News Roundup Saturday 25th August 2018

NEWS ROUNDUP

TAX NEWS

“Grossly unfair” HMRC lifts late payment interest rate

HMRC has raised the rate it charges people and businesses for late tax payments by 0.35 percentage points to 3.25%. The move follows the Bank of England’s latest quarter-point rate rise to 0.75%. The repayment interest rate – the rate HMRC levies on top of sums it owes to taxpayers – has remained at 0.5% since 2009. Tom Selby, a senior analyst at investment platform AJ Bell, said: “It seems grossly unfair for HMRC to increase the late payment rate for those who owe it money without doing the same thing when it owes other people money”.

The Times

HMRC begins rollout of new customs software to importers

HMRC has launched the rollout of the Customs Declaration Service, a system in development since 2013 and expanded since the EU referendum to deal with the expected increase in declarations after Brexit. The first software release has been made available to a selected group of importers, who will start making certain types of supplementary declarations on the new system from this week, in the initial step of a three-phase rollout lasting until early next year.

Holyrood

Corbyn will tax tech firms to subsidise the BBC

Jeremy Corbyn is set to propose a new tax on tech firms such as Facebook, Google and Netflix to subsidise the BBC’s income and to enable it “to compete far more effectively with the private multinational digital giants”. The tax would also support a new public interest journalism fund. Investigative websites that could demonstrate they “take on the powerful” would be exempt from taxes. The corporation would also be forced to reveal the social class of all of its contributors.

Financial Times, Page: 2 The Guardian, Page: 1, 4 The Daily Telegraph The Sun, Page: 8 The Times, Page: 12 Daily Mail, Page: 4

Labour pays no tax on £56m income

The Labour party raised a record income of nearly £56m in 2017, figures show, but paid zero corporation tax despite a £1.4m surplus in the bank. A spokesman said: “The party made no taxable profits; therefore, no corporation tax was due. We pay all tax that is due and always will.” But Tory MP Chris Philp said: “This is sickening hypocrisy from the Labour Party.” The Tories raised £45.9m and paid tax, the Mail says.

The Sun, Page: 2 Daily Mail, Page: 4

Britain needs mould-breaking Budget

The Telegraph’s Allister Heath says Philip Hammond should use his Autumn Budget to slash corporation tax from 19% to 12.5%, thereby “sending a resounding message to the world that Britain is back.” He also calls on the chancellor to halve stamp duty immediately and cut capital gains tax on all assets to 18%. “Brexit Britain is crying out for an emergency, mould-breaking Budget,” he concludes. Elsewhere, the Sun’s leader also argues that the UK’s corporation tax should be as low as Ireland’s and that stamp duty must be slashed to get the housing market moving.

The Daily Telegraph The Sun, Page: 10

ACCA condemns HMRC interest rate change

The ACCA has said it is “simply unfair” that people owing tax have seen a rise in the interest they pay, while those owed a refund will see no change. It comes after HMRC raised the rate it charges people and businesses for late tax payments by 0.35 percentage points to 3.25%, while the repayment interest rate has remained at 0.5%. Chas Roy-Chowdury, head of taxation at ACCA, said that there should be a level playing field.

BBC News

Tax overhaul could hit oil and gas firms

Euan Smith in the Scotsman says the UK government’s plans to introduce tougher tax regulation to the private sector which would mirror that in the public sector will have a negative impact on oil and gas firms. He suggests that if contractors are to be treated as “employees” as far as tax and NI is concerned, they may take the view they are better off being full-time employees on payroll, enjoying the benefits associated with employment status.

The Scotsman, Page: 35

Amazon tax ‘will reduce productivity’

Brian Monteith, director at Global Britain and a former member of the Scottish Parliament, brushes off Chancellor Philip Hammond’s proposals for both an “Amazon tax” and a levy on vaping. An Amazon tax will not raise revenues for the government, he argues, it will reduce UK productivity and customers and online retailers will seek ways to avoid the tax.

City AM

SMEs NEWS

Businesses cautiously welcome no-deal guidance

Adam Marshall, director general of the British Chambers of Commerce, has welcomed the Government’s decision to publish its no-deal strategy documents, although he said preparation should have happened “far earlier”. Allie Renison, Head of Europe and Trade Policy for the Institute of Directors, said the government needs to ensure the no-deal information “trickles down to all businesses in the supply chain, particularly to smaller firms which are typically less resourced, and are less likely to have made preparations so far”. Federation of Small Businesses chair Mike Cherry agreed that smaller firms are most vulnerable, saying: “If you are a small business that trades with the EU or employs someone from the EU, or if you a self-employed EU citizen working in the UK, you need easily accessible information that will explain how a sudden Brexit will impact you and your business while providing practical steps to soften this impact.”

The Independent, Page: 6

North of England ‘braver’ about Brexit than London civil service

Northern Powerhouse minister Jake Berry, a converted Leaver, has said businesses in the north “see a real opportunity in Brexit” and are braver than many politicians and civil servants.

Financial Times Yorkshire Post, Page: 4

CORPORATE NEWS

Debenhams appoints new CFO

Debenhams has revealed that it has appointed Rachel Osborne as its new CFO, effective September 17th. Ms Osborne, formerly Domino’s Pizza finance chief and a John Lewis executive, succeeds Matt Smith, who is leaving at the end of August to join Selfridges. Osborne will join on a salary of £439,000 a year, plus the potential to bag up to £878,000 in bonuses.

Financial Times, Page: 17 City AM The Times, Page: 41 The Daily Telegraph, Page: 31 The Sun, Page: 47 The Independent, Page: 63 Daily Express, Page: 46 Daily Mirror, Page: 49

Union calls for Carillion enquiry

The Unite union has called for a public inquiry into the collapse of Carillion. Unite said the probe should cover the Government’s approach to the awarding of contracts to the firm, despite there being fears over its stability. Assistant general secretary Gail Cartmail said: “There is a growing concern that the Government’s inaction could result in further collapses of outsourcing giants, resulting yet again in workers losing their jobs and the taxpayer picking up the tab.”

The Times, Page: 46 Daily Mirror, Page: 57

Rosenblatt CFO resigns

City law firm Rosenblatt, which listed in May for £42m, is to lose finance director Patrick Firebrace just eight months after he joined.

City AM, Page: 6 The Times, Page: 45

 

PENSIONS NEWS

Two out of five self-employed have no pension

A study by Prudential has found that 43% of Britain’s 4.8m self-employed are failing to pay into a private pension. Nearly one in three says they will rely solely on the state pension, while 28% say they will expect their business to provide the income they need.

Daily Express, Page: 23 Daily Mirror, Page: 14

ECONOMY NEWS

Scotland’s deficit four times higher than rest of UK

Scotland’s fiscal deficit was £13.4bn in the 2017-18 financial year, down £1bn compared with the previous year. However, this represents 7.9% of GDP, compared with the 1.9% recorded for the UK as a whole. The Times points out that this is more than double the limit allowed by the European Union for independent member states. Tax revenue per person was £306 lower in Scotland than the UK average, while total public expenditure was £1,576 higher. Murdo Fraser, the Scottish Conservative party’s finance spokesman, commented: “If Nicola Sturgeon wants to continue her threat of second referendum, she has to come out and explain where she would find £13bn to fill this deficit.”

The Times, Page: 2 The Times Daily Mail, Page: 21 The Guardian, Page: 31 Financial Times, Page: 2 The Scotsman, Page: 1, 7

Axing 1p and 2p coins would not push up inflation

In a blog post, the Bank of England has claimed that scrapping 1p and 2p coins would not push up inflation. Two analysts from the Bank said their research and the “overwhelming weight of literature and experience” suggests that retiring 1p and 2p coins would have “no significant impact on prices”. The analysts also highlighted that price tags ending in 99p now only account for 12% of prices. This means rounding up would be less of an issue if 1p and 2p coins were ditched, they said.

BBC News The Times, Page: 2 Daily Mail

Rise in personal insolvencies predicted

Personal insolvencies in Britain are expected to exceed 100,000 by 2022, according to debt collector Arrow Global. The ONS said the average family spent £900 more than they earned last year – the first time in 30 years households collectively spent more than they had brought in.

The Times, Page: 38

Business fears a Corbyn government almost as much as Brexit

Research by BritainThinks reveals a Corbyn government is perceived by business leaders to be the second biggest threat after Brexit. High taxes and productivity were seen as the next greatest challenges.

Financial Times, Page: 1

Chancellor warns of higher borrowing costs after no-deal

In a letter to the Treasury Committee, published just after the government’s Brexit documents were released, Chancellor Philip Hammond reiterated a warning from his department of a 7.7% hit to GDP under a no-deal Brexit scenario. He claimed that borrowing would also increase by £80bn a year by 2033. The letter is understood to have been published without Downing Street’s clearance, and a spokesperson for No 10 said that the analysis highlighted by the Chancellor was “preliminary and very much a work in progress.”

The Daily Telegraph The Times, Page: 1 The Guardian, Page: 8 The Independent, Page: 62

OTHER NEWS

Katie Price’s full debts revealed

Reality TV star Katie Price reportedly owes almost half a million pounds to the tax office and other creditors and has until October 30th to come up with an individual voluntary agreement to settle her debts.

The Mirror

Aretha died intestate

US website TMZ has reported that Aretha Franklin, who died last week aged 76, had an estate worth $80m, but did not leave a will detailing the distribution of her fortune. Michigan law dictates that, in such an event, an individual’s fortune is to be shared equally among their children – in Ms Franklin’s case, four sons.

The Daily Telegraph

Tax sweetener could tempt Britons to Italy

The Italian government is considering a proposal to lure pensioners to poorer and depopulated areas of southern Italy with the offer of a ten-year tax holiday. The idea would initially apply to Calabria, Sicily and Sardinia, which offer few economic opportunities to their dwindling inhabitants.

The Times, Page: 15

Contact Paul Southward if you have any queries.

Paul Southward