News Roundup Thursday 3rd October 2019
News Roundup Thursday 3rd October 2019
TAX NEWS ROUNDUP
Javid considers scrapping IHT
Chancellor Sajid Javid could be considering scrapping inheritance tax, telling a fringe event at the Conservative party conference that that levy is a “real issue” and saying that changes were “on my mind” when it comes to IHT. Asked if he would consider axing the tax, Mr Javid replied: “We have already made some sensible reforms in that tax … I shouldn’t say too much now but I understand the arguments against that tax.” He added: “I do think when people have paid taxes already through work or through investments and capital gains and other taxes there is a real issue with then asking them on that income to pay taxes all over again.” This comes after the Brexit Party said it would abolish the tax, with party chairman Richard Tice last week describing IHT as “the most hated, the most unpopular tax in this country”, adding: “We’ll just get rid of it”.
The Daily Telegraph, Page: 6 Daily Mail, Page: 2 The Independent, Page: 12 The I, Page: 9 The Sun, Page: 2 Daily Express City AM, Page: 5
PM hints at tax cuts
Prime Minister Boris Johnson has suggested people can expect tax cuts in the upcoming Budget, telling the Sun he wants a “high wage, low tax economy.” Probed on whether this means income tax cuts are on the horizon, he said the Chancellor is “a great radical and he’ll want to do something for reducing the burden of taxation and stimulating growth” He added: “That’s what we want to see. That’s where we’re going.”
The Sun, Page: 4
Tax cut call for low earners
Tim Worstall, a senior fellow of the Adam Smith Institute, believes that the Chancellor should reduce taxation for poorer people. He argues that the personal allowance, the starting point for both income tax and national insurance, should be whatever number is declared to be the minimum wage – saying: “Raise one and increase the other.”
PROPERTY NEWS ROUNDUP
Stamp duty take tanks
Stamp duty receipts from residential property fell by more than £900m in 2018/19 to £8.4bn, according to HMRC figures, a 10% decline and more than at any point in the past decade. HMRC said the drop was driven in part by stamp duty relief for first-time buyers on properties worth up to £500,000 and the devolution of stamp duty to Wales last year, with an 8% fall in transactions over £1m also contributing. Richard Morley of BDO said the uncertainty surrounding Brexit has made families think twice about moving: “They just don’t know what’s going to happen and it’s putting them off. At the same time the richest are not buying at all and foreign investors are keeping well clear.” He added that the figure is “a big drop in revenue for the Treasury,” saying it begs the question of how the Government “is going to afford all of the tax breaks they have promised so far”. The HMRC data comes as house price growth has slowed to just 0.7% according to the latest figures from the Land Registry, with prices in the South East and North East falling by 2% and 2.9% respectively.
House prices growth slows
Annual growth in UK house prices fell back to 0.2% in September, according to Nationwide’s latest data, leaving the average UK house price at £215,352 last month, down from £216,096 in August. “Indicators of UK economic activity have been fairly volatile in recent quarters, but the underlying pace of growth appears to have slowed as a result of weaker global growth and an intensification of Brexit uncertainty, ” Nationwide chief economist Robert Gardner said. Howard Archer of EY Item Club said that prices could “quickly drop around 5%” in the event of a no-deal Brexit at the end of this month.
The Times, Page: 39 City AM
FSB: Firms would like 10 years to deliver wage increase
The Federation of Small Businesses (FSB) says many of its members would like a decade to implement Chancellor Sajid Javid’s plans to significantly increase the national minimum wage. The FSB’s employment policy chief Michael Mealing said: “Small businesses are agile and can adjust to change but they’re also fragile and need the maximum amount of time so that they can plan and change very much their cost base,” saying that while five years was reasonable, “I think many small businesses would consider ten years would have been better.” He also warned that for low-pay sectors “the advent of a very much higher national living wage, will make the problem in those sectors significantly worse”. Meanwhile, Craig Beaumont, the FSB’s advocacy director, has said the Chancellor did not consult business groups on his plan to raise the national living wage. He said: “Government would normally reach out on something like this, to understand the impact of £16bn being shouldered by small businesses that they know are struggling with employment costs.”
The Times, Page: 8 City AM
FRC to probe EY over Thomas Cook collapse
The Financial Reporting Council (FRC) has launched an investigation into the collapse of travel firm Thomas Cook, which will examine EY’s audit of the company for the year ending September 30 2018. The FRC said the investigation would first look at whether EY had a case to answer, and if it did so then the two sides would convene at a tribunal where the accountancy firm – or individual accountants – would have a chance to defend any allegations against them. MP Rachel Reeves, chair of the Commons Business Select Committee, has vowed to grill both EY and PwC as part of its own investigation into Thomas Cook’s demise. EY took over as Thomas Cook’s auditor from PwC in 2017 and Bob Moritz, global chairman of PwC, has claimed that the collapse of Thomas Cook will intensify the politically charged debate in the UK over what should be expected from an audit. The FT’s Matthew Vincent says that arguably, the FRC’s investigation “should find the auditor did no wrong.” Meanwhile, Thomas Cook’s operations in Belgium have officially been declared bankrupt.
The Times, Page: 34 The Guardian, Page: 33 The Independent, Page: 55 Financial Times Financial Times, Page: 18 Daily Mail, Page: 71 Daily Mirror, Page: 7 The Sun, Page: 43 Daily Star, Page: 4 Daily Express, Page: 2 City AM, Page: 3 Evening Standard The Scotsman, Page: 18 The Press and Journal, Page: 21 Yorkshire Post, Page: 7
ACCA: Tomorrow’s accountant needs diverse skills
Writing in the Scotsman, head of ACCA Scotland Craig Vickery says the accountancy body is “evolving” its continuing professional development and mentoring programmes, “recognising that the accountant of the future requires a diverse and broad range of skills to be successful and to be relevant in a fast-moving world.”
The Scotsman, Page: 28
CORPORATE NEWS ROUNDUP
£6m deal for Harland and Wolff
Energy infrastructure group InfraStrata has agreed a £6m deal to buy Belfast shipyard Harland and Wolff with administrators BDO, putting down a £500,000 deposit having secured a £2.2m loan agreement to cover the deal.
The Times, Page: 43 Financial Times
Firm bought out of administration
Consultancy firm Success Flow Digital has been bought out of administration by YouWeSuccessflow, which is backed by Dutch internet agency YouWe. Kris Wigfield and Joanne Hammond of Begbies Traynor were appointed as joint administrators of Success Flow Digital.
Yorkshire Post, Page: 17
PERSONAL FINANCE NEWS
Self-employed pension contributions plummet
Growing numbers of self-employed people in the UK have resulted in a sharp decrease in pensions contributions, by almost a third in four years, according to figures from HMRC. In 2013/14 the number was 600,000, though it fell to 410,000 in 2017/18. The amount that the self-employed contribute to pensions has fallen 18.3% in the past two years – from £1.97bn in 2015/16 to £1.61bn in 2017/18.
UK manufacturers vulnerable
UK manufacturing output remained in the red last month as job losses piled up, according to IHS Markit’s latest UK Manufacturing Purchasing Managers’ Index, which shows that factory activity hit 48.3 in September. IHS Markit director Rob Dobson said: “Output, new orders and employment all fell further as rising political, trade and economic uncertainties exacerbated concerns about Brexit,” and cautioned that the sector may be sliding into recession. Separately, the Chartered Institute of Procurement & Supply warned manufacturers are cutting jobs at the fastest pace for six years.
HMRC reports itself to watchdog over 4 tax suicides
HMRC has reported itself to the Independent Office for Police Conduct four times over the suicides of individuals facing the loan charge, financial secretary to the Treasury Jesse Norman has confirmed.
Contact Paul Southward.