News Roundup Monday 19th March 2018

NEWS ROUNDUP

TAX NEWS

Google, Facebook and Apple face ‘digital tax’ on EU turnover

The European Commission will next week unveil a three-pronged digital tax, likely set at 3%, targeting the revenues rather than profits of big tech firms like Google, Facebook and Apple. The move would be part of plans to push through Common Consolidated Corporate Tax Base (CCCTB) rules, the Express reports, but Brussels faces a fight to centralise control over corporate tax rates from countries like the Netherlands, Ireland, Malta and Luxembourg.

Financial Times, Page: 6 Daily Express

UK needs to change VAT rules for digital publications

William Bowes, general counsel and director of policy at the Publishers Association, says in the Times that the VAT treatment of digital publications in the UK is regressive and unfair. His comments follow a decision by a tax tribunal to reject the Times’ claim that its digital editions should be zero-rated for VAT purposes, in the same way that print newspapers are. Brexit provides Britain with the opportunity to change the rules, adds Bowes, and the Government should act fast if it is to show it is serious about empowering UK digital businesses.

The Times, Page: 26

Dutch tax changes may have influenced Unilever’s HQ move

Unilever has decided to base its sole headquarters in Rotterdam instead of London. The Anglo-Dutch consumer goods denied the move was because of Brexit and insisted there would be “no change to tax” paid in Britain. The Guardian notes that Dutch prime minister Mark Rutte, who used to work for Unilever, has pushed through tax changes to attract more overseas companies. Bart Le Blanc, of Norton Rose Fulbright, in Amsterdam, said: “The investment and regulatory environment in the Netherlands is highly attractive for multinational enterprises. A key element to this is the proposed abolition of Dutch dividend withholding tax.”

The Guardian, Page: 31 The Times, Page: 39

Ministers consider tax rise to bolster NHS funding

The Mail claims a senior Conservative source has said the idea of putting a penny on NI contributions to help fund the NHS has support in the Cabinet.

Daily Mail, Page: 2

INDUSTRY NEWS

Watchdog urges inquiry into break-up of big four accountants over audit role

Financial Reporting Council CEO Stephen Haddrill has suggested the CMA investigate the case for forcing the Big Four to spin off their audit arms, boosting competition and reducing conflicts of interest.

Financial Times, Page: 3

Big Four ‘break in’ young auditors with long hours

A letter to the FT says auditors joining the Big Four are often “broken in” with 16-hour days for weeks on end, a tradition that makes deficiencies in auditing more likely to occur.

Financial Times, Page: 3

CORPORATE NEWS

Insurers pay out as supply chain strains increase

Trade credit insurers paid out £4.3m a week last year, up 7% on 2016 and the highest level since 2009, according to figures from the Association of British Insurers (ABI). Adrian Hyde, president of R3, said: “UK businesses have been having a markedly tougher time over the past year, so it’s not a surprise to see increased supply chain pressure. This is particularly noticeable on the high street, where retailers are grappling with long-term changes in shopping habits, weakening demand and increased competition and discounting.”

The Times, Page: 43

PERSONAL FINANCE NEWS

FCA warns over household debt

The Financial Conduct Authority has warned that a worrying number of borrowers may be “in too deep” with their borrowing. Jonathan Davidson from the FCA said consumer credit levels are close to a 2008 peak, adding that it was “far from certain” that customers who could just manage loans now would be able to do so in the future. He also warned lenders that the FCA would come down on firms whose businesses were based on people being unable to clear debts. Research by BBC News found last month that the value of outstanding personal loans in Great Britain has grown four times faster than wages.

BBC News The Daily Telegraph, Business, Page: 5 The Independent The Sun, Page: 8

Tricks to counter HMRC’s divi raid

Sam Meadows details ways to counter the forthcoming reduction in dividend income that can be received tax free, from £5,000 down to £2,000 from next month. Save in an Isa, he suggests, use next year’s Isa allowance, make use of your spouse – married couples can transfer assets between them free of any capital gains tax, don’t forget about your pension and consider restructuring your portfolio.

The Daily Telegraph

PENSIONS NEWS

Child benefit flaw hits stay-at-home mothers

A many as 50,000 stay-at-home mothers are missing out on a full state pension because changes to the child benefit system in 2010 meant high income families were no longer eligible for the payments. However, failing to register for child benefit, even if none was payable, meant the National Insurance credits needed to qualify for the full pension were lost, with Royal London predicting some will lose more than £23,000 of entitlements. An HMRC spokesman said: “We urge everyone to claim child benefit to help protect their future right to the state pension. It is hugely important that they do this.”

The Daily Telegraph, Page: 2 Daily Mail, Page: 8 Yorkshire Post, Page: 9

Old Mutual Wealth caps exit penalties

Old Mutual Wealth has agreed to limit “early exit” penalties for customers under the age of 55 – setting aside £69m to cover the cost of capping early encashment charges at 5% and refunding exit penalties over that amount levied since January 1st, 2009. Previously, under 55s faced potentially limitless fees while those aged 55 and over were protected by the 1% “pensions freedoms” cap imposed by the Government. Old Mutual has also confirmed its wealth management business is to be renamed Quilter and listed as part of its break-up plans.

The Daily Telegraph City AM, Page: 6 The Daily Telegraph, Business, Page: 4

ECONOMY NEWS

UK research spending trails EU average

The Office for National Statistics has revealed that Government spending on research and development now trails the EU average. The ONS said that the UK ranked 11th out of 28 EU members on R&D investment. The UK’s 1.67% of national income spend compared with an EU average of 2.03%. Mark Tighe, chief executive of the specialist R&D tax relief firm Catax, said: “Brexit is looming and Britain needs to be punching above its weight but these figures will do nothing to inspire confidence that is happening. The UK will not be taken seriously as a world-leading innovator when, as a share of GDP, Britain ranks 11th for R&D spend in the whole of the EU.”

The Times, Page: 40

OTHER NEWS

Almost £1bn lost to financial fraudsters in UK last year

Nearly £1bn was conned out of UK consumers and businesses by financial fraudsters in 2017, according to data from UK Finance, which found sharp increases in fraud using both mobile and online banking. Total losses fell 5% to £731.8m but an additional £236m was lost to “authorised push payment” scams.

BBC News Financial Times, Page: 3 The Daily Telegraph, Page: 10

‘Striking weaknesses’ in adult financial skills

A quarter of adults struggle to work out how much change they should get in a shop and half cannot read a simple financial line graph, according to a study from Cambridge University and University College London, which found “striking weaknesses” in adults’ financial skills across 31 countries, with England among the worst. The report points to a need for “urgent policy intervention”.

BBC News

Contact Paul Southward.

 Paul Southward