News Roundup Tuesday 27th August 2019

NEWS ROUNDUP

TAX NEWS

PM and Trump may clash over tech tax

Boris Johnson is to meet Donald Trump for the first time as Prime Minister this weekend and the Telegraph suggests the y may clash over the mooted digital services tax, which Mr Johnson wants to enshrine in law. Mr Trump’s administration has previously suggested that the tax could jeopardise any free trade deal.

The Daily Telegraph, Page: 1

Campaigners in loan charge march

Members of the Loan Charge Action Group are due to hold a mass demonstration on September 11, marching on Westminster to call on Prime Minister Boris Johnson to honour a commitment to suspend and review the controversial charge.

Yorkshire Post, Page: 25

PM urges Trump to open up US to British firms

Boris Johnson has asked Donald Trump to remove red tape preventing UK firms from exporting to the US as he outlined terms for a trade deal. In a phone call on Friday Mr Johnson said he wanted the agreement to remove the “very considerable barriers” that currently hamper the ability of British firms to operate in the US. He cited obstacles to selling Melton Mowbray pork pies, British-made shower trays, bell peppers and wine. He also said that there is a tax on British micro-breweries in the US that doesn’t apply to US micro-breweries in the UK. The PM went on to say he would hold discussions with the US on the best way to ensure online giants such as Amazon, Google and Facebook pay a fair amount of tax in the UK.

The Sunday Telegraph, Page: 1, 4 BBC News The Mail on Sunday, Page: 14 Financial Times The Observer, Page: 7 The Sun, Page: 2 Sunday Express, Page: 18

Lord Wolfson: Nothing to fear from no-deal

Lord Wolfson explains in the Mail on Sunday why he is no longer fearful of a no-deal Brexit. The CEO of Next says the work done by the Boris Johnson government is starting to make up for the complacency of Theresa May and Philip Hammond. Lord Wolfson points to the “excellent transitional arrangements for imports issued recently by HMRC” which have greatly simplified the process of bringing in goods from around the world. “If there is no congestion there will be no shortages and no need for stockpiles. It really is that simple.” Lord Wolfson looks forward to being free from the EU’s “shackles” adding that: “If Government prepares effectively for No Deal and if businesses follow suit; if we embrace an optimistic outward looking vision of Britain’s place in the world, at the forefront of free trading and democratic thought, then the worst we have to fear is mild disruption.”

The Mail on Sunday, Page: 23

Tax and planning reforms mooted to boost free port plans

The Sunday Telegraph reports that the Government’s advisory panel on free ports is to consider a range of incentives to encourage companies to move to the specially-designated trade zones after Brexit, including fast-track planning permissions, tax benefits, training incentives and regulatory support. Ben Houchen, Tees Valley Mayor and a member of the panel, said free ports in the UK after Brexit will be able to offer tax benefits that are restricted by EU rules.

The Sunday Telegraph, Business, Page: 3

Government urged to cut taxes to help pubs stay open

Ralph Findlay, the chief executive of Marston’s, uses an interview with the Mail on Sunday to call for a tax cut to help pubs stay open. Meanwhile, over 120,000 people have signed a petition by the Long Live the Local campaign to cut the tax, which is set to rise by 2p to 4p in line with inflation. IN the UK, 54.2p is paid on duty on a pint of beer compared with 5p in Spain.

The Mail on Sunday, Page: 95 The Sun, Page: 32

Johnson to cut fuel duty

Boris Johnson is lining up the first cut to fuel duty in nearly a decade in a move designed to “help hard-working hauliers, commuters and parents on the school run.” The plans will allegedly be announced in Chancellor Sajid Javid’s Autumn Budget, with cuts to VAT and stamp duty reforms also mooted.

The Mail on Sunday, Page: 13 The Sun, Page: 6

INDUSTRY NEWS

Big Four lose their appetite for colourful clients

The Sunday Times’ Oliver Shah considers the reluctance of the Big Four to audit Sports Direct. Grant Thornton is set to stand down at the AGM next month after reportedly being unimpressed by the last-minute discovery of a €674m (£611m) tax bill. Mr Shah says it is not the retailer’s financial health which concerns auditors, but owner Mike Ashley’s character. One accountant told the paper: “Everyone’s afraid to touch him — you’re going to get FRC’ed,” referring to the Financial Reporting Council. “Firms are waking up to the reputational risks of wheeler-dealer customers and wondering whether they’re worth it,” Shah continues, adding that competition is a red herring: “What we need is higher audit fees and more focus on quality, plus bigger fines from the FRC to keep everyone in line.”

The Sunday Times, Business, Page: 2

SMEs NEWS

Leadsom: Businesses want to us “crack on” and end the uncertainty

Writing in the Sunday Telegraph, Andrea Leadsom says businesses across the country are overwhelmingly positive about the future but they want the Government to “crack on”, deliver Brexit and end the uncertainty. The Business Secretary points out that the Government has auto-enrolled nearly 90,000 VAT-registered businesses with an EORI trading number to enable them to trade with their customers in the EU after Brexit day and urges any non-VAT registered businesses that cannot be auto-enrolled to come forward and register. After citing a raft of opportunities, such as clean tech and life sciences, Ms Leadsom says: “Brexit is a once-in-a-generation chance. I believe that Britain’s best years for business and for all our people lie ahead.”

The Sunday Telegraph, Page: 19 The Sunday Telegraph, Page: 5

Over 100,000 SMEs appeal rates rise

More than 100,000 small businesses in England have appealed against their business rates since a revaluation two years ago, according to figures from the Valuation Office Agency. The revaluation in 2017 led to thousands of businesses being hit by a hike of more than 50%, especially in the south, where property values have soared since the previous valuation in 2010, writes the Sunday Times’ Peter Evans.

The Sunday Times, Business, Page: 3

CORPORATE NEWS

Eddie Stobart sees accounting discrepancy fallout

Eddie Stobart has suspended trading in its shares and announced that its CEO will stand down with immediate effect, as the haulage firm looks into accounting discrepancies. Eddie Stobart revealed a £2m error in its 2018 results last month, which was uncovered by a review of past accounts. The review is being undertaken by CFO Anoop Kang alongside auditors PwC. It found that in 2018 operating profits were overstated by about 4%. Publication of the firm’s results for the six months to 31 May were due to be released on 29 August, but are now expected in early September. PwC was appointed auditor last year, replacing KPMG who resigned saying that there had been a “breakdown” in the relationship between the firms, and citing “difficulties in obtaining sufficient appropriate audit evidence,” although that information was “ultimately obtained”.

The Guardian, Page: 44 Financial Times, Page: 10 The Independent, Page: 40 The I, Page: 72 Daily Mirror Daily Mail. Page: 107 The Times, Page: 48 Daily Express, Page: 67 The Daily Telegraph

Ann Summers in rent reduction bid

Ann Summers chief executive Jacqueline Gold has accused some retail landlords of “burying their heads in the sand,” after several refused to accept lower rents to support the chain. The lingerie specialist has been struggling during the high street downturn and it emerged in May that it wanted to reduce its rent. After talks with landlords, Ms Gold said the company had successfully negotiated new terms for almost all the chain’s stores – 95 out of 100 – but that it might have to use a CVA to deal with the remaining five outlets.

Daily Mail, Page: 5 The Guardian, Page: 44 The I, Page: 72

Buyers urged to table bids for furniture stores

Steinhoff has hired PwC to find buyers for furniture retailers Harveys and Bensons for Beds as it seeks to sell them by the end of October to raise funds for its creditors.

The Times, Page: 48

 ‘Heathy interest’ in shipyard

Administrators BDO Northern Ireland say there has been a “healthy level of interest” in taking over Belfast shipyard Harland and Wolff and predicted that other offers may also emerge. The firm has extended a temporary unpaid lay-off of the workforce until September 30 in order to explore rescue deal options.

Yorkshire Post, Page: 11

Woodford’s Industrial Heat stake cut

The value of Neil Woodford’s stake in cold fusion company Industrial Heat was yesterday slashed from £71m to £41m by Link Fund Solutions, the administrator that oversees Mr Woodford’s Patient Capital investment trust. The Times’ Patrick Hosking says there are question for Grant Thornton, which is Patient Capital’s auditor “and is also supposed to keep an eagle eye on the valuation process”.

The Times, Page: 47 Cryptocurrency platform seeks CVA

Cryptocurrency platform BlockEx has hired insolvency firm Leonard Curtis to run a company voluntary arrangement (CVA). The move follows the collapse in the price of cryptocurrencies which has been blamed for wiping out the value of BlockEx’s own digital currency, Digital Asset Exchange Tokens (DAXT), which the company used to raise £20m in an initial coin offering (ICO) at the beginning of last year. However, following the crash in the value of cryptocurrencies only £5.5m of the funding was forthcoming. DAXT is now almost worthless. The Sunday Times notes that BlockEx was selected last year for the Financial Conduct Authority’s regulatory sandbox, a connection the paper says embarrasses the regulator as it has repeatedly warned on the dangers of ICOs, calling them “very high-risk, speculative investments”.

The Sunday Times, Business, Page: 3

PENSIONS NEWS

Tax cut for higher earners comes with a pensions sting

The Sunday Times’ Kate Palmer reports on how Boris Johnson’s plans to raise the threshold for paying higher-rate income tax from £50,000 to £80,000 would cost those people dearly in lost pension tax reliefs. Those earning £50,000 or more qualify for higher-rate pension tax relief. With the change in their tax status, they would get relief at the basic rate instead. Steven Cameron, Aegon’s pensions director, warned the move could see people scaling back on contributions to their pension pots.

The Sunday Times, Business, Page: 13

Doctors consider taking cash to avoid pension trap

The Sunday Times picks up on news reported in the British Medical Journal that doctors at 16 NHS trusts are being offered cash instead of pension contributions as a way to avoid the tapered annual allowance, which has led to punitive tax bills.

The Sunday Times, Business, Page: 16

PROPERTY NEWS

Property a taxing matter for the Chancellor

Carol Lewis in the Times considers Sajid Javid’s options in regard to property tax after the Chancellor told the paper he is “a low-tax guy” who wants to see simpler taxes” and also called for “bold measures” to stimulate the housing market. She notes that Prime Minister Boris Johnson has met the Association of Accounting Technicians to discuss the idea of sellers, rather than buyers, paying stamp duty – but highlights criticism of such a measure. She also says scrapping stamp duty for downsizers could be an option, as could relief for first-time buyers or pushing ahead with the Prime Minister’s suggestion of raising the stamp-duty threshold to £500,000 and reducing the highest rate of tax from 12% to 7%. George Bull of RSM warns Mr Javid that “efforts by his predecessors to use the tax system to help solve the housing crisis have, at best, had little impact , and for many people have made things worse.”

The Times, Page: 60

INTERNATIONAL NEWS

India unveils measures to combat slowdown

India has announced plans to roll back a tax increase on foreign investors and accelerate tax refunds to small businesses as it looks to strengthen economic growth.

Financial Times, Page: 6

German government sued over reunification tax

A couple in Germany are suing the government over a tax that was supposed to be a short-term measure to pay for reunification after the fall of the Berlin Wall, claiming it is unconstitutional. More challenges are expected to the 5.5% surcharge on income tax bills after the German government dropped plans to scrap it.

The Daily Telegraph, Page: 21

ECONOMY NEWS

Economy boosted by staycation rise

The economy is set to see a £2.1bn boost from staycations over the Bank Holiday weekend, with 8.6m Brits having booked UK-based getaways – the highest number since 2012. A survey by VisitBritain shows that the number of Britons opting for trips within the UK for the weekend far exceeds the 6.9m who did so in 2017 and the 7.3m who chose a UK holiday last year. Tourism Minister Rebecca Pow said: “Tourism makes a massive contribution to the UK economy,” with figures showing it is worth £127bn.

Daily Express

Lyons outlines three-point plan to get UK on track

Economist Gerard Lyons outlines a three-point plan in the Sunday Times which he claims will get the UK on track following the shock a no-deal Brexit would bring. Firstly, the Government should take advantage of the low costs of borrowing and use it to invest; secondly, the BoE should continue with its focus on low inflation, and monetary and financial stability. Finally, tax and regulatory incentives should be used to promote infrastructure spending, encourage investment and enhance innovation which will drive the supply side of the economy.

The Sunday Times, Page: 15

OTHER NEWS

The case for staying at work an extra decade – or even more

PwC analysis suggests that if the UK, where 65% of 55- to 64-year-olds are still in work, matched New Zealand’s 78%, it could have added almost 9% to its GDP in 2017.

Financial Times, Page: 9

Brexit sees men more cautious with cash

Research from KPMG shows that men are much more cautious about their money in regard to Brexit than women, with over a third of men changing their money management while only one in four women have done the same.

The Independent, Page: 43

Contact Paul Southward.

Paul Southward