News Roundup Thursday 19th September 2019

NEWS ROUNDUP

TAX NEWS

Concern over Labour’s tax stance

The Express’ Tim Newark considers Shadow Chancellor John McDonnell’s calls for accountants to face jail for advising their clients on how they can legally avoid paying as much tax, arguing: “They’re not breaking the law but he doesn’t like what they’re doing, so that’s that.” Mr Newark notes that while tax evasion is illegal, tax avoidance is not. He adds that everyone is entitled to not pay more tax than they have to, and welcomes professional guidance on the matter, yet warns that Mr McDonnell suggests “it’s verging on a criminal act.” Considering the impact on any legislation designed to limit tax avoidance, Mr Newark voices concern that Labour “is increasingly open” to passing laws that make certain activities illegal “merely because it offends their self-righteous sense of fairness”.

Daily Express, Page: 12

MPs call for tax incentives to boost automation

The cross-party Commons Business, Energy and Industrial Strategy Select Committee has suggested that the Chancellor should offer tax incentives to encourage investment in robots to boost productivity.

City AM, Page: 9 Yorkshire Post, Page: 2

CORPORATE NEWS

Labour looks to transform the corporate sector

A Guardian editorial says that while “the pall of the financial crisis still hangs over the ordinary worker”, the share of pre-tax income going to the top 0.1% – the 53,000 adults earning £500,000 a year – is approaching the level seen just before the crash. This is attributed to the “light touch” nature of company regulation and the fact that the wealthy “can muster armies of lawyers and accountants” to help them reduce their tax bills, among other things. The piece goes on to look at proposals from Shadow Chancellor John McDonnell it says would repurpose the corporate world to be “for the many, not the few”.

The Guardian, Journal, Page: 2

Staffline posts H1 loss

Recruiter Staffline swung to a £7.7m loss in the first half of 2019 from profit of £10.5m in H1 2018. While revenue rose 11% to £534.6m year on year, Staffline saw net debt more than double from £36.9m a year ago to £89.2m. PwC resigned as the company’s auditor in August after the annual report warned of “material uncertainty” about the group’s ability to continue as a going concern. Its 2018 results were delayed after PwC received an anonymous email raising concern about accounting practices.

The Times, Page: 43 Daily Mail, Page: 76

EMPLOYMENT NEWS

Veteran roles boost the economy

Analysis by PwC has found that investing in jobs for wounded or sick veterans can boost the economy, with a “social return” of £4.80 for every £1 invested. Studying the work of the Poppy Factory, which helped 1,200 veterans get jobs in less than 10 years, the report shows that the social return hit almost £6m over five years.

Daily Mirror, Page: 6

Blind hiring could end bias

A report from jobs website Milkround suggests that blind recruitment – where recruiters do not have access to candidates’ personal details – could eliminate prejudice against people who did not study at a Russell Group university. The study shows that 78% of graduates from the 24 Russell Group institutions have found a full-time job this summer compared with 70% of those from other universities. Some 41% of the 7,000 students and graduates polled suggested blind recruitment could help deliver a diverse workforce and level the playing field. It is noted that Deloitte is among firms that already use a form of the process.

The Times, Page: 12

LEGAL NEWS

Apple takes on EU in tax battle

Apple believes that the European Commission’s order to pay £11.4bn in back taxes to Ireland “defies reality and common sense”. The firm has taken its case to the General Court, which is Europe’s second-highest, saying taxes imposed by Europe’s competition watchdog in 2016 are an attempt to “retrofit” tax laws after Competition Commissioner Margrethe Vestager ruled that the tax Apple paid on its operations in Ireland was so low that it amounted to state aid. The court was told that changes in US tax laws mean the tech firm is paying around €20bn to the US on the same profits that the Commission claims should have been given to Ireland.

The Daily Telegraph, Business, Page: 1 The Times, Page: 41 The I Daily Express Daily Mail, Page: 75 City AM The Sun, Page: 43

PROPERTY NEWS

First-time buyers boost July figures

July 2019 saw almost 2,000 more first-time buyers join the property ladder compared to the same month last year, according to official figures. UK Finance data revealed that there were 32,640 new first-time buyer mortgages completed in July, some 5.8% more than in the same month last year. The number of people moving house remained similar year on year. UK Finance said there were 32,710 home-mover mortgages completed in July, just 1.4% more than in the same month in 2018. This means that in July, there were just 70 more homeowners moving house than there were first-time buyers completing a mortgage on their first property. Meanwhile, there were 5,800 new buy-to-let home purchase mortgages in July, an increase of 5.5%. Remortgages with additional borrowing slumped 7.1% in July, while pound-for-pound remortgages also fell 12.9%.

Daily Mail City AM

PERSONAL FINANCE NEWS

Soaring numbers of the middle-aged seek equity release

As increasing numbers of middle-aged homeowners are turning to high-interest equity release loans, experts have warned that this could be unsuitable for 55 to 59-year-olds and have called for the minimum age to be increased to 60 or even 65. Analysis by the Mail reveals that the number of 55 to 59-year-olds taking cash out of their homes is this year set to be three times that recorded a decade ago.

Daily Mail

INTERNATIONAL NEWS

Dutch government to reform business tax rules

The Dutch government plans to reform a business tax rule that allows wealthy multinationals to reduce the amount of tax they pay on their profits, a move it says will generate €265m a year in new income. Meanwhile, Wopke Hoekstra, the Netherlands’ finance minister, yesterday announced €3bn of tax cuts but said cuts in corporate tax rates will be halted.

Daily Mail City AM, Page: 9 Financial Times, Page: 7

Trump tax returns to be released

President Donald Trump’s accountants have been ordered to release his tax returns for the past eight years, with a grand jury subpoena served on Mazars in New York.

Daily Express, Page: 2

ECONOMY NEWS

Think-tank: Britons are worse off than in 2008

A report from the New Economics Foundation has questioned official statistics and suggests that Britons are £128 a year worse off on average than they were in 2008. The research argues that figures used to calculate GDP do not include essential items that affected the cost of living over the last 10 years, while tax increases that came as part of the coalition government’s austerity measures were excluded from the calculation of GDP. The think-tank added that the impact of the falling pound has been underestimated in calculations, while rising housing costs were also excluded. Alfie Stirling, the foundation’s chief economist, said that while Office for National Statistics data suggests average living standards returned to 2008 levels in 2015, “when calculated to reflect the true costs of living, our analysis has shown that a combination of the depth of financial crisis, austerity and the vote to leave the EU has meant that average living standards are in fact still yet to recover pre-recessions levels”.

The Guardian, Page: 23

Contact Paul Southward. tax@ksk.co.uk

Paul Southward