News Roundup Tuesday 8th May 2018
News Roundup Tuesday 8th May 2018
Brexit will delay digital tax revamp
HMRC has said that plans to digitise tax returns have been indefinitely put on hold as a result of the UK’s Brexit preparations. The Revenue said it had made the decision to delay the changes “to release project capability to EU Exit work.” It added: “This means halting progress on simple assessment and real time tax code changes. The MTD [Making Tax Digital] for Individuals has made significant progress here, so we’ve laid foundations that will enable us to return to this in the future.” George Bull, a partner at RSM, said: “This delay is very wide reaching and will affect millions of people who would have otherwise moved to pre-populated tax returns in the coming years”.
Think-tank calls for IHT to be scrapped
The Resolution Foundation believes inheritance tax should be scrapped and replaced by a system that spreads the money more fairly between the generations and is harder to avoid. The think-tank has proposed replacing IHT with a lifetime receipts tax that would raise more for the state and would encourage families to pass their wealth to younger members. Under the proposal, each beneficiary would have a £125,000 inheritance allowance, above which they pay 20% up to £500,000 and 30% beyond that. Resolution estimates that the new tax would deter avoidance and raise £11bn a year in 2021, compared with £6bn under the present system. The current review of IHT by the Office of Tax Simplification has been welcomed by John Bunker of the CIOT as an opportunity to make IHT simpler.
The Times, Page: 40 The Daily Telegraph, Page: 2 The Scotsman, Page: 19 Daily Express, Page: 31
Ministers back down on tax haven company registers
The government has agreed to calls for new measures aimed at increasing transparency in offshore tax havens. Facing a possible Commons defeat, ministers said they would not oppose an amendment to force British overseas territories to publish details of the true owners of companies based there. Campaigners say public registers make it easier to uncover corruption, money laundering and tax dodging. The move was backed by both Labour and Conservative MPs. The measures do not apply to Britain’s crown dependencies: Jersey, Guernsey and the Isle of Man.
Tax errors ‘used to expel skilled migrants’
The Home Office has been accused of using a clause designed to deport people deemed a national security risk to remove highly-skilled migrants for minor tax mistakes. Campaigners say officials have refused people’s right to remain in the UK because of problems including missing tax deadlines and errors made by accountants. Evidence seen by the Telegraph shows caseworkers discussing whether minor infringements could be used against applicants.
BBC presenters contest tax bill
A tribunal has heard that the BBC employed household names on “an elegant form of zero hours contract”, as three presenters appealed against a £920,000 tax bill. Joanna Gosling, David Eades and Tim Willcox were “pushed by the BBC” into setting up personal service companies, which allowed the corporation to avoid paying employers’ NI contributions. Gosling, Eades and Willcox, who have all worked for the BBC’s rolling news services, argue they were freelancers who received none of the benefits afforded to employees, and that their contracts amounted to “no work, no pay”. However, HMRC is arguing the presenters were effectively employees of the BBC and should have paid more tax. It is claiming £920,000 in total from the three presenters, of which £609,000 has already been paid.
The Daily Telegraph, Page: 7
Pressure on Government over anti-money laundering bill
Conservative MP Andrew Mitchell says he is confident the Government will support an amendment to the Sanctions and Anti-Money Laundering Bill to force British overseas territories to publish registers revealing who owns which assets. Separately, the FT reports that more than 500,000 companies in the UK have failed to identify their controlling shareholders, despite recent legislation to stop British corporations from being used to hide illicit wealth. Elsewhere, Henry Foy and Barney Thompson consider whether the introduction of new unexplained wealth orders (UWOs) will be a deterrent to money launderers, with contributions from law firm Dechert and EY.
BDO calls for greater restrictions on non-audit work
Scott Knight, head of audit at BDO, has called for harsher rules limiting the amount of non-audit work that accounting firms can offer amid growing concerns about conflicts of interest.
Fewer staff phoning in sick
The number of companies reporting a rise in workers going in when they are ill has more than tripled since 2010, according to a survey by the CIPD. Its report reveals that “presenteeism” has hit a record high, but warns that this is affecting the country’s productivity. Some 86% of companies said people were coming to work ill, up from 72% in 2016 and 26% in 2010.
Icas names new president
Icas has named Sandy Manson, chief executive of Johnston Carmichael, as its new president. Mike McKeon, non-executive director of National Express, has been appointed deputy president of Icas, and Catherine Burnet, senior partner for KPMG in Scotland, has been appointed vice president of the accountancy body.
The Scotsman, Page: 37
Branch closures anger small businesses
Small businesses have reiterated criticism of the decision by Royal Bank of Scotland to close 162 branches in England and Wales. Mike Cherry, national chairman of the Federation of Small Businesses, said: “This fresh round of closures will hurt high streets all over the country at a time when thousands of small firms are already struggling. When a bank goes, it means less footfall, less cash in the local economy and less revenue for local firms.”
Daily Mail, Page: 19 Daily Express, Page: 51 The Times, Page: 45 The Scotsman, Page: 9
Many small businesses operating in the red
Just 49.5% of small businesses in the UK were operating in positive cash flow last year, according to Xero’s latest Small Business Insights index, which also notes that, on average, SME’s 30-day invoices were paid after 46 days, squeezing many smaller businesses. Vicky Pryce, economist and previous director general for economics at the Department for Business, Innovation and Skills, cautioned: “The impact of late payments on the economy cannot be exaggerated”. Elsewhere, a poll by the Institute of Directors reveals three in ten business leaders see “excessively bureaucratic payments systems” as the main reason for late payments. The survey of company directors found that almost half have suffered due to the issue in the last six months.
City AM The Scotsman, Page: 39
Former BT finance chief loses bonuses over Italian fraud
The Telegraph reports that BT’s former finance chief will be stripped of bonuses worth more than half a million pounds, after failing to uncover fraud in the company’s Italian unit. It is understood that BT’s remuneration committee has decided to scrap more than 208,000 shares due to Tony Chanmugam, who served as CFO between 2008 and 2016. BT had already stripped Mr Chanmugam of deferred bonus plan shares valued at £193,000.
Autonomy’s ex-CFO convicted of accounting fraud
A US court has found the former chief financial officer of Autonomy guilty of fraud and securities charges for lying about the company’s financials before Hewlett-Packard’s $11.7bn acquisition of the British software maker in 2011. Sushovan Hussain faces a maximum sentence of 20 years in prison and a fine of $250,000 for each count on which he was convicted.
Panasonic charged with accounting fraud violations
Panasonic has agreed to pay more than $280m (£203m) to resolve charges brought under US anti-corruption law. The fine includes a penalty of $143 from the Securities and Exchange Commission to resolve charges of Foreign Corrupt Practices Act (FCPA) and accounting fraud violations involving Panasonic’s global avionics business.
BoE figures show dip in home loan approvals
Bank of England figures show that mortgage approvals fell more than 1% to 62,914 in March. This marks a low for 2018 and is the second-lowest total since August 2016, after December 2017. Howard Archer, chief economic adviser at EY ITEM Club, said house price gains are likely to be “limited to a modest 2%” over 2018.
Daily Mail, Page: 19 Financial Times
Businesses use Trump tax cuts to boost capex
The overhaul of tax legislation in the US has been partly credited with triggering an overdue and “durable recovery” in capital spending.
Snow freezes consumer spending
March saw the weakest consumer spending in more than five years, according to the Bank of England’s latest data, which shows just £254m was spent on credit cards and personal loans over the month, blighted by blizzards in much of the UK, the lowest since November 2012.
The Times, Page: 37, 40 Evening Standard
UK manufacturing growth remains slow
Britain’s manufacturing industry has experienced its slowest growth since late 2016. The IHS Markit/CIPS purchasing managers’ index fell to a 17-month low of 53.9 in April, down from 54.9 in March.
London firms lose confidence
Confidence among London firms declined during April, as optimism around the prospects for the British economy sagged. According to data from Lloyds Bank Commercial Banking, the balance of firms in the capital expressing overall confidence fell 12 points during April to reach 43%. Confidence was highest among north west businesses at 49%, while those in the south west were the least confident, with an overall score of 20%.
Consumers spending less on leisure
A Deloitte survey reveals consumers are spending less on leisure activities, with culture and entertainment spending falling the most. Some 45% of those who spent less on going out in the first quarter had done so “because they could not afford it, suggesting that consumers were consciously downshifting their discretionary spending”.
Profit warnings rise in Yorkshire
EY’ s latest Profit Warnings report shows quoted companies based in Yorkshire and the North East issued 10 profit warnings in Q1, up from seven in the previous quarter. A spokesman said: “The figures show that general retailers based in the region were particularly hit with three warnings in total, in what was a tough quarter on the UK’s high street.”
Yorkshire Post, Business, Page: 5
High earners most likely to hit the bottle
High earners are far more likely to drink alcohol than those in manual jobs, according to data from the Office of National Statistics’ Opinions And Lifestyle Survey. Finance workers, teachers, lawyers and doctors are among those classified as higher earning managerial and professional occupations. Dr Tony Rao from the Royal College of Psychiatrists said: “While alcohol abuse appears to have improved over the last two years, the general trend is still that hazardous drinking among those aged 45 plus has increased since 2005”.
Nation split on money buying happiness
A survey by the Sun has asked people if they would be happier if they were richer. Across the UK as a whole, 38% of people said they believed money can buy happiness – but 33% disagreed. People in London were the most likely to think money could buy happiness, with 44% agreeing this was the case.
The Sun, Page: 22-23
Contact Paul Southward for further information about any of the News Roundup matters.