News Roundup Tuesday 1st May 2018
News Roundup Tuesday 1st May 2018
British overseas territories may be forced into transparency
An amendment to the Sanctions and Anti-Money Laundering Bill could force the Government to demand British overseas territories and crown dependencies introduce a public register of beneficial ownership for shell companies established on their shores. The amendment, tabled by the Labour MP Dame Margaret Hodge, has cross-party support, with Conservative backer Andrew Mitchell declaring he had the “certain” backing of 19 Conservative backbenchers. Campaigners say that the secrecy provided by tax havens such as the British Virgin Islands and Cayman Islands enables money laundering, criminality, corruption and oppression.
BBC rescues presenters hurt by tax changes
BBC presenters facing tax bills after using personal service companies to receive their pay have been given loans and advances by the corporation after running into financial difficulties. Deputy director general Anne Bulford told the Commons Public Accounts Committee (PAC) that after being moved to a PAYE system last year, some lower paid presenters had faced cash flow problems.
The Daily Telegraph, Page: 4 The Sun, Page: 8 The Times, Page: 5 Daily Mail, Page: 23 Yorkshire Post, Page: 1
Dutch abolished dividend tax to lure Unilever to Rotterdam
Unilever’s decision to move its headquarters to Rotterdam was contingent on a change in tax law in the Netherlands, according to Dutch government memos. Unilever lobbied against the corporate tax on dividends, the abolition of which will cost taxpayers €1.4bn a year from 2020. Dutch prime minister Mark Rutte described the Unilever decision as “very good news”, but denied that it was the government’s reason for scrapping the tax. “We’re not just doing this because of Unilever. We want to bring as many head offices as possible to the Netherlands,” he said.
HMRC challenged over bankers’ bonus tax
Credit Suisse is taking HMRC to court claiming Britain’s one-off bankers’ bonus tax amounted to an unlawful levy that breached EU state aid rules. The bank is seeking hundreds of millions of pounds in tax repayments that it says it was unfairly charged eight years ago.
The Times, Page: 48
US cities willing to pay for Amazon’s second HQ
The Guardian’s David Pegg provides an overview of Amazon’s tax strategy over the years and the complicity of officials in Luxembourg and allegedly the UK too in helping the online retailer pay as little as possible. Now, Amazon is inviting US cities to outbid each other to host its “second headquarters”, with New Jersey even promising $7bn of tax incentives – $2bn more than Amazon’s maximum investment. The company’s criteria for bidders specifically cites “a stable and business-friendly environment and tax structure” as a high priority, Mr Pegg notes.
The Guardian, Page: 13
Fund manager attacks ‘amateur’ FRC
SCM Direct co-founder Alan Miller has criticised the Financial Reporting Council for what he says is their “amateur approach” to investigations. The fund manager also accuses the FRC of deep-seated conflicts of interest and says it is not fit for purpose.
This is Money Financial Times, Page: 20
WPP co-chief says focus will be on growth, not break-up
The FT examines WPP’s strategy in the wake of Sir Martin Sorrell’s departure, noting that the company faces challenges from the likes of Deloitte offering advertising alongside their core services.
Corporate insolvencies jump 67%
Official statistics from the Accountant in Bankruptcy show corporate insolvencies jumped from 155 in January-March 2017 to 259 in the first quarter of 2018, a rise of 67%.
The Scotsman, Page: 2
Pay ratio reporting – what will it achieve?
Dawn Lewis discusses the merits of companies being required to report pay ratios following confirmation from BEIS that it intends to bring in the measure as part of corporate governance changes expected by the end of June. The Institute of Directors’ head of corporate governance Roger Barker, said he was sceptical about the impact that the publication of executive pay ratios will have on the issue of executive pay at individual companies. Deborah Rees-Frost, director at Innecto Reward Consulting, added that pay ratios would be “more nuanced and complex” than gender pay reports and would be “extremely dependent on the industry type.”
SMEs urged to find their ‘hidden accountant’
A study by the Association of Accounting Technicians (AAT) has found that four out of five small businesses have unqualified staff managing their finances. SMEs are losing around £15,000 a year on average because of poor financial management, the ATT said, and were only seeking professional support two years after starting up. Adam Harper, director of strategy and professional standards at AAT, said as well as engaging an external accountant, businesses should “consider looking for their own ‘hidden accountant’ – that colleague who is best placed to upskill and keep your business in good financial shape on a day-to-day basis.”
Lloyds urged to rethink branch closures
Lloyds Bank is being urged to halt branch closures following news the bank’s profits rose to £1.6bn. Mike Cherry of the Federation of Small Businesses said: “The public was there for the bank during the financial crash. It’s high time that support was returned. When a town loses a branch it hurts vulnerable consumers, footfall and small business revenues.”
Daily Mail, Page: 70
EU targets tech giants over unfair business practices
According to a draft European Commission legal text, app makers and small businesses could soon be able to collectively sue big tech firms for unfair business practices.
Number of struggling UK firms rockets
Begbies Traynor ‘s Red Flag Alert for the first quarter 2018 reveals that 477,210 businesses were in ‘significant’ financial distress at the end of March 2018, up 33% from the same time last year. Some 255,131 UK businesses ended the quarter with negative net worth, while 110,266 had a considerable increase in their working capital deficit. Julie Palmer, managing partner at Begbies Traynor, said: “Should these headwinds continue, they could impact the government’s bargaining power when it comes to negotiating new trade deals after the UK’s exit from the European Union, which would be a major concern.”
City AM The Scotsman, Page: 37 The Press and Journal, Page: 36
Declining demand hits UK car output
The Society of Motor Manufacturing and Traders (SMMT) has said the number of cars made in the UK during March fell by 13.3%, with domestic demand falling 17.7% while exports dropped by 11.9%. Mike Hawes, chief executive of the SMMT, blamed uncertainty about future policies towards diesel and post-Brexit trading relationships. In Europe, by contrast, demand for new vehicles is at a near 20-year high.
Hammond rejects shift to CPI index
Philip Hammond has rejected calls to switch from the retail prices index of inflation to the consumer prices index. While it would be a sensible move, the Chancellor said it was not the right time and that the “fiscal consequences” could not be ignored.
Handelsbanken warned over lax financial crime controls
The Financial Conduct Authority has scolded Swedish bank Handelsbanken for “serious weaknesses” and failings by senior management in not tackling financial crime.
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