News Roundup Wednesday 19th September 2018

NEWS ROUNDUP

TAX NEWS

Lib Dems want wealth tax to create £100bn ‘citizen’s fund’

Liberal Democrat leader Sir Vince Cable has proposed the creation of a sovereign wealth fund built from taxing the richest and the sale of assets. The £100bn “citizens fund” would then be used to spread the UK’s wealth more evenly, Sir Vince said. Explaining the policy on the BBC’s Andrew Marr Show, he said he wanted to scrap inheritance tax and replace it with “a tax on people’s gifts through their lifetime”. Every gift worth £3,000 or more above a lifetime tax-free allowance of £250,000 would be taxed at the recipient’s income tax rate.

BBC News The Sun, Page: 8 City AM, Page: 5

Revenues from climate change tax rocket

A new study by UHY Hacker Young shows that businesses have been hit with £1.9bn in tax just from the climate change levy in the last year, up from £690m in 2007-8. Partner Clive Gawthorpe said: “Although fighting climate change is a very worthy cause, these are some eyewatering rises in tax revenue. Most businesses would like to see more carrot and less stick – tax incentives and not extra taxes.”

The Scotsman, Page: 34

REPORTING NEWS

Top companies failing to report fully on diversity strategies

Research by the University of Exeter Business School shows only 15 companies in the FTSE 100 reported properly on their diversity policies and initiatives to shareholders. The Financial Reporting Council, which commissioned the study, said it would be writing to the UK’s largest companies urging them to report more thoroughly on their efforts to introduce more diversity to the boardroom. The Times says the move is part of the wider drive to get more women and ethnic minorities into senior jobs.

The Times, Page: 40

Financial sector remains an impenetrable black box

Despite being 10 years on from the financial crisis, the FT’s Jonathan Ford says the financial statements of banks continue to be opaque, leaving investors in the dark.

Financial Times, Page: 16

INDUSTRY NEWS

UK businesses suffer 123% rise in mandate fraud

Losses from mandate frauds have more than doubled to £77m in the past year, according to figures obtained by RSM. Businesses reported more than 3,451 incidents of mandate fraud in 2017-18 – up 123% on the previous year’s 1,551. RSM partner Akhlaq Ahmed said: “Businesses must ensure their accounts staff are trained to recognise the hallmarks of a mandate fraud attempt. With the right training and controls in place, there’s no reason why these frauds should be successful.”

City AM, Page: 17

Appointing auditors by public body is just a start

A letter in the FT backs the idea of a public body appointing auditors but suggests a change of auditor is vetted too “to ensure it is not a punishment for insisting on transparency.”

Financial Times, Page: 10

SMEs NEWS

Stride assures small firms as HMRC advises on no-deal Brexit

British companies trading with the EU will today receive a letter from the HMRC advising them on how to deal with the complexities of a no-deal Brexit. Small businesses could find themselves having to apply new customs, excise and VAT procedures to their goods and having to fill out customs declarations for the first time, the Times reports. The paper talks to Mel Stride, the financial secretary to the Treasury, about how hard it will be for businesses to navigate a no-deal Brexit. He insists there’s no need to panic: “I am confident that while we won’t on day one of a no-deal scenario have everything up and running as we would want to … we will have free-flowing goods coming into the country.”

The Times, Page: 44

New CBI leader seeks to be ‘more effective’ at taking on government

In a wide-ranging interview with the FT, John Allan suggests the CBI and other business organisations should receive funding to provide more support to small businesses preparing for Brexit.

Financial Times, Page: 10

PERSONAL FINANCE NEWS

Hancock considers auto-enrolment care fund

Ministers are considering a new type of insurance fund to pay for elderly care. Health Secretary Matt Hancock told the Telegraph that the proposals being considered are modelled on the “auto-enrolment” system of pensions. He said: “If you make it the norm, tell people what it is they have to do to look after themselves, it’s often the case that very few people will opt out.”

The Daily Telegraph, Page: 1, 7

ECONOMY NEWS

BCC warns of “snail’s pace” growth

The British Chambers of Commerce has warned that GDP growth will slow to “a snail’s pace” this year due to uncertainty over Britain’s future relationship with the EU. The business trade body cut its outlook to 1.1% from 1.3% and lowered its sights for 2019 from 1.4% to 1.3% in its latest quarterly update. The downgrades are driven by a weaker outlook for trade and investment. Exporters face more subdued growth over continued Brexit uncertainty and slower growth in key markets, the BCC says, while the high upfront cost of doing business in the UK and the ongoing uncertainty over the UK’s future relationship with the EU are expected to continue to stifle business investment.

The Times, Page: 37 City AM, Page: 7 The Scotsman, Page: 37

OTHER NEWS

KBW predicts 31% chance of Corbyn taking power this year

City analysts say the chances of the Tory government collapsing following a failure to reach agreement on Brexit, leading to a snap general election and a Jeremy Corbyn victory, have increased. Analysts at Keefe, Bruyette & Woods say there is now a 31% chance of Labour coming to power this year while it was “highly improbable” the Conservatives would maintain a majority in another election. They calculate a 6% chance for a no deal Brexit. KBW recommends buying stock in Asia-focussed banks HSBC and Standard Chartered and ditching some challenger banks such as OneSavings Bank and Charter Court.

The Daily Telegraph, Business, Page: 1

Contact Paul Southward if you have any queries.

Paul Southward