NEWS – THURSDAY 23RD JULY 2020
NEWS – THURSDAY 23RD JULY 2020
TAX NEWS – THURSDAY 23RD JULY 2020
STAMP DUTY LAND TAX RATE TABLES UPDATED
MPs demand action against advisers who facilitate tax evasion
The Times reports on a push by MPs to make it easier to prosecute lawyers and accountants who enable tax avoidance. In a paper produced by a cross-party parliamentary group on anti-corruption and responsible tax, Dame Margaret Hodge, the former Labour minister and ex-chairwoman of the Commons public accounts committee, said: “The way that the law is currently set out means that it is virtually impossible to prosecute these enablers of failed tax-avoidance schemes, even when a criminal offence has been committed.” The group said one change that could be made would be to remove the requirement for dishonest intent, which is required in all criminal fraud cases, and replace it with a “double-reasonableness” test, which is used for penalising enablers under the civil law regime. But Harry Travers, a partner at BCL Solicitors, says: “The need for the prosecution to prove dishonesty is a crucial safeguard for an accused, and should not be removed. ”
IFS: Inheritance major factor in future wealth
The Institute for Fiscal Studies (IFS) has calculated that as many as one in 10 of UK adults born in the 1980s will inherit more than half as much money from their parents as the average person earns in a lifetime. The thinktank found the median inheritance for those born in that decade is estimated to be £136,000, compared to £107,000 for those born in the 1970s and £66,000 for those born in the 1960s. People born in the 1980s had accumulated no more wealth than adults born in the 1970s had done by the same age, the IFS said, but that their parents were 40% better-off in comparison. Robert Palmer, executive director of the campaign group Tax Justice UK, commented: “It is natural parents want to hand a legacy to their kids, but at some point we need a grown-up conversation about wealth. As we build back from the economic shock of coronavirus, politicians should use the tax system to tackle inequality and support high quality public services.”
HMRC’s modernising drive analysed
Chris Sanger, partner and head of tax policy at EY, chair of the financial secretary to the Treasury’s Tax Professionals’ Forum, and former head of business tax policy at HM Treasury analyses the key announcements from the government’s ‘legislation day’ in City AM. He notes that Making Tax Digital (MTD) will be extended to all VAT-registered UK firms from 1 April 2022, in a bid “to reduce the scope for avoidable errors (i.e., £8.5bn of lost revenue in 2018-19) and to simplify the burden for taxpayers.” He also suggests that “The idea that the tax status of people and businesses should be reviewed when considering licences may not be that controversial, but the idea that HMRC should be the only arbiter of determining whether someone has complied with their tax obligations is more concerning.”
Opinion: Why are HMRC torturing the self-employed?
The Telegraph’s Janet Daley excoriates HMRC for rolling out its Making Tax Digital programme to more small businesses and individuals working for themselves. She says it is evidence the Revenue “hates self-employed people” and regards them as “tax cheats who must be hounded, persecuted and denounced until their mode of earning a living is as thoroughly monitored as those helpless PAYE armies who have tax deducted at source.” Daley adds that this “bureaucratic fiat” will only bring about a rise in the cash-in-hand black economy. Claims by HMRC that the move will improve productivity are bizarre, she goes on, concluding: “Coming up with new ways to torture [independent entrepreneurs], at precisely the moment when their fate is so precarious, is political and economic stupidity.”
Pandemic rescue could end with higher taxes
The Telegraph’s Tom Rees talks to experts about how Rishi Sunak will claw back some of the cash spent on keeping the country afloat during the coronavirus pandemic. Torsten Bell, chief executive of the Resolution Foundation, says the big economic debate “will be how much and which taxes to increase” .Chris Sanger, head of tax policy at EY, warns: “It is only in the major three taxes that you are going to generate significant revenues that are going to result in paying back the large amounts of money that has been spent. When you have got two thirds of total revenue in income tax, national insurance and VAT those are clearly the areas that are going to have to do the heaviest lifting.”
The Daily Telegraph, Business, Page: 5
EMPLOYMENT NEWS – THURSDAY 23RD JULY 2020
CIOT boss welcomes moves to tackle loan scheme promoters
Glyn Fullelove, the president of the Chartered Institute of Taxation, has welcomed the Government’s call for evidence on tackling disguised remuneration tax avoidance, but warned that schemes targeting agency workers are continuing to operate. Mr Fullelove said the call for evidence came out of Sir Amyas Morse’s review of the loan charge, which concluded the rules breached taxpayers’ statutory protections by applying an “unprecedented” 20-year look back period. Mr Fullelove added: “This is a very broad call for evidence – essentially a plea from the Government for ideas on how the remaining DR schemes and other avoidance can be stopped. We look forward to engaging with HMRC and providing constructive input into how such schemes can be stopped at source.”
Yorkshire Post, Business, Page: 1
CORPORATE NEWS – THURSDAY 23RD JULY 2020
Former Wirecard CEO rearrested in Munich
The former CEO of collapsed German payments company Wirecard, Markus Braun, has been rearrested in Munich along with two other unnamed former executives. Munich prosecutors now suspect Wirecard knew it had been lossmaking since 2015 and that its management conspired together in an organised commercial fraud of around $3.7bn. The fintech firm collapsed into insolvency after admitting last month that more than $2bn in funds supposedly held on its behalf was missing and probably never existed. Jan Marsalek, the company’s former chief operating officer, has vanished but is wanted under an international arrest warrant.
Chilango puts sale on the menu as it prepares administration
Mexican restaurant chain Chilango is to put itself up for sale as part of an administration process. More than 1,000 investors bought £5.8m worth of mini-bonds in the chain with the promise of returns of 8% a year. But in November Grant Thornton refused to sign off the accounts and in January the company was forced to undergo a CVA. The group’s twelve restaurants are at risk along with 152 jobs.
PROPERTY NEWS – THURSDAY 23RD JULY 2020
Ashley warns of closures due to rates delay
Mike Ashley has joined other critics accusing the Government of kicking retailers in the teeth by delaying property revaluations until 2023, leaving them with business rates bills they can ill afford. Ashley’s Frasers Group said in a statement to the City that the Government had “buried its head in the sand on the critical business rates issue” and that the company must examine the “viability” of a number of the group’s stores as a result.
The Daily Telegraph, Business, Page: 3
PENSIONS NEWS – THURSDAY 23RD JULY 2020
Pension tax breaks for high earners at risk
Professional services firm Hymans Robertson has warned that radical proposals suggested by the government could see millions of higher earners lose automatic tax breaks on their pension contributions.
ECONOMY NEWS – THURSDAY 23RD JULY 2020
Johnson pledges to get economy back on track
Boris Johnson told MPs yesterday that he would get the economy back on an “even keel” well before the next general election in 2024. In a meeting with backbench Conservative MPs in the House of Commons, Johnson was reportedly “bullish” about covering the £200bn cost of responding to the coronavirus pandemic, provided lockdown was not lifted too quickly resulting in a spike in cases. Separately, the Government is to slash its aid budget by £2.9bn this year in line with an expected shrinking of the economy caused by the coronavirus pandemic.
OTHER NEWS – THURSDAY 23RD JULY 2020
Workers in the south earn 30% more but are less happy
New research commissioned by the Social Mobility Commission (SMC) suggests those who leave their home towns to work in London and the South East will earn a third more than those who stay but are likely to be less happy. The Moving Out To Move On report also finds that those who leave to move to the South East are 50% more likely to have a degree and are more likely to end up in managerial jobs. However, despite earning £7,000 less that those who leave, people who stay in their home towns often benefit from greater wellbeing and a sense of community and nearly two-thirds were homeowners, compared with 55% of “movers”. “COVID-19 has shown that we can begin to do things differently,” says Sandra Wallace, joint interim chairwoman of the SMC, said. “Home working has been successful for many employers and for particular job roles. It has also shown that people’s views about where they want to live, and why they want to live there may be shifting. People should not have to move to prosper.”
Contact Paul Southward