News Roundup Tuesday 15th January 2019
News Roundup Tuesday 15th January 2019
Sales tax would reign in online predators
Sir John Timpson has called for business rates to be replaced with a sales tax operating in a similar way to VAT. The boss of the Timpson shoe repair chain told MPs that internet giants were wiping out high street shops with predatory pricing. His comments come as it was revealed that Amazon paid £63m in business rates last year despite sales of £8bn in Britain. This contrasts with high street players such as John Lewis, which paid £172m with sales of £10.2bn in 2018, while Marks & Spencer handed over £184m while making £9.6bn in sales.
Daily Express, Page: 7 Daily Mail, Page: 13 Daily Mirror, Page: 38
Bereaved missing out on Isa tax break
The Mail reports that just 14% of those eligible to do so are taking advantage of the right to inherit Isas. Widows, widowers and civil partners gained the right in 2014 to transfer a partner’s Isa into an “additional permitted subscription” Isa, but a FOI request from Zurich revealed that over the past three tax years only 61,000 have used the extra allowance out of a possible 450,000.
Daily Mail, Page: 44
Top-rate Scots taxpayers forecast to rise by nearly 50%
The number of Scots paying the top rate of income tax is forecast to rise by almost 50% in the next five years, according to the Scottish Fiscal Commission (SFC). Professor David Ulph from the SFC explained to MSPs on Holyrood’s finance committee that rising earnings are dragging more people into the additional rate band – which sees those north of the Border earning £150,000 a year or more paying income tax at 46p. The SFC has forecast the number of Scots in this category is to increase from 14,900 in 2018-19 to 22,000 in 2023-24, a rise of more than 47%. However, Tory MSP Adam Tomkins questioned why income tax receipts are only forecast to rise “relatively modestly” despite the “significant” rise in top rate tax payers. Tory finance spokesman Murdo Fraser said he feared the SNP policy of sucking “as many people as possible into higher tax bands” would drive wealth away.
The Scotsman, Page: 4
Treasury to review ‘unfair’ tax avoidance measures
Tax advisors have welcomed a review into disguised remuneration schemes, after HMRC said it would publish a review of the effects of the loan charge which, from April, will levy retrospective fines on top of underpaid tax. Contractors with outstanding disguised remuneration loans who have not made arrangements with HMRC by the April deadline could have tax levied on loans dating as far back as April 6th, 1999.
Financial Times The Times, Page: 46
Self-employed warned to look out for technical glitch
Blick Rothenberg is warning that some self-employed people could be charged for late payment of tax relating to their 2017-18 tax return due to a technical glitch at HMRC. Those who have already filed their tax returns are receiving bills for last year’s tax payment from HMRC which fail to include the “payment on account” for the year ahead. A spokesman for the tax office said: “Nobody will be charged additional interest due to this problem.”
Tackle housing, not the elderly
The Taxpayers’ Alliance has declared that taxing elderly people will not solve the problem of intergenerational unfairness. Instead, the lack of affordable housing for young people must be solved, the group said.
The Times, Page: 44 Daily Express, Page: 22
Council’s claim of tourist tax support rubbished by hoteliers
Hoteliers in Edinburgh have said claims that a majority of City’s accommodation providers back a tourist tax are “unbelievable”. Russell Imrie, spokesman for the Edinburgh Hotels Association, made the comment after the City Council published the results of survey which claimed 51% support proposals for a tax of 2% or £2 per room per night. Mr Imrie said direct talks with providers found “nobody from the accommodation sector was in favour of a tourist tax”. He added: “The UK has the second highest rate of VAT in the EU on accommodation. We are at a distinct disadvantage already with the taxation we levy.” Garry Clark, of the Federation of Small Businesses, said firms needed to know who would administer a new tax and what say they would have over how revenues were spent.
The Scotsman, Page: 12
Streamlined registration service for tax and company status proves popular
Small Business Magazine looks at how over 200,000 small business are taking advantage of the Government’s Streamlined Company Registration Service, established by HMRC and Companies House and designed to ease the administrative burdens on new businesses. Mel Stride MP, Financial Secretary to the Treasury, commented: “HMRC and Companies House are working hard to make business registration and tax easier. Previously, the same information would need to be entered into a number of different platforms to register a company and register for tax, we have simplified that process. The Government is committed to ensuring we can deliver a modern, digital tax system for all businesses and their agents, supporting them to get their tax right and reducing the amount of tax lost through avoidable error.”
‘Don’t panic’ as Sipp firms struggle
Following the Self-invested personal pensions (Sipp) industry’s 2018 annus horribilis, which saw several providers collapse or rescued by other firms, Laura Miller suggests rushing to cash in investments, particularly if the Sipp is in a drawdown account, may be the “least sensible option”. If a provider goes bust, she notes, then usually the investor would be protected by the Financial Services Compensation Scheme, cover which will increase to £85,000 per claim from April, with suggestions of a further increase in the future. “The best course is to diversify your portfolio so you always have access to at least some ready cash,” Miller adds.
More prudent pension policy required
The Telegraph’s Juliet Samuel considers pension reforms over recent years and says auto-enrolment is the “only truly successful” change of the last few decades. It has introduced an element of prudence which, she says, should be applied to pension freedoms to prevent people from being duped into losing, or spending at huge cost, their life’s savings.
Pension cold call ban comes into force
A ban on pensions cold calling is now in force, with those breaching the regulation facing fines of £500,000. However, Kay Ingram, director of public policy at advisory firm LEBC, warns that the ban in itself will not stop determined criminals, asserting that people needed to understand that no legitimate adviser or pension provider would call them out of the blue.
WEALTH MANAGEMENT NEWS
Robo-advisers taking work away from wealth managers
The traditional wealth management industry is coming under pressure from automation, according to a new study by GlobalData. The report suggests that automated robo-advisers could provide traditional wealth managers with a competitive advantage if they were used alongside humans to augment services. Andrew Haslip, financial services analyst at GlobalData, explains: “Robo-advice is a volume play, not a margin play, so the boutique specialist angle is not practical. Wealthfront, Betterment and a few other major brands such as Acorns are strong enough and broad enough to attract enough clients. Start-ups with little brand awareness and targeted addressable markets are not.”
World Bank warns of ‘darker skies’ for global economy
The World Bank has warned of increasing risks, or what it calls “darkening skies”, for the world economy. In its annual assessment of global prospects the World Bank predicts continued, though somewhat slower, growth this year and next. The Bank’s forecast for the global economy is expansion this year of 2.9% and 2.8% in 2020. The predicted slowdown is focused on the rich countries, particularly the US, although it will continue to expand more rapidly than either the Eurozone or Japan according to the Bank’s forecasts. The US slowdown is the result of the fading impact of President Trump’s tax cuts and by 2021 its growth will have almost halved – to 1.6% compared with 2.9% last year. In contrast, growth in emerging markets and developing economies is likely to gather pace somewhat despite the continued cooling down in China.
Confidence in the digital skills improves
A survey by Deloitte of 158 digital leaders at FTSE-listed companies, private firms and public-sector organisations has found 18% think that school leavers and graduates are entering work with the right digital skills and experience, up from 12% six months earlier. Commenting on the firm’s latest Digital Disruption Index, principal at Deloitte Digital Scotland, Gareth Edwards, said: “There is a lot more that still needs to be done and, if left unaddressed, the skills gap could grow to a level that’s hard to fill.”
The Scotsman, Page: 37
School leavers feel pressured to choose university over work
Students feel they are being pushed down the route of going to university, according to a survey of 1,500 recent school leavers. The poll, carried out on behalf of AAT found two-thirds were urged to go into higher education by teachers, while almost six out of 10 said their parents wanted them to pick that option. One in five said their parents pushed “too hard” for them to go into higher education. Rod Alder, head of business development for AAT, said: “For many school leavers university remains entirely the correct option”. He added: “In the accounting industry, for example, we see thousands of people each year who left school at 18, got a job and qualified a year earlier without the student debt that graduates built up.”
Contact Paul Southward if you have any queries.