UK tax whose regime relatively middle of the road

The Times’ David Byers talks to PwC’s Martin Muhleder, who has analysed whether higher earners in the UK pay more tax than they would in other western nations. Sweden scored the highest for tax contribution across five of the six incomes looked at by PwC. Top earners on £250,000 would lose 54.91% in tax and social security compared with 42.59% in the UK; Italians pay the second highest amount but it’s the most expensive country for those earning £80,000, who pay 46.41%.Germans also have a higher tax burden than the UK, whose regime is middle of the road when compared with the other ten: Sweden, Italy, Germany, France, Canada, Britain, Spain, Australia, Singapore, and the US states of California and Texas. Separately, Merryn Somerset Webb discusses in a piece for the FT the complexities around determining who exactly the rich are before they can be “soaked”.

The Times Financial Times, Page: 13

The general election and your finances

The tax plans of the main parties are considered across the press today, with the Telegraph reporting that investor bills would double under the Liberal Democrats or Labour. A higher-rate taxpayer with a £60,000 portfolio who sold off just £3,000 of profits each year would be hit with an annual CGT bill of more than £700 under Labour’s plans. Currently, they could sell £12,000 of their profits each year and pay nothing in tax. Under the Lib Dems, the same higher-rate taxpayer would have to fork out more than £12,000 for regularly selling off parts of the £60,000 portfolio over a 10-year period. The Telegraph also looks at how the different parties are targeting specific age groups for their votes. Elsewhere, FT Money reviews key policies on personal tax, pay, pensions and property being touted by the three main parties with Blick Rothenberg providing a chart of proj ected income tax and national insurance changes.

The Daily Telegraph, Your Money, Page: 5, 10 Financial Times, Money, Page: 8-9

Soft-play centres should pay VAT

HMRC recently sent out an advisory note reminding not-for-profit providers they cannot claim VAT on soft-play centres because it doesn’t consider them to have “an exercise purpose”. In contrast, adult exercise venues run by not-for-profit institutions, such as climbing centres run by charities or the local council, are VAT-exempt. Scott Harwood, a tax director at RSM, described the edict as “bizarre” as most people would consider soft-play centres somewhere to tire out their children.

The Times, Page: 67


McDonnell: Those on low incomes will pay more tax

Shadow Chancellor John McDonnell has told the BBC’s Money Box that those on annual salaries of £20,000 a year will be subject to tax reforms under a Labour government. He said that while “the bulk” of those who will pay more will have “incomes over a million, investments over a million”, there will be some “that have a small income”. He added that Labour is “trying to establish a system where everyone is treated fairly,” saying it is “fundamental” that “however you earn your income you should be treated the same”. This came after Money Box presenter Paul Lewis suggested that dividend tax “is going to be raised from quite a low rates up to the same rates as income tax,” calculating that pensioners earning £10,000 in dividends and “roughly” £10,000 from pensions “will be paying an extra £1,000 compared to what they are now.”

The Sunday Telegraph, Business and Money, Page: 9 Sunday Express, Page: 12

High earners in tax warning

HMRC has warned that high earners are failing to declare their pension contributions and may owe millions of pounds in tax. In a letter to pension scheme administrators, HMRC said people may be forgetting to declare in their yearly tax returns big pension increases that may breach their annual allowance – noting that in some cases the oversight may be deliberate. Steve Webb, director of policy at the insurer Royal London, said many taxpayers do not understand they have to declare any contributions over the threshold in their tax returns, while others are unable to work out how much they have put in so simply give up.

The Sunday Times, Business and Money, Page: 16

IHT system ‘complex and baffling’

Marc Shoffman in the Mail on Sunday describes his experience of the inheritance tax system, which he describes as “complex, baffling and, in the midst of grief, utterly soul-sapping”. He looks at the weight of paperwork involved and notes that a form he filled in after his father’s death was one of 275,500 that HMRC receives each year. Mr Shoffman cites Laura Kearns, a private client solicitor at law firm Royds Withy King, who says inheritance tax “isn’t straightforward from an administrative point of view,” and notes that the Office of Tax Simplification has called for the system to be simplified and digitised.

The Mail on Sunday, Page: 104



Eddie Stobart urges investors to back rescue bid

Eddie Stobart is recommending investors back a rescue deal from shareholder DBay warning that a rival bid by former boss Andrew Tinkler would lead to banks demanding immediate repayment of its £200m debt. DBay is offering a £55m high interest loan in exchange for a 51% stake in the company and its lenders, KBC, Allied Irish Bank, Bank of Ireland and BNP Paribas have agreed to give the company up to a year to repair its finances if shareholders supported the takeover. The trucking company has suffered from an accounting blunder and auditor PwC is yet to sign off half-year figures to May.

The Daily Telegraph, Business, Page: 33 Financial Times

Harley Medical bought in pre-pack deal

Harley Medical Group has been sold by RCapital through a pre-pack administration handled by BDO. The company will now come under the ownership of Lasercare Holdings Limited, controlled by private equity investor TriSpan.

The Daily Telegraph, Page: 35



Buy-to-let repossessions soar

Figures from UK Finance show the number of rental properties being repossessed by lenders because the owners are too far in arrears on their buy-to-let mortgage has risen by 40% compared with last year. Some 4,550 buy-to-let mortgages were in arrears of 2.5% or more of the total borrowing in the third quarter of this year. Of those more than a thousand are in serious arrears of 10% or more.

The Independent, Page: 50


Labour to act on empty shops

A Labour government will tell landlords of empty shops to “use it or lose it”. Plans would see councils set up a register of shop owners, outlining strict limits on how long a shop can remain empty before it is taken over. Labour is also vowing to deliver an overhaul of business rates.

The Sunday Mirror



Investors quitting Hargreaves Lansdown face huge delays

According to the Daily Telegraph, investors who are using Hargreaves Lansdown are facing huge delays transferring Isas and pensions to rival fund shops, as the stockbroker collects extra fees. The paper suggests that some customers have been left waiting for over three months to move to a new provider.

The Daily Telegraph

Banks end cheapest credit card deals

Halifax, Tesco Bank, Lloyds Bank, MBNA and Barclaycard are among Britain’s biggest credit card providers who have been withdrawing their best deals and putting up their rates as Christmas approaches. Rachel Springall from Moneyfacts said the banks are reining their offers in after having come under pressure to reduce unsustainable levels of consumer debt.

The Times

UK consumers ‘counting on credit’

A study by credit management company Intrum found consumers in the UK come second only to the Finnish for financial literacy, however, Brits are twice as likely than the average European to use credit to pay bills.

Financial Times, Money, Page: 3



Lump sum warning for those with public-sector pensions

The Times’ David Byers advises readers that taking large tax-free lump sums from final-salary public-sector pensions can leave savers facing huge charges. He says some of the schemes run by local councils, the civil service and the NHS are charging savers an average of £1 in annual income for every £12 of a tax-free lump sum they take out. “Public-sector pension schemes, in particular, offer very poor value when members sacrifice a pension for a lump sum,” says pensions expert Steve Webb. “It is vital that people seek advice or guidance so that they do not give up far too much of their hard-earned retirement savings.”

The Times

Self-employed women, how good is your pension?

Emma Maslin explains how women’s pensions are effected by motherhood or being self-employed, with a third of those who work for themselves saving nothing at all into a pension.

Financial Times, Money, Page: 10


Review coming for pension anomaly

The Government has promised a comprehensive review of a pensions anomaly that has led to 1.75m people, mostly women, losing tax relief on their pensions. The issue affects workers earning between £10,000 and £12,500 a year, with the average person losing an average of around £64 a year. Gregg McClymont, director of policy for The People’s Pension, said the issue “threatens to damage public confidence in the system and lets down those who need to boost their retirement savings the most.”

The Sunday Times, Page: 14


Christmas concern for small businesses

Research from online marketplace Not On The High Street shows that 22% of small businesses say they will be forced to close within the next 12 months if they experience below average Christmas trading, with almost one in 10 saying they would be forced to shut within weeks. The analysis shows that while the average consumer plans to spend £362 on gifts this Christmas, just £92 of that will be with small businesses. Not On The High Street chief executive Claire Davenport said: “Brits love to shop with small businesses and believe they support them but they aren’t quite putting their money where their mouth is.”

Sunday Express, Page: 43

BDO in ‘pro-enterprise, pro-business’ call

Stuart Lisle, co-chairman of BDO’s Brexit taskforce, calls for a “pro-enterprise, pro-business agenda” from the next government, saying it will “put Britain on the front foot.” He notes that BDO has created a “new economy” manifesto to champion those running mid-sized entrepreneurial businesses. He says the new government should prioritise local infrastructure projects as well as higher-profile national initiatives and suggests manufacture require targeted support.

The Sunday Times, Fast Track 100, Page: 4



Which party’s pledges will boost your wealth most?

The Mail on Sunday’s Jeff Prestridge examines which political pledges will boost consumers’ wealth the most. He concludes that Labour will hit the wealthy harder – with the party’s taxation plans for those who invest deemed “draconian”. Jason Hollands, director of Tilney, says they are a significant hindrance to investing. Sarah Coles, personal finance analyst at Hargreaves Lansdown, says Labour’s scrapping of the marriage tax allowance should act as a call to arms for 700,000 couples who currently are eligible to take advantage of it, but don’t use it. Labour’s pledge to cut the dividend allowance will also hurt, according to Moira O’Neill, head of personal finance at wealth manager Interactive Investor. Mr Prestridge suggests that like much of their manifesto, the Tories taken a somewhat defensive approach towards personal taxation, with no grand promises, nor a nasty round of tax rises in the pipeline.

The Mail on Sunday, Page: 75



Brits launch Black Friday spending frenzy

Retailers are expecting record sales of £2.5bn from Black Friday, according to Barclaycard, which recorded a 12.5% rise in transactions compared with last year. PwC said data suggested that three quarters of purchases would be made from the home or office. Elsewhere, Jason Gordon, a consumer analyst at Deloitte, said: “This weekend’s extended Black Friday promotions are not the end, and we are likely to see a continuation of discounting throughout the run up to Christmas.”

The Times, Page: 9 BBC News The I, Page: 13 Daily Mirror, Page: 15 Daily Mail, Page: 23 The Sun, Page: 24 Daily Express, Page: 10

UK firms lose £9.2bn to fake imports

The Organisation for Economic Cooperation and Development (OECD) has warned that the flood of fake goods into the UK is costing companies £9.2bn a year in lost sales. Britain’s economy has lost more than 86,000 jobs and the exchequer £4bn in tax revenue as a result. China and Hong Kong were the worst culprits for counterfeiting and piracy, the OECD said. Marcos Bonturi, the OECD’s director of public governance, said: “Countries need to work together if they want to win the fight against illicit trade and against all other illicit activities linked to it.”

The Daily Telegraph, Business, Page: 33


Stores see Black Friday boost

Figures from retail consultant Springboard show that Black Friday footfall rose for the first time since 2016. The number of people visiting stores was up 3.3% overall, compared to a decline of 5.4% last year and a fall of 3.6% in 2017. Shopping centres led the way, with a 6.6% increase, while visitors numbers climbed 2.4% on the high street and 1.8% at retail parks. With tomorrow set to see further discounts as part of Cyber Monday deals, Paul Martin, UK head of retail at KPMG, commented: “There’s no denying that Black Friday and Cyber Monday have become firm fixtures on the UK’s retail calendar. Year-on-year shoppers have notably held off their purchases until the discounting begins.”

Sunday Express, Page: 43

IFS: Crashing out will drive up national debt

Research by the Institute for Fiscal Studies (IFS) suggests that crashing out of the EU would cause the national debt to rise by £221bn over the next five years. Prime Minister Boris Johnson has said Britain will not extend the transition period with the EU beyond the end of 2020, even if no trade deal is in place, a move Liberal Democrat deputy leader Ed Davey says “will create a tidal wave of debt that would jeopardise funding for our schools, hospitals and vital public services.”

The Observer



EC in tax haven blow

The Observer’s Business Leader column says the European commission has, for the time being, lost its battle with the EU’s tax havens as it sought greater visibility on how much tax multinational companies pay and where they pay it. This comes after 12 of the 28 member states voted against a proposed rule that would have forced multinationals to reveal the revenues and profits they make – and how little corporate tax they pay. The column suggests that with a number of influential countries utterly dependent on being tax discounters, they “need a carrot and not just a stick” before they can look to tackle tax avoiders.

The Observer, Page: 58



County Armagh couple jailed for VAT fraud

Farmer Joseph Cassidy and his wife have been jailed for their role in a £610,000 VAT fraud, after a HMRC investigation into their County Armagh beef cattle farm.

Press Release


Automation expectations

The Sunday Telegraph looks at “an imminent and inevitable wave of technological innovation in AI, robotics and automation that is poised to upend traditional work habits.” It notes PwC research which suggests 30% of Britain’s workload could be undertaken by machines within 15 years, up from about 5% currently.

The Sunday Telegraph, Business and Money, Page: 4

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