News Roundup Wednesday 31st July 2019

NEWS ROUNDUP

TAX NEWS

HMRC sorry over delays to R&D tax relief claims

HMRC has apologised for taking up to seven months to process R&D tax relief claims.  It is reported that there is a significant backlog of claims. A spokesman for HMRC said it was “sorry” for the time taken and said it had hired additional staff to try to speed up the process.

The Press and Journal, Page: 35

OTS consults on simplifying tax for self-employed

The Office of Tax Simplification (OTS) is reviewing tax reporting and payment arrangements amid concerns that the rise of the gig economy has left the self-employed struggling with tax compliance. The OTS said that it was looking to explore “options for information reporting or payment of tax to take place closer to real time” after self-employed people said they would like the option to report information and pay tax periodically, or on the completion of jobs.

The Times, Page: 41

CORPORATE NEWS

Was Sports Direct auditor kept in the dark about tax bill?

Sources have told the Telegraph that Sports Direct auditor Grant Thornton was only told of the £600m tax bill from Belgium on Friday morning – the day it was due to release its annual results. In its description of the tax claim, disclosed in the final paragraph of the report, Sports Direct said it planned to “investigate further” with the help of its tax adviser, Deloitte. “Clearly Deloitte must have been aware,” a source close to the events said last night, claiming it was unusual that Grant Thornton has not been informed. “Auditors shouldn’t be surprised by information such as this,” the source said.

The Daily Telegraph, Page: 29

Aim delistings fall to lowest rate in 10 years

The number of companies delisting from the Alternative Investment Market (Aim) dropped to the lowest level for a decade last year, according to research by UHY Hacker Young. Just 66 companies delisted from Aim during the year ending 30 June, down from last year’s figure of 82.

City AM, Page: 9

Primark seeks steep rent cuts from landlords

Primark is seeking rent cuts to compete with retailers using insolvency proceedings to renegotiate leases and cut costs. The number of retailers opting for CVAs has doubled since 2016, according to PwC.

Financial Times, Page: 11 The Times, Page: 35 City AM, Page: 4

SMEs NEWS

Employee-owned businesses more resilient than traditional counterparts

The Times examines the benefits of shared company ownership, noting the culture change the structure fostered at firms like Richer Sounds and Manchester-based Unicorn Grocery. According to the Employee Ownership Association, potential benefits of shared ownership include increased productivity, resulting from “increased discretionary effort on the part of worker-owners, stronger teams, a unifying culture, greater degrees of trust, more efficient management and easier implementation of decisions.” However, the paper’s James Hurley writes that with the help of tax incentives, it was hoped that family businesses and entrepreneurs would sell stakes to their staff but few advisers, such as accountants, present it as an option.

The Times

PENSIONS NEWS

Pension Superfund strikes second deal

Pension scheme consolidator the Pension Superfund has agreed terms with an unnamed company to take £300m of closed defined-benefit scheme liabilities on to its books. It is the firm’s second such deal as it awaits approval from the Pensions Regulator and Department for Work and Pensions. The Times notes that as many as 50 defined-benefit pension schemes are on the regulators’ “critical” watchlist, making it ever more urgent to give employers options to exit troubling liabilities.

The Times

PROPERTY NEWS

Overseas buyers eye 50% discount on UK homes

Stagnant property prices and a weak pound are luring overseas buyers into the British housing market, the Telegraph reports. Hannah Aykroyd of Aykroyd & Co, a London buying agent, says: “We have had clients flying in from Asia and the Middle East looking to buy very quickly as they believe we’re at the bottom of the market in London. House prices in prime areas are down about 30% since the 2014 high. Combined with the weak pound, this means some buyers – such as those from America – are looking at an effective discount of over 50%.”

The Daily Telegraph, Money, Page: 2

House prices set to pick up from 2020

London and the South East will be the exception to house price growth of between 2.5% – 4% across most of the UK , according to PwC, witnessing price falls this year and only modest growth in 2020.

Yorkshire Post, Property Post, Page: 10

ECONOMY NEWS

Jobs boom continues despite slow growth

The latest data from the British Chambers of Commerce shows nearly a third of companies plan to hire more staff in the next three months, indicating that slowing growth had little impact on employers’ intentions. The CBI’s growth indicator survey also showed that the strong jobs market is unaffected by weakness elsewhere. However, almost two-thirds of firms are struggling to recruit employees, with the construction and hospitality sectors finding it particularly difficult.

The Times, Page: 34 Daily Mail, Page: 62 The Guardian, Page: 33

Interest rates expected to remain on hold

Commenting ahead of this week’s MPC meeting, Howard Archer, chief economic adviser to the EY Item Club, says the Bank of England is likely to keep interest rates at 0.75% throughout the rest of 2019 and well into 2020.

The Scotsman, Page: 34

OTHER NEWS

PPI call centre boss and his accountant jailed in £2.3m tax probe

David Buckley, the director of a Basingstoke call centre business, and accountant Mahmood Sadiq Poptani have been jailed for a total of seven and a half years after an investigation into a £2.3m income tax, National Insurance and VAT fraud.

Press Release

Gang that flooded Kent with illegal cigarettes jailed for more than 16 years

A gang of nine men who flooded Kent with millions of illegal cigarettes and sold them for just £3 a pack in shops have been jailed for a total of 16 years and nine months.

Press Release

EU decision on equivalence set to heighten UK post-Brexit fears

Brussels has withdrawn equivalence provisions for rating agencies in five countries in a move that will heighten fears any equivalence granted to the City post-Brexit can be too easily withdrawn.

Financial Times
Contact Paul Southward, Tax Consultant.

Paul Southward