News Roundup Tuesday 1st October 2019
News Roundup Tuesday 1st October 2019
NEWS ROUNDUP TUESDAY
Loan charge: MPs say no evidence of deliberate ‘aggressive tax avoidance’
MPs have met with Sir Amyas Morse who will conduct the review into the loan charge. Leading figures from the All-Party Parliamentary Loan Charge Group (APPG) communicated their “serious concerns” about the policy, which critics say undermines the rule of law. A submission compiled by the APPG states: “The evidence clearly shows that the main reason the vast majority of people entered into payroll loan schemes was not to avoid tax, which is the basis for the aggressive pursuit by HMRC and indeed the whole punitive approach of the loan charge.” The statement added: “The overwhelming majority of people sought and followed professional advice. Many sought further reassurances that the schemes were legal and compliant with tax law. They were advised that they were. The way the Treasury and HMRC continually claim that people entered into these schemes as a form of deliberate ‘aggressive tax avoidance’ is simply not supported by the evidence.”
Yorkshire Post, Page: 15
Airbnb questioned over its tax bill
City AM reports that filings from Airbnb show the firm remains subject to “tax enquiries and proceedings concerning its operations and intracompany transactions”. HMRC first began questioning the firm two years ago and the latest filings reveal it has been contacted regarding its application of tax laws, “some of which may result in litigation”. A spokesperson said: “We follow the rules and pay all the tax we owe in the places we do business.”
City AM, Page: 1
Public disagree with Labour’s school tax
The chairman of the Headmasters’ and Headmistresses’ Conference, Fiona Boulton, is the latest educator to come out against Labour’s plans to abolish private schools. In a speech today, she will say political activists who want to tax good schools to death are making “ignorant” decisions which are not supported by the public. The imposition of “crippling” taxes will amount to “abolition by the back door”, Ms Boulton will add.
Daily Mail, Page: 21
Former Clarks boss sues company
Mike Shearwood, the former CEO of Clarks, has sued the company claiming that he was ousted when he tried to blow the whistle on financial mismanagement. Mr Shearwood was dismissed from the footwear retailer last year for allegations of workplace misconduct. However, in a workplace tribunal that starts today, Shearwood will claim that he was removed because he was set to reveal the company’s questionable accounts. In a statement, Clarks said he was “fabricating a frivolous and vexatious narrative surrounding his time at Clarks purely with the intent of eliciting a termination payment.”
Daily Mail, Page: 26
Baby chain hires advisers to explore sale
Mamas & Papas, the nursery and baby accessories retailer, has hired Deloitte to explore its future options including a potential sale. Stork Beta, Mamas & Papas’ parent company, unveiled annual losses of £8.2m for the year to end of April 2018, down from a £10.3m loss a year earlier, in its filing at Companies House. Sales were flat at £121.7m. Mamas & Papas said that its operating costs had risen by £670,000 in one year because of the impact of sterling depreciation and living wage rises.
MPs urged to stop posturing over Thomas Cook failure
City AM picks up on the Thomas Cook story noting that the Financial Reporting Council may investigate EY and PwC, which audited the company. The Financial Conduct Authority is said to be considering the levels of market disclosure in the run-up to the travel firm’s collapse. The paper says MPs probing the failure may well focus on bosses’ pay, but it is more likely the directors are “open to charges of incompetence and arrogance.”
City AM, Page: 2
Mayor celebrates move towards a fairer, more inclusive society
Writing in City AM, Peter Estlin, the lord mayor of London, explains how the Lord Mayor’s Dragon Awards, run by the City of London Corporation, are encouraging firms to put innovation, inclusion and social responsibility at the very heart of their business. Mr Estlin says the City is also funding the charity Heart of the City, which supports SMEs with their responsible business programmes. It is looking now for London’s SMEs to join and learn how their businesses can make a positive impact on people, places and the planet. He concludes that firms that embrace these values “attract highly motivated employees, improve their reputations and boost staff satisfaction – a win-win for us all.”
City AM, Page: 22
Enterprise Finance Guarantee scheme losing its lustre
Loans made to small businesses under the Enterprise Finance Guarantee fell to £226m in the year to June 30, down 70% from the scheme’s peak a decade ago, the Times reports. The paper’s James Hurley suggests the decline in borrowing from the scheme may reflect the fact that small businesses have become less inclined to use external credit since the financial crisis. Accounting firm Moore said the 2% fee acts as a disincentive considering the base interest rate is 0.75%.
Cases involving FTSE 100 companies fall to seven-year low
Data compiled by Thomson Reuters show the number of court cases involving FTSE 100 companies dropped to a seven-year low, but the firm’s Raichel Hopkinson said corporations should not become complacent. She says cash-rich litigation funders are ready to act. Energy giants are among the most prone to litigation. Hopkinson said: “Oil and gas businesses operating in emerging economies often face an elevated risk of legal claims being made against them. For example, tax disputes can be a hazard.”
City AM, Page: 11
UK to introduce Magnitsky law
Foreign Secretary Dominic Raab promised at the Tory party conference that the Government will introduce a UK Magnitsky law, “to place visa bans and asset freezes on those individuals deemed responsible for serious human rights abuses, including torture.”
City AM, Page: 7
ECJ ruling could land PPF with huge bill
The Mail’s Alex Brummer reports on how a case before the ECJ in Luxembourg could result in the UK Pensions Protection Fund (PPF) facing a bill for tens of billions of pounds. Gunther Bauer, a worker for a defunct German company, asserts that under human rights law and the Insolvency Directive, pension bail-out funds have no right to cut benefits and should pay in full. If successful, the PPF would be required not just to upgrade future payments by 10pc but also, at huge cost, to back date to the date when schemes entered the PPF.
Daily Mail, Page: 65
WEALTH MANAGEMENT NEWS
Peter Flavel: ‘It’s not venture capital, it’s patient capital’
The FT interviews Coutts CEO Peter Flavel, who talks about how the bank brings together clients and companies they wish to invest in and mentor, describing it as patient capital.
Confidence slumps ahead of Brexit
A survey by Lloyds Bank found optimism in the economy fell to a balance of -10 this month, its worst level since before the referendum. The bank said concerns about Brexit have escalated over the past month with Scotland, Northern Ireland, the South West and London the most pessimistic regions. The most confident areas were the East and West Midlands and Yorkshire and the Humber. Separately, a study by Santander reveals that 35% of businesses have made no plans for Brexit. Of those that have, 46% plan to cut costs and 33% will cut jobs to mitigate an expected fall in economic activity.
Treasury urged to take holistic approach to spending
Former Treasury head of fiscal policy Richard Hughes has said the department needs a holistic approach to public finances, as recognising the value of public assets would enable more infrastructure investment.
Draghi backs calls for fiscal union to bolster eurozone
The outgoing European Central Bank president Mario Draghi has backed calls for a common eurozone budget in order to strengthen the economic and monetary union.
Contact Paul Southward.