News Roundup Wednesday 30th January 2019

NEWS ROUNDUP

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TAX NEWS

Facebook should pay more tax, Nick Clegg asserts

In some of his first public comments since joining the social media network, Sir Nick Clegg has asserted that Facebook should pay more tax in Europe. The former UK deputy prime minister said it was “unbalanced” that most of Facebook’s tax bill is paid in the US “even though the vast majority of Facebook’s users are outside the United States”. Elsewhere, Spotify CEO Daniel Ek has written to the EU finance ministers arguing that a tax on digital revenues would “create a harmful legal precedent of taxing revenues over profits, even when the taxpayer is not yet profitable”. The letter was co-signed by executives from Booking.com and e-retailer Zalando and the CEOs of software company Allegro, gaming company Supercell and delivery company Takeaway.com.

The Daily Telegraph The Times, Page: 9 The Daily Telegraph, Business, Page: 5

Corporation tax cut to cost UK government coffers £12bn

The Government’s planned cut to corporation tax from 19% to 17% in April 2020 will cost the exchequer some £12bn by 2022, according to estimates from HMRC.

Financial Times, Page: 2

CORPORATE NEWS

Documents show Patisserie Valerie in a new light

A report from KPMG intended for potential buyers, shows that Patisserie Valerie sales were in decline for at least three years before the £40m accounting black hole was unearthed. The information provided by KPMG is in stark contrast to that put out by the café chain prior to its collapse. The management of the business is criticised in the document as is the lack of “any reliable financial info”.

The Daily Telegraph, Business, Page: 1

Oddbins on the brink of collapse

More than 500 jobs are at risk as Oddbins faces collapse for the second time in less than ten years. Its owner, European Food Brokers, has reportedly lined up Duff & Phelps to handle a pre-pack administration.

Daily Mail, Page: 65 The Sun, Page: 45 Daily Express, Page: 60

SMEs NEWS

Costs weigh heavily on small businesses

Small businesses are spending an average of £480,000 a year on taxes, levies and employment obligations, according to research by the Federation of Small Businesses. The group found that costs such as business rates and pension auto-enrolment rose by 15% from 2011 to 2017. The study also found that the burden was slightly heavier on businesses in Wales, Scotland and Northern Ireland than in London. The construction sector has suffered most, with a 28% increase in policy-linked costs while manufacturing costs are up a fifth in just two years. Mike Cherry, FSB chairman, said: “The minute you start firing on all cylinders as a business owner – you’re struck with an avalanche of additional costs. That has to change.”

The Times, Page: 44 Financial Times, Page: 2 The Daily Telegraph, Business, Page: 1 The Scotsman, Page: 37

PERSONAL FINANCE NEWS

MSPs reject ministers’ proposed debt payment calculator

The Scottish Government’s proposed system to calculate the financial situation of people in debt or facing bankruptcy should be delayed until significant reservations are addressed, a Holyrood committee reported on Monday. It is the second time that the Economy, Energy & Fair Work Committee has chosen not to endorse the Common Financial Tool (Scotland) Regulations, which would replace the common financial statement currently in use. The Committee said it remains “unconvinced that the adoption of a UK wide system would be beneficial to Scottish debt advisers and their clients at this time”.

The Journal of the Law Society of Scotland

PENSIONS NEWS

Pension providers required to disclosure charges under FCA proposal

Under Financial Conduct Authority proposals to increase transparency and competition, the providers of popular pension products will be required to show consumers the fees they have actually paid in “drawdown”. The FCA also wants firms to offer customers ready-made “investment pathways” that broadly meet their aims.

Financial Times, Page: 2 The Daily Telegraph, Page: 10 The Times, Page: 36

ECONOMY NEWS

Retailers warn of no-deal food shortages

The bosses of Britain’s leading supermarket chains have signed a letter put together by the British Retail Consortium warning that a no-deal Brexit could put food supplies at risk. The CEOs of McDonald’s and KFC also added their names to the letter which was sent to all MPs. Tesco said that although it did not sign the letter, as it is not a member of the consortium, it had the same concerns. The Department for Environment, Food and Rural Affairs said: “The UK has a high level of food security built upon a diverse range of sources, including strong domestic production and imports from other countries. This will continue to be the case whether we leave the EU with or without a deal.”

The Times The Daily Telegraph Financial Times, Page: 3 The Guardian, Page: 14

OTHER NEWS

Carney: Digital ID cards could keep online finance safe

Accessing money online could be may safer by the introduction of digital ID cards, Mark Carney has said. Speaking at the Bank’s Future Forum, the Bank of England Governor admitted that the idea would raise privacy concerns, but “having a consistent and comprehensive digital ID” would unlock a lot of opportunities and provide some of the protections needed for a digital financial system. Mr Carney added that ID cards were a decision for the Government, not the bank.

The Daily Telegraph

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Paul Southward