News Roundup Monday 12th August 2019

NEWS ROUNDUP

TAX NEWS

Will the top 1% hang around to pay more tax?

David Smith considers the nature of the top 1% of taxpayers in the Sunday Times, noting that those who occupy the top tier are not a fixed group: a quarter of those in the top 1% this year will not be in the group next year and only half will still be at the top in five years. The top 1% pay nearly a third of total income tax revenues – up from 21% two decades ago, according to a report from the IFS. They are mobile and able to take their talents elsewhere, as well as use tax planning to minimise liabilities. “Tax plans that aim to get a lot more revenues out of the top 1% are almost certain to disappoint,” Smith concludes.

The Sunday Times, Business, Page: 4

SMEs NEWS

Seedrs shares suspended as reserves dwindle

Seedrs is looking to raise extra cash following a recent report by its auditors KPMG which warned a failure to raise extra capital would “cast significant doubt on the group’s ability to continue as a going concern”. The crowdfunding site has suspended its shares from trading on a secondary market while it attempts to complete a financing deal. Seedrs has been criticised for putting volume ahead of quality of deals as it tries to compete with Crowdcube.

The Sunday Times, Business, Page: 3

High profile disappointments put investors off IPOs

Investors are holding back IPOs after witnessing firms such as Funding Circle and Uber struggle after listing, according to fintech firm NextHash. Research by the company found 24% of Brits felt their performance made flotations “unpalatable” while 68% of investors would only be prepared to trade or invest where there is security or protection against fraud.

Sunday Express, Page: 44

German Mittelstand issues no-deal warning

Germany’s trade body for SMEs fears a no-deal Brexit is a “major ingredient” in a “toxic cocktail” being “stirred up in global trade relationships” which could deal the country’s Mittelstand a crippling blow. Marc Tenbieg at the German Mittelstand Association said that although companies had prepared well, creating a “perfect plan for such a complex scenario as a no-deal Brexit is illusionary”.

The Sunday Telegraph

CORPORATE NEWS

British Steel thrown £300m lifeline

The future of British Steel could be secured after the Government put together a £300m support package for the company, paving the way for a takeover by Ataer, is a subsidiary of Oyak, Turkey’s military pension fund. Oyak is itself the largest shareholder in Turkish steelmaker Erdemir. Discussions between the Official Receiver and Ataer are being led by EY, which has been under pressure from lenders to seal a takeover or begin closing down British Steel’s Scunthorpe site. A BEIS spokesperson said: “This government will leave no stone unturned to get a good solution for British Steel at Scunthorpe, Skinningrove and on Teesside. The Official Receiver continues to run the business, whilst the sales process is ongoing.”

Sky News

Vulture fund claws back £20m in HMV collapse

The Sunday Times reports that companies controlled by the vulture fund Hilco have recouped millions from the collapse of HMV, while staff and suppliers are set to lose out. According to a report by HMV’s administrator KPMG, the retailer’s two secured creditors, both owned by Hilco, have received £20m of the £46.8m they were owed. The chain’s unsecured creditors, which include suppliers and staff, are owed £65.2m but will share a maximum distribution of just £600,000 before costs.

The Sunday Times, Business and Money, Page: 3

Mini-bond savers warned over losses

Investors in failed mini-bond firm Harewood Associates have been told they will get back no more than 16p for every pound they invested. A spokesman for Begbies Traynor, the administrators, said: “The proposals issued to creditors anticipate a range of returns between nil and 16p in the pound. The return is subject to realisations of debts due from associated companies.”

The Sunday Telegraph, Business, Page: 12

Schuh drafts in restructuring experts

KPMG has been hired by footwear retailer Schuh to assess its options after a spell of dismal trading.

The Sunday Times, Business, Page: 3

REGULATION NEWS

FCA to probe fraud at Goals Soccer Centres

The Financial Conduct Authority (FCA) has launched an investigation into alleged fraud at five-a-side football group Goals Soccer Centres. The inquiry follows a report by BDO alleging former finance chief Bill Gow sent email requests to former chief executive Keith Rogers asking him to create false invoices. The pair are also said to have manipulated results to prevent the company breaching covenants with Bank of Scotland.

The Sunday Times, Business, Page: 1, 2

PROPERTY NEWS

Ministers could halt retrospective rates appeals

The Government is considering plans to implement a cut-off date for business rates appeals. A spokesman for the Ministry of Housing, Communities & Local Government said: “We are considering arrangements for the 2017 rating list and will set out our position in due course.” Alex Probyn, president of expert services at Altus Group, said halting appeals would be “anti-business” and “deny tens of thousands of ratepayers” justifiable tax rebates.

The Mail on Sunday, Page: 100

ECONOMY NEWS

BoE told to cut rates ahead of Brexit

Following ONS data showing a 0.2% fall in GDP in the second quarter, the Bank of England has come under pressure to cut interest rates before Britain’s departure from the EU. Geoffrey Yu of UBS Wealth Management said: “As uncertainty continues to loom over the UK economy, the difficult run of data is expected to continue and the Bank will need to consider its next step carefully as its global peers embark on further rate cuts.” Elsewhere, Yael Selfin, chief economist at KPMG, commented: “It is clear that the uncertainty and prospects of Brexit are causing havoc on the UK business environment, with business investment contracting once again and significantly hurting the future prospects of the UK economy.”

The Sunday Times, Business, Page: 2

Investors shun London’s blue-chip stocks ahead of no-deal Brexit

Analysis by Goldman Sachs indicates that FTSE 100 shares are trading at their biggest discount to global peers in a decade. The index’s price to earnings ratio trades at a 21% discount compared to the MSCI World Index with housebuilders and domestic-focused banks trading at 38% and 56% less respectively than their global peers.

The Sunday Telegraph, Business, Page: 3

OTHER NEWS

Top bankers shift tone over horror of no-deal Brexit

David Crow reports on how some senior bankers are swinging behind a no-deal Brexit. Tired of the inertia and buoyed by Boris Johnson’s enthusiasm, some say the disruption would be good.

Financial Times

Contact Paul Southward.

Paul Southward