News Roundup Monday 30th April 2018
News Roundup Monday 30th April 2018
New record for IHT receipts
The government enjoyed a £400m year-on-year increase, to £5.2bn, in the amount of IHT collected in 2017-18, according to HMRC’s latest monthly estimate, an 8% increase on the £4.8bn total for 2016-17. The Mail points out that just one in six families who paid IHT benefited from the new family home allowance, though far more were expected to qualify. Meanwhile, analysis by the CBI showed the total amount paid by UK businesses in taxes came in at £186bn in 2017-18, equal to around 27% of all tax revenue, showing that they were “continuing to make a strong tax contribution, despite relatively subdued economic growth”.
Health Secretary open to NHS tax, says MP
Health Secretary Jeremy Hunt is reportedly open to ring-fencing national insurance contributions to fund the NHS, despite the idea of a hypothecated NHS tax clashing with previous statements from ministers, including Liz Truss, who described it as a “bad thing”. MP Nick Boles has told BBC Radio 4’s Today programme that, whilst Mr Hunt has not committed to the idea, he had made it plain that tax increases will be required in order to meet the growing cost of financing the health service. Meanwhile, the head of the NHS, Simon Stevens, has said the “accumulated housing wealth” of the older generation should pay for their care, rather than increasing taxes for working-age adults to pay for it.
The Daily Telegraph The Sun, Page: 2, 12 The Daily Telegraph, Page: 1, 2 Daily Mail, Page: 19
Apple agrees back taxes bill with Ireland
Apple has agreed with the Irish government to repay €13bn (£11.38bn) in back taxes, with payment beginning in the second quarter of the year and full recovery expected by the end of the third quarter. The money, being paid after the European Commission ruled in 2016 that Apple had received unfair tax incentives under EU state aid rules, is being paid into an escrow account as both parties have appealed against the EU ruling.
UK competition watchdog chair signals accountants probe
The new chair of the CMA has suggested that the lack of competition in the audit market needs to be addressed. Answering questions form MPs over his suitability for the role, Andrew Tyrie said the dominance of the Big Four “now constitutes an oligopoly” and that “is certainly something that needs to be looked at.” The FT notes that the Financial Reporting Council faces a review following criticism of its policing of the audit market.
SME preparedness key for post-Brexit success
A discussion on whether SMEs are prepared for Brexit was hosted by the Times and the Sunday Times yesterday, with questions over the future trading relationship a central concern. Many were mitigating risk by planning bases in the EU with advisers such as Bobby Lane urging companies to be nimble in the face of uncertainty. KPMG’s Bina Mehta noted that opportunities might be created for companies outside a customs union because it may be easier for Britain to agree trade deals with the rest of world once it can rely on common law, instead of being burdened by Europe’s “patchwork of legal codes and the predominance of civil law systems”.
Campbell’s fraud alert
Former England footballer Sol Campbell is aiming to raise awareness among small business owners of the risk of online fraud after his and his wife’s luxury handcrafted furniture company FBC London fell victim to a phishing scam. The Sun notes that a study by YouGov for Barclays found online fraud typically costs SMEs £35,000 a time.
The Sun, Page: 45
Property transactions fell last month, HMRC says
Just 92,270 homes were sold in March, according to HM Revenue & Customs’ latest figures, a 7.2% month-on-month fall and 11.8% lower than the same point a year ago. Brian Murphy, head of lending for Mortgage Advice Bureau, suggests that in the vast majority of towns and cities across the UK it’s not a lack of consumer demand which is putting the brakes on the housing market – but what’s available to buy and lack of choice.
Daily Mail Financial Times City AM, Page: 14
Pension reform could allay gig worker fears
Gig economy workers are increasingly concerned over their ability to fund their retirement, according to research by think tank Demos. Almost half (46%) of self-employed workers were “seriously concerned” about their lack of savings, while 38% were “seriously concerned” with their current pension provision. Demos suggested a “new deal” to reform pensions and welfare for self-employed workers, including an “engagers tax” to fund an auto-enrolment scheme for self-employers.
City AM, Page: 11
Hammond hits budget surplus
Chancellor Philip Hammond has achieved the UK’s first current budget surplus since 2002, according to the latest Office of National Statistics data, which show that public borrowing fell to £1.35bn in March, £0.8bn lower than the same time last year. Government borrowing for the full 2017/18 financial year hit £42.6bn, the lowest since 2007. Samuel Tombs, chief UK economist at pantheon Macroeconomics, said the figures tell us little about the underlying health of the economy however: “Lower borrowing in March than last year primarily reflected a £1bn decline in interest payments and a £1.4bn reduction in local authority borrowing,” he added. But John Hawksworth, chief economist at accountant PwC, said: “It is clear that the repair job on the public finances begun by George Osborne in 2010 is now well on the way to completion.”
Perception of corruption in UK rises dramatically
Perception of the UK as a corrupt nation has risen 20 percentage points over the last six years, a survey by EY has revealed. Thirty-four per cent of respondents in the UK said they believed that bribery and corruption happens widely in business, up from 14% in 2012. The UK’s ranking is 13 percentage points higher than the 21% average for western Europe. In Germany and Switzerland just 2% of people thought there was a widespread problem with corruption. Head of fraud investigation at EY Richard Indge said: “Increasing regulation worldwide appears to be having little demonstrable impact on corruption. The prevalence of corruption, both globally and in the UK, means that businesses remain vulnerable to significant financial and reputational harm.”
City AM, Page: 8
Contact Paul Southward for the latest Tax, Finance and Business News.