News Roundup Wednesday 15th May 2019

NEWS ROUNDUP

TAX NEWS

Online sales tax idea rejected in favour of rates reform

Liz Truss yesterday rejected calls from Tesco chief Dave Lewis for a 2% sales tax on internet retailers arguing the move would be a “tax on families”. Mr Lewis said the levy would pay for a 20% cut to business rates for high street stores. However, the Chief Secretary to the Treasury did say she would back business rate reforms suggesting a “simpler, flatter tax system” paid for from cuts to subsidies to businesses. Helen Dickinson, chief executive of the British Retail Consortium, backed Ms Truss saying an “online sales tax would punish modern shopping habits” and agreed business rates reform was the solution. Marks & Spencer and Sainsbury’s also said rates reform was the best way forward.

Daily Mail, Page: 2

UBI would hike taxes, says Truss

Writing in the Express, Liz Truss says Labour’s plan to introduce a universal basic income is “ludicrous”. Handing out free cash to everyone includes giving it to millionaire footballers and investment bankers, Ms Truss added. The scheme would cost around £200bn a year and could only be paid for by hiking up taxes. Ms Truss claims Labour would pay for the scheme by scrapping the tax-free personal allowance.

Daily Express, Page: 8

Restaurant owner used stolen VAT money to pay school fees

The owner of a Surrey restaurant who used stolen VAT money to pay her children’s school fees has been jailed. Huey Jun Khoo, along with her business partner Jing Fu, used an off-the-record card machine at the Bon East Chinese restaurant in Farnham to pocket £180,000 in VAT over four years, a HM Revenue and Customs (HMRC) investigation found.

Press Release

CBI calls for urgent UK action to boost research and development

The CBI has warned that a 2027 target for R&D investment will be missed by 26 years unless spending was increased. The CBI suggested tax deductions for investment in data management.

Financial Times, Page: 2 Yorkshire Post, Business, Page: 1

CORPORATE NEWS

Former Autonomy CFO sentenced to 5 years

Autonomy’s former finance boss Sushovan Hussain has been sentenced to five years in prison for fraud relating to the $11bn sale of the UK software firm to Hewlett Packard. A court in San Francisco found that Mr Hussain made false statements to investors about the company ahead of the deal in 2011, which subsequently saw HP write down the value of its acquisition by $8.8bn. Mr Hussain was also fined $4m and must pay an additional $6.1m in restitution. Mr Hussain is also being sued in the UK by HP along with Autonomy’s founder Mike Lynch for $5bn over claims they “committed a deliberate fraud over a sustained period of time” to artificially inflate the firm’s value. Both Mr Hussain and Mr Lynch have denied the claims.

BBC News Financial Times The Daily Telegraph, Business, Page: 1 The Times, Page: 39

Cotswold Outdoor has CVA application approved

The group behind Cotswold Outdoor, Outdoor and Cycle Concepts (O&CC), is moving forward with a CVA after creditors backed a plan that will see our stores close and applications for rent reductions across 50 of the company’s 120 stores. Advisers from Grant Thornton have been appointed to oversee the proposals and have begun consulting with key stakeholders, suppliers and landlords.

The Times, Page: 41

Goals boss leaves for BOA

Goals Soccer Centres boss Andy Anson is leaving just two months after its shares were suspended over £12m accounting errors. Goals warned investors of “a substantial misdeclaration of VAT going back over several years”, saying its new VAT policies “may have an impact on profitability going forward”. Goals replaced its auditor KPMG with BDO last year. Anson will move on to become chief executive at the British Olympic Association.

Daily Express, Page: 51 The Times, Page: 41 The Press and Journal, Page: 33

PROPERTY NEWS

Tenants face rent hikes as landlords bail

The withdrawal of tax breaks for landlords is leading to an exodus from the buy-to-let market risking a crisis for tenants, according to the Residential Landlords Association (RLA). The RLA says that tenants face less choice and higher rents if landlords sell up. David Smith, of the RLA, said: “The government’s tax increases on the sector are already making it difficult for tenants to find a place to live, with many landlords not renewing tenancies. If rushed and not thought through, planned changes to the way landlords can repossess properties risk making the situation even worse.”

The Times, Page: 2

More pensioners investing in buy-to-let

There has been a notable rise in the number of over-65s investing in the buy-to-let sector, according to figures from Commercial Trust. The share of buy-to-let mortgage applications by 65 to 75-year-olds increased by 5.43% in 2018, owed in part to the fact that a number of mortgage lenders have recently increased their maximum age at the end of the mortgage term criteria from 75 to 85 years, while also pushing up their maximum mortgage term.

Landlord Today

INTERNATIONAL NEWS

Supermodel ordered to pay back £1.7m in tax

Bar Refaeli has been ordered to pay £1.7m to the Israeli tax authorities after medical receipts showed that the supermodel spent months in the country while claiming to live abroad.

The Times, Page: 28

ECONOMY NEWS

Three in ten go into the red

Nearly three in ten adults across Britain ran a “budget deficit” in March, spending more money than they had in income, a survey has found. Some 28% of people had forked out more than they received, according to the survey from insolvency trade body R3. Millennials aged 25 to 34 were the most likely group to spend more than they received. R3 chair Mark Sands said: “This is a worrying snapshot of British adults’ personal finances.”

The Sun, Page: 26 Daily Express, Page: 25

Private equity investment into Yorkshire slumps

Transactions involving private equity investors in Yorkshire fell by 67% and values more than halved year-on-year during the first quarter, according to KPMG. Brexit uncertainty, rising prices, a scarcity of quality assets coming to market and increasing concerns about global trade policies are thought to have contributed to the decline.

Yorkshire Post, Business, Page: 1

Contact Paul Southward.

Paul Southward