News Roundup Wednesday 2nd January 2019

NEWS ROUNDUP

HAPPY NEW YEAR

TAX NEWS

Thousands file tax returns on Christmas Day

Some 2,616 tax returns were filed on Christmas Day, according to HMRC data, 204 between midnight and 8am, 1,372 between 8am and 4pm and 1,040 from 4pm to midnight. On Boxing Day, 8,465 returns were submitted, with 348 received before 8am, 4,492 between 8am and 4pm and 3,625 over the rest of the evening. HMRC director-general for customer services Angela MacDonald said: “Whether you fit it in while cooking the Christmas turkey, or after the kids have gone to bed, or after the Queen’s Speech, our online service is available for you to file your tax return at a time that suits you.”

Daily Mirror Daily Express, Page: 46 Yorkshire Post, Page: 4

Labour’s tax plans would hit over 65,000 doctors

Nearly 70,000 NHS doctors would be hit by increases in income tax under Labour, Health Secretary Mathew Hancock has warned. The Shadow Chancellor John McDonnell wants the 45% tax rate threshold to be reduced from £150,000 to £80,000 – a move that would also hit other public-sector workers, such as headteachers and senior police.

Daily Express, Page: 10, 14

CORPORATE NEWS

HMV files for administration for second time in six years

HMV owners Hilco have appointed KPMG to handle the insolvency of the music and video chain after it fell into administration for the second time in six years. Around 2,200 jobs are at risk and analysts doubt another turnaround fund will show interest in a physical entertainment market that has been destroyed by Netflix and other streaming providers. HMV’s woes have led to renewed calls for radical reforms forcing huge foreign internet companies to pay their fair share of tax. HMV, with sales of £277m, paid £15m in business rates last year, while Amazon, with £8.8bn sales, paid £38m.

Financial Times, Page: 1 The Daily Telegraph, Business, Page: 37 The Times, Page: 9 The Guardian, Page: 2 Daily Mirror, Page: 10 Daily Mail, Page: 10, 97

Government to consult on new consumer protections

The Government is set to outline proposed new laws in January designed to protect consumers who buy from online stores or use savings clubs which later collapse. A Law Commission report in 2016 proposed new regulations to cover schemes such as the Farepak Christmas club, which failed in October 2006 and which it said, “pose a particular risk to vulnerable consumers”. The report found that customers risked losing millions of pounds from redundant gift vouchers in 15 of the 20 large insolvencies it studied. Business Secretary Greg Clark said: “The measures we are consulting on will give shoppers greater peace of mind.”

Daily Mail The Times, Page: 45 The Sun, Page: 49

PERSONAL FINANCE NEWS

British adults suffering lack of financial resilience

New research from ComRes and R3, the insolvency trade body, indicates that 20% of British adults would find it somewhat difficult, very difficult or impossible to immediately pay an unexpected bill for an amount as little as £20, without assistance from an external source. Around one in 20 (6%) said they would find it “very difficult” or “impossible” to immediately pay an unexpected £20 bill, while another 14% said that doing so would be “somewhat difficult”. Asked whether they would be able to pay an unexpected bill of £500, 52% of Brits said they would find it very difficult or impossible to pay it immediately. Stuart Frith, President of R3, said: “The research is more evidence of financial precariousness in Britain, and a worrying sign that many people do not have any kind of financial cushion to fall back on if needed.”

Press Release

PROPERTY NEWS

UK house prices edge up

Amid large regional variations, British property prices increased 1.02% overall this year according to Zoopla, taking the collective value of UK homes to £8.29trn, up £83bn since January. In Scotland, property values rose 6.43%, in Wales 3.98%, while England saw prices edge up by 0.58%. The seaside town of Ryde on the Isle of Wight was named Britain’s property hotspot, with house prices rising by more than 10% this year to £242,016, while house prices fell the most in Alnwick, Northumberland, where they dropped 6.58% to £238,802.

Daily Mail, Page: 8 The Daily Telegraph

PENSIONS NEWS

Rise in NHS workers opting out of pensions

Concerns have been raised over a steep rise in NHS workers opting out of their workplace pension scheme. A recent Freedom of Information request by the Health Service Journal found that nearly a quarter of a million NHS staff had opted out of the NHS pension scheme in the past three years. Sir Steve Webb, the former pensions minister who is now director of policy at Royal London, said: “The NHS needs to take urgent action to tackle this epidemic of pension opt-outs […] Those who opt out will save money in the short term, but could lose nine times as much in the long term in reduced pension rights.” The British Medical Association, the doctors’ union, has also raised concerns that members were quitting the scheme as successive cuts to pensions tax relief were exposing them to hefty charges.

Financial Times, Page: 2 The Daily Telegraph, Page: 2 The Times, Page: 55 Daily Mail, Page: 98 The I, Page: 68

ECONOMY NEWS

High Street to struggle regardless of Brexit, thinktank warns

The UK retail industry will continue to struggle into 2019, regardless of the unknowns of Brexit, according to the KPMG/Ipsos Retail Think Tank (RTT), which warned of changing consumer habits, too many shops, high levels of debt, compliance costs, macro-economic challenges, and a lack of talent. Bricks-and-mortar retailers could be granted some reprieve next year however, with RTT member Jonathan De Mello suggesting: “Commercial rents are now under so much scrutiny that they can’t really go up.”

Daily Mail The Times, Page: 45 The Sun, Page: 49

Record number of British workers switching jobs

Analysis of official figures shows that British workers are switching jobs in numbers not seen since 2004 with employers struggling to hold on to staff as workers seek higher pay. Analysts say this reflects a strong economy and expect average earnings to rise by 3.5% in 2019, up from 2.9% in 2018. However, recruiters say employers are now quicker to offer flexibility as well as more cash, while workplace culture is also a key factor prospective employees are looking for.

The Daily Telegraph

Caution creeping in for deal-makers

Deal­makers shrugged off Brexit concerns in 2018 enjoying a buoyant M&A market but recently released data from the Office for National Statistics (ONS) showed a fall in the value of transactions in the third quarter. Jonathan Boyers, head of M&A at KPMG, said: “While the M&A market has remained blisteringly hot over 2018, the most recent data from the ONS seemed to indicate that deal volumes are starting to decline – perhaps a sign that boards are becoming more cautious as economic and political uncertainty continues to intensify. We’re also starting to see banks, who have previously been bullish in offering generous debt packages to support transactions, start to tighten their stance and terms on offer in recent months.”

The Scotsman, Page: 27

Hard Brexit will trigger rate cut

The Times’ annual survey of economists has suggested that leaving the EU without a deal would trigger a cut in taxes and interest rates and lead to the return of quantitative easing. The 52 economists surveyed all agreed that a disorderly Brexit would require intervention from the Bank of England and the Treasury. Some 42% of the respondents thought that there was at least a one-in-five chance of Britain leaving the EU without a deal, either by crashing out or on “managed” WTO terms.

The Times

INTERNATIONAL NEWS

Tax cuts one year on: ‘we are on a very unstable fiscal path’

Sam Fleming and Andrew Edgecliffe-Johnson challenge the sustainability of President Trump’s $1.5tn tax cuts’ positive effect on growth, amid modest investment by firms and a widening budget deficit.

Financial Times, Page: 4

CRIME NEWS

Annual cost of fraud in UK hits £110bn

The level of fraud continues to rise at an alarming pace, reports Conal Gregory in the Yorkshire Post, with research by Crowe Clark Whitehill showing financial crime was costing the UK £110bn annually. Gregory highlights some common scams to be aware of including fraudsters pretending to be from HMRC and promising refunds. HMRC closed 20,750 false websites in the 12 months to July which dishonestly claimed to be a legitimate tax body, a 29% increase on the previous year, Gregory adds. Elsewhere, the Scotsman’s Jane Bradley points to some of the latest tech advances being used by scammers, including “phone spoofing” – where fraudsters send messages or make calls from numbers which appear to be those of a legitimate organisation, such as HMRC. So-called “whaling” is an equally pernicious practice which involves duping business’s finance departments into believing that an email h as come from a board member or senior member of staff.

Yorkshire Post, Page: 20 The Scotsman, Page: 4

Brussels seeks tougher anti-money laundering controls

A raft of scandals in 2018 has pushed Brussels to seek tougher anti-money laundering rules. EC vice-president Valdis Dombrovskis said the measures would spur “convergence” of supervisory standards across the EU.

Financial Times, Page: 4

OTHER NEWS

Queen of Soul owes millions in back taxes

Aretha Franklin’s estate has paid at least $3m (£2.36m) in back taxes since her death in August, the estate’s lawyer David Bennett said. The singer reportedly owes more than $6.3m in back taxes from 2012 to 2018 and $1.5m in penalties. Bennett added: “We have disputes with the Internal Revenue Service regarding what they claim was income. We claim its double-dipping income because they don’t understand how the business works.”

The I, Page: 27

Contact Paul Southward if you have any queries.

Paul Southward