News Roundup Thursday 20th June 2019
News Roundup Thursday 20th June 2019
Boris pulls back on tax plan
Boris Johnson has backed away from contentious plans for tax cuts for the rich. Speaking in his first TV debate of the Conservative leadership campaign, the former Foreign Secretary said a proposal to raise the thresholds for the top rate of income tax was an “ambition” which was open to “debate”. Mr Johnson also said it was “very sensible to have an ambition to raise the threshold for the highest rate of tax for middle income earners”. Commenting on plans for tax, Foreign Secretary Jeremy Hunt said: “People say we are the party of the rich. We must never fall into the trap of doing tax cuts for the rich.” The discussion also saw Rory Stewart comment on promises made by leadership rivals, describing them as “the thing that slightly depresses me in this debate.” He offered: “I’m going to be very straight with people. I don’t think this is the time to be cutting taxes – I would be spending the m oney not on tax cuts but on investing in our public services.”
TPA: IHT plan ‘kicked down the road’
Duncan Simpson, research director at the Taxpayers’ Alliance, says the Treasury and Government made “no serious concerted effort” to abolish inheritance tax, saying a pre-coalition plan was to increase the inheritance tax threshold to about £1m but “that can was kicked down the road because of the political priorities, going into a coalition with the Liberal Democrats.” He added: “But really since then, there has been no serious concerted effort by the Treasury or the Government at least publicly, to really think about how we get rid of this tax or seriously limit the burden on people.” He notes that one option would see raising the threshold from £325,000 to £500,000 and halving the rate so “rather than it being 40% of your estate going to HMRC it’s 20%.”
MPs demand curbs on fast fashion waste
A report by MPs has urged the Government to end the era of throwaway clothes and poor working conditions in the fashion supply chain. The Environmental Audit Committee made 18 recommendations, including a 1p per garment tax which would go towards better recycling schemes, however, the Government has rejected the proposals, saying it has been developing its own set of measures that encourage retailers to self-regulate.
Tax gap concern
Murdo Fraser in the Scotsman looks at tax devolution in Scotland, noting that while it is “barely two years” since Holyrood was given powers over non-savings, non-dividend income tax, with a right to vary bands or rates, the Government has already used the power “to create a significant tax gap between Scotland and the rest of the UK, for those earning over £43,000 annually.” He says the gap has prompted “serious concerns from business” and suggests there is “a real danger that if the tax gap widens, there will be a discernible impact on Scotland’s economic performance.”
The Scotsman, Page: 25
Islands to reveal who owns offshore firms
Jersey, Guernsey and the Isle of Man are to adopt public registers of the true owners of offshore companies incorporated in their jurisdictions, with fully public registers to be introduced by 2023. MP Margaret Hodge and the Conservative MP Andrew Mitchell, who have suggested legislation should be used to force the dependencies to introduce the registers, welcomed the new announcement as “an important first step towards our goal of ensuring greater transparency in the fight against tax avoidance, tax evasion and money laundering”. However, they have called for clarification over some elements of the proposals, saying the 2023 timetable for implementing the new registers was “unacceptably long”, that current proposals would grant banks and accountants access to the information before the public and the media, and that it was unclear if the data would be free of charge.
The Guardian, Page: 14
Goals looks to score buyer
Goals Soccer Centres have appointed advisers to look for a possible buyer, saying it has engaged Deloitte to “work alongside its current advisers and its lenders in assessing its future corporate options”. The five-a-side football pitch operator last month appointed forensic accountants to examine its finances after it revealed it had mis-declared its VAT bill over several years, leaving it with a potential liability of £12m. The Guardian says options under consideration by Deloitte are thought to include a sale of the firm, with Goals saying the board could make a move before it settled its tax bill, with talks continuing with HMRC and lenders including Bank of Scotland and auditor BDO.
The Guardian, Page: 35 Daily Mail, Page: 64
Ex-BHS owner fights tax evasion charges
Former BHS owner Dominic Chappell has appeared at City of London Magistrates’ Court charged with tax evasion. Mr Chappell is charged with three counts of cheating public revenue out of £650,000 and two counts of money laundering connected to his bankrupt finance company Swiss Rock. The charges involve tax evasion offences including failing to register his company for taxes from the correct date, providing false information to the HMRC, failing to pay corporation tax, not declaring profits and failing to submit VAT returns.
Government settles Bank Mellat lawsuit
The Government has made an out-of-court deal to settle a £1.3bn damages claim made by Iran’s Bank Mellat over a UK trading ban. Both sides refused to disclose the size of the settlement, although a source suggested that it could be in the region of £100m. The Government declined to comment on suggestions that it had spent £35m defending itself against Bank Mellat’s claim, including more than £6m paid to Deloitte.
PERSONAL FINANCE NEWS
Rule changes and rates cuts hit savers
Changes to the way NS&I index-linked savings are calculated could see a drop in interest for up to half a million savers. NS&I moved away from the retail prices index (RPI) inflation measurement on May 1, and adopted the consumer prices index (CPI) method, which is usually lower. In the year to April, the RPI figure was 3% while the CPI was 2.1%. Analysis shows that over a year, somebody with £10,000 worth of certificates could now earn £91 less interest.
Daily Express, Page: 29
Pound falls amid rising no-deal threat
The pound is at its lowest in almost six months on heightened fears of a no-deal exit, points out Neil Wilson, chief market analyst at Markets.com. “The calculus is simple – failure to take Britain out of the EU this year risks a General Election and wipe out at the polls at the hands of the Brexit Party, potentially handing Jeremy Corbyn the keys to Number 10,” he says. “The EU says it won’t renegotiate (it may have to), MPs won’t accept the existing deal, and Parliament has limited scope to stop this train. Sterling is increasingly reflecting the no-deal risk.” The pound has stumbled quite badly against the dollar over the past three months, currently at $1.2531, down 0.02% on the day, and is now getting close to a year low. Professor Costas Milas, of the University of Liverpool’s management school, thinks there is a good chance that the pound could rebound if Rory Stewart goes through to the next rou nd of the Tory leadership race, due to his firm stance against a no-deal Brexit.
Contact Paul Southward.