News Roundup Monday 3rd June 2019

NEWS ROUNDUP

TAX NEWS

HMRC relents on inadvertent pension overpayments

HMRC has backed down after a showdown with pensioner Gary Hymanson who was charged 55% tax on his savings after making an honest mistake. He had breached lifetime allowance rules by mistake and HMRC’s refusal to challenge the ruling represents an extension of HMRC’s “genuine error” rules, experts say. Mr Hymanson claimed his overpayment was due to advice given to him on matters he knew nothing about. Maria Riccio of Penningtons, said: “This case shines a light on what might be deemed to be an honest error, which is helpful to anyone wishing to challenge HMRC.”

The Daily Telegraph

Breakthrough controls stop phone fraudsters spoofing HMRC

New defensive controls deployed by HMRC have put an end to fraudsters spoofing the tax authority’s most recognisable helpline numbers. The new controls, created in partnership with the telecommunications industry and Ofcom, will prevent spoofing of HMRC’s most used inbound helpline numbers and are the first to be used by a government department in the UK.

The Times, Page: 63 Daily Mail, Page: 29 The Daily Telegraph, Page: 5 The Sun, Page: 12

Vestager’s competition enforcement questioned

Analysis by Politico reveals that the European Commission has lost 17 out of 41 state aid cases taken to the European Court of Justice since November with experts saying this illustrates competition boss Margrethe Vestager’s inconsistency on state aid. She has been accused of re-badging “tax cuts as state aid” and of ignoring clear violations of EU rules on bailouts or nationalisation.

Daily Express

Javid considers scrapping top rate of income tax

In an interview with the Sunday Telegraph, the Home Secretary suggests he would be willing as Prime Minister to scrap the 45p rate of income tax entirely in a bid to inject more “dynamism” into the economy. Sajid Javid says his initial focus would be to cut the basic rate but if the evidence was there that a further cut in the additional rate can raise more taxable revenues that should be looked at. He goes on to say that he believes the UK is ready for a PM from an ethnic minority background and that he has the broadest reach any of the leadership candidates. In the meantime, Philip Hammond today warns leadership candidates that they risk the party’s reputation for “fiscal stability” if they make too many pledges to cut taxes. Writing in the Telegraph, he says: “If we are tempted down this route, we abandon one of our party’s proudest achievements and most enduring hallmarks: fiscal responsibility.”

The Sunday Telegraph, Page: 1 The Sunday Telegraph, Page: 6

Taxman targets lap-dancing charges

HMRC is battling with lap-dancing clubs over whether they should pay VAT on the commission they charge for exchanging customers’ cash for vouchers to pay dancers. Secrets and Platinum Lace are among those disputing the taxman’s claim VAT is due. Secrets owner Stephen Less, who is fighting HMRC over £500,000 he was forced to pay in 2017, warns that a wave of claims by HMRC could lead to some clubs being forced to close down.

The Sunday Times, Business, Page: 3

Buy sovereigns to avoid a capital gains tax bill

Gold dealer Rob Halliday-Stein informs Sunday Telegraph readers that investors in gold sovereigns do not have to pay CGT on their profits, whereas those who buy gold bars do.

The Sunday Telegraph, Business, Page: 10

CORPORATE NEWS

Green squeezed by pension regulator ahead of CVA negotiations

The Pensions Regulator (TPR) has demanded that Arcadia boss Sir Philip Green inject an additional £50m into the group’s pension scheme on top of the £100m already offered. Sir Philip has also pledged about £185m of security in the form of assets to the regulator, in exchange for Arcadia reducing its annual payments from £50m to £25m for the next three years. He is seeking backing for radical restructuring plans that will include shop closures. Due to the complex nature of Arcadia’s structure, it will need to get seven CVAs approved if it is to avoid administration. One of those CVAs needs the approval of the Pension Protection Fund, which is its biggest creditor and is being advised by TPR. Meanwhile, prosecutors in the US have announced that Sir Philip is to be charged with four counts of misdemeanour assault after Pilates instructor Katie Surridge alleged the Topshop tycoon touched her inappropriately.

The Daily Telegraph Sky News The Daily Telegraph The Times, Page: 47 The Sun, Page: 48 Daily Mail The Guardian, Page: 1, 39 Sky News

Rococo calls in administrators

Luxury chocolate brand Rococo – founded in 1983 by Chantal Coady when she was 23 years old – has gone into administration. The company has five stores in central London. It will now search for a buyer after it admitted it had been hit by “negative trading conditions”. Insolvency specialists BDO were appointed as administrators on 23 May. Rococo’s stores, which include its flagship site on King’s Road in Chelsea, are continuing to trade and no redundancies have yet been made.

Daily Mail The Daily Telegraph, Page: 33

Karen Millen up for sale?

Kaupthing bank is considering a sale of high street fashion chain Karen Millen. After receiving unsolicited offers, the bank hired Deloitte to explore sale options.

The Sunday Times, Business, Page: 3

REGULATION NEWS

Labour would impose climate targets on public contracts

A Labour government would ensure public sector contracts include a clause forcing companies bidding to take on work to take radical steps to tackle the climate crisis. The proposed regulations would force suppliers to “put people and planet before profit”, with the threat of losing contracts if they fail to do so. The party would also impose higher green standards on public sector bodies that deliver goods and services, including the NHS. Additionally, standards on trade union recognition, late payments and tax compliance would also be updated and enforced.

The Observer

SMEs NEWS

Metro switches lending focus

Metro Bank has stopped lending money on commercial property as it tries to shore up its finances following its accounting blunder in January. The bank has stopped lending against assets such as shopping centres to focus on small businesses and residential mortgages.

The Sunday Times, Business, Page: 2

SMEs need guidance to stay on top of their finances

Research from finance group Funding Options suggests almost three million SMEs are struggling to cope with their finances. The fintech firm said that 51% of small firms want help while 23% have no idea if they are going to go into the red until it happens.

Sunday Express, Page: 44

REPORTING NEWS

Administrators say London Oil & Gas accounts are inaccurate

Administrators of London Oil & Gas, one of the collapsed companies at the centre of the London Capital & Finance scandal, claim that they have been handed “completely inaccurate” accounts of the firm. Smith & Williamson said the accounts make “no provision for assets which have little or no value or for funds which have disappeared out of the company.” The Serious Fraud Office is investigating individuals associated with London Capital & Finance which had raised more than £237m by selling high-risk, unregulated mini-bonds to about 11,500 private investors. About £124m was lent on to London Oil & Gas. A spokesman for London Oil & Gas said: “A statement of affairs is being prepared […] The directors of the company strongly refute the comment that its financial statements were inaccurate and strenuously deny any funds have improperly disappeared from the company.”

The Times, Page: 49

PROPERTY NEWS

House prices slip in May in subdued market

House prices in May fell 0.2% from April, according to Nationwide Building Society. Compared with a year earlier, house prices rose 0.6% – slower than the 0.9% rise the previous month. The average price for a house bought over the period was £214,946, up from £214,920 the previous month. Meanwhile the number of first time buyers has continued to recover, with 359,000 first-time buyers in the 12 months to March, just 10% below the 2006 peak, according to the Nationwide data. “New buyer inquiries and consumer confidence have remained subdued in recent months,” said Nationwide chief economist Robert Gardner. “Nevertheless, indicators of housing market activity have remained broadly stable.”

BBC News City AM The Times, Page: 50 Daily Mail The Guardian The Daily Telegraph, Page: 29

PERSONAL FINANCE NEWS

After Lendy, which P2P platforms are safe?

Following the collapse of peer-to-peer company Lendy, the Sunday Telegraph talks to industry experts about risks for investors. Roger Gewolb of FairMoney, a loan broker, and the Campaign for Fair Finance warned of further crashes. “I expect at least one large player to go and between six and a dozen or more smaller firms to close down,” he said. Lendy fell into administration at the end of last month with more than half of its borrowers in arrears. Around 20,000 investors must now wait to see how much of their £165m can be recovered by administrators.

The Sunday Telegraph, Business, Page: 9

Monzo founder sets out vision

The Mail on Sunday interviews Monzo founder Tom Blomfield. He says he wants the challenger bank to be able to cater for all its customers’ personal money needs – such as finding them a cheaper energy deal, better savings rate, notifying when they need to remortgage, and even filing their tax return automatically.

The Mail on Sunday, Page: 103

PENSIONS NEWS

Pension changes pushing NHS to ‘crisis point’

Hospital leaders warn that changes to annual and lifetime limits on tax-free pensions savings are pushing the health service to “crisis point”, as doctors decide to cut their hours or quit.

Financial Times, Page: 2 The I, Page: 16

Recycling rules risk creating a generation of poor pensioners

The Sunday Telegraph’s Sam Brodbeck hits out at pensions “recycling” rules, which are designed to prevent people withdrawing cash, after the 2015 pension freedom reforms, only to put it back into a pension and then withdraw it once again using the 25% tax-free allowance. The cap on how much you can save into a pension after making a withdrawal, the “money purchase annual allowance”, was slashed from £10,000 to £4,000 in 2017. But, because of automatic enrolment, by the mid-2020s someone earning £50,000 a year would breach the recycling cap if they made a withdrawal.

The Sunday Telegraph, Business, Page: 10

ECONOMY NEWS

Mortgage approvals rebound in April

Mortgage approvals for house purchases hit a three-month high in April, with the number of residential mortgages approved reaching 66,300, according to new data released by the Bank of England. Net mortgage borrowing by households was strong for the second month in a row, hitting £4.3bn compared with an average £3.8bn over the previous six months. “April’s marked rise in mortgage approvals suggests that housing market activity may well have got at least some temporary support from the avoidance of a disruptive Brexit at the end of March,” suggested Howard Archer, chief economic adviser at EY ITEM Club. The annual growth rate of mortgage lending remains unchanged at 3.3%.

The Times, Page: 50 City AM Financial Times

Feel-good weekend boost to economy

The Champions League Final between Liverpool and Tottenham Hotspur, the Epsom Derby, two Cricket World Cup matches and the Premiership Rugby Final will all give Britain’s economy a boost this weekend. Dan Jones of Deloitte said the Champions League Final will have a “significant economic impact”, adding “it will be millions of pounds”. Meanwhile, new analysis of HMRC data shows exports of sporting goods surged by 10% last year to a record high of £500m.

Daily Mirror, Page: 4 The Daily Telegraph, Page: 33

London ranked top city for future investment

According to the 2019 Global Cities report from consultancy firm A.T. Kearney, London has been ranked as the top city in the world for future business investment. Andrew Stewart, managing partner at A.T. Kearney, said: “While the true impact of Brexit is yet to come, London’s consistently strong performance in recent years puts the city in good stead for the future.”

City AM

Consumer borrowing hits five-year low

The annual growth rate in unsecured consumer lending fell to 5.9% from 6.4% in March – its slowest rate since 2014 – as households limited spending on credit cards and cut back on finance deals.
The Times Financial Times

OTHER NEWS

Britain increasingly cashless

An investigation by the Telegraph has highlighted the extent to which Britain is becoming an increasingly cashless society, with local authorities, football stadiums, national bus service providers and shops all phasing out coins and notes. At least 17 councils no longer accept physical money, and a further 11 are planning to go cashless or limit cash use in the near future. Treasury Committee chair Nicky Morgan has today joined campaigners in pressuring Chancellor Philip Hammond to ensure consumers can continue to pay for goods and services with cash, alongside cards and contactless forms of payment, amid concerns that the elderly and vulnerable groups are at risk of being excluded from society.

The Daily Telegraph

Broadbent reappointed as BoE deputy

The government has reappointed Ben Broadbent to his role as deputy governor for monetary policy at the Bank of England. It also appointed TUC general secretary Frances O’Grady to the Bank’s court of directors. She will be joined by Ron Kalifa, chairman of payments company Network International, and Hanneke Smits, chief executive of Newton Investment. They will start their four-year terms on 1 June.

The Times Financial Times, Page: 50 The Daily Telegraph, Page: 29 The Sun, Page: 48

Poll puts Brexit Party 20 seats short of a majority

The latest Opinium poll for the Observer, which asked people how they would vote in the next Westminster election, puts the Brexit Party out on top with 26% of the vote. Labour is in second place on 22%, down seven points in the past two weeks. The Tories are third on 17%, with their support down five points, and the Lib Dems are up five points, on 16% of the vote. According to the Electoral Calculus website, the result would leave Nigel Farage 20 seats short of a majority, with 306 MPs. The Conservatives would be reduced to 26 MPs.

The Observer

Contact Paul Southward.

Paul Southward