This Week’s Business News Headlines

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Corporates probed for failing to stop tax evasion

HMRC has opened nine criminal inquiries under 2017 laws relating to the facilitation of tax evasion and 21 other firms are being assessed for failing to prevent tax evasion, the Times reports. Provisions under the Criminal Finances Act 2017 allow for companies to be prosecuted for failing to prevent the criminal facilitation of tax evasion and HMRC’s head of fraud investigation, Simon York, says “groundbreaking” investigations are taking place “right up to some of the largest corporates . . . across sectors including financial services, construction, labour providers, oil dealers and software developers”. The difference since the new law was introduced means: “We don’t have to establish intent. We don’t have to say it’s deliberate conduct. They are guilty of facilitating tax evasion unless they can show they have strict procedures to prevent it,” Mr York said. The Times adds that HMRC’s fraud unit is also pursuing nearly 200 investigations into professional enablers of tax crime, including accountants, lawyers, tax advisers and cryptocurrency brokers.

Source:   The Times (12/02/2020)


IR35 rules will only apply to new contracts

New IR35 tax rules for freelancers will only apply to contracts that start after April 6th, when the new rules come into force, HMRC has said. Previously the rules would have applied to any payments made on or after April 6, regardless of when the services were carried out. The changes to off-payroll working tax laws mean employers will be required to assess whether a contractor is genuine or effectively working as a full-time employee. The rules are designed to prevent people working on a permanent basis but enjoying the tax breaks of using a limited company, but the pressure on employers has already seen contractors turned down for work or paid less. Andy Chamberlain of the Association of Independent Professionals and the Self-Employed (IPSE), a trade body, said: “This minor amendment will be little comfort to the many contractors already laid off by companies who are panicking about the approaching changes.”

Source:   The Daily Telegraph (07/02/2020)    GOV (07/02/2020)


Tories lose direction with plans for higher taxes

Sources have told the Sunday Telegraph that Boris Johnson and Sajid Javid have been discussing cuts to pension tax relief and a “mansion tax” to help pay for a huge increase in public spending. News of the proposals is likely to cause disquiet among Tory supporters already disappointed that the PM rowed back on a pledge to lift the higher rate of income tax and cut corporation tax. One senior Conservative MP told the paper he would be “stunned” if Mr Johnson and the Chancellor went ahead with either of the taxes. An editorial in the same paper describes such policies as a “levelling down” and the sort of thing Conservative governments “are elected to stop, not to encourage.”

Source:   The Sunday Telegraph (08/02/2020)   The Sunday Telegraph (08/02/2020)   The Mail on Sunday (08/02/2020)   The Times (09/02/2020)


HMRC carries out over 1,000 dawn raids

Figures unearthed by Pinsent Masons reveal that HMRC raided 1,082 homes and businesses last year as part of criminal investigations into tax evasion, a 27% fall from the previous year. Andrew Sackey, partner at the law firm and former head of HMRC’s offshore, corporate and wealthy enforcement division, said: “Thanks to the common reporting standard and a host of additional powers such as production orders and information notices, HMRC now has far more information on taxpayers, whether that taxpayer is a person or a company, than it had just a couple of years ago.” Pinsent Masons said dawn raids usually take place in cases where HMRC suspects serious tax evasion, has a concern that suspects may attempt to destroy evidence of crime, or thinks suspects are a flight risk.

Source:   City AM (10/02/2020)  The I (10/02/2020)


Battle to claw back business rates could take years

A new report warns that thousands of businesses could spend up to four years locked in a battle to claw back millions of pounds in ‘unfair’ business rates. Companies can appeal to the Valuation Office Agency (VOA) if they believe that their bill is too high. But a crippling backlog means there are now over 25,000 appeals against rates outstanding, according to analysis by Colliers International. At the current rate, some businesses will wait four more years to have their 2017 bills corrected.

Source:   Daily Mail (06/02/2020) The Daily Telegraph (06/02/2020)

Business activity leaps in the capital

New purchasing managers’ index figures from NatWest and IHS Markit show London businesses recorded the strongest output growth of any region in the UK in January, rising from 51.6 in December to 56.5 – the sharpest rise in private sector output for 33 months. “London businesses turned on the taps at the start of 2020,” said Stuart Johnstone, a managing director at NatWest. “With the path to Brexit made all-but-certain by the election result, much of the previously pent-up demand was released.”

Source:   City AM (10/02/2020)


Cut taxes on those living remotely, researchers say

Researchers at University College London suggest people should be taxed less if they live in remote locations. This would encourage them to stay and boost ailing regions. Norway abolished such a system in 2004 to comply with EU rules which led to decline in employment in previously low tax areas, the academics point out.

Source:   The Sun (10/02/2020)


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