News Roundup Tuesday 23rd April 2019
News Roundup Tuesday 23rd April 2019
Matalan founder wins £84m tax appeal
HMRC has lost out on £84m in tax after John Hargreaves, the founder of Matalan, convinced a court that the Revenue took too long to go after money relating to a tax return filed in 2002. An investigation was opened in 2004, with HMRC being alerted to the fact that Mr Hargreaves, who had told taxman he had moved to Monaco and was no longer a tax resident in the UK, was working for three days a week at the firm’s head office in Skelmersdale. The Revenue did not issue its charge for £84m in unpaid capital gains tax until 2007.
700k couples could miss out on tax break
Couples could be missing out on a tax break worth more than £1,000, warns the Mirror’s James Andrews. He highlights that the marriage tax allowance which was introduced four years ago has a four-year deadline for backdated claims, noting that HMRC estimates that around 700,000 couples are eligible for the free tax break, which applies to anyone who’s married or in a civil partnership, but are yet to claim it. Victoria Todd from the Low Incomes Tax Reform Group says: “You can still claim to transfer the personal allowance for 2015/16 and subsequent tax years, even if you did not do it at the time.”
MP in Loan Charge report climbdown
MP Ross Thomson, vice-chairman of the parliamentary group looking at HMRC’s crackdown on tax avoidance by freelancers, says he wants to retract some of the key findings of a 91-page report, suggesting he had not had time to read it because of Brexit-related votes. “It is a hefty piece of work, it’s a very long report. Given the time demands on MPs over Brexit, with hindsight, not enough time was allocated to scrutinise the report properly before publication,” he said. He added that it was written by a campaign group opposed to attempts to claw back unpaid tax, saying: “As the secretariat to the all-party group, members of the Loan Charge Action Group, who also had a personal interest in the issues, compiled and produced the report on behalf of the APPG and provided the staffing. The focus of the report should have been on the implementation of policy by HMRC.” In a statement to the Times, Mr Thomson said he supported the report’s main findings but added: “I do regret that some of the language used within the 91-page document was not tempered before publication.” He said the suggestion that ministers or civil servants were “deliberately misleading” should have been removed, and expressed regret over suggestions that Melvyn Stride, the financial secretary to the Treasury, “deliberately and dishonestly” misled MPs. Ruth Cadbury, Mr Thomson’s fellow vice-chairman in the all-party group, stands behind the report’s findings, saying the Loan Charge inquiry report “is factual and evidence based and exposes the unfairness of the Loan Charge and also the misinformation from the Treasury and HMRC in seeking to justify it.”
The Times, Page: 58 Press Release
HMRC warns over spring scams
HMRC has warned young adults with less experience of the tax system to be especially vigilant against springtime refund scams, with this group – alongside the vulnerable and elderly – increasingly being targeted by fraudsters. Last spring HMRC received around 250,000 reports of tax scams, or almost 2,500 a day, and requested that over 6,000 phishing websites be deactivated. HMRC says April and May often see scammers target people to coincide with the time legitimate rebates are being processed. Pauline Smith of Action Fraud said criminals will often target victims with spoofed calls, voicemails and text messages and urged people to be wary of emails with attachments which might contain viruses designed to obtain personal or financial information.
BBC News Press Release
Broker calls for SDRT to be scrapped
Online broker Etoro has called for a tax that brings in almost £4bn a year for the Government to be scrapped, with UK managing director Iqbal Gandham describing Stamp duty reserve tax (SDRT) as “the ultimate stealth tax.” SDRT is paid by investors on the electronic purchase of more than £1,000 of UK stocks and shares. A poll by YouGov and Etoro suggests that 80% of Britons are unaware of the charge which is expected to raise £3.8bn for the Government in the 2019/20 tax year, rising to £4.3bn by 2023. Patrick Cannon, a tax barrister, says: “The area where SDRT really hits people is their pensions and the whole thing should be abolished.”
HMRC loses case against Loose Women presenter
TV presenter Kaye Adams has won a case against HMRC over her employment status and a £81,000 PAYE tax bill, with the Revenue arguing she was a BBC employee rather than a freelancer.
Change UK treasurer used tax dodge
Neil Davidson, treasurer of the new Change UK party, has admitted taking part in a tax avoidance scheme, telling the Sunday Times he had repaid substantial sums to the authorities. The matter relates to Eclipse film partnerships, which were tax avoidance schemes set up by Future Capital Partners. HMRC described them as “aggressive tax avoidance” and won a court case against one of the schemes. Mr Davidson said: “Eclipse was sold to me as an investment with tax advantages. When it became clear that it was a tax avoidance scheme, I voluntarily repaid the tax advantage I had received in full.”
Lenders expect demand for mortgages to weaken
The Bank of England’s quarterly survey shows lenders expect demand for mortgages to fall over the next three months amid continuing Brexit uncertainty. A net balance of 18.9% of respondents said that demand from homebuyers was likely to fall between April and June. This is the largest figure since the fourth quarter of 2010, when almost a third of lenders were preparing for a slowdown. According to the Royal Institution of Chartered Surveyors, both new buyer inquiries and instructions to sell have been falling for several months.
Letter: Tax system ‘not neutral’
In a letter to the Guardian, Rev Paul Nicolson of Taxpayers Against Poverty says the tax-benefit system is “not neutral between home ownership and rental”. Looking at regulation of the sector, he adds that rewards from rule-breaking are higher for landlords “than any penalty that might be incurred through bad behaviour.”
The Guardian, Page: 6
Fewer homes earn more than owners
Analysis suggests that the proportion of homes earning more than their owners is shrinking as house price growth continues to slow. Halifax says the average rise in house prices over the last two years has outstripped post-tax earnings in 8% of local authority districts. This compares to 18% in 2017 and 31% in 2016. The average UK house price has increased by £14,975 over the past two years, while the average take-home pay over two years has been £46,225.
Daily Express, Page: 63 I, Page: 25 Yorkshire Post, Page: 9
1.8m Scottish homes fall short on energy efficiency
A report from KPMG shows that while the Scottish Government wants all homes to reach energy efficiency standards by 2040 as part of its Energy Efficient Scotland plan, 1.8m homes failed to reach the EPC C benchmark in 2016. This equates to around 66,000 buildings requiring major improvements each year over the next two decades.
The Scotsman, Page: 7
PERSONAL FINANCE NEWS
Credit card defaults jump
Figures from the Bank of England show the number of people defaulting on their credit card debts rose sharply in the first three months of the year. The Bank’s survey of major lenders found the default rate had increased to 22.9% in the first quarter from 12.7% in the last quarter of 2018.
The Guardian, Page: 46 The Independent, Page: 55 Daily Mail, Page: 2
Funding Circle loan book grows
The loan book of Funding Circle has reached £3.4bn after it arranged £644m of new SME lending in the first three months of the year. The company’s revenues rose by 40% in Q1 thanks to more loans being written and an improved cut for Funding Circle, particularly on loans to American companies.
Millennials may be better off with a Lisa
Michael Johnson, of pension company Barnett Waddingham, says nine out of ten young savers would be better off investing in a Lifetime Isa (Lisa) rather than a pension, saying employers should offer staff the option of workplace Lisas. Mr Johnson, a former adviser to David Cameron, says a Lisa will produce a larger return in later life than a pension for most under-40s. He commented: “For the majority of millennials, the Lisa is better. The pensions industry knows this, and is terrified. The next generation of self-invested personal pension buyers, for example, is likely to be very thin.”
SMEs urged to make the most of Brexit delay
Consultant Ready For Brexit says 80% of small businesses were not prepared for Brexit, saying they would have been at risk of disruption if the UK had exited the EU on March 29. Ready for Brexit chairman Paul Hodges has urged SMEs to utilise the delay, saying: “They can’t waste the extension and can’t afford to be complacent, as no deal remains the default position and businesses need to know how Brexit will affect them.” Andrew Gray, PwC’s head of Brexit, comments: “Any extra time to plan for Brexit is a gift. As the European Council president Donald Tusk suggested, don’t waste it.”
Sunday Express, Page: 43
Sales up in March
Data from the Office for National Statistics show s retail sales increased for the third straight month in March. Sales grew 6.7% over the year – the highest since October 2016 – after a monthly rise of 1.1%. Three-quarters of the growth came from internet sales, with department stores the only sector to register declining sales in March, with sales shrinking 0.3%. Commenting on the health of the sector, Anne Alexandre of the British Retail Consortium said: “It is clear that retail is going through a tough year, with increasing store closures and job losses. It is under enormous pressure from both rising costs and Brexit uncertainty.”
The Independent, Page: 55 I, Page: 48
Weather set to deliver Easter shopping boost
Shoppers are expected to spend £11.5bn over the Easter weekend, with the High Street set to see a boost from hot weather. Garden centres and DIY stores are forecast to see sales up 8.5% on last year. The forecast comes from the Centre for Economics and Business Research, which said: “Recent retail data has been very strong, and aided by the good weather and Easter falling late this year, we expect a bumper long weekend for the High Street.” Anne Alexandre, of the British Retail Consortium, said: “When the weather is good as forecasted, consumers are attracted to the summer ranges of clothing and footwear, which are available in the shops, leading to good fashion sales.”
Daily Mail, Page: 1
Arts contribute more to the economy than agriculture
Research from Arts Council England suggests arts and culture have overtaken agriculture in terms of their contribution to the UK economy. The study shows that the sector added £10.8bn to the economy at the last count in 2016, £390m more than the previous year and more than the agricultural sector .
The Guardian, Page: 59
Budget deficit undershoots expectations
Figures this week are set to show that the budget deficit in the fiscal year just ended was lower than expected. Public borrowing for 2018/19 is set to come in at just over £22bn, lower than the £25.5bn predicted by the Office for Budget Responsibility (OBR) last autumn, and £15bn below the forecast in March 2018. Analysts at Investec predict a budget surplus of £0.8bn for March, while Capital Economics is predicting borrowing of £0.5bn for last month. The OBR’s projection is for borrowing to increase to £29.3bn this year before resuming a downward trend. The Sunday Times notes that strong retail sales have boosted VAT receipts while faster earnings growth has boosted tax revenues.
FCA reveals credit complaints fall
The Financial Conduct Authority says the number of consumer credit complaints fell by 5% to 3.91m in the second half of 2018, compared to 4.13m in the same period the year before. The figures show that payment protection insurance made up 40% of total complaints.
The Daily Telegraph, Business, Page: 9
Poor mental health hits employers
Sophie Smith in the Telegraph looks at work-related stress, noting a Deloitte report which suggests the collective cost of poor mental health to employers was between £33bn and £42bn a year.
The Daily Telegraph, Business, Page: 10
Millennial insight on business focus
Chris Blackhurst, director of CTF Partners, considers the need for companies to appeal to millennials. He highlights the annual Deloitte Millennials Survey, which polls 10,500 people born between January 1983 and December 1994 who hold degrees, are employed full-time, and work in large, private sector organisations. Deloitte says the latest poll shows: “They believe business’ priorities should be job creation, innovation, enhancing employees’ lives and careers, and making a positive impact on society and the environment.”
The Independent, Page: 45
Contact Paul Southward.