News Roundup Friday Afternoon 7th September 2018

NEWS ROUNDUP

TAX NEWS

Hammond U-turns on Class 2 National Insurance pledge

Chancellor Philip Hammond has scrapped the Government’s pledge to abolish Class 2 National Insurance contributions. The move, to raise an extra £435m a year, would have provided a tax break for 3.4m self-employed people. “A significant number of self-employed individuals on the lowest profits would have seen the voluntary payment they make to maintain access to the State Pension rise substantially,” he said. Sam Dumitriu however, head of research at the Adam Smith Institute, complained that it is a stealth tax rise: “Philip Hammond didn’t win the argument in Parliament on raising Class 4 Nics. As a result, he is going back on the scrapping Class 2 as a backup,” he asserted. Elsewhere, Mike Cherry, chairman of the Federation of Small Businesses, said: “The self-employed community has been let down today, missing out on a promise to reduce their tax burden. This raises serious questio ns once again about the Government’s commitment to supporting the self-employed. The move is extremely disappointing and flies in the face of tax simplification.”

The Daily Telegraph, Page: 1, 2 Financial Times The Times, Page: 11 Daily Express, Page: 2 Daily Mail, Page: 2 The Sun, Page: 6

Paris overtakes London in the super-rich league

Tax breaks introduced by Emmanuel Macron and a stronger French economy has lured the world’s ultra-rich to the country’s capital, with Paris now ahead of London for the first time as a top destination for the super-rich. Britain is now in sixth place and France fifth in the city stakes. New York lost its top spot to Hong Kong while Tokyo came third and Los Angeles fourth. Etienne Lefevbre, editor of financial daily Les Echos, said the French president has “effectively halved the tax paid by the very wealthy” while Corinne Dadi, a tax lawyer with Stehlin, said for the first time in 15 years she was organising returns to Paris. Ms Dadi said those wishing to leave London cited “Brexit plus a huge fear of Jeremy Corbyn” and Britain’s decision to slash “non-dom” tax perks.

The Daily Telegraph, Page: 9

Tax Amazon or lose bookshops, trade body warns

The Booksellers Association has warned MPs that unless there is an overhaul of tax on internet retailers independent bookshops will disappear from the high street. The point was made in a submission ahead of a parliamentary inquiry into the future role of the high street. The trade body said: “Amazon may maintain that they create jobs, but the company is putting numerous competitors out of business.”

The Guardian, Page: 37

Football referees win HMRC case over employment status

Professional Game Match Officials Limited (PGMOL), advised by Deloitte, has won its case against HMRC, meaning football referees should be considered self-employed and pay less national insurance.

Financial Times, Page: 2 The Daily Telegraph, Sport, Page: 9

Back tax on tech giants, France urges

Bruno Le Maire, the French finance minister, has urged his EU counterparts to back plans to change tax rules to target tech giants which declare their revenues from across the 28-member EU in a single low-tax jurisdiction.

The Daily Telegraph, Business, Page: 7

PENSIONS NEWS

Pension saving at record high

Auto-enrolment has pushed the number of workers putting money aside for old age to a record 15.1m – up 1.5m on last year. Private sector pensions surged to a new high of 8.8m active savers while public pensions hit 6.3m, according to the ONS. Reflecting the shift of risk from employers to employees, final salary schemes have fallen to a record low while defined contribution schemes have increased. Nathan Long at Hargreaves Lansdown commented: “The growth in pension savers shows auto-enrolment has been spectacular at changing the financial future of the nation. Attention should now shift to helping everyone gain the confidence to take control of their own retirement if they want to.”

The Daily Telegraph

EU court rules UK pensions lifeboat fund cap is unlawful

The European Court of Justice has ruled that the Pensions Protection Fund’s £35,000 cap on high earners pushed into the UK’s pensions lifeboat fund is unlawful.

Financial Times, Page: 2

PROPERTY NEWS

Sainsbury’s chief urges business tax reform to help high street

Mike Coupe, the boss of Sainsbury’s, has called for tax reform to ease the burden of business rates, arguing that the bricks and mortar retail sectors pays a disproportionate amount of tax.

Financial Times, Page: 2

SMEs NEWS

Santander programme to match SMEs with graduate interns

A survey by Santander has found that despite small firms making up 99% of private sector employers only one in three job-seekers leaving education this year has considered working for an SME. The bank has now set up a Universities SME Internship Programme to match SMEs with graduate interns.

The Sun, Page: 50

ECONOMY NEWS

High street sales fall again

Underlying high street sales slid 2.7% compared with a year ago, with homewares and fashion taking the biggest hit, according to BDO. The results represent the worst August performance for three years and the seventh month in a row in which sales had fallen. “With inflation continuing to bite on the weekly shop and the heatwave driving discretionary spending to bars and entertaining, there is even less disposable income heading to the high street,” said Sophie Michael, head of retail and wholesale at BDO.

The Guardian, Page: 27 Daily Express, Page: 46 The Times, Page: 40

Contact Paul Southward if you have any queries.

 Paul Southward