News Roundup Sunday 30th June 2019

NEWS ROUNDUP

TAX NEWS

Johnson could slash stamp duty in emergency no-deal Brexit budget

Boris Johnson could bring forward the next budget and implement a series of tax and regulatory cuts to ensure Britain is “going gangbusters” by October 31st. The emergency no-deal Brexit budget could include policies mooted by his former leadership rivals such as Dominic Raab’s plan to increase the national insurance contribution threshold from £8,632 to £12,500 and overhaul stamp duty. The levy on homes under £500,000 could be scrapped while the increase from 7% to 12% on homes worth more than £1.5m made by George Osborne could be reversed. It is also rumoured that Johnson has called on Sajid Javid to be his Chancellor although he continues to deny jobs have been offered.

The Times, Page: 1, 4

HMRC error affects 350,000 tax returns

Hundreds of thousands of taxpayers have received incorrect tax returns with an error in their capital gains allowance, with HMRC stating that nearly 350,000 tax returns were affected by the error. According to HMRC, the short tax returns showed capital gains tax exemptions of £400 less than they should have been, based on the 2017-18 CGT figure rather than the 2018-19 allowance. Around 600 individuals with capital gains may have been affected by the mistake, with HMRC confirming that anyone who filled out the capital gains page unnecessarily would not have their tax liability affected.

The Daily Telegraph

Scores of MPs and peers urge loan charge suspension

Two hundred parliamentarians have now signed a letter from the Loan Charge All-Party Parliamentary Group demanding the retrospective element of the law be scrapped.

Financial Times, Page: 2

Ringleader of cigarette smuggling gang jailed

The ringleader of a smuggling gang caught with more than nine million illegal cigarettes and £356,185 in cash has been jailed. Oleg Cretu of Northampton was investigated by HMRC after the cigarettes and used bank notes were discovered during a search of an industrial unit in September 2018.

Press Release

INDUSTRY NEWS

ICAEW warns no-deal Brexit could lead to a number of profit warnings

The ICAEW’s regional director for Europe, Martin Manuzi, has told MPs on the Exiting the European Union Committee that the prospect of a no-deal Brexit raises “significant concerns” about the regulatory environment businesses and auditors would face. Manuzi suggested that the lack of a decision on Brexit had left a “kind of legal void” regarding audit regulation, and that although the Financial Reporting Council had been clear on some of the actions it would take, there were still unanswered questions. Manuzi added that the audit profession believes it likely that the UK could see, with companies facing “unprecedented circumstances” after November 1st, “a flurry of profit warnings” which could lead to a “systemic loss of confidence.”

economia

CORPORATE NEWS

Autonomy finance chief ‘scared’ to address revenue questions

Autonomy founder Mike Lynch has told a court that former finance chief Sushovan Hussain was too scared to face scrutiny from analysts regarding the software company’s quarterly results in 2009, criticising analysts for “put[ting Hussain] in a position where he had to calculate something on the fly and he made a mistake…and they criticised him for it”. Both Lynch and Hussain are being sued by Hewlett Packard for allegedly falsely inflating Autonomy’s revenues ahead of a 2011 sale to HP. The alleged $5.1bn fraud is now the centre of the UK’s largest ever civil fraud case, with Mr. Lynch’s month-long testimony beginning this week.

City AM

Creditors demand Woodhouse firms enter administration

A group of seven investors who funnelled cash into businesses owned by financier Gavin Woodhouse have applied to the high court to have four of his companies taken into administration. Creditors requested that Phil Duffy and Sarah Bell of Duff & Phelps be appointed joint administrators. Phil Duffy said: “The latest publicly filed accounts of those four companies show them to all be insolvent on a balance sheet basis so creditors are concerned that they are not going to get their money back”. Three care home project companies and the Afan Valley adventure resort are in the administration orders.

The Guardian, Page: 6

SMEs NEWS

Banks accused of treating small fintechs unfairly

Experts are warning fintechs to be cautious if approached by big banks amid reports small firms are being taken advantage of. Although there are good examples of cooperation, some fintech executives have complained that banks can too easily demand an unfair relationship that can leave start-ups without adequate capital.

The Times, Page: 44

More than half of Scots firms fail first bid for funding

Smith & Williamson is warning Scottish businesses seeking external funding to be fully prepared when they meet potential investors after its research found 54% had failed to net funding at least once, compared with a UK average of 70%. Nearly a quarter were unsuccessful more than three or more times, and 7% made five or more attempts, the report also revealed.

The Scotsman, Page: 30

PERSONAL FINANCE NEWS

FCA to review credit reference industry

The Financial Conduct Authority is to investigate whether vulnerable customers are disproportionately impacted by the credit reference industry. The regulator announced yesterday that it will review the market to determine how it can better work for consumers. The FCA’s Christopher Woolard commented: “Through the study we will seek to get a better understanding of how this vital market works and will identify remedies, where appropriate, to make it work more effectively for credit information users and individual consumers.” Financial complaints service Resolver received more than 2,000 complaints about credit reference agencies last year and 20,000 in the past five years.

The Daily Telegraph

PENSIONS NEWS

Government faces £4bn a year extra public sector pension cost

The Government has been denied leave to appeal against a landmark ruling by the Court of Appeal that pension reforms unfairly discriminated against younger public sector workers by protecting the retirement benefits of older staff. Although the case was brought by members of the Judicial and Firefighters Pension Schemes, the decision is expected to affect every public sector pension saver in Britain, meaning the Government could need to find an extra £4bn each year to cover extra costs. The case will now be sent back to employment tribunal for a remedy to be reached.

The Daily Telegraph Financial Times The Times, Page: 4

Urgent pensions reform awaits new PM

Jiri Krol, the global head of government affairs at the Alternative Investment Management Association, says in the Telegraph that the next PM must make it their urgent priority to reform pensions. He says regulation needs to be introduced which “encourages better diversification for savers who are currently over-reliant on the vagaries of the stock market”. Krol also says the charge cap for defined contribution schemes needs to change too so beneficiaries can have a broader choice of investment.

The Daily Telegraph, Business, Page: 2

EMPLOYMENT NEWS

Number of gig economy workers doubles

The number of people doing gig economy work has doubled in the past three years, according to a survey for the TUC by the University of Hertfordshire. Nearly one in 10 working-age adults now work in a gig job at least once a week, compared with around one in 20 in 2016.

The Guardian, Page: 1, 5 The Independent, Page: 59 The Times, Page: 46

ECONOMY NEWS

Billions added to economy in statistics review

The Office for National Statistics has revealed Britain’s economy is about £26bn bigger than previously thought, as it published a major revision of its growth data for the past 20 years. The ONS said that average GDP growth between 1997 and 2016 was about 0.1 percentage points higher than the previous estimate of 2.1%. It means that over the period, the country’s economy was 1.3% larger than previously thought.

The Times, Page: 4

Ford plans to cut 12,000 jobs in Europe

Ford has announced plans to cut about 12,000 jobs across its European operations by the end of 2020, including 3,100 jobs in Britain. The American carmaker said the restructuring was “the most comprehensive redesign in the history of its business in Europe”. Elsewhere, French carmaker PSA has said the next generation of the Vauxhall Astra will be built at its Ellesmere Port car plant from 2021 but only if a satisfactory Brexit deal is reached.

The Times Financial Times Financial Times The Daily Telegraph The Guardian, Page: 33

OTHER NEWS

Labour plans to seize Big Six at bargain price

Labour’s plan to nationalise the Big Six energy companies would cost taxpayers just £9bn, according to a report backed by shadow energy secretary Rebecca Long-Bailey. However, their current market value is £140bn. Taking control of the companies without paying full market value for them would cheat pension holders and private investors out of billions, says Sam Lister in the Express.

Daily Express, Page: 7

Contact Paul Southward

Paul Southward