News Roundup Monday 8th July 2019
News Roundup Monday 8th July 2019
Conservatives warn over Labour’s IHT plan
Conservative chairman Brandon Lewis has warned that inheritance tax plans being considered by Labour could leave people on average incomes facing “eye-watering” tax bills. Analysis by the Conservatives suggests that replacing IHT with a lifetime gifts tax would leave a worker on a salary of £35,000 with a £189,000 tax bill if they inherit a £500,000 home. Shadow Chancellor John McDonnell says Labour is considering plans in its Land for the Many report that would see anything inherited over a lifetime allowance of £125,000 taxed as income. Mr Lewis says the move would represent “another attack” in Labour leader Jeremy Corbyn’s “barrage of new taxes on homes.” A Labour spokesperson said: “What is clear is that the land system in Britain is clearly dysfunctional, benefitting a small few at the expense of the many. While other parties are content to ignore this, Labour are committed to taking it on”. They added that the report “outlines recommendations, not party policy.”
Whitehall plotting Brexit boost
The Mail on Sunday reports that senior Whitehall figures have sought input from business leaders and economists as they look to deliver measures that give Britain a post-Brexit boost. The Mail says senior executives at FTSE 100 firms have revealed that measures discussed reportedly include tax relief on investments, which would possibly come through a temporary investment allowance. Other plans mooted include business rate relief that could benefit small firms, cuts to VAT and income tax, and stamp duty breaks.
The Mail on Sunday, Page: 95
Boris looks to ‘bear down on taxation’
The Sun says Boris Johnson is looking to deliver a high-wage, low-tax economy, with the Conservative leadership frontrunner telling the paper: “I do think there is scope to bear down on taxation and particularly taxation as it affects people on low incomes. That’s where my heart is.” Meanwhile, Jeremy Warner in the Telegraph considers the options open to Mr Johnson in regard to tax reform, including opting for a flat rate regime. Mr Warner advises that he would not put anything that radical into a manifesto as while it “may make sense economically … as a concept it remains very much political dynamite.”
The Sun on Sunday, Page: 2 The Sunday Telegraph, Business and Money, Page: 2
OTS: No need for Aim IHT tax perk
An Office of Tax Simplification report on inheritance tax has questioned why savers who invest in shares quoted on London’s junior Aim market are granted a cut on the levy. The report suggests there is no need for the business relief tax perk to extend to Aim-quoted shares.
The Sunday Telegraph, Business and Money, Page: 11
HMRC sees 14% climb in late-payment fines
HMRC figures show an almost 14% increase in the number of people fined for paying their self-assessment tax bills late, with the total up to 331,000 in 2016/17 from 291,000 the year before. The Times says this may be in part due to an increase in the number of self-employed people, which hit a record high of 4.93m in Q1, while Moore Stephens’ Tim Woodgates suggested HMRC becoming less sympathetic to late-payers’ excuses may also have contributed to the jump.
Amazon in prime position for heavier taxes
The Observer’s business leader column looks at Amazon’s tax arrangements, with this coming after Labour leader Jeremy Corbyn used the firm’s 25th anniversary to call on it to pay more tax in the UK and wish Amazon boss Jeff Bezos “many happy tax returns”. The paper notes Chancellor Philip Hammond’s planned 2% tax on revenue for large digital firms making more than £500m a year globally. With this expected to raise £30m from each firm, the Observer argues that: “It should be more. Bezos and Amazon should be made to cough up.”
The Observer, Page: 54
Contractors hit by Bathstore collapse
The Observer talks to several self-employed Bathstore contractors, who have collectively been left nearly £3m out of pocket after the company called in administrators, putting 500 shop floor and head office jobs at risk. Although the retailer continues to trade as BDO seeks a buyer, the self-employed fitters are unlikely to receive any money for jobs completed.
The Observer, Page: 52
Spud firm looks to chip away at rents
Baked potato specialist Spudulike wants to close at least four of its 31 outlets and reduce rent at some stores to as little as 10% of turnover as part of restructuring attempts via a CVA. Landlords, who are being asked to approve the changes next week, say they are shocked that the scale of rent cuts being demanded are much more severe than previous companies had sought. Advisory firm Leonard Curtis is understood to have been appointed to lead the process.
Farmers hit by auction firm collapse
More than 1,100 farmers have not been paid for their livestock after the collapse of cattle auction house Wright Marshall Auctioneers. Administrators Anthony Collier and Ben Woolrych, of FRP Advisory, said they are focusing on identifying a buyer in order to maximise any returns for creditors.
The Mail on Sunday, Page: 96
Compensation scheme extended
The Dispute Resolution Scheme (DRS), a compensation scheme for small business owners who have been mistreated by their banks, is likely to hear cases dating back as far as 2000, having previously been set to only accept complaints dating back to 2008. The DRS, which will review historic cases for companies too big for the Financial Ombudsman Service, will be overseen by industry body UK Finance.
The Sunday Times, Business and Money, Page: 2
Small retailers hand out 2m plastic bags a day
Figures reveal that 2m plastic bags a day are handed out as the Government continues to delay proposals to force small retailers to impose the bag levy. Although the Government estimates that the 5p charge imposed in supermarkets and larger businesses has taken 15bn carrier bags out of circulation, thousands of retailers are still allowed to give plastic bags away for free because they have fewer than 250 employees.
The Independent, Page: 13
PERSONAL FINANCE NEWS
Rise in demand for Child Benefit loans
Credit unions have reported a significant rise in demand for a type of loan to families who repay using their Child Benefit. “Family loans” allow a parent or guardian to borrow up to £500 as long as they arrange for their Child Benefit to then be paid into an account with the credit union. Part of the weekly Child Benefit is then taken to repay the debt and part is placed into savings. The idea is that by the time the loan has been repaid the customer will also have a savings cushion in place to fall back on.
Business investment set to dip
Analysis from the EY Item Club is set to forecast business investment will fall by 1.6% in 2019, with this coming on the back of a 0.4% decline in 2018. The overall growth forecast points to a 1.3% rise in GDP this year, dragged down by a 0.2% fall in the second quarter, followed by 1.5% growth in 2020. The report is expected to attribute the slowdown in investment to political uncertainty, the potential for a disorderly Brexit and the lack of clarity around the nation’s future trading relationship with Europe. Mark Gregory, EY’s chief economist, said: “Three years after the Brexit vote, the UK economy is arguably more uncertain and unpredictable than it was in 2016.”
The Sunday Times, Business and Money, Page: 2 The Mail on Sunday, Page: 95
Contact Paul Southward