News Roundup Saturday 11th 2019

NEWS ROUNDUP

TAX NEWS

Gifting errors costly for heirs

Taxpayers have been caught out to the tune of £372m over the past three years having miscalculated complex inheritance tax rules, reports the Telegraph’s Harry Brennan. Hundreds of families have fallen foul of “gift with reservation rules”, meaning they have lost tax relief because they have benefitted in some way from the gift, such as elderly parents gifting their home only to continue living in the property. Rupert Wilkinson of Wilsons said: “In many cases, it is better for parents simply to downsize their home and give children a cash sum, rather than giving a property incorrectly that can give rise to the estate paying a considerable tax bill. To avoid making costly mistakes, parents may want to consider putting sentiment aside and selling the family home.”

The Daily Telegraph

INDUSTRY NEWS

ICAEW benefits from opposing audit reforms, professor claims

The Mail’s James Burton and Matt Oliver claim the ICAEW is raking in cash from fines on the very accountants the trade body is defending from reform. The fines are levied by the Financial Reporting Council and for investigations started before 2016, the money must be paid to the ICAEW, whereas fines raised from investigations begun after 2016 go to HMRC. Commenting following yesterday’s £5m fine for KPMG over its failure to spot a black hole in the Co-op Bank accounts, Professor Prem Sikka, of the University of Sheffield, said: “The KPMG fine is another windfall for the ICAEW. They use that money to reduce the fees that firms pay, and they are campaigning against even the modest reforms that have been proposed.” Labour MP Peter Kyle added: “We can’t have a situation where accountancy firms are fined for malpractice and the body that’s campaigning to slow down reform is the beneficiary.” But t he ICAEW said accountants accept the need for reform and that the body had contributed £60m to FRC investigations in the past 20 years.

Daily Mail, Page: 71

Disclaimers outline expectations

The Telegraph’s Sophie Smith talks to employees at Grant Thornton about the use of email disclaimers staff use to inform others of their flexible working practices. One reads: “At Grant Thornton we work in an agile manner and emailing you now suits me. I respect your choice of when and how you work and I don’t expect a response outside of your working hours.” Rachel Suff, of the Chartered Institute of Personnel and Development, is in favour of email disclaimers. She says: “Technology has created the potential for people to never switch off. If someone is emailed, there is an expectation to respond and this creates an unhealthy culture. Organisations need to be more sophisticated about how people work and play to people’s strengths and circumstances, taking flexible working to another level.”

The Daily Telegraph, Business, Page:8

Aggressive regulation is needed to halt poor accounting

The Standard’s Jim Armitage mocks some of the proposals for audit market reform, suggesting breaking up the Big Four or limiting the number of audits they can undertake is “knee-jerk” and naïve. Instead, Armitage says large fines paid by partners issued from a “tough, well-funded regulator with sharp teeth” would soon force the biggest firms to “rein in their recalcitrant audit teams”. The Mail’s Ruth Sunderland agrees, saying KPMG’s £5m fine for its Co-op Bank work is insignificant considering the group’s £2.3bn annual revenue and will not serve as a deterrent.

Evening Standard Daily Mail, Page: 73

PROPERTY NEWS

Buy-to-let tax squeeze tips for landlords

Telegraph Money outlines some tips for landlords to beat the buy-to-let tax squeeze. Buying a property through a limited company could result in landlords paying corporation tax, which can work out cheaper in some cases, instead of income tax on the rental income generated, the paper suggests, noting that holiday lets continue to maintain a much more favourable tax regime. Landlords could use an investment trust but should absolutely take advantage of low mortgage rates – which remain at historically low levels.

The Daily Telegraph

For further information about Furnished Holiday Letting, check out our Tax Alert page here: –

KSK Tax Alerts

ECONOMY NEWS

Employers plug gaps with temps

The latest monthly report on jobs by the Recruitment and Employment Confederation and KPMG reveals hiring intentions have fallen to their weakest level in almost seven years. “The UK jobs market has seized up, with both employers and candidates waiting to see which direction Brexit is going to go in,” James Stewart, vice-chairman at KPMG, said. Neil Carberry, chief executive of the confederation, which represents recruiters, added that employers were “turning to temporary work to support their business and offer people opportunity while the long-term economic picture is unclear”.

The Times, Page: 42 Yorkshire Post, Business, Page: 4

SPORT NEWS

Bolton set for administration

Bolton Wanderers are set to go into administration after appearing in the High Court over a £1.2m unpaid tax bill. This would result in a 12-point penalty in League One next season after relegation from the Championship. Judge Clive Jones adjourned the case until 22 May.

The Times, Page: 67 Daily Mail, Page: 79

SPORT NEWS

Bolton set for administration

Bolton Wanderers are set to go into administration after appearing in the High Court over a £1.2m unpaid tax bill. This would result in a 12-point penalty in League One next season after relegation from the Championship. Judge Clive Jones adjourned the case until 22 May.

The Times, Page: 67 Daily Mail, Page: 79

OTHER NEWS

Rita Ora’s former accountant jailed

Accountant Andrew Munday has been jailed for five years and eight months after admitting stealing millions from high-profile clients including singer Rita Ora and rugby player Matt Dawson. Munday admitted six counts of fraud by false representation and three counts of money laundering whilst he was an accountant at Blue Cube Business Ltd, which no longer exists. Judge Rupert Mayo told Northampton Crown Court: “The individuals who trusted you with their bank sign-in details and therefore trusted you with their hard-earned wealth have been emotionally harmed by the abuse of trust which you perpetrated.”

Sky News Daily Mirror, Page: 8 Daily Mail, Page: 35 The Times, Page: 5

Trump made $1bn in losses for tax purposes

U.S. President Donald Trump has responded to reports that he made over $1bn of losses from his businesses from 1985-95 with the claim that it was standard practice for real estate developers at the time to claim such levels of tax relief on borrowing and building. The practice meant Trump avoided paying income tax in eight out of the 10 years.

BBC News Financial Times, Page: 4 The Daily Telegraph, Page: 15 The Guardian, Page: 29 The Times, Page: 35

Contact Paul Southward.

Paul Southward