News Roundup Wednesday 26th September 2018

NEWS ROUNDUP

TAX NEWS

Rich on ‘borrowed time’, warns Corbyn

Jeremy Corbyn has warned that the rich are on “borrowed time” and that a Labour government would break the mould of “neoliberal economics”. Speaking at The World Transformed rally at the party’s conference in Liverpool, the Labour leader said: “The very richest in our society have had tax breaks, giveaways and tax havens. I tell you what – they are on borrowed time because a Labour government is coming.” Meanwhile, shadow chancellor John McDonnell will today unveil plans for a multibillion pound raid on companies which would force them to hand over 10% of their shares to workers. The levy will come on top of higher corporation tax and increased income tax for top earners planned by Labour. Chief Secretary to the Treasury Liz Truss called the shares proposal “yet another tax rise from a party that already wants to hike taxes to their highest level in peacetime history.”

Daily Mail, Page: 6-7 The Daily Telegraph, Page; 1, 5 Financial Times, Page: 1 The Times, Page: 1 The Sun, Page: 4 Daily Express, Page: 4 City AM, Page: 1

Workers urged to claim cash back from HMRC

HMRC is urging millions of UK employees to go online and directly check if they can claim extra cash back. Nurses, hairdressers and construction workers are among the employees who could be missing out on their full tax relief entitlement for work-related expenses by using agencies rather than claiming online. According to HMRC, 85% of eligible taxpayers currently pay agents to claim their money. But those who are paid through PAYE can claim the full amount of tax relief they are owed directly from HMRC.

The Press and Journal, Page: 34

Finance secrecy services sourced within EU

The Tax Justice Network has claimed that people or firms in the EU that wish to keep their financial affairs secret find more of the services they require inside the EU than in one of the tax havens blacklisted by the bloc.

City AM, Page: 12

Labour sets sights on tax avoiders

John McDonnell has warned tax avoiders that they face a crackdown under a Labour government. In his speech at the Labour Party Conference, the shadow chancellor said: “We need to exert some people power over our tax system” and that the current government’s record on tax avoidance “has been a disgrace”. He announced Labour is launching a shareholder campaign and is demanding companies sign up to the Fair Tax Mark, which awards businesses on their tax practices and transparency. Meanwhile, many of the responses to Labour’s employee share ownership proposals claim that the plans are a thinly disguised revenue-raiser. The Times’ Philip Aldrick says the proposals are not actually employee ownership at all, and amount to “a stealth tax on big business, borne by their shareholders in diluted stakes.” Elsewhere, the FT’s analysis concludes that “maybe it would be simpler jus t to put up the taxes on corporate profits, or dividends.” The Telegraph agrees that “this is a stealth tax smuggled in under the guise of a complex bonus scheme.” Lastly, the Guardian’s Nils Pratley questions: “What’s wrong with giving tax breaks to companies to run improved individual share ownership schemes?”

Economia The Times, Page: 41 The Daily Telegraph, Business, Page: 4 Financial Times The Guardian, Page: 28 The I, Page: 8

Leonard targets wealthy as he bids to become FM

Scottish Labour leader Richard Leonard has used his speech at the party’s annual conference in Liverpool to call for a wealth tax, the break-up of large land estates and rights for workers to buy enterprises which face closure, saying the economy needs “more planning and less market”. He claimed: “A 1% windfall tax on Scotland’s wealthiest 10% would raise £3.7bn to invest in public services”. Among the options the party is considering is a land value tax that would oblige owners to sell and a residential requirement targeting “absentee” landowners

The Daily Telegraph BBC News The Scotsman, Page: 1

INDUSTRY NEWS

Employers hire apprentices to tackle lack of diversity at top

A survey by the ISE reveals many of the biggest graduate employers are stepping up apprenticeships to tackle a lack of diversity in the top ranks of professional life.

Financial Times, Page: 3

Loan accounting rules leave plenty of wriggle room for bank bosses

The FT’s Jonathan Ford says it remains to be seen whether the IASB’s new IFRS 9 standard will stop companies recording upfront gains while delaying the recognition of losses.

Financial Times, Page: 16

Why Brexiters’ confidence in services trade may be misplaced

A new study suggests Brexit will fail to transform Britain into a global services powerhouse because of the importance of geography to trade in finance, retail and other services.

Financial Times

SMEs NEWS

Small firms exposed to pension fund risks

Goldman Sachs has warned that the funding positions of company pension pots have improved since last year but smaller firms are not managing their risks well. The investment bank found that 45% of the FTSE 350 data was for schemes below £500m in size, compared with 87% for the UK economy overall. Risk management was likely to become more important as companies look to navigate Brexit, according to Shoqat Bunglawala, of Goldman Sachs Asset Management.

The Daily Telegraph

Smaller firms unprepared for a hard Brexit

Only 14% of smaller firms in the UK have started planning for a no-deal Brexit, according to the Federation of Small Businesses. Its latest research shows that a further 41% believe a no-deal Brexit will have an impact on their business but have yet to start planning for the possibility. Just 10% believe a no-deal Brexit will have a positive impact on their ability to do business.

The Press and Journal, Page: 33

Small companies lament late payments delay

The Federation of Small Businesses has criticised the lack of government action on late payments to small companies. In March’s spring statement, Philip Hammond promised that the government would launch an assault on the “scourge” of late payments, but there has been no progress on the promised consultation. Mike Cherry, the FSB’s national chairman, said that since big businesses “aren’t doing enough” to tackle the issue, “we need to see government stepping in”. New figures have also revealed that the government’s small business commissioner, appointed last year to tackle late payment to small suppliers, has helped just nine small businesses to handle complaints about late payments from larger customers.

The Times, Page: 47

Small firms dissatisfied with rates appeal system

Almost nine in ten companies who are in the early stages of appealing against their business rates bills are dissatisfied with the new system, according to a government survey. The three-stage “check, challenge and appeal” system was introduced alongside the first revaluation of business rates for seven years in 2017. In the five months to August 8, of respondents who were in the first stage of making an appeal 86% said they were dissatisfied or very dissatisfied with the new system. Representatives of businesses argue that it has become far too difficult to begin a challenge against a bill that may be incorrect. Meanwhile, Labour has said it would re-evaluate business rates annually as part of a plan to save the UK’s high streets.

The Times, Page: 43 Daily Mirror, Page: 4

CORPORATE NEWS

Regulators urged to look at City links to Danske scandal

Anti-corruption groups are calling on the Serious Fraud Office and Financial Conduct Authority to investigate UK links to a €200bn (£180bn) dirty-money scandal at Danske Bank. Corruption Watch and Transparency International said watchdogs needed to act to “send a clear message that the UK will no longer be a hiding place for dirty money”.

The Daily Telegraph, Business, Page: 1

PENSIONS NEWS

People who regret cashing in pensions could claim compensation

People who regret swapping their “final salary” pensions for cash may be able to claim compensation following a controversial ruling. The Financial Ombudsman has published details of a case where a saver is to be paid compensation after transferring, even though they signed a waiver confirming they understood the risks.

The Daily Telegraph

INTERNATIONAL NEWS

Deutsche Bank ordered to tighten controls on money laundering

German financial regulator BaFin has appointed KPMG to monitor Deutsche Bank’s efforts to prevent money laundering and terrorism financing over the next three years.

Financial Times, Page: 14 The Guardian, Page: 29 City AM, Page: 7

Macron offers €6bn tax cut

Emmanuel Macron has promised a €6bn tax cut for French households and an €18.4bn tax cut for businesses in a bid to boost the economy and his own flagging popularity.

The Times, Page: 35

ECONOMY NEWS

Weak sterling offers bargains for US firms

Analysis by Moore Stephens shows US firms are taking advantage of the cheap pound to snap up some of Britain’s most successful businesses at bargain prices. The value of deals involving US firms buying British businesses in 2017-18 was £79bn, up from £36.8bn the previous year. Moore Stephens said US firms, unlike their European counterparts, had shrugged off Brexit concerns. “This has been in part due to the devaluation of sterling since 2014, making British businesses comparatively cheaper than many of their foreign competitors,” it said.

The Guardian, Page: 25 City AM, Page: 14

UK export growth slows again

Growth in UK exports has slowed for the sixth quarter in a row, according to figures from BDO. Its report concluded that the rising price of UK exports, thanks to higher costs, is contributing to the sluggish growth. BDO said the UK’s continued drop saw it “creeping closer to the point of contraction.”

The I, Page: 40 City AM, Page: 14

Brexit stunting British manufacturing growth

Growth in British manufacturing has slowed as exports cooled, according to fresh data from the Confederation of British Industry (CBI), to the lowest since May. Anna Leach, CBI Head of Economic Intelligence, said: “While manufacturing order books remain strong and output is still growing, Brexit uncertainty continues to cloud the outlook. Heightened fears of a ‘no deal’ Brexit scenario have prompted some firms to move publicly from contingency planning to action.”

City AM The I, Page: 41

OTHER NEWS

HMRC tells OAP he’s dead

A retired Royal Navy chief petty officer has spoken of his surprise at receiving a letter from HMRC telling him he had died. Ronald Pomeroy, of Portsmouth, commented: “HMRC has told me that they are sending somebody round to see me – presumably to check my pulse.”

Daily Star, Page: 17 Daily Express, Page: 23

Tax inspectors reach new heights

Tax inspectors in Athens are using drones to count the number of tourists on board pleasure boats in holiday hotspots to make sure that the number tallies with receipts presented by tour operators.

The Times, Page: 34

Contact Paul Southward if you have any queries.

Paul Southward