Weekend News Roundup Saturday 11th August 2018
Weekend News Roundup Saturday 11th August 2018
HMRC launches fewer transfer pricing investigations
The number of HMRC investigations into transfer pricing dropped to 250 last year, from 362 the previous year, according to law firm Pinsent Masons. The lower volume of transactions has been partly attributed to HMRC using diverted profits tax investigations instead. Incorrect transfer pricing is estimated to have cost HMRC a record £5.8bn last year, a 51% increase from £3.8bn in 2015/16. Analysis by Pinsent Masons also found that custodial sentences for tax fraud increased from three years and three months to just over four years in the past year. The lengthier sentences have been attributed to HMRC and the CPS pushing for tax fraud cases to be categorised among more serious offences.
Finance sector pays biggest share of income tax
Bankers and insurance brokers are shouldering a bigger income tax burden than ever, according to HMRC’s annual statistics on the distribution by industry of tax. The finance and insurance industry made up 17.1% of the total amount HMRC collected in the 2016-17 tax year, a record high and a 0.5 percentage point increase on the amount of tax taken in 2015-16. The tax liability of the burgeoning “Stem” field (science, technology, engineering, and mathematics) is the second highest, making up 12.2% of the Revenue’s income tax pot. The agriculture, forestry and fishing industry accounted for the least amount of income tax paid, at just 0.3%.
Plan ahead to avoid IHT hit
The Mail’s Tony Hazell says the sharp rise in IHT receipts, which have increased by 120% to £5.23bn in eight years, is a reminder that “we should give away as much as we can afford to without leaving ourselves short.”
Daily Mail, Page: 42
Online sales tax could level the playing field
Tim Newark in the Express argues that an online sales tax would help erode the unfair advantage that web retailers such as Amazon have over high street traders.
Daily Express, Page: 12
Pressure on FRC to publish BHS report
The chairman of the Commons Work and Pensions Committee has written to the Financial Reporting Council to ask when it intends to publish its full report into PwC’s auditing of BHS. Frank Field asked for an explanation if no firm date could be given, and suggested that the committee might publish its own copy of the report. The High Court last month dismissed an attempt by Sir Philip Green to get an injunction to prevent the publication of the FRC’s report.
Concept of prudence no longer takes priority
A letter to the FT argues that while accounting rules have not abandoned the prudence concept; they have removed its priority over other accounting concepts.
City needs to help regional business to thrive
Alison Rose, chief executive of commercial and private banking at RBS, writes in City AM that financiers must look to offer the same funding opportunities to businesses in the regions as they do in London. She says that we need to ensure that SMEs maintain the ability to innovate and expand, regardless of whether they are based in Louth or London. Ms Rose adds that the UK’s regions need to be at the heart of the City’s strategy to boost Britain’s business environment.
Homebase set to file CVA
Hilco Capital, the new owner of Homebase, is expected to outline proposals for a CVA that will close roughly 60 of Homebase’s 249 stores . Landlords have expressed anger at the growing use of CVAs, with the British Property Federation saying the process is now being mis-used.
Sky News The Guardian, Page: 30 HSBC finance director to join GlaxoSmithKline
Ian Mackay is to join GlaxoSmithKline as CFO from early next year. Mr Mackay is currently the finance boss of HSBC. The bank has lined up former RBS executive Ewan Stevenson to replace him.
Rents could rise 15% following tax changes
Rents could rise 15% by 2023 as the supply of new rental properties dries up, according to a survey by the Royal Institution of Chartered Surveyors (RICS). It said small scale landlords are pulling out of the market following tax changes which have made Buy-To-Let investments less profitable.
The Times, Page: 34 The Daily Telegraph, Page: 29 The Guardian, Page: 33
Higher taxes ‘damage housing market’
The Times’ David Smith says George Osborne’s reforms to stamp duty and buy-to-let taxes have damaged London’s housing market, by driving down activity and prices.
Sterling slumps amid no-deal fears
Fears of a no-deal Brexit have pushed down the value of sterling to below $1.29 for the first time in a year. Analysts said the decline in sterling would push up inflation and lead to a renewed squeeze on living standards at a time when support for the government’s handling of Brexit has fallen sharply.
The Guardian, Page: 1-2 The Independent, Page: 60
UK house price growth accelerates, Halifax says
UK house prices were 1.4% higher in July than June, the Halifax has said, rising at the fastest annual pace since November. Prices in the three months to July rose by 3.3% from a year earlier, with the average cost of a house hitting a record £230,280. Howard Archer, chief economic adviser to the EY Item Club, said: “The impression remains that the housing market is struggling to really step up a gear in the face of still limited consumer purchasing power, fragile confidence and expectations of the Bank of England edging up interest rates”.
Britain’s richest man relocates to Monaco
Ineos founder Sir Jim Ratcliffe, the richest man in Britain according to this year’s Sunday Times Rich List, is leaving the country in favour of Monaco. The reasons behind the move are not known, although Sir Jim, whose fortune is estimated at £21.05bn, has complained previously about Britain’s restrictive business and tax environment.
Pensioner contemplated suicide over tax request
A 90-year-old man said he contemplated suicide after an error on his tax return claimed he earned £3m and owed £200,000 in tax. George Taylor, said he explained his personal circumstances to HMRC but claims “they didn’t even apologise for the error”.
Bangor City FC avoids winding-up bid
Bangor City FC has settled its score with HMRC, paying a £10,300 unpaid tax bill to avoid a second move to wind it up.
Property bosses slow to embrace tech
Property bosses are lagging behind when it comes to embracing digital disruption, according to a global survey by PwC. It found that only 17% of property CEOs cite cyber threats as a danger to their growth prospects, compared with 40% of all CEOs surveyed. And only a tenth see the speed of technological change as a threat to their firms compared with 38% across the spectrum .
The Scotsman, Page: 32
Katie Price avoids bankruptcy ruling
Former model Katie Price has avoided being declared bankrupt after a hearing over her finances was adjourned, for almost three months, to allow time for the consideration of an IVA.
Evening Standard Daily Express, Page: 15 The Sun, Page: 11