News Roundup Thursday 16th August

NEWS ROUNDUP

TAX NEWS

Tax incentives benefit few Aim firms

Paul Kavanagh, chief executive of Patronus Partners, says the London Stock Exchange’s Alternative Investment Market has benefited significantly from tax incentives, particularly through enterprise investment schemes, venture capital trusts and inheritance tax planning to bring in capital. However, he adds that this has only benefited a favoured few firms, rather than the majority, with the net result a growing void of investors for the market. He says there is a need to create an environment to tempt back more established business leaders who have expressed concern over the costs and bureaucracy of Aim and turned to private equity instead.

The Times, Page: 35

Client avoids APN penalty after accountant’s date error

A taxpayer who challenged a £7,071 penalty for late payment of an accelerated payment notice (APN) has won his case. A tribunal found Richard Lee’s accountant was at fault for failing to notice the correct date by which action was required, despite reminders from his client. The judge stated: “A taxpayer who simply hands everything over to his accountant and says “get on with it” does not generally have a reasonable excuse if the accountant fails to do so. That is not the case here.”

Staff Reporter

Bankers and celebrities in £200m legal battle with film tax scheme

Bankers, sports stars and celebrities are suing a London finance firm for £200m over a film-related tax relief scheme deemed to be illegal by HMRC. Dozens of bankers from Goldman Sachs, Lloyds, HSBC and Credit Suisse claim they were misled by Ingenious Media Holdings. Stars including Andrew Lloyd-Webber are also among the 500 claimants heading to the High Court after they were given ‘catastrophic’ tax bills. More than 1,000 of Britain’s most rich and famous people invested a minimum of £100,000 into various film projects to legally offset their tax bills. But in 2016 a tax tribunal ruled the incentives were not allowable deductions, leaving investors with bills running into the millions.

Daily Mail The Times, Page: 44 The Sun, Page: 11

Views split on Amazon tax

The Telegraph’s Matthew Lynn describes Philip Hammond’s suggestion for a special levy on online sales – or ‘Amazon tax’ – as a “terrible idea.” He argues that it would penalise the most successful, fastest-growing part of the economy and deter investment, “at precisely the time when, with Brexit looming, we need it the most.” However, Scottish Conservative leader Ruth Davidson writes in the Telegraph that without some kind of sales tax on online retailers to level the playing field, high street businesses will find it impossible to compete.

The Daily Telegraph, Page: 30 The Daily Telegraph, Page: 16

Investors could lower IHT bill by 12%, claims study

A report by UHY Hacker Young suggests taxpayers could reduce their IHT bills by 12% over the next year. According to the study, forecasts from HMRC show the value of business relief is expected to rise 8% in 2017/18, from £655m in 2016/17. As a result, taxpayers are expected to reduce their bills by around £710m in 2017 to 2018, through investments made in Aim-qualifying shares, unlisted companies and other business assets.

FT Adviser

Britain’s taxation system is an inefficient mess

Paul Johnson, director of the Institute for Fiscal Studies, says the UK’s tax system needs overhauling to cope with new demographic circumstances.

Financial Times, Page: 11

SMEs NEWS

New platform for firms seeking finance

A new online business finance platform has been launched by WGN. The Business Finance Finder platform allows firms to prepare one funding application that can be shared with an audience of over 120 lenders, including banks, specialist finance houses and alternative finance providers, at no cost to those businesses.

Yorkshire Post , Business, Page: 17

Small businesses put survival before productivity

The FT suggests the UK’s sluggish productivity may be partly down to small companies that are more focused on profitability, revenue growth or sheer survival.

Financial Times, Page: 2

CEOs looking to collaborate with startups

The findings of KPMG’s 2018 Global CEO Outlook indicate that UK CEOs are increasingly looking to collaborate with startups in order to drive innovation and support their growth objectives. The survey found that 61% of CEOs in the UK are relying on a network of third-parties to support their growth and innovation objectives, compared to just 53% globally.

London Loves Business

Protection planned for rail arch firms

Transport minister Jo Johnson is planning to impose conditions on the short-listed bidders for Network Rail’s commercial property portfolio that will require them to demonstrate that small businesses will be protected.

The Times, Page: 11

Small firms pay fair

A survey by the Federation of Small Businesses has found 84% of smaller companies do not use zero-hours contracts, while more than half were paying all staff the new national living wage before it was introduced in April.

Daily Mirror, Page: 43

 ECONOMY NEWS

UK unemployment at 43-year low

The unemployment rate fell to 4% in the three months to June, according to the ONS, the lowest figure for more than 40 years. The number of unemployed Britons fell by 65,000 to 1.36m while the number in work increased by 42,000 to 32.4m. However, wage growth slowed to 2.4% in June, with earnings rising exactly as much as prices over the past year. There was more encouraging news on productivity, as output per hour improved to 1.5% in the three months to June from 0.9% in the first quarter.

Financial Times, Page: 2 The Daily Telegraph The Times The Guardian, Page: 27 City AM

PENSIONS NEWS

Pension pot scams cost £91,000 per victim

Pension scam victims are losing an average £91,000 each as fraudsters see the potential for looting savings pots. The Pensions Regulator and Financial Conduct Authority are now launching a new campaign to urge the public to “be on their guard” when receiving unexpected offers about their pension and to check who they are dealing with.

Daily Mirror, Page: 1 The Guardian, Page: 27 Daily Mail, Page: 10 Financial Times, Page: 3 The Sun, Page: 41

UK employees pessimistic about retirement finances

UK employees are among the most pessimistic in the world about their retirement finances, according to a report by asset manager State Street. Its survey suggested that employees in the UK expected their retirement income to be half of their earnings in work and that fewer than one in 10 young workers felt financially prepared for retirement. State Street also suggested that the pensions industry needed to do more to help people understand whether they were on track to meet their income expectations in retirement.

BBC News

PROPERTY NEWS

Buy-to-let lending slumps

The number of new home loans taken out by buy-to-let landlords fell by nearly one-fifth following a series of tax changes and new regulations. UK Finance said that 5,400 buy-to-let mortgages completed in June, a 19.4% fall from June 2017, when 6,700 were completed.

Financial Times, Page: 3 The Times, Page: 31

Backing for Boris’s call to cut stamp duty

Sam Dumitriu, Head of Research at the Adam Smith Institute, backs Boris Johnson’s call for stamp duty to be slashed and argues that the former foreign secretary could have gone even further. He urges chancellor Philip Hammond to use his next budget to bring down the high rates at the top end of the market – or, better yet, eliminate the duty altogether.

The Daily Telegraph

INTERNATIONAL NEWS

Cryptocurrency investors facing higher taxes

Dozens of hedge funds investing in cryptocurrencies face bigger tax bills, or even penalties, after the IRS said that virtual currencies would be a focus of audits for its large business and international division. Many funds do not know if they are calculating their taxes correctly, due to a lack of guidelines governing their holdings.

The Independent, Page: 61

Deforestation facilitated by tax havens

A report published in the journal Nature Ecology and Evolution has found that money channelled through secretive tax havens has been used to fuel deforestation in the Amazon and illegal fishing around the world.

The Guardian, Page: 29 The Independent, Page: 17 The Times, Page: 16

OTHER NEWS

Employers favour work experience and apprenticeships over degrees

A poll by the AAT suggests employers now favour relevant apprenticeships or experience over university degrees. The survey, coming ahead of A-level results day tomorrow, found 49% prefer to see experience from a relevant apprenticeship or previous position on a candidate’s CV. Just 24% said they would be more likely to take on someone who had a relevant degree qualification.

The Independent

Switch off on holiday

Poppy Jaman, chief executive of the City Mental Health Alliance, writes in City AM that employees should make an effort to avoid checking their emails when on holiday. She says annual leave is not a dispensable luxury and respecting it is an opportunity to create “healthy workplaces where people can flourish.”

City AM, Page: 15

PwC working to expose fake steaks

PwC is developing an “invisible barcode” which can be sprayed onto joints of meat to thwart food fraud. The edible signature is being developed with an agent used in spices and powdered milk that can reveal how the animal was raised, what it ate and where it was processed. The new electronic etching procedure is due to be launched in Australia and China within the next 12 months.

The Daily Telegraph, Page: 12

HMRC grabs poker winnings

A fraudster who won nearly £70,000 in a poker tournament has been forced to hand his winnings to HMRC. Adam Lulat had previously avoided paying a fine for money laundering, but was taken back to court after HMRC learned he had won £68,930 at the Manchester event.

Daily Mail, Page: 66 The Daily Telegraph, Page: 8 Daily Mirror, Page: 14

Contact Paul Southward if you have any queries.