News Roundup Wednesday 18th September 2019
News Roundup Wednesday 18th September 2019
Start-up bosses call for tax break extension
Founders of a number of British start-ups have written to the Prime Minister urging him to extend a tax break related to share options, saying doing so will help protect the tech sector from any shock stemming from Brexit. The letter to Boris Johnson, signed by around 100 start-up bosses, calls for rules on share options to be relaxed in an effort to strengthen the UK’s “thriving” tech sector as it faces competition from US rivals. The start-up leaders have called for a reform of enterprise management incentives – which give start-up employees tax relief when they cash in shares – suggesting that a limit that sees the relief stop when a firm’s assets exceed £30m or its workforce totals more than 250 should be raised to £100m in assets or 500 employees. Husayn Kassai, chief executive of Ofindo, says such a move by HMRC would help start-ups to attract talent by using share options to balance the higher salaries offered by larger firms.
Loan charge is ‘wrong on every level,’ accountant says
Paul Hornby, managing director of accountancy firm JF Hornby, says the Government’s controversial action over the loan charge is “wrong on every level” and he says those being pursued over the payments should seek advice. “Lives are being affected in the most terrible way because action is being taken against people who were acting perfectly lawfully at the time, but are now being punished by retrospective action,” he said.
Yorkshire Post, Business, Page: 4
Think-tank director questions IHT pledge
Writing in the Guardian, Resolution Foundation director Torsten Bell considers the Brexit Party’s pledge to scrap inheritance tax, arguing that while it would benefit a small number of wealthy people, the move would see everyone else hit by higher taxes. He notes that if inheritance tax was abolished in 2015/16, 70% of the benefit would have gone to those with estates of over £1m, and a 40% to 528 estates worth over £2m. Mr Bell says that it is “crucial to recognise that fairer taxes on wealth are crucial to making a success of 21st-century Britain,” adding: “Scrapping inheritance tax isn’t.”
The Guardian, Journal, Page: 4
Poll sees support for Labour tax plan
With Shadow Chancellor John McDonnell saying a labour government would scrap lucrative government contracts for firms that failed to pay their fair share of tax, the Mirror polled readers on whether they backed the proposal, with 79% of respondents voting in support of the plan.
Daily Mirror, Page: 36
FINANCIAL SERVICES NEWS
FCA boss in equivalence call
Andrew Bailey, chief executive of the Financial Conduct Authority, has urged the EU to recognise equivalence for financial markets post-Brexit, warning that overlaps between UK and EU share trading regulations would seriously damage markets. In a speech at Bloomberg, he asserted equivalence as “the best option” to avoid disruption to derivatives trading. Mr Bailey also praised firms which had “stepped up” Brexit planning, saying that “much progress has been made on preparations in financial services,” but noting: “Inevitably, we cannot relax, progress is welcome but there are issues still to be resolved and uncertainly to be dealt with.”
London extends currency and derivatives dominance
Research by the Bank for International Settlements has revealed that London has strengthened its position as the global centre for the foreign exchange and derivatives markets. Foreign exchange trading volumes have risen almost 30% on the figure recorded in 2016’s survey, with the UK’s market share up from 37% to 43%. In the derivatives trading markets, London’s share of business rose from 38% to 50% – pushing it ahead of the US.
FCA faces scrutiny over P2P failures
James Hurley in the Times says the Financial Conduct Authority (FCA) is facing scrutiny over regulation of peer-to-peer lending after scandals involving Lendy and Collateral. He notes calls for an inquiry into the FCA’s role in the collapse of Lendy after it emerged that it authorised the firm when it knew that the business had financial and governance issues. The FCA is also under fire after it was revealed that it did not spot that Collateral wrongly presented itself as operating with the authority’s consent for two years, and failed to warn Collateral’s investors once it became aware of the matter. Mr Hurley notes that insolvency practitioners from BDO have encountered numerous irregularities at Collateral.
EU probes Belgian tax deals
The European Commission is investigating tax schemes that Belgium has set up with 39 multinational companies, with the probe looking at whether they gave an unfair advantage to the companies by allowing them to pay less tax. EU competition chief Margrethe Vestager said: “We are concerned that the Belgian ‘excess profit’ tax system granted substantial tax reductions only to certain multinational companies that would not be available to companies in a comparable situation.”
The Independent, Page: 53
REAL ESTATE NEWS
Councils plan £1bn shopping mall investment
Research by shopping centre trade body Revo and property advisory firm Lambert Smith Hampton shows that councils are set to spend £1bn buying shopping malls. Over the past three years, local authorities have spent £775m buying shopping centres, and a further £230m outlay is expected next year. Figures from PwC and the Local Data Company show that 16 stores a day shut their doors in the first half of this year, resulting in 1,234 net closures.
The Times, Page: 43
Eddie Stobart warns on profits
Haulage firm Eddie Stobart has warned that profits would be “significantly below” expectations. The company’s shares have been suspended since last month after failing to publish its half-year results in time. Auditor PwC, which replaced KPMG last year, has not finished its accounting review, with the financial impact of any adjustments required “not yet determined”.
The Daily Telegraph, Business, Page: 8 The Times, Page: 43
Bamford eyes Wrightbus
Jo Bamford, the son of JCB billionaire tycoon Lord Bamford, is looking to strike a deal to buy Northern Irish bus builder Wrightbus. The company hired Deloitte to find a new owner after falling sharply into the red on the back of tough trading.
The Daily Telegraph, Business, Page: 4
Tech to add as many roles as it takes
Olesya Dmitracova in the Independent considers the impact of automation on workers. She cites a PwC report which estimated that the net impact on UK employment from new technologies over the next 20 years will be broadly neutral, as many existing jobs disappear but new ones are created. She goes on to look at measures which could support workers, saying firms could be incentivised, perhaps through the tax system, to keep or expand their workforce by developing workers’ skills. On upskilling, she cites a recent PwC survey showing that 51% of British workers are offered no opportunities to learn new skills by their employers.
The Independent, Page: 29
Tax thief ordered to pay back £297k
Brian Pearson, an airport car park boss who in 2017 was jailed for three years and two months after an HMRC probe found he had stolen more than £466,000 from his employees’ income tax and national insurance contributions, has been ordered to repay £297,993 within three months – or spend another three years in prison and still owe the money.
PERSONAL FINANCE NEWS
Reasons why millennials are going bankrupt
The Daily Telegraph considers why middle-class millennials are experiencing debt problems. Data from the Insolvency Service suggest the number of 18 to 25-year-olds going bankrupt has increased 10-fold over the past three years. Possible reasons for bankruptcy include easy credit, overspending on contactless payment services, irregular income and the rising cost of living.
Contact Paul Southward.