Business News 11th August 2017

TAX

EU seeks to squeeze more tax from home-sharing platforms

EU ministers will next month discuss moves to make companies in the so-called sharing economy, such as Airbnb, pay more taxes and pay them in the correct tax domains. French economy minister Bruno Le Maire recently proposed a pan-European clampdown after it was revealed that Airbnb paid less than €100,000 in French taxes last year, despite the country being the firm’s second-biggest market after the US. Germany and France have agreed to work together on corporate taxes and the two countries are set to put a joint proposal on taxing the digital economy to a meeting of EU finance ministers in Estonia next month.

The Guardian, Page: 23   Financial Times, Page: 4

Brussels told to end tax perk for employees

Campaigners and politicians are calling for Brussels to end a perk that allows staff and MEPs to pay as little as 12% tax. Instead of paying income tax, they pay an often far lower “community tax” directly back into the bloc’s budget, the Telegraph reports. The average percentage of tax and other deductions from basic salary is between 12 and 25%, according to Commission figures. Nigel Farage, the former leader of Ukip and an MEP since 1999, said: “In Euroland, the unaccountable bureaucrats think that income tax is just for the little people, who should just shut up and pay up. The quicker we get out, the less money we pay to these people…”

The Daily Telegraph, Page: 8

FIRMS  

Deloitte associate fined over Equity Syndicate

The Financial Reporting Council (FRC) has reprimanded James Rakow, an associate partner with Deloitte, over misconduct related to actuarial services for Lloyd’s of London insurer Equity Syndicate Management Ltd and Syndicate 218. Mr Rakow, a member of the Institute and Faculty of Actuaries (IFoA), was fined £75,200 as well as ordered to contribute £400,000 towards the legal costs of the Executive Counsel. The FRC is continuing its parallel probe into KPMG’s audit of Syndicate 218.

FRC   Financial Times, Page: 18   The Times, Page: 46

Economic decline rebuttal

Scarborough Borough Council leader Derek Bastiman has hit back at research from Moore Stephens showing seaside towns such as Scarborough, Torquay, Blackpool and Great Yarmouth, were economically fragile and had “epidemic” levels of bankruptcy. Mr Bastiman declared: “I am furious about the portrayal of the Yorkshire coast in the coverage about personal bankruptcies, which has taken a narrow study in isolation, and from it, made outrageous assumptions about our area’s economy, without actually researching the real position, which is far from in decline.”

Yorkshire Post, Page: 3

International investors eye League One clubs

A study by BDO has found 73% of finance chiefs at League One football clubs have been approached by international investors over the last six months. BDO said investors were seeing greater growth potential in lower league clubs because the impact of enhanced broadcasting rights may yet to be factored into their valuations.

City AM

Toshiba avoids delisting for now as auditors sign off on accounts

Following a three-month delay, PwC Aarata has issued a “qualified opinion” for Toshiba’s annual results, allowing the company to maintain its listing on the Tokyo Stock Exchange. Toshiba unveiled an annual loss of $8.8bn (£6.7bn) for 2016, which the Telegraph says puts its commitment to building the £18bn Moorside power plant in Cumbria in further doubt.

Financial Times, Page: 16    The Daily Telegraph, Page: 29   The Sun, Page: 49   The Times, Page: 42

Cinram brings in Mercer & Hole

Mercer & Hole have been appointed as joint administrators of Cinram Logistics after the company saw revenue decline following the loss of a major contract.

Press Release

Appointments

Deloitte has strengthened its Aberdeen practice with the appointment of Caroline Muir to lead its business tax team.

The Press and Journal, Page: 36

PROPERTY

Home repossessions drop amid low interest rates

Repossessions of homes in the UK fell from 1,900 in the first quarter of the year to 1,800 in April to June, according to lenders’ trade body UK Finance, the lowest since quarterly data was first published in 2008. However, the number of households evicted from rented accommodation remains much higher. Figures from the Ministry of Justice showed that between April and June landlords made 32,077 claims for possession, county courts issued 25,195 orders and there were 8,819 actual repossessions of homes by county court bailiffs.

BBC News   The Times, Page: 45

OBR: Stamp duty poses risk to economy

The OBR has said that stamp duty is putting the economy at risk because revenues are now “highly concentrated” on the sale of more expensive homes. The OBR pointed out that in 2015-16 just 9,250 house sales in Westminster, Kensington and Chelsea accounted for 14% of all stamp duty collected by the Government.

The Daily Telegraph, Page: 2    The Guardian, Page: 24

SMEs  

Funding demand pushes up Aldermore’s profit

Aldermore saw its profits rise 32% to £78m in the first half of the year following increased funding demand from Britain’s homeowners, landlords and small businesses. CEO Phillip Monks said the challenger bank was “addressing a market opportunity that is as real today as it was in the aftermath of the global financial crisis”, when high street banks were shown to be “failing their customers”. Monks added that: “In terms of Brexit-related uncertainty, the majority of our business customers are telling us they have not started to feel a slowdown.”

The Daily Telegraph, Business, Page: 28     Independent i, Page: 48   Daily Mail, Page: 64   The Sun, Page: 49   The Scotsman, Page: 31   Yorkshire Post, Business, Page: 15

Sage links in to direct debit system

Sage is teaming up with direct debit provider GoCardless to help small businesses get paid on time. Sage users can now link their accounting software directly with GoCardless, allowing them to automate both payment collection and reconciliation in both the UK and across Europe. Alan Laing, Sage MD for the UK and Ireland, said automating back-office functions will free up business owners’ time to spend growing their companies.

Startups

Edinburgh is the place to be

Edinburgh has been named as the best city in the UK to work for a startup company, according to rankings produced by Nestpick, an online platform for furnished property rental. The city was ranked ahead of London, Birmingham and Manchester in a study that looked at locations offering the best quality of life for those employed by fledgling firms.

The Scotsman, Page: 20

ECONOMY 

Slowdown to hit financial services sector

New research suggests that the financial services sector is set for a sharp slowdown as Brexit uncertainty and economic conditions slow lending. The stock of mortgage lending is expected to ease back to £1,184bn next year, down from £1,192bn in 2017, according to EY Item Club. Mortgage demand will be impacted by the inflationary squeeze on household finances while business lending is expected to fall from £425bn this year to £424bn in 2018, before returning to growth in 2019 at £427bn and stepping up again to £435bn by the end of the decade. Omar Ali, UK financial services partner at EY, said: “Despite warnings from the Bank of England and some high-street lenders, the only type of lending that is expected to grow in 2018 is consumer credit.”

The Times, Page: 40   Independent i, Page: 46   The Scotsman, Page: 32

Trade deficit widens as manufacturing output stagnates

Figures from the ONS show the trade deficit widened to £4.6bn in June – the biggest monthly deficit of the year. The ONS noted that the depreciation in sterling since the Brexit vote has had little impact on trade. Separate data revealed that manufacturing output stagnated, largely due to weak car production. “The buoyancy of manufacturing surveys continues to be at odds with the weakness of the official numbers,” said Howard Archer, chief economic adviser to the EY Item Club. “With sterling’s deprecation and a healthy world economy supporting exporters, one would hope that the gap between the two will narrow in a favourable direction [but] there was little sign of this in June’s trade numbers.”

The Times, Page: 40   Financial Times, Page: 2   The Guardian, Page: 24   Independent i, Page: 47   The Sun, Page: 49     The Scotsman, Page: 31    

OTHER

Animal fat to stay in future banknotes, Bank of England concludes

Banknotes will continue to contain traces of animal products despite objections over the use of tallow in the Bank of England’s polymer notes. Future production of the polymer £5 notes and £10 notes, plus the £20 to be launched in 2020 will be unchanged, despite some vegans, Hindus and Sikhs being unhappy with tallow’s use in the new plastic £5 notes, which entered circulation in September.

The Times, Page: 19   The Daily Telegraph, Business, Page: 27   Daily Mirror, Page: 39   Independent i, Page: 2   Daily Mail, Page: 26   The Guardian, Page: 7

Poor record keeping

Accountant Brian Foster writes to the Telegraph to say he is not surprised that EU officials have spent thousands on junkets, but he is surprised they produced the figures. He says: “As an accountant, my main reason for voting Leave was that those who rule over us are not trustworthy and don’t keep proper financial records.”

The Daily Telegraph, Page: 15

Meltdown risk remains

Tony Lomas – the PwC partner in charge of the administration of collapsed investment bank Lehman Brothers – has warned that the complexity of financial products means “there is always a risk” of another financial crisis.

Independent i, Page: 48

Previous News pages

Business News 10th August 2017

Business News 9th August 2017

Business News 7th August 2017

Business News 3rd August 2017

Business News 2nd August 2017

Business News 1st August 2017

Business News 31st July 2017

Business News 28th July 2017

Business News 27th July 2017

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