News Roundup Monday 2nd September 2019
News Roundup Monday 2nd September 2019
Raid on dividends helps bring record income tax haul for HMRC
Income tax receipts have soared to a record £191bn for the 2018-19 tax year, according to figures published today, representing a 6% increase on the previous year. Income from self-assessment income tax receipts was 12% higher than in 2017-18, driven in part by a cut to the amount you can earn from dividends without paying tax. Last year, the Government cut the dividend allowance to just £2,000, from £5,000 in April 2018. This came as British firms paid out a record £100bn in dividends. High levels of employment and rising wages are also thought to have contributed to the taxman’s record haul.
Botox VAT exemption ends
Botox injections could become 20% more expensive after a court ruled the treatment should not be exempt from VAT, because it is a cosmetic procedure. In cases where injections are made for medical reasons the procedure will remain VAT-free. A first-tier tax tribunal judge ruled in favour of HMRC in its case against Skin Rich that had provided injections without paying VAT. The southwest London skincare clinic now faces having to pay a backdated tax bill of £21,064.
Gove outlines “Get Ready for Brexit” campaign
Michael Gove explains in the Telegraph how the Government’s “Get Ready for Brexit” campaign will give everyone from small business owners to hauliers and EU citizens, “the facts they need” to prepare for the UK’s departure from the EU on October 31st. For businesses that export to the EU there will be guidance on the new customs procedures to follow. The campaign will also help businesses secure the support, help with VAT and taxes, and access to professional advice and grants they may need, says Mr Gove. He adds: “The British people voted three years ago to make the move out of the EU and into the world. It’s time now to deliver.”
Ferrexpo admits charity donations could have been misappropriated
Charitable donations made by London-listed miner Ferrexpo “could have been misappropriated” according to a review conducted by BDO. Questions over payments made to charitable foundation Blooming Land earlier this year led Deloitte to resign as the Ukraine-focused company’s auditor and for its annual report to be delayed twice. Deloitte said its investigation indicated likely links between Blooming Land and the company’s CEO Kostyantin Zhevago, but Ferrexpo says its review found no evidence any of its management or directors were involved in any misappropriation of funds, but that it was unable to explain a number of discrepancies. Last month Ferrexpo hired Baker Tilly as its new auditor.
UK fintech Ipagoo bought out of administration
Chairmans Financial has agreed to buy UK fintech Ipagoo after regulators told it to freeze customer accounts. The Anglo-Dutch investment group entered an agreement with administrators FRP Advisory on Friday.
Shareholders urged oust Staffline’s audit chief
Glass Lewis is calling for a rebellion at Staffline’s AGM after PwC raised a red flag over the recruiter’s prospects then resigned as its auditor. The shareholder advisory group said audit committee chief Edward Barker should be ousted for failing in his duty of care to “ensure that internal audit and control procedures are in place that provide the external auditor with correct and complete information”. Staffline’s shares were suspended for six weeks in February after an anonymous whistleblower alleged it had underpaid some workers – forcing it to delay publication of its annual results.
The Sunday Telegraph, Business, Page: 3
Debenhams brings in Deloitte as it prepares for worst
Deloitte have been hired by Debenhams in case a legal challenge against its rescue plan is derailed, potentially pushing it into administration. The retailer is being taken to court by a landlord complaining of being treated unfairly. If the landlord wins, the rescue deal could be unwound with Debenhams having to pay backdated rents at the old level, which it would struggle to meet.
The Sunday Telegraph, Business, Page: 1
Mortgage approvals at two-year high
Mortgage approvals for July hit a two-year high, according to the latest Bank of England data. Lenders approved 67,306 mortgages last month, up from 66,506 in June, while net mortgage lending rose by £4.6bn, or 1.2%, the largest increase since March 2016. So far this year more than 461,000 mortgages have been approved for movers. However, Hansen Lu at Capital Economics warned that transactions this year would fall by 1% if the UK struck a deal to leave the EU – and by as much as 10% in a no-deal Brexit scenario. “We think the mid-year recovery in lending will be cut short,” he said.
Nationwide: House price growth remains flat
Average house prices remained flat month on month in August, the latest Nationwide House Price Index shows, though the annual rate of property price growth nudged up to 0.6%, compared with 0.3% in July. It is the ninth month in a row that annual house price inflation has remained below 1%. Howard Archer at the EY Item Club said he expected the Nationwide figures to show an average house price increase of 1% for the whole of 2019.
The Daily Telegraph Daily Mirror The Guardian Daily Mail City AM
PERSONAL FINANCE NEWS
Over £31m deposited in Help to Save
Over 132,000 people have signed up to the Government-backed savings account Help to Save – depositing more than £31.4m. The account offers working people on low incomes a 50% bonus on what they save – rewarding them with 50p for every £1 they put away. The scheme allows those in receipt of working tax credit and universal credit to save up to £50 a month for four years with a maximum bonus of £1,200 available on savings of up to £2,400. However, the Telegraph points out that 3.5m people are eligible so 96% are missing out. Anna Bowes of the specialist comparison site Savings Champion says the low take-up is unsurprising: “A lot of this group will not have any spare money to save.”
The Daily Telegraph Press Release
Cautious investing costs women dear
The Telegraph’s Marianna Hunt talks to investment experts who say women are missing out on £12,000 over the long term by being more cautious than men with their investments. A woman with a £5,000 lump sum who had also saved £100 a month over the past 10 years would now be more than £12,000 worse off if she had left this money in cash as opposed to investing it, according to data from The Share Centre. Women who do invest are less likely to put their cash in higher-risk stocks. Rebecca O’Keeffe of Interactive Investor explains that women prefer the better-known FTSE 100 stocks while men tend to go for stocks quoted on the junior Aim market.
The Daily Telegraph, Money, Page: 8
UK government to urge banks to keep lending after no-deal Brexit
Andrea Leadsom, Michael Gove, and City minister John Glen are expected to meet senior bankers and industry group UK Finance next Thursday to co-ordinate plans to maintain credit supply to small businesses.
Insure football clubs against the threat of insolvency
Stefan Szymanski says, for football clubs, insolvency is predominantly a product of bad luck. If clubs paid into an insurance fund it could easily finance the restructuring of those in trouble.
Tesla cars get tax break from Beijing
Tesla’s electric cars are to be exempted by China from a 10% levy on new car purchases. The move comes just days after CEO Elon Musk visited the country.
The I, Page: 65
Buyers hold back hoping for stamp-duty reform
The Sunday Times talks to estate agents about the current housing market paralysis. This is not just to do with Brexit, they say, but because of the possibility of imminent stamp-duty reform. One agent says a buyer wants to delay completion until November 1, “just in case stamp duty is changed in October”. Transaction figures released by HMRC for July show residential deals are down 11% on last year. With a general election now also on the cards, the uncertainty looks set to continue for a while.
The Sunday Times, Home, Page: 7
PM commits to debt reduction
After announcing a £14bn funding boost to primary and secondary education over the next three years, Boris Johnson told Sky News that he would “continue to keep debt coming down every year” despite his proposed spending increases and tax cuts. Elsewhere, the Resolution Foundation has said the Chancellor’s spending statement on Wednesday will likely break his fiscal rules on public borrowing. Torsten Bell, the foundation’s director, said Mr Javid would “undermine economic credibility by professing to be bound by fiscal rules that are likely to be inconsistent with the scale of spending rises and tax cuts being planned”.
Brexit has cut UK productivity by up to 5%, says BoE
A Bank of England report says Brexit has prompted European-exposed British companies to cut capital spending by 11% on average, and it has dragged down UK productivity by between 2% and 5%.
Activity continues to fall stoking recession fears
Data from manufacturers’ body Make UK and BDO due out this week will show slumping confidence, falling domestic orders and shrinking profit margins. The fall in factory output will sink hopes of another boost from Brexit stockpiling and fuel fears that Britain is heading for recession, the Sunday Times reports. Separately, the CBI’s latest growth indicator shows a continued decline in services and distribution volumes – including the fastest decline in retail sales volumes since February 2009 – alongside flat manufacturing output. Rain Newton-Smith, the CBI’s chief economist, commented: “The economic alarm bells are ringing louder and louder.”
European manufacturers “weaponising” Brexit to exploit UK rivals
The Confederation of British Industry (CBI) claims that German and French manufacturers are “weaponising” Brexit to scare companies into signing contracts with them. Carolyn Fairbairn, head of the CBI, said numerous businesses had told her that European rivals were playing on fear to “go after their customers”. Ms Fairbairn added: “Several companies have told me that they have already lost market share to this, that they were fighting for every percentage point and it is so difficult to claw that back. Getting those customers back is going to take years to do.
The Mail on Sunday
Johnson’s prorogue gamble paying off?
The Mail leads with a poll showing the Tories have secured a seven-point lead over Labour with the two parties on 31% and 24% respectively. The Liberal Democrats are on 21% and the Brexit Party 14%. The Tory poll lead over Labour has nearly doubled in three weeks, the paper notes. The poll also showed Lib Dem leader Jo Swinson is considered a more suitable prime minister than Jeremy Corbyn, with a 19% approval rating compared with the Labour leader’s 17%, while 45% consider Boris Johnson to be “best PM”.
Daily Mail, Page: 1
Spending review to include defence budget increase
The Chancellor is expected to announce a modest increase in Britain’s defence spending this week. It will be included in a Commons statement that Sajid Javid will make on Wednesday, which will increase expenditure on schools, the police and NHS. The Treasury said the announcement would also include a £90m boost for the country’s embassies and consulates around the world, as well as £60m to extend a campaign promoting trade with the UK. Mr Javid said: “Across our history, Britain has thrived as an open, free-trading nation. As we leave the EU, we are deeply committed to playing a leading role on the global stage. That means bolstering alliances, celebrating our culture, building new trading relationships and making sure we can act when needed to keep our people safe.”
The Sunday Telegraph, Page: 9
Cashless UK leaves kids clueless
The Sun reports on a study by University College London’s Institute of Education, which has found children have no idea how to manage money because they see their parents paying by card all the time. They do not know how to work out change in a shop with some not even understanding the notion of “change”. Professor John Jerrim says: “The research highlighted how England is facing a crisis in terms of adults’ financial literacy skills.”
The Sun, Page: 40
Contact Paul Southward.