News Roundup Thursday 29th August 2019
News Roundup Thursday 29th August 2019
Crackdown on tax avoidance brings in an extra £1bn
HMRC has clawed back an extra £1bn over the last year in an unprecedented crackdown on payment loopholes. A report from UHY Hacker Young says tax authorities have managed to close down a raft of tax avoidance schemes used to lighten the tax burden. Mike Crellin, director of UHY Hacker Young, said: “HMRC’s focus on eliminating the use of tax avoidance schemes is delivering impressive results. Fewer schemes are being launched and HMRC is sweeping up more of the taxpayers who have bought into these schemes.” In the year ending March 31, investigations had yielded £2.7bn in tax, up from £1.8bn the previous year. Mr Crellin said the taxman also made a fortune out of the Loan Charge scheme, by giving workers who signed up a deadline for payment. “The Loan Charge deadline led to a bumper year for HMRC, but a lot of that money was squeezed out of taxpayers who never realised they were buying into a tax avoidance scheme, ” he said, adding: “Many of those taxpayers had to sell their assets to pay those crippling tax bills. Nobody can fault HMRC’s targeting of tax avoidance, but many of its methods are causing some alarm.”
Daily Express, Page: 2
Trump and Macron strike accord on digital tax plans
Emmanuel Macron agreed with Donald Trump at the G7 summit that tech companies subject to the French digital tax will be able to deduct the amount they pay once a new international deal on how to tax internet companies is decided later next year. The US President had threatened to slap a tariff on French wines in retaliation for the tax on tech groups.
City AM, Page: 6 The I, Page: 21
Well-run companies are succeeding on AIM
Nearly 390,000 people are now employed at companies listed on AIM – an increase of 76% in the last five years. Revenues of AIM-listed businesses have grown 86% over five years, bringing total sales figures up to £58bn, according to the analysis by BDO. Managing partner, Paul Eagland, said: “Despite unusual economic conditions, well-run companies are succeeding on AIM. Almost 25 years since it was established, the market has grown and matured and is creating long-term gains for businesses and investors alike. Brexit uncertainty is having an impact on new listings but Aim has survived many downturns. Listed businesses, and importantly investors, seem prepared to weather the storm and take a slightly longer-term view.” The Yorkshire Post notes that Begbies Traynor raised £8.3m on AIM on Friday, helping fund future acquisitions. The paper also points out that a strong IPO rally in the second qu arter contributed to an overall 35% increase in IPO capital raised through London Stock Exchange in the first half of 2019, compared to the same period last year. Over £19bn of equity capital was raised in H1 – almost three times more capital than on the next largest European exchange.
City AM, Page: 11 Yorkshire Post, Business, Page: 4
Firms confused by advice on EU trade
The Government says it has cleared up confusion over no-deal Brexit advice it had given to businesses. Advice from the Government and the European Commission gave the impression that they would need to apply to Brussels for an identification code as well as getting one from HMRC if they were exporting to continental Europe. The EU Commission’s tax department also deleted a tweet saying both an EU EORI number and a UK EORI umber would be required. Craig Beaumont, director of external affairs at the Federation of Small Businesses, said: “Small firms are trying to get ready for Brexit in nine weeks’ time. Confused guidance between UK and EU customs authorities is the last thing we need. If they can’t agree how goods will flow, what chance do our small businesses have?”
Small companies hit by “air-con tax”
The Federation of Small Businesses (FSB) is calling for the Government to change the rules which mean small business pay higher business rates for installing air conditioning, fire alarms or CCTV cameras, as these are counted as “plant and machinery” assets which add value to a property. Mike Cherry, the FSB national chairman, said: “It’s ludicrous that doing something as simple as trying to keep your employees and customers cool with an air conditioning unit can cause your business rates to spiral.”
The Daily Telegraph, Business, Page: 27
Most SME owners have only a fortnight of holiday a year
A survey of small businesses has found that 37% of owners took no more than 15 days of holiday in the last calendar year – 13 days less than the statutory 28 days offered to those in regular employment. However, 22% took at least 36 days off per year.
City AM, Page: 11
Peer-to-peer industry faces harsh reality when winter comes
Robert Armstrong says in the FT that P2P lenders striving for high returns and with high marketing costs will be the ones that suffer in the event of a downturn.
PERSONAL FINANCE NEWS
Bank of Mum and Dad could lead to pensioner poverty
The generosity of parents who hand out money to children looking to buy property may leave millions facing poverty when they retire, according to research. Large numbers of over-55s risk an uncertain retirement after handing out an average of £24,100 to allow their children or grandchildren to buy homes, according to the study by Legal & General and the Centre for Economics and Business Research. More than a fifth of parents or grandparents who supported family members to secure a mortgage did so using their pension pot and more than half used savings. “Parents and grandparents across the UK want to see their loved ones settled in homes of their own and are giving generously as part of the Bank of Mum and Dad. Many are using their pensions and savings to help out and unfortunately this could be leaving some facing a poorer retirement,” commented Chris Knight, chief executive of Legal & General retail retirement.
The Times, Page: 4 Daily Mirror, Page: 9
Industry voices fears of rates reform delay
A total of 10 trade bodies have written to the Treasury Select Committee to express concern that the recent ministerial reshuffle has risked delaying urgent business rates reform. The industry groups, including the British Retail Consortium, have urged the MPs to publish the results of their business rates inquiry before the autumn Budget, with the committee having started its investigation in February. Four out of 12 committee members have left in the past month.
Armed forces caught in pension tax trap
Following a freedom of information request by Quilter, it has emerged that 3,840 members of the armed forces pension scheme breached their annual tax-free pensions savings limit in 2017-18. Tobias Ellwood, the former defence minister, said some senior services personnel are rejecting promotions rather than face a financial loss for breaching the allowance.
Financial Times The Daily Telegraph, Page: 10 Daily Mail, Page: 26
Survey reveals skills shortage is holding back manufacturing
A Lloyds bank survey of 200 of the UK’s largest manufacturers has revealed that 88% suffer from a skills shortage, of which 49% aid the problem was most acute at the management levels of their organisation. When asked about their own investment decisions, employers were more likely to prioritise creating new products than funding training. Around half of respondents believe further and higher education courses would help, while others called for manufacturing to be included in the national curriculum. It has been suggested that the skills shortage is harming UK productivity.
Two-thirds of businesses fear economy will worsen
Sentiment within Britain’s services sector weakened in the three months to August, the CBI has found, with expectations in consumer services companies at their lowest level since 2012. “The outlook for services firms is bleak at the moment, with Brexit uncertainty holding back investment and expansion plans,” Rain Newton-Smith, chief economist of the CBI, said. “The idea of a no-deal Brexit is clearly weighing down the economy and is affecting businesses both big and small.” Meanwhile, Brexit, trade wars and a consumer slowdown will lead to economic decline over the next 12 months, according to two-thirds of FTSE 350 company secretaries, a survey has found.
The Times, Page: 35 City AM, Page: 2, 6
Contact Paul Southward.