News Roundup Tuesday 19th February 2019

NEWS ROUNDUP

TAX NEWS

John McDonnell warns Jim Ratcliffe against shifting tax affairs

Labour’s shadow chancellor has warned Ineos chief Sir Jim Ratcliffe that future government backing for his chemicals company will be jeopardised if he shifts his tax affairs outside of the UK. John McDonnell’s comments come after reports that Britain’s richest man is planning to relocate to Monaco in a bid to avoid £4bn in tax. The Sunday Times reported that Sir Jim has been working with PwC on the tax avoidance plan. It is understood that PwC has consulted its public interest body over whether it should refuse to help or drop the Ineos account over potential damage to its reputation.

Financial Times, Page: 2 Daily Mirror, Page: 6 The Guardian, Page: 17 The Independent, Page: 57 The Times, Page: 40 City AM, Page: 3

St Albans top tax-dodging town

St Albans has topped a list of tax dodging towns in the UK, according to research by UHY Hacker Young. The firm found that there were 24 disclosures of unpaid tax per 100,000 population last year in the Hertfordshire city. The firm’s Andrew Snowdon said: “Tax avoidance is not restricted to super-rich neighbourhoods of London. Normal commuter-belt towns are minor hotspots for admitting unpaid tax.” Other cities in a top 10 list published by the company include Edinburgh, Slough, Bournemouth, Milton Keynes and London.

The Sun, Page: 17 Daily Star, Page: 19 The Daily Telegraph, Page: 12 The I, Page: 2

HMRC accused of ludicrous pursuit of business

Retailers are growing frustrated with HMRC accusing the taxman of being “unreasonable” in their pursuit of businesses that inadvertently breached pay rules. The British Retail Consortium says the Government is right to be reviewing the rules, but as it does so HMRC should cease enforcement action against “those employers who are operating reasonable pay practices designed to support colleagues.”

The Times, Page: 40

Johnson puts crime and taxes at heart of stealth leadership campaign

In what has been described as a secret leadership bid to Conservatives, Boris Johnson has called on the party to concentrate on fighting crime and cutting taxes after Brexit. In speech to Social Justice think tank last week he told a group of 30-plus MPs that the Tories were “the party to promote social justice and equality”, as they did it “better than Labour”, adding: “Our One Nation Tory values will knock Corbyn out of the park.”

The Sun Daily Mail

SMEs NEWS

Government urged to protect smaller firms

The Federation of Small Businesses (FSB) has called on the Government to introduce measures to end a culture of late payment and “supply chain bullying”. Revealing that 84% of small companies had been paid late, the FSB said there needs to be an obligation for large companies to assign non-executive directors to their boards who would have responsibility for their organisation’s payment practices and supplier relationships. Mike Cherry, the federation’s national chairman, said: “Our reforms are not the silver bullet that will suddenly signal the end of poor payment practices, but they are certainly important and necessary steps towards this. I am calling on all politicians and big businesses to back these reforms and to show that they believe in fair pay and fair play.”

The Times, Page: 44 Daily Express, Page: 43 The Daily Telegraph, Business, Page: 6 Yorkshire Post, Page: 5 The Press and Journal, Page: 31 The Scotsman, Page: 34

Are the Government’s IR35 reforms suitable for today’s tech landscape?

Graham Smith, the head of marketing at Curo Talent, questions the wisdom of the Government’s IR35 tax reforms, suggesting they could discourage IT and computing contracting to the detriment of the UK’s fast growing tech industry. Mr Smith says some contractors may decide the burdens are too much and move to permanent employment, reducing the flexibility of the labour market, while UK start-ups may also baulk at the admin involved with proving a contractor is outside of IR35. Mr Smith concludes: “Rising numbers of tech start-ups in the country require the tax system to support them, rather than hinder their hunt for IT talent. If IR35 reduces the talent pool, these start-ups will have reduced ability to develop, implement and manage ground-breaking digital technologies.”

The HR Director

Business lending to SMEs should be regulated

Writing in the Mail, Ruth Sunderland argues that business lending to small and medium-sized businesses should be regulated to stamp out exploitative practices. She says the Financial Ombudsman must be given a big increase in staff and funding so it can deal with cases properly, or a tribunal system is created which has real teeth. Ms Sunderland ends by saying that the market must be fixed in order to restore trust in banks, adding that the least entrepreneurs deserve is fair and transparent banking.

Daily Mail, Page: 66

INDUSTRY NEWS

Manufacturers spend £1bn on Brexit advice

Research from Source Global, a data provider, has found that manufacturers in Britain spent more than £1bn on consultants last year as businesses attempt to navigate the impact of Brexit. Manufacturers were the second biggest private sector buyers of consulting services. Financial services companies spent the most, at £2.6bn.

The Times

MPs call for five years of hospitality data from Big Four

The House of Commons business select committee has called on the Big Four to hand over five years of data detailing how much they spent on wining and dining current and prospective clients.

Financial Times, Page: 2

REPORTING NEWS

Trust in auditors will be elusive without an overhaul of priorities

The FT’s Jonathan Ford suggests current accounting standards fail to aid the central legal duties of auditors to protect capital and ensure a company’s figures present a “true and fair” view.

Financial Times, Page: 16

INTERNATIONAL NEWS

Big Four face serious review in Australia

The Australian Securities and Investments Commission (ASIC) has been asked by the country’s joint committee on corporations and financial services to develop new audit quality measurements amid ongoing concerns about the industry. A report from the committee also called for a review of audit focussing on “market dominance and conflicts of interest”. The report stated that there was a risk that Big Four firms “fail to fearlessly scrutinise the accounts and risks of the corporations they audit because it may be detrimental to the pursuit of their wider business interests”. The Australian Financial Review notes that the call for a review comes after two probes in the UK into audit – the CMA review and the Kingman investigation. It is also pointed out that ASIC has opposing views to the country’s Financial Reporting Council, which believes there is no systemic problem with audit quality in Australia.

The Australian Financial Review

ECONOMY NEWS

Hammond may be forced to abandon borrowing targets

KPMG has warned that Philip Hammond may need to drop his borrowing targets as public finances come under increased pressure from a sluggish economy, uncertainty around Brexit and rising demands to spend. Yael Selfin, KPMG UK’s chief economist, said: “The Chancellor may have to abandon his fiscal targets temporarily. The remaining space to borrow is already very tight, and he may throw caution to the wind – if there is a further downturn then the economy will need help.” Ms Selfin predicts the economy will grow by 1.2% this year, down by one-quarter from a previous forecast of 1.6%.

The Daily Telegraph, Business, Page: 3

Veganuary hurts pub sales

RSM has said the increased popularity of Veganuary has led to a fall in sales for pubs and restaurants as consumers “opted for cheaper vegetable/ plant-based dishes over meat options.” The accountancy firm’s head of leisure and hospitality Paul Newman added: “Wet-led operators were also hit by the growing influence of Dry January with much of December’s uplift being undone by these disappointing results.”

The Daily Telegraph, Business, Page: 3

OTHER NEWS

Corbyn’s son rents luxury ex-council flat on Airbnb

Jeremy Corbyn’s son Sebastian has come under fire for allegedly buying a two bedroom former social housing flat in Shoreditch for £162,000 and renting it out for £150 a night on Airbnb. Other two bedroom flats in the same building have been sold for £650,000. Sebastian Corbyn works as an adviser for Shadow Chancellor John McDonnell who has previously said the sale of social housing units is “scandalous”. Labour MPs including Jeremy Corbyn have criticised Airbnb in the past, with the Labour leader calling for such platforms to be taken out of private hands and into “cooperative ownership”. Conservative vice-chairman James Cleverly commented: “It looks like rank hypocrisy for Mr Corbyn to be benefiting from an affordable home sell-off and from Airbnb. One rule for them and one rule for everyone else.”

Daily Express The Sun, Page: 10 Daily Mail

Contact Paul Southward if you have any queries.

Paul Southward

Paul Southward