News Roundup Monday 16th July 2018
News Roundup Monday 16th July 2018
HHMRC reports record tax take
HMRC brought in a record total of £605.8bn in taxes in the year to April 2018 – up 5.4% (£0.9bn) on the previous year. The figure includes £186bn in income tax, £130.5bn in NI contributions, £128.6bn in VAT and £53.3bn in corporation tax. The only taxes which saw revenue decrease over the year were capital gains tax which fell by 7.1% as a result of the reduction in the rate from 18% to 10% for non-higher rate taxpayers, and hydrocarbon oils which fell by 0.4%. The data also shows that the compliance yield went up over the year by £1.4bn to £30.3bn, £2.3bn ahead of the annual target.
MPs call on taxman to scrap loan charge
MPs are demanding that HMRC calls off its plans to fine freelance workers who are accused of avoiding tax. A group of 74 MPs say the Revenue is “pursuing people who acted in good faith” and that a new loan charge, levied from April on top of the tax owed, will have a devastating effect, causing “financial distress and bankruptcies”.
MRC seeks ‘unprecedented’ information request powers
Jason Collins, a tax expert with Pinsent Masons, says HMRC is seeking “unprecedented” powers to obtain information about taxpayers without independent oversight from the tax tribunal. He said plans set out in a consultation could allow the Revenue to submit information requests to financial institutions, accountants, lawyers, estate agents and other third parties that hold information about taxpayers without first seeking approval from the tax tribunal. Mr Collins predicts that information requests covering basic bank account information were likely to become more frequent following the introduction of the Common Reporting Standard, through which overseas tax authorities will automatically receive data on taxpayers’ UK accounts.
HMRC ‘needs to shed negative label’
Poli Stuart-Lacey, director of communications at HMRC, says the organisation needs to shed its ‘taxman’ label and the negative connotations that go with it. She said the term “doesn’t represent the diversity and huge range of capabilities that we’ve got in the department.” Meanwhile, HMRC has been criticised for failing to provide support outside of office hours to individuals who are suicidal and facing bankruptcy as a result of 2019 Loan Charge. The Loan Charge Action Group has called for a 24-hour helpline to be set up for those facing suicidal thoughts and severe anxiety after receiving unpayable demands from HMRC, but the Revenue says those affected can only access advice between 8:30am and 4pm, Monday to Friday.
PERSONAL FINANCE NEWS
Insolvency rate rises again
The UK’s insolvency rate has risen for the second year, standing at 21.4 per 10,000 adults , up from 19.7 in 2016. Insolvency Service data shows the female insolvency rate reached 22.6 in 2017, compared with 20.2 for males. However, men remain more likely to be made bankrupt. Stoke-on-Trent was the debt capital of England and Wales, with an insolvency rate of 44.8 per 10,000, followed by Plymouth, Hull and Scarborough. Insolvency rates rose for all people except those aged over 55. The largest increase was among younger people aged between 18 and 44.
The Guardian, Page: 38 The Times, Page: 50
Self-employed are the pension world’s great unsolved dilemma
The FT’s Josephine Cumbo say the government should consider using the tax system to nudge the self-employed into a pension scheme. Elsewhere, the Telegraph claims some of the biggest players in the pension market are failing to alert customers to a £500 allowance to which they are entitled, which can be put towards professional financial advice.
Financial Times, Money, Page: 6 The Daily Telegraph, Money, Page; 10
Master Trusts ranked
Corporate Adviser has analysed the returns of 20 master trusts that between them cover 95% of the people who have a workplace pension. The best performer, Supertrust UK Master Trust, managed by Legal & General, produced an average annual return of 11%. It was followed by Moore Stephens Pensions Master Trust on 8.58%.
HMRC urged to extend GMP reconciliation deadline
Willis Towers Watson has suggested the government should extend its support for schemes seeking to reconcile guaranteed minimum pension (GMP) records until October 2019. The consultancy warned that many schemes may not be able to reconcile the data by October this year, when HMRC switches off its scheme reconciliation service.
Russians less keen on London property
The flow of Russian money into London is slowing as a result of government pressure and a tightening of anti-money laundering rules, according to experts. Dmitry Zakirov of Mayfair-based property consultancy Longrad, says tax changes and pressure from major banks, which freeze assets and close accounts, are also making the UK less attractive for property investment to Russians.
Equity release booming
Over £1.7bn of equity was released in the first six months of this year, according to adviser Key Retirement, up 37% on the same period a year ago. Those releasing money from their homes received an average of almost £78,000, and almost one in three retired homeowners gifted some or all of the money to family members.
UK’s renters face squeeze as tax reforms shrink supply of homes
UK renters face a squeeze as landlords raise rents, impacted by a package of tax and regulatory changes that have shrunk profit margins and discouraged new investment in the sector.
Financial Times Daily Mail, Page: 16
PwC predicts slowdown in house price growth
House prices will rise by only 3% this year and will carry on growing at that pace until 2025, according to analysis by PwC.
The Times, Page: 42 City AM, Page: 3
Gaucho races to pay £1m tax bill
Argentinian restaurant group Gaucho is facing administration unless it can settle a £1m-plus tax bill. The company was understood to be considering three final potential rescue deals before a late-night deadline for the bill by HMRC.
The Guardian, Page: 36
Consumer confidence hits record high
The onset of summer has seen consumer confidence rise to its highest level since 2011, according to the latest Deloitte Consumer Tracker. The survey of more than 3,000 people shows consumer confidence grew by two percentage points in the second quarter of this year to reach a record high of -4%.
The Times, Page: 51 The Sun, Page: 46
No rush to hike rates, says Cunliffe
Bank of England Deputy Governor Sir Jon Cunliffe has signalled that he is unlikely to vote for an interest rate rise at next month’s policy meeting, arguing that policymakers should react slowly to signs of recovery in uncertain times.
UK regains top spot for venture capital funding in Europe
According to new data from KPMG, the UK has regained its place at the top spot in Europe for venture capital investment in the second quarter of 2018. A total of £1.55bn of venture capital money was invested into UK businesses, spanning 244 deals. London-based companies attracted the most capital of anywhere in Europe, with the most recent quarter breaking the record for the third-highest quarterly sum of venture money being invested into the city to date. Separate research from PwC recently revealed that London was the number one European exchange in the second quarter, with listings up 25% from the same period last year.
City AM, Page: 10
Consumers set for surge in debt
Lenders expect people to step up their demand for unsecured credit over the next three months, according to the Bank of England’s latest credit conditions survey. A net balance of 12.3% of lenders expect demand for consumer credit to rise in the coming quarter, the highest since the first quarter of 2016.
The Times The Daily Telegraph, Business, Page: 3
French expect to lure City jobs
France has claimed that Britain’s blueprint for its future relationship with the European Union will lead to an exodus of City jobs. It comes after the government’s watered down proposals on financial services drew criticism from groups including the ACCA and the City of London Corporation.
Wimbledon success means hefty tax bill for Serena
Serena Williams’s run to the final of Wimbledon will earn her at least £1,125,000 in prize money – and land her with a hefty tax bill. Forbes estimates that the star earns about $18m a year in endorsement income, which is also taxed in the UK based on the amount of time she spends playing and practicing here. It is estimated that by year-end she will have spent about 5% of her play/practice time in the UK, which would place $900,000, or about £680,000, in HMRC’s jurisdiction.
Wigan looks to score tax win
Wigan Athletic has gone to court to challenge its business rates. The club argues that they should pay less because HMRC has failed to account for the catastrophic loss of value that football clubs sustain when they are relegated.
Contact Paul Southward if you have any queries.