News Roundup Wednesday 16th January 2019
News Roundup Wednesday 16th January 2019
British Overseas Territories win public register reprieve
The Government has bowed to pressure from British Overseas Territories to push back the timetable for introducing compulsory public registers. Overseas territories had threatened to take the government to court or even to secede from the UK if it imposed the change, leading to the Foreign Office to extend the date for introduction to 2023 from 2020. “Every year that goes by gives more opportunity for dirty money to flow through the UK’s overseas territories and crown dependencies undetected,” said Rachel Davies Teka, the head of advocacy at Transparency International UK. “It will be disappointing if the overseas territories do not take the initiative to implement public registers on their own terms before the 2020 deadline.”
The Guardian, Page: 12
Three key changes in tax returns
The Telegraph’s Sam Meadows highlights three key changes those filing a tax return should be aware of this year. For landlords, returns corresponding to the 2017-18 tax year are the first to take account of the phased removal of mortgage interest relief. Nimesh Shah of Blick Rothenberg warns that some landlords were not sure whose responsibility it was to calculate the deduction. George Bull from RSM points to two new allowances: the trading and property allowance, which gives taxpayers up to £1,000 of tax-free income from either trading or property. Finally, Dawn Register of BDO alerts readers to updated guidance on rules for company directors, to make clear they are not required to fill in a tax return if they had no additional income.
HMRC warns over no-deal tax scam
The Government’s no-deal Brexit preparations are being used by fraudsters to target 240,000 businesses with scams, according to HMRC. Companies trading with the EU are being targeted with fake websites posing as the taxman which instruct firms to register for a “UK trader number”, for a fee. The service is free from HMRC.
The Daily Telegraph, Page: 5
Clampdown on EIS tax breaks felt by investors
A change in the rules for tax-efficient investment schemes – barring low-risk investments in favour of innovative, growth-pursuing businesses – led to a 17% fall in schemes open to investment in November 2018.
HMRC accused of slack no-deal advice
Business minister Richard Harrington has raised concerns with the Treasury over no-deal Brexit advice provided to businesses by HMRC. Official guidance for those trading with the EU states simply that that they should buy customs software and seek the advice of specialist agents. One business leader said the reply from the Treasury did nothing to reassure small companies: “They have seen a poor letter from HMRC telling them to go buy some software, while millions of taxpayers’ money is spent on a questionable ferry company and a farcical traffic jam. Small businesses are being hung out to dry.”
Minister wants North to set own tax rates
Northern Powerhouse minister Jake Berry has called for new powers allowing the North of England to levy its own taxes on 19m people, with a “bespoke devolution deal” available to all regions. It would see the creation of a new department which would oversee a transfer of power from Whitehall in a bid to drive forward transport, education and other agendas. He said: “A big complaint is that money is being invested more in London and the South than in the North. Taxes raised in the North could be spent in the North. And we should not close our minds to varying income tax at a local level.”
Chancellor’s construction firm pays meagre tax bill
The Mail on Sunday reports on the accounts of a construction firm linked with Philip Hammond. The company, Chiswell (Moorgate) Limited, was established by Hammond when he became a Minister as the parent company of the firms he owned. Experts say from what they can ascertain, Chiswell paid just £5,964 in tax on total profits of £1.6m since it was set up in 2010, probably by offsetting losses at one subsidiary against profits at another. Although no illegality is claimed, Richard Murphy of Tax Research UK, said: “It’s one of the absolutely fundamental failings of UK company accounts. We don’t know because he doesn’t have to tell us. Why is it that we cannot get data on the tax affairs of companies where we have a reasonable right to know? This is wrong.”
The Mail on Sunday, Page: 97
Labour ponders solution to high street woes
Rebecca Long-Bailey has warned that Britain does not have “a fair taxation landscape between online and physical retailers” as the shadow business secretary admits Labour is looking at a range of options to save the high street. Long-Bailey said the party was looking at taxing online retailers but conceded the problem was complicated.
The Independent on Sunday, Page: 7
Surge in start-ups defies economic uncertainty
Figures due to be released this week will show the number of companies being formed in Britain bounced back last year and while London was still by far the most popular place to form a business, Birmingham, Manchester, Leeds and Bristol saw sharp increases in new ventures. The total number of new businesses started in Britain increased by 5.2% to 645,774 last year – an annual record and a return to growth following a decline in 2017. “These figures demonstrate the resilience and confidence of entrepreneurs,” said Matt Smith, the director of the Centre for Entrepreneurs. “The achievement is especially noteworthy as contractor accounting firms . . . seem to have been replaced by genuine local business activity.” However, although the UK was ranked third by the OECD for start-ups, it fell to thirteenth in the world for scale-ups in 2017. An early-stage investor, Malcolm Evans, says: “Scale-ups, which are what matter, requir e changing the shape of the commercial world around you by showing precision and human flair. It’s quality over quantity.”
Seven-year rule hampering business growth
The Sunday Times looks at how small businesses are left disappointed when looking for alternative investment because tax breaks for investors, made through tax-efficient venture capital trusts or via the enterprise investment scheme (EIS), are only accessible to companies for seven years after they make their first sale. Wol Kolade of the private equity house Livingbridge says it’s great when start-ups achieve “glorious valuations”, but “actually the backbone of the country is the scale-ups who go from employing five people to 50. But sometimes it is these companies that struggle to raise finance.” Mark Brownridge, director-general of the EIS Association. “We are campaigning for a change after Brexit.”
Wave of store closures set to hurt landlords
Deloitte has been instructed by more than 20 struggling high street chains in the past two months to assess whether they are eligible for debt restructuring, the Sunday Times reports. The firm is assessing their eligibility to use a company voluntary arrangement (CVA) to shut shops and if the retailers proceed they are likely to be launched in February or March.
MPs raise alarm over pension transfers ‘contingent charging’
The FT explores why MPs are so concerned about contingent charging – where financial advisers operating in the pension transfer market are only paid if the client acts on their recommendation. MPs say such agreements incentivise advisers to encourage clients to transfer, even if it leaves savers much worse off. The Telegraph’s Laura Miller also looks at the issue, noting that the Financial Conduct Authority recently revealed that 5,000 pension transfers were carried out by firms that later closed after it found problems with their advice.
Financial Times, Money, Page: 4 The Daily Telegraph, Money, Page: 8
Thousands more high earners caught out by complex pension rules
More than twice as many high earners are breaching the annual pension allowance rules now than in 2015/16, triggering “excess” tax relief payments to HMRC as high as £30,000.
WEALTH MANAGEMENT NEWS
How bad behaviour by super-rich hits London’s wealth managers
The FT reports on how some wealth managers are turning down clients because of demands for advice on aggressive tax avoidance, lying about the source of their wealth, philandering or other bad behaviour.
PERSONAL FINANCE NEWS
Open banking: the quiet digital revolution one year on
The FT provides a user guide to open banking, noting research from PwC which found more than 33m people are expected to sign up to open banking services by 2022.
UK economy posts slowest growth in six months
The British economy slowed in the three months to November, the Office for National Statistics reported on Friday, as car manufacturing went into reverse amid the broadest drop in industrial production since 2012. GDP grew 0.2% compared to October, and by 0.3% in the 12 weeks to the end of the month, the weakest since a 0.1% increase between March and May. Month on month, production as a whole contracted 0.4% in November; construction growth was 0.6%, manufacturing contracted 0.3%, while services activity rose 0.3%. Mike Jakeman, senior economist at PwC, said as long as uncertainty over Brexit continues, “businesses will continue to defer major investment plans and households will reconsider making big-ticket purchases.”
Lord Bamford: Nothing to fear from a clean break
Anthony Bamford spells out in the Telegraph why a clean break from the EU on WTO terms is what business in the UK needs. A no-deal Brexit would bring certainty, says Lord Bamford, in the absence of a “well-constructed negotiated settlement” and future trade agreement. Few in the UK will be looking forward “to at least another 21 months of uncertainty under the current Withdrawal Act”, while exporters should be “delighted” at the prospect of negotiating new trade agreements from Day One after exit. “As a businessman with over 50 years of experience in selling construction and agricultural machinery all over the world and buying components from both EU and non-EU countries, I am used to operating on WTO terms. There is nothing to fear. Tariffs and import duties are simply characteristics of business life that most companies – including JCB – have long since adopted.”
Britons lacking basic tax knowledge
A tax quiz set by a consumer rights group Which? has uncovered “worrying gaps” in knowledge about tax perks and penalties. More than 4,500 people took a quiz on the basics, answering “true”, “false” or “don’t know” to a range of tax-related questions. Just over half of those tested on the “Great British tax quiz” were unaware how much money can be earned tax-free, the survey found. Meanwhile, two-thirds did not know how much could be saved in an Isa every year. Over half of those surveyed did not know the fine imposed if you miss the tax deadline. The findings were released ahead of the self-assessment tax return deadline, which is 31 January.
The I, Page: 12
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