News Roundup Thursday 16th May 2019

NEWS ROUNDUP

TAX NEWS

Co-op chief backs Lewis on rates

Co-op CEO Steve Murrells has backed the recommendation from Tesco chief Dave Lewis that online retailers be charged a 2% sales levy to help pay for a reduction in business rates for high street stores. Separately, Robert Hayton, head of UK business rates at the property consultant Altus Group, said: “There is now an overriding consensus that the tax playing field must be levelled. The proposal ensures additional revenue is ring-fenced for the good of the entire sector.”

Daily Mail, Page: 61

Tourist tax must be put to bed

The Scottish tourism and hospitality sector is opposed to a proposed Transient Visitor Levy and points out that the sector’s existing tax contributions and the fact that the UK VAT rate applied to accommodation is among the highest in the EU.

The Press and Journal, Page: 8

CORPORATE NEWS

Richer Sounds hands controlling stake to staff

More than 500 staff at Richer Sounds are in line for a £3.5m windfall after the retail chain’s boss handed them a 60% stake in the business. Julian Richer, who founded the business in 1978 when he was 19, said the “time was right” to give employees the stake as he had turned 60. The shares will be placed in an Employee Ownership Trust. Each of 522 employees across 53 stores will pick up £1,000 for every year at the firm, giving an average pay-out of £8,000. Mr Richer will receive £9.2m for the stake, although £3.5m will be used to make the cash payments to staff. Mark Fielden from Kingston Smith said: “The transfer of shares into an employee ownership trust means that, provided the conditions are met, any sums realised will be free of capital gains tax. Employees may also receive bonuses of up to £3,600 per tax year free from income tax.”

BBC News Financial Times The Times, Page: 31 The Independent Daily Mail

Standard Life Aberdeen suffers heavy revolt over CFO pay

Investors in Standard Life are irked by a £750,000 golden hello for incoming CFO Stephanie Bruce, who joins from PwC next month. Forty-two per cent of SLA investors voted against the fund house’s remuneration report. Ms Bruce will be paid a salary of £525,000, a 16.7% increase on predecessor Bill Rattray, as well as the package of company shares worth £750,000.

Financial Times, Page: 18 The Times, Page: 31 The Guardian, Page: 37 The Daily Telegraph, Business, Page: 1 Daily Mail, Page: 61

Soren Aandahl: It’s down to short-sellers to hold management to account

Short-selling activist Soren Aandahl, founder of Blue Orca Capital, is turning his attention to the UK declaring that every market has a small subset of companies that are either “flattering their accounts or engaging in outright fraud.” He told the Times that neither investment bankers, stockbrokers or auditors were incentivised to identify problems and that it was now the short sellers’ role to keep management teams accountable.

The Times, Page: 39

SMEs NEWS

UK fintech start-ups rake in £4.5bn

A new report by start-up body Tech Nation reveals that Britain is the world’s top fintech hub, with high-growth companies attracting over £4.5bn in investment over three years. London and Cambridge lead the country in attracting high-growth tech investment, with the former receiving £9bn between 2015 and 2018, and the latter £583m. Eileen Burbidge, chair of Tech Nation, remarked: “The UK has an incredibly pivotal role in the global tech scene. Nowhere is this more evident than in the Fintech sector where the UK is ranked number one in the world, an enviable position that has been established with decades of hard work, entrepreneurial talent, innovation and supportive policymakers.”

City AM

Nationwide big winner with £50m RBS grant

Nationwide Building Society has been awarded £50m to increase competition in the small business banking market. The Co-operative Bank and Investec Bank received £15m each in the latest handout of grants paid for by Royal Bank of Scotland. All three have pledged to add their own cash to the funds.

The Times, Page: 38 Daily Mail, Page: 63 The Daily Telegraph, Business, Page: 7

PERSONAL FINANCE NEWS

Consumer finance complaints rise

The number of complaints to the Financial Ombudsman Service (FOS) about fraud and scams has surged to record highs, figures show. The 40% rise in grievances after people have been tricked out of their money has pushed the overall number of complaints to its highest level in five years. For the first time in ten years, PPI complaints made up less than half (46%) of new complaints received while complaints about fraud and scams increased by 43%. Authorised push payment (APP) fraud, where someone is tricked into transferring money directly to a fraudster, is one of the fastest-growing types of fraud, the ombudsman said.

Financial Times, Page: 2 The Times, Page: 33 The Guardian, Page: 37 The I, Page: 41

PENSIONS NEWS

Premier stung by equal pension ruling

Premier Foods has announced a pre-tax loss of £42.7m having been hit by new pension rules treating women on a par with men. The food group estimated the cost of equalising benefits dating back to the 1990s at £41.5m. It is one of the first big employers to reveal the cost of a High Court judgment handed down in October in a case involving Lloyds Banking Group, relating to the rights of those contracting out of the state earnings related pension scheme.

The Times, Page: 37

ECONOMY NEWS

Unemployment falls to 40-year low

The unemployment rate has fallen to its lowest level for more than 40 years while the number of people in employment rose to a new high of 32.7m. The jobless rate fell from 3.9% to a record 3.8%, the lowest since 1974. However, pay growth fell to 3.3% on the year in the three months to March, from 3.5% in the three months to February. Moreover, productivity fell for the third consecutive quarter reflecting a lack of investment, which analysts have put down to Brexit uncertainty. “There is obviously concern that delaying Brexit until Oct 31 extends business uncertainty and will continue to weigh down on investment, with negative repercussions for productivity prospects,” said Howard Archer, chief economic adviser to the EY Item Club. Output per hour fell 0.2% in the first quarter following a decrease by 0.1% in the last quarter of 2018 and 0.2% in the third quarter of 2018.

The Guardian, Page: 35 The Daily Telegraph, Business, Page: 8 The Independent, Page: 58 The Sun, Page: 45

OTHER NEWS

Corporate leaders urged to ‘speak out’ against Jeremy Corbyn

Liz Truss is urging business leaders and entrepreneurs to speak out about the threat of a Jeremy Corbyn-led government claiming Labour “have big, sinister plans for the future of our economy”.

Financial Times, Page: 3

Contact Paul Southward

Paul Southward