News Roundup Thursday 3rd January 2019

NEWS ROUNDUP

TAX NEWS

David Sleath refutes Segro tax claims

The CEO of Segro writes to the Mail on Sunday to explain the company’s tax status after the paper last week accused it of being amongst Britain’s “worst scrooges”. David Sleath objects to the claim that Segro paid no tax last year, stating that it had in fact paid £16m “in various taxes” and when it converted to REIT status Segro paid about £90m to HMRC. He adds that Segro shareholders are also taxed directly on property income distributions.

The Mail on Sunday, Page: 91

Foreign Secretary hails Singapore-style post-Brexit Britain

Jeremy Hunt has called for the UK to follow the example of Singapore and transform itself into a low-tax country and slash regulation to enhance its post-Brexit future.

The Mail on Sunday, Page: 20

Cohabiting couples choosing deathbed weddings

The Telegraph reports on how more cohabiting couples are choosing to marry at the last minute – when one spouse is on their deathbed – to ensure the other has a greater level of financial support. The trend follows the example of comedian Ken Dodd who married his long-term partner, Anne Jones, two days before his death in March this year, aged 90.

The Daily Telegraph, Page: 10

CORPORATE NEWS

Former Carillion bosses quizzed

The Insolvency Service interviewed former Carillion chair Philip Green and CEO Richard Howson earlier this month, according to Sky News. The questioning came 11 months after the collapse of the construction giant, with insiders saying hundreds of witnesses have been called for interviews. The Insolvency Service is looking to determine whether any of Carillion’s former directors should face disqualification. Since the company’s failure, KPMG’s audit work for Carillion has been probed by the Financial Reporting Council. Sky News says the reforms of the FRC and the audit market as a whole proposed earlier this month were prompted partly by its reaction to the Carillion scandal.

Sky News Yahoo! News The Sunday Times, Business, Page: 3

Hilco took £48m from ailing HMV

Several papers follow up on the collapse of HMV, which has appointed KPMG as administrator. Geoff Ho in the Sunday Express points out that in the six years under the ownership of Hilco the retailer never made a profit and racked up losses of £39m. The Sunday Times says accounts for HMV Retail show Hilco took up to £48m out of HMV since 2013 in fees, wiping out its profit leaving it with no corporation tax to pay. Hilco said HMV had paid no fees in the past two years. The Mail on Sunday is urging anyone given an HMV gift card for Christmas to use it immediately while the Sunday Telegraph’s Christopher Williams wonders how the store managed to survive so long. He adds: “That a specialist in lost causes has thrown in the towel suggests that administrators KPMG may struggle to attract another rescuer.”

Sunday Express, Page: 65 The Sunday Times, Business, Page: 1 The Mail on Sunday, Page: 103 The Sunday Telegraph, Business, Page: 2

A tumultuous year for some corporate giants

The Sunday Times’ Andrew Lynch looks back over the most significant corporate failures of 2018, noting how the collapse of BHS and Carillion brought the spotlight onto the Big Four auditors and their regulator, the Financial Reporting Council, which was found unfit for purpose in a review led by Sir John Kingman this month.

The Sunday Times, Business, Page: 7

HMV was too ‘unimaginative’, says Waterstones boss

Waterstones CEO James Daunt has blamed the insolvency of HMV on an unwillingness to take risks and too much focus on a single demographic, calling its management “relatively unimaginative”. KPMG was appointed as administrator late yesterday after what it described as “extremely weak” Christmas trading. The Times points out that Intu Properties has more sites rented out to HMV than any other retail property group.

Financial Times, Page: 16 The Times, Page: 33

SMEs NEWS

Pagano: The needs of family firms must be prioritised

Maggie Pagano lauds Britain’s family businesses in the Mail citing a report by the Institute for Family Business which showed that the gross value-added contribution to national income by family firms has increased by £100bn since 2010 to £519bn – a quarter of the total. Ms Pagano says the country’s health depends on small companies for its future growth but they are being cut down by the time they get to their fourth generation because of onerous inheritance tax and succession rules.

Daily Mail, Page: 59

Mike Cherry: Politicians must stop neglecting the domestic agenda

In a piece for the Times, Mike Cherry, national chairman of the Federation of Small Businesses, says the confidence of Britain’s small businesses desperately needs lifting. He calls for politicians to stop their infighting and “resolve to refocus on the domestic issues that affect small businesses day-in, day-out.” Meanwhile, the paper’s James Hurley talks to six entrepreneurs about how they are planning for a tricky 2019.

The Times, Page: 39 The Times, Page: 36

INDUSTRY NEWS

Finance staff fail to share feelings

A new report from the Chartered Institute for Securities & Investment (CISI) has found that less than half of UK financial services employees would feel confident speaking to their manager about mental ill-health, despite a third of absences being due to stress, anxiety or depression. The survey found that 31% of workers would find it difficult to tell their manager if they were struggling with mental health and another 23% said they were “unsure” if they would. Survey respondents did highlight PwC and Hargreaves Lansdown as particularly supportive of staff. A separate survey by business solutions firm Adviserplus in 2017 indicated that a third of absences in the financial services sector were due to mental ill health.

Yahoo! Finance

Will audit market review trigger tenders?

One of Oliver Shah’s predictions for 2019 is that companies will be “galvanised” into action by the competition review of the audit market, with FTSE 350 companies bound to put more audits out to tender as they try to show their relationships are commercial rather than “cosy”. The Sunday Times journalist also believes some of the Big Four “will make noises about calling [Andrew] Tyrie’s bluff by pushing for a full competition inquiry, rather than agreeing new rules behind the scenes.”

The Sunday Times, Business, Page: 4

ECONOMY NEWS

UK retailers facing tough 2019

As many as 10,000 shops could close next year as heavy discounting wipes out profits and business rates remain high. The prediction comes from the Centre for Retail Research, whose Professor Joshua Bamfield says: “The greatest sufferers will be the smaller, independent retailers who have to pay high rates and wages while not getting as much business. There will be a continuation of the current situation rather than an absolute calamity.” The number of job losses in the retail sector are expected to rise 19.2% to 164,000 in 2019. Meanwhile, insolvency specialists Begbies Traynor say 30,214 UK retailers are in “significant” financial distress. Partner Julie Palmer said: “The picture is very uncertain for 2019. Even online is not immune.”

Sunday Express, Page: 1, 4-5 The Mail on Sunday, Page: 93 The Sun, Page: 10

OTHER NEWS

Cowell snubbed over tax?

The Sun believes music mogul Simon Cowell has been snubbed in the Queen’s New Year Honours because he was caught up in the 2016 Panama Papers scandal. Cowell tells the paper he is now “on speaking terms with HMRC” and calls them whenever he’s unsure about something.

The Sun, Page: 16

Tax man watching property shows to catch fraudsters

The Sun reveals that tax officials are watching TV programmes such as Grand Designs and Homes Under The Hammer to build cases against developers who submit dodgy returns. An HMRC source said: “It’s been going on for years. We make an average of one new case a month. As a bonus we are paid to watch TV for an hour or so each week.”

The Sun, Page: 26

Contact Paul Southward if you have any queries.

Paul Southward