News Roundup Thursday 25th April 2019
News Roundup Thursday 25th April 2019
Accidental landlords must sell or face new tax hit
Samantha Partington in the Daily Mail says Government plans to scrap two types of tax relief for landlords who sell a property that was once their main home will leave over half a million accidental landlords with less than a year to sell up before facing tax bills. Analysis by RSM suggests the reform, which will come in from April 6, 2020, will raise £470m for the Treasury over five years. Ms Partington notes that someone selling an investment property pays capital gains tax on any profit made, while someone selling a rental property that was once their home pays CGT on the amount it went up in value by since they moved out. Currently, landlords can also add 18 months on to the amount of time they lived at the property, for tax purposes, but this will be slashed to nine months. Lettings relief, which lets landlords shelter £40,000 of their gain from the tax, is also to be reformed, with it only applicable to landlords who live in the property with their tenants. Daily Mail, Page: 46
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Pensioners overtaxed £400m
HMRC figures show that pensioners have been overtaxed by more than £400m since pension freedom rules came into effect in 2015. Since the launch, the Revenue has refunded £402,743,108 in overpaid tax from pension savings, with 174,260 people having to make claims. Which? said the issue is linked to the way withdrawn money is taxed, saying it is taxed on an emergency rate as it is collected by pension companies, which are unaware of the saver’s correct tax code and other income. The tax is thereby based on a Month 1 basis, under the assumption the lump being taken out will be repeated every month.
Fines for missed deadlines a week away
The Daily Mail notes that self-employed workers who missed the January 31 deadline tax filing deadline face daily penalties if they fail to submit their return within the next week. Around 731,000 people missed the cut off, with those failing to act before April 30 set to be fined £10 a day for up to 90 days plus a £100 late filing charge. After 90 days, the penalties will increase. Derek Kelly, of Nixon Williams, notes that HMRC will consider mitigating circumstances.
Daily Mail, Page: 46
Ferrexpo warns over misappropriated funds
Iron ore miner Ferrexpo says funds it paid to a charity in Ukraine could have been “misappropriated”. The firm hired BDO to investigate “discrepancies” in the bank statements of Blooming Land and says the probe has made “progress” in understanding the irregularities. Meanwhile, the firm has said its board holds the “unanimous view” that chief executive Kostyantin Zhevago “does not have significant influence or control over Blooming Land”. This goes against comment from Ferrexpo’s main auditor, with Deloitte saying it has found “a significant number of potential associations and linkages adjacent to the CEO”.
Police link UK to BT’s Italian scandal
Italian prosecutors have alleged that executives at BT’s UK headquarters were at the heart of a £530m accounting scandal at its Italy division, prompting calls for UK regulators to investigate. The police report cites emails sent by Brian More O’Ferrall, finance director at BT’s B2B division, asking colleagues in Italy to adjust their accounts to show higher profit. The Financial Reporting Council looked into the audits of BT’s books by PwC during the alleged fraud in 2017, while a review of the matter by KPMG has never been published. Considering the news, Alex Brummer in the Mail says shareholders need access to the findings of the internal KPMG probe.
Daily Mail, Page: 69 The Independent, Page: 13 Daily Mirror, Page: 38 City AM, Page: 5
Johnson joins Patisserie Valerie creditor committee
Luke Johnson, the former executive chairman of failed café chain Patisserie Valerie, has joined its committee of creditors. A source close to the administration, which is being managed by KPMG, said that Mr Johnson’s position on the committee was an “unusual situation”.
FINANCIAL SERVICES NEWS
FCA boss moots ‘lower burden’ regulatory regime
Financial Conduct Authority (FCA) chief executive Andrew Bailey has suggested the City could benefit from a “lower burden” regulatory regime when the UK leaves the EU. He said: “I do think that, left to our own devices, the UK, with its common law system and large, global financial markets, would construct financial conduct regulation in a rather different way.” He added that the FCA “would continue to look to improve onshore EU legislation on a ‘same outcome, lower burden’ basis”. With UK-based financial services firms expected to access the EU market under the equivalence regime, Mr Bailey said equivalence needs “common agreement on [the] rules of the game,” adding: “It is not about whether we each approve of the other’s rules but whether they achieve the common substantive outcomes.” Stephen Jones, chief executive of UK Finance, said the industry body “strongly” supports Mr Bailey’s vision for the future of financial regulation, “with a coordinated regulatory approach centered on competition and delivering the best outcomes for consumers.”
City AM Financial Times
FSB calls for work experience return
The Federation of Small Businesses (FSB) has called for work experience to be reintroduced for all children aged 14 to 16, with compulsory work experience having been scrapped in 2012. The FSB said this would provide a “taste of the skills they will need to succeed in the workplace” during a “crucial stage of learning”. The FSB’s national chairman, Mike Cherry, commented that smaller companies are more likely to “hire people from harder-to-reach backgrounds, which is why the reintroduction of work experience would be a valuable leg-up for students looking to experience work and small firms looking to plug their recruitment gaps in the future”.
The Times, Page: 43 I, Page: 21
Prospective Fed nominee’s chances hit by comments on women
Grant Thornton ’s Diane Swonk says articles from 2000 in which prospective Federal Reserve board nominee Stephen Moore criticises equal pay for women “ought to represent another nail in [his] candidacy.”
Household earnings rise fastest in a decade
UK household earnings have risen at their fastest rate in a decade, according to IHS Markit’s household finance index, which hit a three-month high for April as consumers increased their spending. Current downbeat consumer sentiment could turnaround in the next few months, IHS said. Elsewhere, Deloitte’s consumer confidence index edged up on the back of rising disposable incomes and optimism about job prospects, but remains in negative territory with a net balance of -8%.
The Times, Page: 36 City AM
Extra bank holiday boost?
The Telegraph’s Tim Wallace considers the impact extra bank holidays could have on the economy and productivity. He cites a PwC study which looked at the impact of an extra bank holiday in Victoria, Australia, in 2015 and found the immediate costs outweighed the benefits of extra tourism spending, additional wages and the value of leisure time by around £82m – although the firm said the study misses the potential boost to productivity from workers “recharging their batteries”.
The Daily Telegraph, Business, Page: 8
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