News Roundup Saturday 18th May 2019

NEWS ROUNDUP

TAX NEWS

OTS recommends simplification of PAYE

The Office of Tax Simplification (OTS) says the PAYE system needs to be reviewed and has suggested HMRC offer better guidance for SMEs in regard to compliance with the tax system. OTS tax director Bill Dodwell said start-ups need advice on taxes, licences and pensions to beat red tape, commenting: “Many new businesses are formed without sufficient help and guidance. This can lead to mistakes being made, resulting in substantial costs or penalties.”

Financial Times, Page: 3 The Daily Telegraph, Business, Page: 7

Guterres: Tax rethink could help tackle climate change

UN secretary-general Antonio Guterres believes governments should tax carbon emissions instead of salaries, suggesting the move could help fight climate change. He suggested governments around the world should “tax pollution, not people.”

The Independent

Brexit Party could cut income tax

Christopher Hope in the Telegraph reports that Brexit Party leader Nigel Farage “has left the door open” to fighting a general election on a pledge to cut the top rate of income tax. When asked whether his party would cut the top rate of tax from 45p, or if he considered the rate to be too high, Mr Farage said: “We’ll deal with that in our manifesto, when we’ve won the European elections.”

The Daily Telegraph

SMEs NEWS

SME’s face ‘absurd’ tax system

The Mail’s Tom Utley highlights the “nightmare” small firms have to face as they negotiate Britain’s “absurd tax system”. He says that as soon as a company “starts getting somewhere” – with turnover of £85,000 – VAT rules mean it has to add 20% to prices, “putting it at a huge competitive disadvantage against smaller rivals.” He adds that the complexity of the system and the paperwork involved “eat away hours of valuable time” that could more profitably be spent developing, producing and marketing products and services. Mr Utley describes his own situation, where his turnover means he charges VAT to anyone who employs his services, saying money he hands to the taxman is claimed back from the Treasury as a tax-deductible business expense. This process, he says, is a “ludicrous money-go-round.”

Daily Mail, Page: 16

CORPORATE NEWS

No profit for Trump’s UK golf courses

The US ethics regulator has heard that President Trump made £21m income from his Scottish golf courses but has never declared a profit in Britain. HMRC said: “We do not comment on identifiable taxpayers or businesses … We make sure that all businesses pay all the taxes due under UK law.”

The Times, Page: 17

Pret eyes Eat

Pret a Manger is hoping to acquire sandwich chain Eat and is said to be in advanced negotiations with the company and its private equity backer Horizon Capital. Eat last year hired KPMG to handle a possible company voluntary arrangement, but eventually closed loss-making sites without a CVA.

The Times, Page: 41 Financial Times The Daily Telegraph, Business, Page: 3 Daily Express, Page: 51 The Guardian, Page: 34 Evening Standard

Xero sees revenue growth

Accounting software company Xero has seen revenue jump 36% to £267.9m in the year to the end of March, while subscriber numbers rose 31% to 1.81m. The New Zealand-based software company recorded a record performance in the UK, with subscriber numbers up 48% to 463,000 and revenue hitting £62m – a 50% increase.

City AM, Page: 19

No FCA probe for Yu

The Financial Conduct Authority has dropped an investigation into energy company Yu Group, saying it will take no action over an accounting error which last year cost the company £10m. A review by PwC and law firm DLA Piper found that Yu had inadequate and inconsistently applied internal controls, with Yu saying it has since implemented new control, accounting and governance processes with support from PwC.

City AM

INTERNATIONAL NEWS

Bundesbank chief backs criticism of surplus

Jens Weidmann, head of Bundesbank, has called on authorities to ensure Germany’s corporate tax burden does not get too high, saying tax cuts by European neighbours could hit Germany’s attractiveness to businesses.

Financial Times, Page: 4

ECONOMY NEWS

Homeowners cashing in on cheap loans

Figures from UK Finance show that the number of people remortgaging their homes with additional borrowing spiked in March. The figures showed that in March there were 16,180 new remortgages with additional borrowing, a 9.1% increase year on year. The average amount taken out on top of the remortgage money was £55,700. UK Finance also revealed that new first-time buyer mortgages reached 28,800 in March, 2.4% fewer than in the same month a year earlier. The figures also suggest the withdrawal of tax breaks for buy-to-let investors has had an impact, with buy-to-let borrowing down by just over 9%, while buy-to-let remortgaging was up 3.9%.

The Times, Page: 36 I, Page: 51

Contact Paul Southward

Paul Southward