News Roundup Thursday 22nd August 2019

NEWS ROUNDUP

TAX NEWS

Labour’s tax plan questioned

The Express’ Paul Withers looks at criticism of Labour’s tax proposals, including a mooted reform of inheritance tax that would see it replaced with a lifetime gifts tax. Whereas the current system allows up to £475,000 to be passed on without tax, the proposed levy would be charged on anything passed on above the value of £125,000. Matthew Lesh, Head of Research at the Adam Smith Institute think tank, said: “It is often forgotten that this income would already have been taxed once when it was earned. It is nonsensical to tax it another time before it is spent,” while Ben Harris-Quinney, Chairman of The Bow Group think tank, warned the proposals could make Britons among the most taxed people in the world.

Daily Express

Tax probe take climbs

Analysis from UHY Hacker Young shows that HMRC collected £13bn from tax investigations in 2018/19, a 27% increase on the £10.3bn recorded in 2017/18.

The I, Page: 41

Honour vow to suspend loan charge, allies urge Johnson

The FT reports that the Prime Minister is being urged to deliver on promises to suspend the loan charge, having previously said the tax “needs a proper independent review”.

Financial Times, Page: 2

CORPORATE NEWS

Pay falls for FTSE 100 bosses

Several papers highlight Deloitte research showing that median pay for FTSE 100 bosses fell to a five-year low last year, dipping to £3.4m from £4m the year before. Last year’s figure was the lowest since companies were first required to report a single figure for chief executive pay in 2014, when the median was £4.4m. The analysis also shows that the median increase in base salary stayed at 2%, while nearly a third received no pay rise at all. Bonus payouts remained at about 70% of the maximum allowed under each company’s pay criteria. Deloitte analysis also shows that 16% of firms in the FTSE 250 have suffered investor revolts over excessive pay. In contrast, FTSE 100 businesses have seen a reduction in major rebellions, with the proportion of these companies hit by rebellions from a fifth of investors or more falling to 7% in 2018, down 13% on a year earlier.

Daily Mail, Page: 70 The Guardian, Page: 29 Financial Times, Page: 12 The Daily Telegraph, Page: 26 Daily Express, Page: 51 The I, Page: 40

Fewer EU contracts for UK firms

The value of central EU public procurement contracts secured by UK businesses fell by 30%, to €108m (£99m) in 2018, from €155m (£142m) in 2017, research by UHY Hacker Young shows. The firm says UK firms could see a further drop in new European Commission contracts, with the firm’s Andrew Hulse saying: “A drop in direct EU spending is causing some UK businesses scrambling to plug the hole. The EU is clearly not waiting for the Brexit deadline before cutting spending on British businesses. It is fairly obvious what Brexit is going to mean for UK firms trying to win work from the EU.”

The I, Page: 39

Leadsom backs British Steel buyer

Business Secretary Andrea Leadsom has said that Turkish Oyak military pension fund Oyak, which has been lined up to buy British Steel, is not a short-term speculator and, unlike its previous private equity owners, has a long-term plan for the business. Meanwhile, the Mail reports that EY, appointed to assist the Official Receiver in running British Steel after it went into liquidation, ran up fees of more than £13m.

Daily Mail, Page: 69

PROPERTY NEWS

AAT questions stamp duty reform U-turn

In a letter to the Telegraph, Phil Hall, head of public affairs and policy at the Association of Accounting Technicians (AAT), says the body has long promoted the idea of switching stamp duty liability from the buyer to the seller. With this in mind, he said he welcomed Sajid Javid’s backing of such a move but was less pleased by the Chancellor’s “U-turn within 48 hours”. He questions Mr Javid’s claim that the Ministry of Housing, Communities and Local Government did not back the idea, saying senior individuals there “have privately expressed very strong support” for it. Mr Hall says that while the AAT does not believe switching the burden to home sellers “is a panacea, it would be “fairer, simpler, more effective and cheaper than the current regime.”

The Daily Telegraph, Page: 15

More retailers challenging rates

Figures from RPC show that the number of businesses challenging their rates bill soared over the past quarter as retailers continue to feel the squeeze from tough conditions on the high street. RPC found that there was roughly 4,000 challenges made in the first quarter of 2019, a 65% increase on the previous three months. “The sharp jump in challenges shows that the burden of business rates is causing more and more pain for retailers on the high street,” said Jeremy Drew of RPC.

Daily Mail, Page: 69

LEGAL NEWS

Fraud case value falls

KPMG ’s Fraud Barometer, which analyses cases of more than £100,000, shows a decline in the number of cases related to embezzlement, benefit VAT and procurement frauds. Across the UK, fraud cases worth more than £319m were taken to courts in the first half of 2019, down from £345m in the first six months of 2018.

The Press and Journal, Page: 29 Yorkshire Post, Business, Page: 4

INTERNATIONAL NEWS

US tech companies call on France to abandon digital tax plans

Senior executives from Amazon, Google and Facebook – alongside Silicon Valley lobbyists – have told a hearing in Washington that France’s digital services tax is unilateral, discriminatory and would damage their businesses.

Financial Times, Page: 6

ECONOMY NEWS

Financial optimism index points to fragility

IHS Markit’s monthly household finance index has dipped to a three-month low, falling from 44.3 in July to 43.7 in August, the second-sharpest drop in demand for major purchases since September 2017. The survey found that pessimism over job security increased to the highest level since March and also shows that almost a quarter of households expect interest rates to rise, the highest since October 2016. “Latest survey data continued to highlight a fragile state among UK households towards their financial wellbeing,” said IHS Markit economist Joe Hayes. “The Brexit haze, uncertainty over the political environment and the increased possibility of the UK entering recession appear to have dented expectations,” he added.

The Guardian The Daily Telegraph City AM, Page: 6

Eurozone inflation falls short of ECB target

Figures show that prices in the eurozone were up 1% in July, down from 1.3% in June. The rate fell short of an estimate of 1.1% growth and also came in under the European Central Bank’s (ECB) inflation target of around 2%, despite record-low interest rates. The data shows inflation of 0.3% in Italy and a decline of 0.7% in Portugal, while Germany saw inflation fall to 1.1% in July from 1.5% in June.

City AM

OTHER NEWS

Store criticised over outdated tax guide

Phil Hall, head of public affairs at the Association of Accounting Technicians, has criticised WH Smith, saying it is putting taxpayers at risk of fines after selling a guide to completing a tax return that is five years out of date. He tweeted his concern over the £24.99 Do-it-yourself Tax Return Organiser booklet, which relates to tax returns filed in 2014 and 2015. He commented: “Selling the public a DIY self-assessment kit that’s five years out of date beggars belief,” noting that there have been “various tax changes” since then, adding that anyone following the advice “could find themselves getting into a real mess, and potentially facing an HMRC fine as a result.” The retailer insists the error was a “one off”.

The Daily Telegraph

Contact Paul Southward.

Paul Southward