News Roundup Wednesday 15th August 2018

NEWS ROUNDUP

TAX NEWS

Finance firms pay £14bn in tax

Finance firms paid a record £14.6bn in corporation tax last year, according to Moore Stephens. The tax payment was 24% higher than in the previous financial year , suggesting that industry profits have continued to grow despite fears of a slump in the run-up to Brexit. However, David Kinsella, business tax director at Moore Stephens, said there was a risk the financial services sector was being “overburdened” by increasing tax and called for it to be safeguarded in the Brexit deal. Separately, the Telegraph reports that the UK has the 22nd highest tax-to-GDP ratio out of 80 countries, according to data released by the OECD. With total tax revenues standing at 33.2% of GDP in 2016, the UK has a higher ratio than countries such as the United States, Ireland, Australia and Canada.

Daily Mail, Page: 66 City AM, Page: 3 The Daily Telegraph, Business, Page: 33

Low taxes key to Brexit success

The Telegraph’s Roger Bootle says raising tax rates would be one of the best ways to undermine the chances of Brexit succeeding. He suggests any gains from Brexit will come from adopting a reformed regulatory system and a creating a business-friendly economy. “Accordingly, we should be thinking about lower taxes, not higher ones,” he adds. Elsewhere, Mark Littlewood, director-general of the Institute of Economic Affairs, writes in the Times that further devolution of tax powers after Brexit is required to counter “simmering resentment with the power of Whitehall.”

The Daily Telegraph, Business, Page: 30 The Times, Page: 37

Level down taxes to benefit retailers

The Sunday Telegraph’s leader argues against Philip Hammond’s proposal to introduce a tax on online retailers. It says that at a time when Britain needs to attract more tech companies, it would make more sense to help traditional retailers by cutting their taxes instead. Meanwhile, the Centre For Retail Research has warned that retailers are facing their worst year since 2008, in terms of both store closures and job losses. The CRR predicts that 10,000 stores will shut this year, of which half will be independents. The figures have prompted renewed calls for an overhaul of business rates, which have been blamed as one of the key factors sending retailers to the wall. Federation of Small Businesses policy chairman Martin McTague said: “For too long the system has been confusing, outdated and unfair to small businesses.”

The Sunday Telegraph, Page: 18 Sunday Express, Page: 53 The Sun, Page: 26-27

Labour urges windfall tax on failing rail firms

Labour has backed the idea of a one-off profits tax on poorly performing rail companies, to be used to freeze fares for passengers hit by weeks of disruption.

The Observer, Page: 2

SMEs NEWS

Report blames banks for speeding up high street decline

A survey commissioned by the Nottingham Building Society has blamed bank branch closures for exacerbating the decline of the high street. Almost a quarter of respondents said bank closures had contributed to them going out of business within the last five years. According to the Local Data Company an average of 11 stores opened on UK high streets every day in 2017 – down from 15 in 2013 – while 16 stores closed. Lisa Hooker, of PwC, said: “Retailers are waking up to the challenge. The winners will work out the best way for their stores to differentiate themselves.”

Daily Express, Page: 1, 4-5 The I, Page: 13 Daily Mail, Page: 14 The Daily Telegraph, Page: 5 The Guardian

Small business lender critical of competition fund

Christoph Rieche, the co-founder of Iwoca – which lends to small businesses – has criticised plans for a £775m banking competition fund, saying that worthwhile challengers are being sidelined by an unfair application process. In a letter to Lord Cromwell, the chairman of the Banking Competition Remedies, he said the fund structure seems unfair to non-bank lenders.

The I, Page: 36 Daily Express, Page: 44

Support for scale-ups

The Times highlights some of the support available to small firms looking to scale up, including the Business Growth Fund and the London Stock Exchange’s Elite programme.

The Times, Page: 41

FCA accused of putting banks before small business

The Financial Conduct Authority has been criticised for failing to take disciplinary action over Royal Bank of Scotland’s mistreatment of small businesses. The FCA concluded last month that it had lacked the powers to take punitive action against RBS over the scandal at its Global Restructuring Group. Kevin Hollinrake, the co-chairman of the all-party parliamentary group on fair business banking who is calling for a public inquiry into banks’ behaviour towards SMEs, said RBS was “being protected by the regulator.”

The Sunday Times, Business, Page: 2 The Mail on Sunday, Page: 49

CORPORATE NEWS

House of Fraser deal draws attention of pension watchdog

The Pensions Regulator has not ruled out an investigation into Mike Ashley’s £90m purchase of House of Fraser, after the sale left workers facing possible cuts to their pensions. Meanwhile, retail billionaire Philip Day – one of the losing bidders for the department store chain – has urged Mr Ashley to “do the right thing” and pay all its suppliers and concession holders in full because he clinched the deal so cheaply.

Financial Times, Page: 15 The Times, Page: 33 Daily Mail, Page: 66

Rise in executive pay revolts

A report from Deloitte shows 22% of the UK’s top 30 firms faced opposition to their remuneration reports from more than a fifth of voters this year, up from 6% last year. Across the FTSE 100 chief executive pay rose by an average of 10% to £4m, up from £3.6m the previous year.

City AM, Page: 2

PROPERTY NEWS

Boris Johnson wants stamp duty slashed

Boris Johnson has called on Theresa May to slash “absurdly high” stamp duty and ditch affordable housing targets. Writing in the Telegraph, the former foreign secretary warns that the tax is “freezing whole chains of purchases as people are deterred from trading up.”

The Daily Telegraph, Page: 1, 6

Stamp duty reform urged amid fall in transactions

Campaigners for stamp duty reform have claimed a recent drop in transactions is due to would-be buyers trying to avoid the levy. Government stamp duty figures for April to June showed the overall number of sales eligible for stamp duty had fallen 11% year on year. Mark Bogard, of the Family Building Society, said: “These figures show that we need an urgent re-think on housing policy. The market is gummed up and stamp duty is a major reason.”

The Sunday Telegraph, Business, Page: 10

ECONOMY NEWS

Rapid rise in insolvencies amongst under-25s

The number of insolvencies amongst under-25s in the UK has risen by 20% in a year, from 4,709 in 2016 to 5,640 in 2017, according to Moore Stephens. The firm said increasing student debt levels are a likely contributor to the high levels of insolvencies among young people.

The I, Page: 39

Surge in low-value jobs magnifies UK productivity problem

Analysis by the FT has found that a surge in low-value work in the past two years risks perpetuating the UK’s productivity slump.

Financial Times, Page: 1
Treasury shifts cash into euros

The Bank of England has ploughed billions of the Treasury’s foreign currency reserves into euros following the Brexit referendum. Figures from the Bank show that Britain now holds more euros than dollars in its reserves, reversing the position of June 2016. Campaigners for a fresh Brexit referendum said the numbers showed the government was betting on the stability of the euro even as ministers push for a clean break with the EU.

The Sunday Times

WEALTH MANAGEMENT NEWS

Big UK banks wade back into wealth management

The FT examines how Britain’s biggest banks are moving back into wealth management as the sector hunts for areas of growth after years of restructuring and regulatory issues.

Financial Times, Page: 19

OTHER NEWS

Action Fraud slower to pick up than HMRC

The crime-reporting agency Action Fraud takes more than twice as long to answer phone calls than HMRC and picks up only two-thirds of calls. A freedom of information request has revealed that the government fraud centre typically takes 11 minutes and 8 seconds to answer the phone, whereas callers get through to HMRC in 4 minutes and 42 seconds, on average.

The Sunday Times, Page: 13

FRC accounts are overdue

The Financial Reporting Council has yet to publish its accounts, despite a deadline of July 24, as it has been unable to present them to the small business minister following Andrew Griffiths’ resignation from the role last month.

The Sunday Times, Business, Page: 10

Contact Paul Southward if you have any queries.

Paul Southward