News Roundup Monday 16th September 2019
News Roundup Monday 16th September 2019
There’ll be no hiding place for tax avoiders, vows McDonnell
John McDonnell is interviewed by the Sunday Times’ Tim Shipman, who learns of the shadow chancellor’s plans for tougher criminal sanctions for accountants who facilitate tax evasion. Those who enable tax avoidance will also be targeted. Mr McDonnell wants to see “bigger fines” for “people who devise and promote and sell” these schemes. He also wants to rip up professional privilege rules so the state can examine “the advice and activities they are undertaking.” A new supervisory board for HMRC would be created to examine how laws are created and any special deals done between the taxman and celebrities. The public are with him in his quest for “fair taxation”, Mr McDonnell claimed: “People say, ‘I agree with you. I pay my taxes, why don’t the others.’ I’m not getting the kickback that some people would expect. In fact, quite the reverse.” Mr McDonnell also said he wanted the wages of every worker in Br itain determined by trade union collectives.
Labour tax hike on private medical cover “catastrophic” for NHS
Labour plans to hike VAT on private medical insurance from 12% to 20% will swamp the NHS with millions of extra patients, experts have warned. Alex Perry, chief executive of Bupa Insurance UK, said: “If they drop out because they can no longer afford it, then they become solely reliant on the NHS for their care. If they do need treatment, they will then have to wait for longer and will have less choice over how and where they have the treatment. The knock-on effect could mean ‘longer waiting times for everyone,” he added. A report by CEBR found each 1% rise in tax on private premiums generated £37m in extra revenues but also added £21.5m to NHS costs; and there’s no guarantee the NHS would receive all the extra money raised in tax.
The Mail on Sunday, Page: 40
Taxman takes it easy on businesses that missed MTD deadline
HMRC has been lenient with the 80,000 business that missed the Making Tax Digital (MTD) deadline this month. HMRC could have netted tens of millions in fines from the businesses that had not signed up in time but chose to deploy a “soft touch” approach, according to officials. The new initiative requires firms that turn over more than £85,000 to file their VAT returns online
Field wants VAT on school uniforms scrapped
Labour MP Frank Field has called for VAT to be scrapped on all school uniforms after Brexit. Currently, VAT does not apply on clothes and shoes designed for children under the age of 14 but EU rules require 20% tax to be levied on items intended for older children.
Sunday Express, Page: 9
Professional services “turning a blind eye to dirty money”
Britain’s leading police chief on economic crimes has accused accountants and lawyers of turning a blind eye to organised crime gangs making millions from fraud. Karen Baxter, police national lead on economic crime, said some accountants and legal professionals were “complicit” or “complacent” in the laundering of “dirty” money and were undermining public trust in their professions. Ms Baxter said, since taking up the role, she had been surprised at how few alerts on “suspicious” transactions were passed to law enforcement by accountants and solicitors when most proceeds of crime “at some point probably go through them.”
Small firms storing more cash
A report by Hampshire Trust Bank (HTB) reveals that small businesses have increased the amount of cash they hold in current accounts by 78% over the past two years. Stuart Hulme, director of savings and marketing at HTB, said more money is being stored to fuel growth and reduce loans. “With such a large amount of economic uncertainty, it reflects a desire to have better cash balances.” Emma Jones, founder of Enterprise Nation, comments: “Conserving cash is putting off key decisions such as hiring staff and buying new equipment, but just imagine the economic bounce we’ll see when the position on Brexit is clear and money starts flowing again.”
Santander winds down asset finance arm
Spanish bank Santander is reversing out of its £800m asset finance arm in the UK to divert resources elsewhere. Santander UK said it expects to stop offering new asset finance from the end of this year and will shrink its loan book as existing customers clear their debts.
WEALTH MANAGEMENT NEWS
SJP under pressure over “holidays” and high fees
Wealth manager St James’s Place has discussed ending controversial bonus schemes for advisers. A Sunday Times exposé revealed how the firm rewarded top advisers with overseas trips described as “holidays”, even though they are declared as business conferences for tax purposes. Andrew Colquhoun, senior tax manager at Blick Rothenberg, said: “The inference that the conferences are not business trips but are paid holidays would indicate their value is additional income. We would expect the recipient to report this on their tax return under self-assessment.” SJP is also under pressure over its early withdrawal charges on pensions and bonds and high fees.
Broadcasters may have to reveal gay staff numbers
Leaked plans show the Government is considering giving Ofcom the power to force broadcasters to audit and publish how many gay and transsexual staff they have on and off screen. They would also be told to reveal the ages of all their employees.
The Mail on Sunday, Page: 7
Negative interest rates may not spur growth
Economists have warned that attempts by central banks to revive the global economy by slashing interest rates will do little to spur growth and are instead storing up trouble by punishing savers, squeezing bank margins and driving debt levels even higher. Russ Mould, investment director at AJ Bell, said: “Falling returns on cash and bonds are forcing savers to buy riskier assets in search of a return.” He added: “The more risks investors take, the more likely it is that something will go wrong.” Yael Selfin, chief economist at KPMG agreed adding that near-zero rates are bad news for banks, pension funds and insurers who need to get a return on their investments. John Hawksworth, chief economist at PwC, said ECB rate cuts have diminishing returns: “Germany is teetering on the brink of recession and needs fiscal stimulus through increased government spending instead.” Peter Dixon, economist at Commerzbank, said the Ban k of England is likely to hold rates at 0.75% this week.
Sunday Express, Page: 43 The Mail on Sunday, Page: 102
Contact Paul Southward.