News Roundup Wednesday 22nd May 2019

NEWS ROUNDUP

TAX NEWS

Raab proposes dramatic income tax cuts

Tory leadership contender Dominic Raab has proposed a one pence per year cut in income tax reducing it from 20p to 15p over the course of a five-year Parliament. Mr Raab also suggested the NIC threshold should be raised to £12,500 in line with the personal allowance for income tax but that cutting taxes for higher earners “would not be my first priority”. He was speaking alongside other Tories at the Telegraph Live debate on the future of the Conservative Party. Other stand-out comments came from Liz Truss who said the Tories needed to be less timid and cut red tape to free up business and grow the economy. Meanwhile, Amber Rudd has launched the Conservative One Nation Caucus calling for the party to regroup under a “moderate, pro-business and low tax” vision.

The Daily Telegraph, Page: 1 The Daily Telegraph, Page: 7 Financial Times

How to avoid your own expenses scandal

The Telegraph talks to experts about how taxpayers can reduce their tax bill through expenses claims without the sort of scandal MPs generate. Dawn Register of BDO warns people against “bunging it through the books” saying HMRC inspectors “love to trawl through bank statements” and check claims against industry standards. Mike Parkes of self-assessment tax software firm GoSimple advises people to avoid the bizarre and to squeeze the pips from the basics.

The Daily Telegraph

INDUSTRY NEWS

Goldman moves beyond Big Four by selecting Mazars as auditor

Goldman Sachs has gone beyond a Big Four accounting firm for the first time and selected Mazars to audit its European operation – a coup for the UK’s eighth-largest auditor by revenues. Mazars will replace PwC from 2021. Goldman chose Mazars after citing conflicts with the Big Four, all of which supply the investment bank with consulting services. Its decision comes after a drive by regulators and politicians to increase competition in the British audit market after a series of scandals and corporate collapses. PwC will continue to audit Goldman outside Europe.

Financial Times, Page: 1 Daily Mail, Page: 67 The Times, Page: 38 The Daily Telegraph, Business, Page: 7

Top graduates shun “uncool” financial services

Financial services lies outside the top ten destinations for graduates who are choosing instead careers with trendy businesses in fashionable industries such as technology. Dame Helena Morrissey, head of personal investing at LGIM, told the City Week conference: “We do need to better represent society, we need to make sure we are very joined up […] we need to be living and breathing what we are talking about when it comes to responsible investing.” Bruce Carnegie-Brown, chairman of Lloyd’s of London, said the perception that financial services was “regulated to death” made fintech more attractive while John McFarlane, head of TheCityUK, believed young workers were targeting “tomorrow’s industries and tomorrow’s companies rather than today’s.”

The Daily Telegraph

North’s financial sector rated as one of happiest

A survey of northern workers by KPMG finds that people working in the financial services sector are happier than the regional average, with 86% of bank, insurance or asset management employees saying they like their job compared to 79% of workers in different sectors. However, Richard Little, head of regional financial services at KPMG, said the sector has an image problem that’s putting off talent; over two in five people cited the “boring” reputation of financial services as their main reason for not wanting to work in the sector.

Yorkshire Post, Business, Page: 1

CORPORATE NEWS

ICAEW warns construction sector over low price bids

The ICAEW is warning construction firms against offering unsustainably low prices for work, arguing that it can easily mean small profits are turned into losses. Andrew Hobbs, EY partner and chair of the ICAEW’s Audit Insights, says: “A robust approach to responsible project procurement and bidding is essential and needs to be supported by both sides.” The Audit Insight report into construction warns lowest-price tendering could lead to not only more firms collapsing, it will also damage their supply chains, forcing more smaller firms out of business.

ICAEW

Challenging London market claims Foxtons’ CFO scalp

Foxtons’ chief financial officer Mark Berry has parted ways with the estate agent, amid a “very challenging” London property market. He will be replaced by Richard Harris, who was most recently financial controller at electronics and technology firm Laird.

Financial Times The Daily Telegraph

SMEs NEWS

HMRC insolvency reforms could limit asset-backed lending

Business advisory firm Duff & Phelps has warned that insolvency reforms giving HMRC preferred creditor status in business insolvencies from April 2020 could limit the appetite for lending among asset-backed lenders. The reforms put HMRC ahead of creditors that have a floating charge as security, which could include some peer-to-peer lenders; Duff & Phelps claims this change could deplete the security available for lenders and make them less willing to provide finance.

P2P Finance News

Confidence high among Scots self-employed

Confidence remains high among self-employed Scots with 54% optimistic they will win more work this year. The latest SentiMeter report from Kensington Mortgages also found 88% believe new technology will have a positive impact on their business.

The Scotsman, Page: 37

PERSONAL FINANCE NEWS

Pessimism surrounds family finances

An IHS Markit survey shows that although unemployment is at record lows and wages are increasing, Britons are feeling more pessimistic about their finances than at any time since September 2017. The indicator shows household sentiment fell to 42.5 this month, down from 43.8 in April. The index, which measures overall perceptions of financial wellbeing, has been struggling below the 50 mark that signals a positive outlook for several months. IHS Markit said people reported a marked increase in living expenses during May, and concerns were high regarding job security.

The Times

ECONOMY NEWS

Broadbent: No deal would see postponed investment cancelled

The deputy governor of the Bank of England has rebuked the government for its chaotic handling of Brexit, telling an audience at Imperial College Business School that it had damaged the UK economy more than necessary. Ben Broadbent said the sustained fall in UK business investment over the course of 2018 was “remarkable” at a time at when the economy had been growing, profits healthy and employers adding jobs. However, he said a no-deal Brexit would likely mean “investment projects that have so far been postponed will instead be cancelled for good.” His comments come as City minister John Glen warns against adopting a looser regulatory environment after Brexit and the Chancellor claims proponents of a no-deal Brexit are knowingly inflicting “damage on our economy and our living standards.”

Financial Times Bloomberg The Guardian, Page: 11 City AM Financial Times BBC News

German economy backslides as Italy provokes investor fears

A Bundesbank report suggests Germany’s economy will not enjoy expansion in the second half of 2019 despite throwing off last year’s stagnation at the start of the year. That growth had been driven by one-off effects which “are expected to lapse or even reverse themselves”. Claus Vistesen of Pantheon Macroeconomics said that the eurozone economy “defied the pessimists in the first quarter, but a setback looms in the second”. The gloomy outlook coincides with concerns over Italian domestic policies as Matteo Salvini promises to press ahead with proposals for a universal 15% flat tax.

The Daily Telegraph, Business, Page: 3

OTHER NEWS

Taxman raided Paul’s BGT pot

Britain’s Got Talent star Paul Potts has told of how he lost over a third of his £100,000 winner’s cheque to the taxman. “It’s because in winning Britain’s Got Talent you use a skill. If it was a quiz, it wouldn’t be taxable. But if you use a skill, then it’s employment.”

Daily Mirror, Page: 23 Daily Mail, Page: 21
Contact Paul Southward.

Paul Southward