News Roundup Monday 15th July 2019

NEWS ROUNDUP

TAX NEWS

New tax rules threaten innovation

Proposed changes to off-payroll tax rules could seriously damage British innovation, the Association of Independent Professionals and the Self-Employed (IPSE) has warned. CEO Chris Bryce commented: “Recent research shows how crucial freelancers are for companies to create, innovate, improve productivity and compete on the global stage. Extending these rules will put a huge extra burden on organisations which depend on the use of highly-skilled flexible workers to help them succeed.” Changes to IR35 rules mean companies will have to determine the status of contractors. In the public sector, employers have sought to avoid potential penalties by simply classifying every contractor as being inside IR35. But Dave Chaplin of ContractorCalculator says the rules mean those judged to be within IR35 are taxed on a level with employees but do not receive associated benefits such as holiday and sick pay or pension contributions.

Business Matters The Sunday Telegraph, Business, Page: 9

Taxman takes interest in presenters’ fashion

HMRC is asking TV presenters if they are told to stand in certain places in the studio and if they are allowed to choose their own clothes or must pick from a wardrobe provided by their employer. The questions are designed to reveal whether the TV presenter should be classed as employed or self-employed. Other questions that are being asked include to what extent the presenters are told what to say, or what to ask guests, and whether or not they conduct their own research for a programme. Separately, actor Robert Glenister has written an angry letter to the taxman claiming he and fellow actors were victims of a “wholly immoral and unethical witch-hunt” when HMRC cracked down on the use of personal services companies. An HMRC spokesman said: “HMRC treats people equally and fairly when we enforce the rules. Rules ensure that individuals working like employees, but through their own limited company, pay broadly the same tax and NI contributions as other employees.”

The Sunday Times, Business, Page: 11 Sunday Express, Page: 9

UK’s top earners brace themselves

Research conducted for the Sunday Times indicates that one in three high earners would consider leaving the country if Labour won the next general election. George Bull at RSM and Nimesh Shah at Blick Rothenberg explain how some of the proposals coming from Labour would affect high earners and investors in particular. Retired accountant Mike Warburton tells the paper’s Ian Cowie: “It is dangerous to assume that additional funds can be raised by putting up tax rates, because the more you tax something, the less you get of it. That applies to all forms of economic and personal activity.”

The Sunday Times, Business, Page: 13

Sky chief tells firms to pay their fair share

Sky CEO Jeremy Darroch told business leaders in a speech last week for Prince Charles’ charity, Business in the Community, that companies should be paying their fair share in tax. He said: “Those taxes go to support communities with vital services and I believe strongly that all businesses should be doing this and not shirking that responsibility.”

The Mail on Sunday, Page: 116

FINANCE NEWS

Treasury accused of scaring lenders with insolvency clawback

Business groups have warned that new rules making HMRC a preferential creditor in the event of an insolvency could harm access to finance for small businesses. By jumping over other types of creditors – including floating charge lenders that offer loans against assets such as stock in a warehouse – the Government is likely to make it harder for businesses to secure credit. Trade body UK Finance said asset-based lending and invoice finance was worth £22.7bn at the end March and was still growing; Duncan Swift, president of insolvency and restructuring trade body R3, says the move increases the risks for lenders and will by extension limit growth.

The Sunday Times, Business, Page: 2

CORPORATE NEWS

Airport parking firm finally collapses

Airport parking firm Park First has fallen into administration after two years of troubles. The group’s car parks are now in the hands of insolvency specialist Smith & Williamson. The FCA had made arrangements with Park First to refund investors after it found the firm had been running an illegal investment scheme but the Mail on Sunday’s Tony Hetherington claims the regulator was complicit in the delays investors faced receiving refunds. Over 6,000 investors face an estimated loss of £150m.

The Mail on Sunday, Page: 124

Deadline for final British Steel offers looms

Bidders have until midnight on Monday to finalise their offers for British Steel, the Sunday Telegraph reports, as the Government reportedly makes contingency plans for the closure of the Scunthorpe steelworks as EY, which is managing the bidding process, looks to settle the company’s fate by the end of the month. Almost 5,000 jobs have been put at risk after British Steel’s owner, Greybull Capital, failed to secure a £30m bailout from the Government.

The Sunday Telegraph The Sunday Times, Business, Page: 2

BAE seeks new finance chief

BAE Systems is interviewing candidates to replace its finance director Peter Lynas, who has been with the business since 1985. One long-time BAE watcher said: “It could be tough finding an external candidate. It’s a pretty specialised job and there are complications involving national security, which means the job may well have to go to a Brit, making the talent pool pretty small.”

The Sunday Telegraph, Business, Page: 3

US giant swallows craft brewer

Investors who ploughed £1.5m into a craft beer start-up Hop Stuff have been wiped out after it collapsed into administration. KPMG was appointed on Friday and the firm was sold in a pre-pack deal to brewing giant Molson Coors.

The Sunday Times, Business, Page: 3

SMEs NEWS

Most SMEs stay quiet about late payment

A recent survey shows small businesses are tolerating late and non-payment due to a fear of reprisal. The findings showed that 43% of small firms experienced late payments from larger businesses, rising to 50% for medium-sized businesses. Meanwhile, 77% said a fear of damaging client relationships was the greatest concern when considering chasing payment while 76% said doing so might damage their chance of being paid at all. Paul Uppal, Small Business Commissioner, insisted that the Government was “building an environment in which SMEs can continue to prosper,” adding: “I am committed to keep the spotlight on this issue and instil confidence in the minds of small businesses.”

Business Matters

JP Morgan set for major hiring spree in the City

Despite warnings from the US investment bank that Brexit would lead to job losses, JP Morgan is about to embark on a major hiring spree in the City. JP Morgan is setting up 75-strong team that will target small businesses across Europe following a similar move by Goldman Sachs.

The Sunday Telegraph, Business, Page: 1

PENSIONS NEWS

Scottish Widows backs sourcing cash from pension to fund first home

Scottish Widows has backed a proposal to allow first-time buyers to use their retirement savings to fund a house deposit. The housing and communities secretary James Brokenshire was criticised last month for suggesting the 55% tax charge for accessing a pension early should be dropped. But Scottish Widows said with an increase in contribution rates and a government top-up the idea would be workable. In one scenario, the firm said a 21-year-old in Southampton earning £25,000 a year would be able to buy a home at the age of 25 and still have a pension pot worth more than £100,000 once they reach their forties.

The Sunday Times, Business, Page: 15

ECONOMY NEWS

UK facing highest risk of recession since 2007

Britain is facing the highest risk of a recession since the financial crisis and preparations need to be made to mitigate the impact, according to a stark assessment by the Resolution Foundation. James Smith, research director at the think tank, commented: “Policymakers can’t prevent recessions from happening, but they can limit their damage with the right policy response. The problem for the incoming government and the Bank of England, however, is that many of the tools used to fight the last downturn are either spent or severely blunted.”

The Sunday Times, Business, Page: 2 Financial Times The Observer, Page: 24 Sunday Express, Page: 43

Pound racks up record 10-week slide versus euro

Sterling has recorded its 10th straight week of decline against the euro making it the worst-performing major currency in the last three months as fears of a no-deal Brexit rise and investors brace for an interest rate cut. The pound is now trading at €1.1150 after sinking to a six-month low hitting holidaymakers for the fourth summer in a row.

The Sunday Telegraph

Contact Paul Southward.

Paul Southward