had been in contact in the last seven days. A spokesperson said: “Good progress is being made in identifying potential buyers for British Steel. Multiple parties have signed non-disclosure agreements giving them access to a detailed information memorandum and virtual data-room that my team has developed to inform their bids.” EY, which is assisting, has sent non-disclosure agreements to 60 prospective buyers.

The Daily Telegraph, Business, Page: 2 The Guardian, Page: 19 Financial Times, Page: 20 The Times, Page: 43 The Sun, Page; 43 City AM

Goals Soccer Centres battling to tackle VAT issue

Goals Soccer Centres, Britain’s biggest operator of five-a-side football centres, has warned that it may not be able to file its 2018 annual report within a six-month window and that an accounting scandal will see results fall short of forecasts. The alarm comes as the company, aided by BDO, is locked in negotiations with HMRC over a £12m VAT hole – which was discovered shortly after Goals’ long-term finance chief Bill Gow stepped down and the company’s auditor, KPMG, was replaced.

The Daily Telegraph, Business, Page: 1 The Independent, Page: 61 The Times, Page: 44 Daily Mail, Page: 63 Daily Mirror, Page: 38 Daily Express, Page: 49 The Sun, Page: 43 The Scotsman, Page: 36

Select seeks support for another CVA

Administrators for collapsed women’s fashion chain Select are making a last-ditch attempt to save the retailer, its 169 shops and its 1,800 employees. The CVA launched on Tuesday by Quantuma is the retailer’s second this year. The restructuring process, if backed by landlords, will be used to secure lower property costs for the chain; however, if landlords vote against the CVA, and no buyer is found for the business, it is likely to cease trading altogether, according to administrator Andrew Andronikou.

The Times, Page: 45 I, Page: 39 Daily Express, Page: 49 The Sun, Page: 43 Daily Mail, Page: 41

Trying times for RFU

The Rugby Football Union (RFU) has been hit by the news that the principal sponsor of the England Sevens sides, Secure Trading. has gone into administration with a payment to the RFU of more than £1m outstanding. Rugby’s governing body is in negotiations with the company’s administrators, PwC, but reportedly does not expect to receive any of their outstanding payments.

The Daily Telegraph, Sport, Page: 15

10% of firms plot contractor change

AGCC research shows that one in 10 firms will look to convert contractors into full-time employees in response to new legislation relating to off-payroll working rules, with IR35 legislation set to come into force in April next year. Deborah May of KPMG comments: “Although April 2020 may seem some time away, planning ahead will help to put the relevant processes and controls in place to ensure compliance with the new rules and ensure contractual arrangements are appropriate.”

The Press and Journal, Page: 12

Oil and gas firms boost spending and staff

Research conducted by Aberdeen & Grampian Chamber of Commerce in partnership with KPMG and the Fraser of Allander Institute shows that the oil and gas sector is investing in innovation at its highest level for more than a decade, while 40% of firms have increased their total workforce in the last year.

The Scotsman, Page: 37


Almost £100m spent on Brexit consultants

A leaked Whitehall report reveals the government has spent almost £100m on Brexit advice from consultants. The draft report by the National Audit Office warns Whitehall spending on Brexit consultancy work could hit £240m by 2020 and criticises government departments for not meeting transparency standards. Nearly all (96%) of the expenditure under Cabinet Office arrangements has so far been handed to six consultancy companies: Deloitte, PA Consulting, PwC, EY, Bain & Company and Boston Consulting Group.

The Guardian, Page: 1, 6

ARGA head to be paid £330,000

The head of the new audit regulator will be paid £330,000 a year, according to a job advertisement placed by the Cabinet Office. The figure is £60,000 less than the wage last year of Stephen Haddrill, the departing chief executive of the Financial Reporting Council, which is to be replaced by the more powerful Audit, Reporting and Governance Authority.

The Times, Page: 48


Firm seeks to help start-ups gain a credit rating

Financial technology company Cashplus is applying for a £10m Royal Bank of Scotland grant to create a new way for start-up businesses to gain a credit rating. It believes it can improve choice and service for small businesses seeking easier access to investment and, if successful, will work with a large data company to create the new credit rating service.

The Times, Page: 41

Loophole leaves late payment law unfit for purpose

MPs and SME representatives are calling for legislation designed to force large companies to reveal how long they take to pay their suppliers to be rewritten over concerns loopholes mean it is easily sidestepped. This comes after it was shown that not all subsidiaries of large firms are required to follow the duty to report rules. Rachel Reeves, chairwoman of the Commons business, energy and industrial strategy committee, said: “If large companies can exploit loopholes to dodge reporting requirements, it undermines efforts to tackle late payments and protect small businesses.” Ian Cass, managing director of the Forum of Private Business, said that the loophole “makes a mockery” of the legislation, describing it as “unfit for purpose”. Paul Uppal, the small business commissioner, said: “It is disappointing that the regulations are not proving to be as effective as I anticipated.”

The Times, Page: 39

Mid-sized firms see overseas revenue growth

Research from BDO shows that medium-sized firms are boosting Britain’s revenue growth overseas, driving international turnover by 63% in the last five years from £96bn to £157bn. Mid-sized businesses based in London were the best-performers in regard to foreign revenue growth, with an 80% leap from £28bn to £50bn. Domestic turnover growth among mid-sized firms increased 44% over the five year period, from £920bn to £1.3trn. BDO managing partner Paul Eagland said the firm is urging ministers to “do more to help this overlooked and undervalued segment” of the economy. “Simplifying tax, investing in infrastructure and prioritising skills are all policy areas that the government should be focusing upon,” he added.

City AM

SMEs struggle to see the upside

The latest Daily Telegraph Business Tracker indicates small business sentiment has improved for the first time since January with 56% of firms declaring themselves upbeat and 44% downbeat. Separate research by Robert Half shows SMEs fearful of falling profits and struggling to adapt and modernise. A further study by Hitachi Capital found the proportion of small business owners predicting growth for the next three months had fallen to one in three, the lowest level for two years. Sole traders were least confident in their business outlook, while companies with between ten and fifty staff were much less gloomy.

The Daily Telegraph, Business, Page: 8 The Times, Page: 47


Buyers return to housing market

More money entered the UK housing market in April than at any point since 2007, according to industry group UK Finance, with almost £9bn of home purchase mortgages approved for nearly 43,000 such loans. The number of mortgages was up 6% on the month and more than 11% on April 2018, while remortgaging also picked up – with more than 31,000 homeowners shopping around for a new loan in the month. Howard Archer, chief economic adviser to the EY Item Club, commented: “We believe with Brexit most likely being delayed until October 31 and the domestic UK political situation volatile, prolonged uncertainty will weigh down on the economy and hamper the housing market.”

The Daily Telegraph, Business, Page: 1 Financial Times, Page: 3 The Times, Page: 40 Daily Mirror, Page: 38 Daily Mail, Page: 61 The Guardian, Page: 31


English Premier League clubs score record revenues

Premier League football clubs netted record combined revenues of £4.8bn last season, according to Deloitte‘s Annual Review of Football Finance, bolstered by strong performances in Europe. But profits fell as top teams spent more on players. The 20 sides in the top division lifted revenues in the 2017-18 season by 6%. A separate study by KPMG shows Real Madrid has leapfrogged Manchester United as the most valuable European football club.

Financial Times, Page: 17 The I, Page: 40


Banking sector warned of ‘no good news’

The EY Item Club has warned the banking industry that mortgage lending, consumer credit and business loans are all expected to grow by less than 2% this year. The forecaster called this “the best-case scenario” and said that the outlook will be even worse if the UK leaves the EU without a deal. “The overall economic forecast delivers no good news for financial services,” warned EY’s financial services partner Omar Ali. “The subdued economic picture, Brexit uncertainty and the emergence of some longer-term trends such as the decline in car ownership and continued high house prices are all taking their toll.” Demand for consumer credit is forecast to grow 1.6% this year and 2% in 2020, the lowest rate of growth since 2013.

The Daily Telegraph City AM, Page: 4

UK drags down economic confidence in the EU

UK economic sentiment fell significantly in May, according to figures from the European Commission, as confidence in the industrial sector sank. Britain registered a sentiment score of 94.5 for the month, below the long term average and 4.8 points lower than April’s figure. The eurozone’s score of 105.1 in May marked the first increase in 11 months, with sentiment having fallen from 111.8 in June 2018 to 103.9 in April.

City AM

Car production suffering under Brexit instability

Factory shutdowns during April saw car production drop by 44.5%, according to figures from the Society of Motor Manufacturers and Traders (SMMT). The self-imposed production shutdown had been scheduled to follow the UK’s expected departure from the EU on 29 March. SMMT boss Mike Hawes said: “Prolonged instability has done untold damage, with the fear of ‘no deal’ holding back progress, causing investment to stall, jobs to be lost and undermining our global reputation.”

The Daily Telegraph The Times, Page: 37 Daily Express, Page: 9 Daily Mail, Page: 71 The Guardian, Page: 31 The Sun, Page: 45

ECB issues warning over corporate debt bubble

The European Central Bank (ECB) has warned that a huge corporate debt bubble poses a fundamental threat to financial stability. The warning comes a week after the Bank of England presented a “severe but plausible” scenario that if large number of corporate bonds were downgraded to below investment quality as much as £10bn could be swiftly sold by UK fund managers, triggering a liquidity shortage. Fears over highly indebted eurozone members such as Italy were also flagged by the ECB.

The Daily Telegraph


Fines for breaking data rules rise 30%

British companies paid 30% more in fines last year for breaching privacy rules, according to a PwC report, with even bigger penalties forecast for this year. Marketing activities triggered the largest number of infringements last year, accounting for half the cases, with 64% of those resulting from telephone gambits. A quarter of enforcement actions related to personal data security breaches. Mark Taylor, a partner at Osborne Clarke commented: “While GDPR has made international compliance easier, it hasn’t unfortunately made it a one-size-fits-all approach everywhere.” Mr Taylor predicted that “enforcement activity will step up, with companies that are undertaking higher-risk processing likely to be most at risk”.

The Times, Page: 47

Contact Paul Southward.

Paul Southward