News Roundup Thursday 27th June 2019

NEWS ROUNDUP

TAX NEWS

Johnson’s tax cuts to cost £20bn

Calculations by the Institute for Fiscal Studies suggest Boris Johnson’s pledges to raise thresholds for higher rate income tax and NI would cost the exchequer up to £20bn a year while mainly benefiting richer households. The Conservative leadership hopeful has proposed raising the threshold at which higher-rate income tax is payable to £80,000 a year from £50,000. The analysis says that cutting tax on these earnings to 20% from 40% would cost the public finances around £9bn a year, and benefit the highest-earning 10% of Britons, while increasing the NI threshold to the £12,500 mark at which income tax becomes payable would cost at least £11bn.

Daily Mail, Page: 9 Financial Times, Page: 1

NHS consultants turn down work over pension tax

Research commissioned by NHS Employers suggests that senior health service doctors are reducing their hours and turning down extra work to avoid being hit with large tax bills on their pensions, with some even opting to retire early. The study shows that almost 20% of consultants have cut the number of hours they work and 42% have reduced the amount of extra shifts they do. Some 33% say they are considering taking early retirement due to changes to the NHS pension tax regime in 2016 that may result in tax bills that top £50,000 a year.

The Guardian. Page: 18

Healthy restaurants to be served tax cuts

Government plans to combat obesity could see restaurants offering healthier options benefit from tax cuts. Ministers have backed measures which will see discounts on business rates for restaurants and cafes serving healthy food. Public Health Minister Seema Kennedy has backed five council-led programmes which will be rolled out nationally if they succeed.

The Daily Telegraph, Page: 10 The Sun, Page: 6

Tax break call for relocation

The Centre for Policy Studies has suggested companies that move to Britain’s most deprived should be handed tax breaks to address London’s domination of trade. The think-tank has urged ministers to set up a network of “opportunity zones” for “economically distressed areas”, providing tax incentives to encourage investment.

The Times. Page: 42

Lloyds freezes accounts of 8k clients

Lloyds Banking Group has frozen the accounts of around 8,000 offshore customers in a bid to crack down on money laundering. This comes days after Jersey, Guernsey and the Isle of Man announced they will open up their company registers to public scrutiny, having faced growing international pressure over the lack of transparency in offshore tax havens..

The Independent, Page: 54

CORPORATE NEWS

Goals shareholder hits out at Ashley

Goals Soccer Centres’ second biggest shareholder has criticised Mike Ashley, accusing him of “bullying” after the Sports Direct owner threatened to vote against the reappointment of all of Goals’ directors. Chris Mills, founder of Harwood Capital, which has an 18.86% stake in Goals, described Mr Ashley’s intervention as “deeply unhelpful”. “Sports Direct are indulging in a degree of bullying. The board are fully cognisant of their fiduciary duties and are busy trying to sort out this mess,” Mr Mills added. Mr Ashley last week attacked Goals’ decision to appoint forensic accountants from BDO to investigate accounting errors and policies, arguing that because BDO is the company’s auditor it is not independent. Mr Mills, however, pointed out that BDO only took over from KPMG as the auditor of Goals last year.

The Times, Page: 3

Wealth manager: Woodford illiquidity ‘breath-taking’

Analysis of Neil Woodford’s suspended Equity Income fund shows that almost half of it was invested in “illiquid” stocks by the end of 2018 – with just 60% “level one securities”. While open-ended funds are allowed to own up to a maximum of 10% in unquoted stocks, accounts show that 20% of the fund’s assets were invested in such companies, while a further 20% was invested in stocks that were less liquid. Alan Miller, of online wealth manager SCM Direct, said the figures were “breath-taking” and raised “so many alarm bells”. Mr Miller believes auditor Grant Thornton could also have done more to help investors, saying it could have included a written warning that the fund was not liquid enough, rather than leaving the figures as they were in the annual report.

The Daily Telegraph, Business, Page: 1

Campaigners put the spotlight on sponsors

Melanie Phillips in the Times considers corporate sponsors of whom some campaigners disapprove, noting that the Globe Theatre has long been associated with PwC – a firm with “a lengthy record of auditing oil and gas companies”.

The Times, Page: 24

Unlike Boris, PatVal boss Luke Johnson cannot have it both ways

The FT’s Matthew Vincent looks at the collapse of Patisserie Valerie and the regular column written by former boss Luke Johnson, noting he has used it to question Grant Thornton’s role.

Financial Times, Page: 18

Tourism agency reports complete

Investigations into expense claims and bullying allegations at tourist agency Welcome to Yorkshire have been completed – including a probe by BDO – but the Yorkshire Post says uncertainty remains about when details will be made public with reports of the findings not finalised.

Yorkshire Post, Page: 1

SMEs NEWS

Political uncertainty worries 1 in 4 SMEs

The latest BVA BDRC SME Finance Monitor shows that a quarter of UK SMEs see political uncertainty as the main obstacle facing their business. In London the proportion jumps to 33%, with the North East (30%) and West Midlands (27%) also exceeding the average. Stephen Pegge, managing director of commercial finance at UK Finance, said: “This survey suggests many small businesses across the country are increasingly concerned about the ongoing uncertainty over Brexit.” He added that the banking and finance industry is ready to support viable businesses, noting that 80% of finance applications from SMEs in the UK are successful, “showing that firms should be confident in approaching their bank to discuss any financing needs.”

Yorkshire Post, Page: 8

SMEs hit by late payments

Issues related to late payment problems have worsened for 27% of UK SMEs in the last 12 months, according to research conducted by Purbeck Insurance Services. The study also shows that 29% are experiencing worsening cash flow problems and 30% have found that access to finance has become harder.

Yorkshire Post, Page: 8

INTERNATIONAL NEWS

Billionaires call for a wealth tax

Some of America’s richest people have called for a wealth tax on the super-rich, saying: “America has a moral, ethical and economic responsibility to tax our wealth more.” In a letter to US presidential candidates, 18 signatories including investor George Soros and Facebook co-founder Chris Hughes said a wealth tax that would target the wealthiest 0.1% “could help address the climate crisis, improve the economy, improve health outcomes, fairly create opportunity, and strengthen our democratic freedoms.” The group, who say they are non-partisan and not endorsing any candidate, added: “Instituting a wealth tax is in the interest of our republic.”

BBC News The Guardian, Page: 35 Financial Times, Page: 4

ECONOMY NEWS

Think-tank: Brexit vote negative for the economy

Academic think-tank The UK in a Changing Europe says the Brexit vote has hurt the economy, with its Brexit Scorecard report saying: “There is little doubt that the impact of the Brexit vote on the UK economy has been negative.” The study, which considers the potential implications for inflation, productivity, public finances, exports and imports, says that while “huge uncertainties” remain about the long-term economic impact, “it seems highly unlikely to be positive”. “The question is how large the damage will be,” the report adds. The think-tank cites calculations by John Springford, deputy director of the Centre for European Reform, which suggest that the UK economy is 2.5% smaller than it would be had Britain voted to remain in the EU.

The Guardian The Independent, Page: 56

Contact Paul Southward.

Paul Southward