News Roundup Thursday 31st January 2019

NEWS ROUNDUP

SELF-ASSESSMENT TAX RETURNS

Today is the last day for filing your 2017/18 self-assessment tax return.  It may not be too late if you contact us now to see how we may help.

TAX NEWS

OECD pushes ideas for global corporate tax overhaul

Members of the Organisation for Economic Co-operation and Development have agreed to “address the tax challenges of the digitalisation of the economy”, meaning global taxation rules will be redrawn in a bid to end avoidance by technology giants and other multinationals. The reform will see the organisation review what some call the ten commandments of tax law. “The implications of these proposals may reach into fundamental aspects of international tax architecture,” the Paris-based institute said. Plans will be published in June, with an agreement hopefully in place by October 2020.

The Times, Page: 35 Financial Times, Page: 7

REPORTING NEWS

Underlying causes of audit failures must be assessed

Rodger Hughes outlines what he thinks has driven a fall in audit quality and asks whether “regular retendering and restriction on providing non-audit services [has] perversely caused a decline in audit quality?”

Financial Times, Page: 10

UK statistics agency sets up international business unit

With globalisation increasingly distorting international capital flows, the Office for National Statistics is setting up an international unit to work with multi-national firms to ensure that their reporting is accurate.

Financial Times

CORPORATE NEWS

RCapital keen on Patisserie Valerie

RCapital is among the front runners in the race to acquire most of the remaining Patisserie Valerie business from administration. KPMG is running the sale. The list of potential buyers is also thought to include private equity firm Endless. Meanwhile, it has emerged that Patisserie Valerie failed to share a fraud report with its banks as it grappled to secure a funding lifeline prior to its collapse last week. According to the Telegraph, neither Barclays nor HSBC were given sight of analysis prepared by forensic accountants from PwC. The paper suggests the revelation raises fresh questions over the role of top executives at the company during the final throes of its existence.

The Times, Page: 37 The Daily Telegraph, Business, Page: 1

Ashley targets sofa retailer

Mike Ashley is thought to be keen on buying the online furniture specialist Sofa.com which is being auctioned off by owner LGT European Capital. KPMG is handling the sale.

The Guardian, Page: 32 Daily Mail, Page: 60

SMEs NEWS

Venture capital trusts booming

Investors are steaming into venture capital trusts (VCTs), which offer tax breaks in return for investing in smaller companies, with £116m invested so far in January – 245% more than this stage a year ago. Andrew Wolfson, managing director of Pembroke VCT said his trust is seeing its fastest rate of investment ever this year. The most promising new issues, which are strictly limited and come with 30% income tax relief on up to £200,000 per year, and tax-free dividend payments and capital gains.

The Daily Telegraph

A move towards proportionality will help SMEs

Writing in the Yorkshire Post, Tim Ward, CEO of the Quoted Companies Alliance, voices his approval of the Kingman review of the Financial Reporting Council (FRC). He says its replacement, the Audit, Reporting and Governance Authority, would, among other duties, “have to take account of the size and resources of those being regulated and adjust its regulatory actions accordingly”. This, says Ward, would greatly lesson the burden on small and mid-sized businesses which he asserts are disproportionately affected by regulation.

Yorkshire Post

PENSIONS NEWS

Savers scammed out of £23m in 2017

Action Fraud has reported that, in 2017, £23m was stolen from savers accessing their pensions under freedoms introduced in 2014, with two people losing over £1m. The average loss was £91,000 with a total of 253 savers affected. Pensions expert Steve Webb commented: “The combination of someone being not that financially literate but having lucrative pension savings is obviously hugely attractive to scammers.”

The Times, Page: 2 Daily Express, Page: 27

Insurance boss warns pension shake-up plans are ‘terrifying’

Tracy Blackwell, chief executive of Pension Insurance Corporation, has said the government’s new pension proposals are “terrifying” and could leave members with less protection than currently.

Financial Times, Page: 19

ECONOMY NEWS

Personal insolvencies hit seven-year high

Amid a backdrop of tightening consumer credit and stagnating wages, the number of people in England and Wales turning to insolvency has reached a seven-year high. The number of people who became insolvent in England and Wales in 2018 was 115,299, a 16.2% rise from 2017, and there were 71,034 individual voluntary arrangements (IVAs), an increase of 19.9% on 2017 and the highest level ever recorded. Stuart Frith, president of insolvency and restructuring trade body R3, said: “As banks and other lenders have tightened their credit standards in response to the Bank of England’s concerns around consumer over-indebtedness, many people have run out of road,” while Brian Johnson, a partner at H W Fisher & Company, predicted that a rise in interest rates could lead to a further spike in individual insolvencies, adding: “The rise in CVAs likely to have been driven by the retail sector last year, which faced a perfect storm of reduced consumer spending, internet shopping, an interest rates rise and minimum wage increase.”

Financial Times, Page: 2 City AM, Page: 7 Daily Mirror, Page: 13 The Times, Page: 38 The Independent, Page: 66 The Guardian, Page: 32

Spring Statement scheduled before Brexit

Philip Hammond has revealed that he will deliver his Spring Statement in March, shortly before Britain is due to leave the EU. Should the country crash out of Europe with a no-deal scenario then the Chancellor will follow it up with an emergency mini-Budget in April designed to boost spending and confidence in the economy. Mr Hammond said he was not planning to unveil any changes to tax and spending plans in March.

Evening Standard Sky News Financial Times

OTHER NEWS

Parents passing on bad money habits

A survey of 1,000 primary school parents carried out by financial education charity RedStart has revealed that 19% of parents do not save for a rainy day, and 18% say they “overspend”. A further 13% say they do not have the right knowledge to educate their children about money, while 26% believe schools should be promoting more financial education.

The I, Page: 43

Royals looking for accountant

The Royal Household is advertising for an accountant. “You’ll produce management information and financial accounts for a number of entities including retail, charitable bodies and private accounts,” the advertisement on the royal website states. The successful candidate will be paid around £40,000 per year.

Daily Mail, Page: 32

Contact Paul southward if you have any queries.

Paul Southward