News Roundup Wednesday 21st August 2019
News Roundup Wednesday 21st August 2019
Is Scottish income tax progressive?
Lisa Tait of Anderson Anderson & Brown looks at Scottish income tax, considering whether it is progressive or hindering the economy north of the Border. Writing in the Press and Journal, she notes that Scottish income tax revenue grew by 1.8% in the 2017/18 tax year, with the growth driven primarily by an increase in contributions from higher and additional rate taxpayers – those earning above £43,000. She also highlights that while former chancellor Phillip Hammond used his last Budget to adjust the band for higher rate taxpayers south of the Border, Scottish Finance Secretary Derek Mackay has confirmed there will be no such adjustment to Scottish tax bands. HMRC and the Scottish Fiscal Commission have forecast that income tax receipts will grow faster in Scotland than the rest of the UK, Ms Tait notes.
The Press and Journal, The Business, Page: 4
Tax change warning for contractors
Johnston Carmichael ’s Alistair Miller has warned construction contractors of a need to take action ahead of VAT changes due to come into force on October 1, saying a shift that will see the main contractor responsible for declaring the VAT on services supplied by sub-contractors means firms involved in the construction industry “will need to review their supply chains ahead of time to consider how they will be impacted by the changes”. “VAT will disappear from working capital and cash flows will need to adjust to reflect this,” he adds.
The Press and Journal, Page: 33
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OTS review looks to simplify IHT and CGT
Solicitor Kirsten McKinnon looks at the Office for Tax Simplification’s review of Inheritance Tax, which was published in July and put forward recommendations to make “substantive aspects of the design of IHT simpler, more intuitive and easier to operate”. She says that while the review “is a dry topic and not exactly headline-grabbing”, some of the recommendations regarding significant changes to the Inheritance Tax and Capital Gains Tax regimes are noteworthy.
The Press and Journal, The Business, Page: 11
Insight on EBTs
Writing in the Press and Journal, Michael Reid of Meston Reid & Co details HMRC’s approach when tax is due by a company in liquidation, particularly if an Employee Benefit Trust is involved, noting that liquidators have the ability to agree a company’s tax liability with HMRC.
The Press and Journal, Page: 18
Tilney and Smith & Williamson in merger talks
Several papers look at the news that Tilney is in negotiations with Smith & Williamson over a merger that, by the amount of assets under its control, would create a top-five player in the investment market, with the combined entity capable of offering services including financial planning, tax advice and money management to its private clients. The Times notes that a merger would have to be waved through by regulators at both the Financial Conduct Authority and the Prudential Regulation Authority. The paper also offers a brief history of the firms, noting that Smith & Williamson acquired Begbies Traynor‘s tax advisory business in 2011.
Investor’s past raises due diligence questions
The Times’ Alex Ralph reveals that industrial investor Leonard Levie, who is at the centre of the collapsed Avlon drugs factory, owned British companies that failed owing money to unsecured creditors before he entered the medicines manufacturing business. This, he says, raises questions over the due diligence conducted by Big Pharma before doing business with Avara, Mr Levie’s contract drugs maker. Looking at Avara’s acquisitions and supply agreements agreed with drugs companies in recent years, Mr Ralph notes that two plants have collapsed already, with the Avlon plant appointing David Rubin & Partners as its administrator in February and a site in Shannon, Ireland, appointing joint provisional liquidators at KPMG and Edwin Kirker & Co last month.
Prices fall and sales climb
Figures from Rightmove show that the average property asking price fell 1%, or nearly £3,200, to £305,500 in the month to August 10. This follows a 0.2% fall in the previous month. While prices dipped, sales have reached their highest point since 2015, with the number of agreed sales up by 6.1% year-on-year.
The Times, Page: 34 The Guardian
Chancellor denies stamp duty reform
Chancellor Sajid Javid has refuted a suggestion that he is planning to shift the stamp duty burden from buyers to sellers, saying that while bold measures are needed on housing, “this isn’t one of them.” Following reports that the change to the levy was being considered, Mr Javid tweeted: “To be clear, I never said I was planning to put it on sellers and I wouldn’t support that.”
Financial Times The Sun, Page: 2
Chancellor urged to use RBS dividend for SME redress scheme
The SME Alliance has written to Chancellor Sajid Javid calling on him to use a £1bn Royal Bank of Scotland dividend to fund a compensation service for small companies mistreated by the banking industry. The organisation, which represents SMEs that are in dispute with financiers, has called for “tangible support” from the Treasury for the business banking resolution service, which is being set up by seven big banks and is due to be launched this year. It will be aimed at companies that are too large to access the Financial Ombudsman Service but are unable to afford court action to pursue claims.
The Times, Page: 41
Firms back US probe into France’s tech tax
Amazon and Facebook have backed a US hearing on whether France’s new digital tax unfairly affects American companies, a probe that could see the US apply tariffs on French wine and cheese. France’s new tax will target digital companies with global revenues of more than €750m (£685m), hitting them with a 3% tax on their French revenues. France is the first country to sign such a tax into law, while Britain is working on its own digital tax on the back of concerns over the amount of tax large online firms pay.
Greece to prioritise broad tax changes
Greece’s new finance minister Christos Staikouras says tax reforms will be his “key priority”, telling the FT of plans for “comprehensive” tax changes that are designed to accelerate growth.
Think tank: Higher pension age would boost the economy
The Centre for Social Justice think tank has suggested that the state pension age should be raised to 75 within the next 16 years to help boost the economy. While the state pension age is set to increase to 67 by 2028 and to 68 by 2046, the organisation believes it should climb to 70 by 2028 and 75 by 2035. In its report, Ageing Confidently: Supporting an ageing workforce, the think tank says evidence suggests the UK is “not responding to the needs and potential” of an ageing workforce, with hundreds of thousands of people aged 50 to 64 seen as “economically inactive”. The report says that by getting more people aged 55 to 64 to start work, out-of-work benefit costs would be drastically reduced and boost GDP by approximately 9% – around £182bn.
Daily Mail, Page: 2 The I, Page: 10 The Independent, Page: 12
Blue-chip bosses suffer pay cuts as top companies reel from investor revolts
Analysis by Deloitte shows that FTSE 100 CEO pay has fallen to its lowest level in five years, with median pay hitting £3.4m in the last financial year – down from £4m the year before.
8 in 10 workers offered flexibility
The Scotsman looks at the productivity of the UK workforce and notes Deloitte research which shows that 78% of UK employees were offered flexible working as a benefit at their current or most recent employer.
The Scotsman, Page: 33
Contact Paul Southward.