News Roundup Tuesday 3rd July 2018
News Roundup Tuesday 3rd July 2018
Tax avoidance deadline nears for contractors
Freelance workers must declare any tax-avoidance schemes they have used by September 30th, or face a hefty fine. HMRC has ordered almost 100,000 contractors who were paid by “disguised remuneration” and similar arrangements going back to 1999 to come forward to avoid a loan charge on top of demands for repayment. A source said that “thousands” have registered, but a “significant number” have not. Those who have registered will be asked to pay back the tax they owe, with some believed to be facing bills as high as £900,000, but will be offered the chance to pay in instalments over years. They will also be spared the heavy loan charge fine imposed on those who do not come forward by September.
Work perk tax take rises
The amount of tax HMRC takes from in-work benefits such as gym membership or health insurance has risen by 18%. Although the number of people receiving such benefits fell from 3.76m in 2015-16 to 3.66m the next year, the amount of tax collected rose from £2.8bn to £3.3bn, largely because of higher taxes on company cars and private medical insurance. Andrew Snowdon, head of tax at UHY Hacker Young, says: “Work perks are a good way for businesses to recruit and retain the best talent. But as HMRC ratchets up tax rates on some perks, there will soon come a time where the size of the tax bill outweighs the benefits.”
The Times, Page: 63
MP backs rise in self-employed NICs
Conservative MP Sarah Wollaston has suggested a rise in NICs for the self-employed could contribute to increased funding for the NHS.
Yorkshire Post, Page: 6
A million couples missing out on tax break
More than a million married and civil partnered couples are still eligible for a tax break but have yet to claim it, HMRC has said. The Marriage Allowance is worth up to £238 a year, and backdated payments of up to £662 could also be available. There has been criticism that the allowance, aimed at couples with one major source of income, is not easy to claim. However, the government said that the new online application takes fewer than 10 minutes to complete.
BBC News The Daily Telegraph, Page: 11
Tax rises ‘would stunt growth’
Kate Andrews of the Institute of Economic Affairs argues that raising taxes to fund the NHS is likely to stunt economic growth. She says politicians should consider all other options, ranging from increasing the pension age to prefunding healthcare systems, that would help combat issues of intergenerational unfairness in the tax and spending cycle.
City AM, Page: 27
McLaren to leave FRC
The Times reports that Melanie McLaren, executive director for audit and actuarial regulation, will leave the Financial Reporting Council in the coming weeks. In April it emerged Ms McLaren had quietly stepped down from the board of the FRC alongside Paul George, executive director for corporate governance and reporting. The moves were part of a string of reforms made by the FRC as it comes under pressure to be quicker and more robust in investigating and punishing failings by accounting firms.
CVA criticism misleading
John Buchanan from HW Fisher & Company writes to City AM to argue that the increasingly frequent depiction of CVAs as a soft option which unfairly inflicts pain on a business’s creditors can be misleading. He says a CVA is only as good as the plan the company puts into place, and if the fundamental problems of the retailer are not addressed, a CVA “just delays the inevitable failure.”
City AM, Page: 26
Consultants strengthen ad industry presence
The Independent’s Joe Mayes says the heavy presence of firms including PwC, Deloitte and Accenture at this year’s Cannes Lions festival shows that advertising agencies are facing increasing competition from consultants.
The Independent, Page: 67
HMRC trawl identifies decades of pension errors
Tens of thousands of retired workers face reductions to their future pension payments after HMRC identified errors in their records stretching back decades. A comparison of HMRC’s official files with those held by pension schemes has identified errors dating back as long as 40 years ago. Retired workers with both public and private sector pensions face cuts to their pensions, which in some cases will see their retirement income halve. However, in some cases pensioners have been paid too little and will receive back payments in addition to future increases. The pension data clean up, which began in 2014 and is due to conclude at the end of the year, identified underpayments that range from £50 a year to £10,000 over the course of someone’s lifetime.
FCA to overhaul charges on drawdown pensions
Businesses offering pension investment accounts will have to display fees in a single figure under new proposals designed to better protect individual investors from retirement rip-offs. The Financial Conduct Authority said some pensioners could receive 37% more retirement income every year by investing rather than cashing in. The regulator is also proposing that pension providers send “wake-up” packs to their customers at the age of 50 and for every five years after that until they access their pension, to encourage them to think about how much they need to save now and to alert them to potential pitfalls. Separately, research by Prudential has found two-thirds of couples over 40 living together have no idea what their combined pensions will be, and nearly a quarter have never discussed retirement income plans.
MPs eye tribunal to help small firms challenge banks
Small businesses that are victims of fraud, conspiracy and misconduct by British banks could soon be able to sue their lenders without fear of financial ruin. Kevin Hollinrake, chairman of the All Party Parliamentary Group (APPG) for Fair Business Banking, has said the APPG will propose a tribunal, likely funded by the banks themselves, in a report in July. The proposal comes amid ongoing fallout from corporate scandals involving Royal Bank of Scotland’s turnaround unit and Lloyds Banking Group’s HBOS Reading division.
London’s diversity good for millennial businesses
London is the fifth best place in the world for millennials to start their own businesses, according to GoCompare. While Estonia topped the list, London has strength in its diversity – with the second highest diversity ranking globally.
Green refused injunction over BHS audit report
The High Court has refused to grant an injunction preventing publication of a full report by the Financial Reporting Council into PwC’s audit of BHS. Former BHS owner Sir Philip Green had attempted to block the publication of the report on the grounds that his firm Taveta would be “adversely affected” by it. Mr Justice Nicklin said that Taveta had not demonstrated this was an “exceptional case” which required an injunction. In skeleton arguments submitted to the High Court, lawyers for the FRC said PwC’s reasons for rubber stamping BHS’s accounts as a “going concern”, days before it was sold for £1, were “obviously insufficient”.
Financial Times, Page: 17 The Guardian, Page: 38 Daily Mail The Daily Telegraph, Business, Page: 33 The Times, Page: 47-48 Daily Express, Page: 66 Yorkshire Post, Page: 4 The Press and Journal, Page: 21
Regulators need result from Carillion inquiries
Following the Financial Conduct Authority’s announcement that it is looking into allegations of possible insider trading in the run up to Carillion’s collapse, the Independent’s James Moore says it is imperative that regulators ensure those responsible are held to account. When it comes to corporate scandals, he says the perception that “those at the top always get away with it” continues to fuel a “simmering anger.”
The Independent, Page: 65
Stamp duty headache for first-time buyers
Measures introduced by the Government to assist first-time buyers could actually be pricing them out of the market, according to Blick Rothenberg. The firm’s Denise Yau says first-time buyers borrowing from ‘the ‘Bank of Mum and Dad’ are often required by banks to have parents’ names on the mortgage and the title deed. This then scuppers the ability to qualify for the first-time buyer stamp duty relief.
Yorkshire Post, Property Post, Page: 12
Q1 growth revised up
The UK’s economic growth has been revised up for the first quarter of the year, from 0.1% to 0.2%. The ONS attributed the upgrade to “later construction data and significantly improved methods for measuring the sector”. Separate data from the ONS showed that the key services sector grew by 0.3% in April, the fastest monthly rate since last November. Household spending increased by 0.2% over the quarter and the household savings ratio fell from 4.5% to 4.1% – the third-lowest quarterly ratio since records began in 1963. Business investment shrank by 0.4% – worse than the previous estimate of a 0.2% contraction.
Interest rates to rise ‘gradually’, says BoE deputy
Deputy Bank of England governor Jon Cunliffe has moved to allay fears of an imminent interest rate rise – following BoE chief economist Andy Haldane calling for an immediate rise earlier this month. Speaking to BBC’s Wake Up to Money, Cunliffe asserted that any rises would be delivered in a “gradual and limited way”.
Crime family member jailed for tax fraud
A member of a notorious crime family has been jailed for three years after cheating his way out of around £300,000 in tax. Michael Adams submitted seven false self-assessment tax returns between 2006 and 2013, the court heard.
The Times The Sun, Page: 4
Thousands of fake HMRC sites taken down
A record 20,750 malicious websites posing as HMRC were taken down in the last year, an increase of 29% on the previous 12 months.
Yorkshire Post, Page: 14
Legalising cannabis could raise £1bn
The Institute of Economic Affairs has called on the government to legalise cannabis, arguing that the move could generate more than £1bn in extra tax revenues every year.
The Guardian, Page: 35 The Sun, Page: 16
Gambling firms scolded over laundering
The Gam bling Commission has given firms a “call to action” over their attitude to consumer welfare and money laundering. Chief executive Neil McArthur said not enough was being done.
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