News Roundup Thursday 14th March 2019

NEWS ROUNDUP

TAX NEWS

Tax avoidance warning for healthcare workers

Sir Ed Davey, the chairman of a parliamentary panel investigating the number of healthcare professionals set to be affected by huge bills in a major tax avoidance crackdown, has said the true number could be higher than an estimate of 50,000 contractors. Dr Iain Campbell, of the Independent Health Professionals Association, said the Government was responsible for the problem: “We have advised against these schemes from the very beginning. The problem is you have snake-oil salesmen dealing with financially vulnerable people.” Contractors facing the loan charge for each separate tax year are being offered settlement terms by HMRC.

The Daily Telegraph

Much needed tax changes that won’t be in the Spring Statement

The Telegraph’s Sam Meadows outlines five changes to the tax system the Chancellor should make in his Spring Statement, but most likely will not. Firstly, Philip Hammond should fix IR35 rules so freelancers declared employees by employers have associated benefits like holiday and sick pay. Secondly, Making Tax Digital should be postponed to help small businesses struggling to adapt; thirdly IHT thresholds should be changed so fewer people fall into the net; fourthly, pension saving should be simplified and finally stamp duty needs to be reformed to get the housing market moving.

The Daily Telegraph

Brexit an opportunity to hoist tax system out of Victorian era

Writing in City AM, Laurence Field, corporate tax partner at Crowe UK, says Brexit should be viewed by policymakers as a once-in-a-generation opportunity for the UK to “reboot Britain’s archaic tax system.” He says: “The UK economy now operates via the click of a mouse and commerce occurs at greater speeds than ever. In contrast, our tax system is stuck in the Victorian era.”

City AM, Page: 26

CORPORATE NEWS

Kier Group shares fall thanks to ‘accounting error’

Construction outsourcer Kier Group has announced that its debt was higher at the end of last year than previously indicated, despite efforts to reduce it, with shares falling as a result by as much as 18%. The firm’s net debt position for the end of 2018 was adjusted from £130m to £180.5m, as a result of hedging activities and a reclassification of debt associated with assets held for resale. However the company said it continued to forecast a net cash position by the end of June and was still focused on reducing its average month-end net debt. Average month-end net debt for the six months to the end of December was revised to £430m from £370m previously. Liberum analyst Joe Brent said the company’s situation was the result of an “accounting error”, which led to the “restatement of £40m of net debt from assets held-for resale to underlying net debt”.

City AM Financial Times, Page: 18 Daily Mail, Page: 68 The Daily Telegraph, Business, Page: 1 The Times, Page: 43

Care home closures set to continue

Research from BDO warns of further care home closures as operators struggle under the pressure of funding cuts, crippling debt and rising costs. BDO found that in 2014-2016, there were an average of 69 care home company insolvencies per year. The number rose sharply to 123 in 2017 and another 101 collapsed last year. The firm said further funding cuts planned by councils signalled further pain ahead.

The Guardian, Page: 5

SMEs NEWS

Businesses in Scotland expect growth

Despite economic uncertainty, 96% of SMEs and mid-market firms in Scotland expect to grow by at least 5% in 2019, according to a report from KPMG. However, most firms “struggle to see the value” of tax incentives, the firm found, with only 29% viewing the current tax system as a key growth driver. Alan Turner, head of tax for KPMG in Scotland, said: “Understanding how well the tax system is working for SMEs and mid-market businesses – the engine room of the Scottish economy – could not be more important, especially as we move towards a post-Brexit economy. One possible way forward is to provide more explanation of the intentions behind policies which might help raise awareness.” Meanwhile, research conducted by YouGov and RSM found 44% of Scottish middle market businesses believe that a no-deal Brexit would be “either harmful or catastrophic” to their business, up from 37% the previous quarter.

The Scotsman, Page: 34

Big banks join forces with mini-hubs for small business

Lloyds Banking Group, Royal Bank of Scotland and Barclays have teamed up to launch jointly-run mini-branches for business customers, a move described by the Federation of Small Businesses as “a welcome step forward”.

Financial Times, Page: 18 City AM, Page: 17

PROPERTY NEWS

BRC: Rates system must change

The slew of store closures seen over the past few years will continue unless business rates are cut, the head of the British Retail Consortium (BRC) has warned. Helen Dickinson said the system is not fit for purpose and needs to change so rates can go down as well as up. According to PwC, 19,115 shops have closed since 2015 while the BRC says 93,000 fewer people were working in retail in September 2018 compared to the previous September.

The Daily Telegraph, Page: 7

PENSIONS NEWS

Pensions Regulator drops probe into publisher Johnston Press

The Pensions Regulator has ended its probe into whether Johnston Press used a “pre-pack” insolvency to dump £300m of pension liabilities into the Pension Protection Fund saying it found “no evidence” to suggest that insolvency was avoidable nor that the administration was planned to circumvent payment into the company pension scheme.

Financial Times, Page: 18 City AM, Page: 15

Savers more prudent amid volatile markets

Research by AJ Bell suggests savers are “responding sensibly to difficult market conditions and Brexit uncertainty” with withdrawals down a third on 12 months ago while investment expectations are also being adjusted down.

City AM, Page: 15

INTERNATIONAL NEWS

Rome vetoes UAE inclusion on EU tax haven blacklist

Italy is blocking moves by the EU Commission to include the United Arab Emirates on an EU blacklist of alleged tax havens, arguing it needs more time to adjust to transparency rules.

Financial Times, Page: 6

ECONOMY NEWS

Low business investment set to persist, says BoE

Jonathan Haskel, an external member of the Bank of England’s Monetary Policy Committee, has warned that business investment in the UK risks staying low because of continuing Brexit uncertainty.

Financial Times, Page: 2 The Times, Page: 48

Contact Paul Southward if you have any queries.

Paul Southward