MTD will give one million businesses more financial control
The Government’s Making Tax Digital programme became law on Monday, meaning most businesses above the VAT threshold will need to keep their records digitally and submit their VAT return using MTD-compatible software for VAT periods starting on or after 1 April. HMRC says MTD will make it easier for businesses to get their tax right first time. During the first year of the programme, HMRC will take a light touch approach to penalties by not issuing filing or record keeping penalties where businesses are doing their best to comply with MTD. Emma Jones, founder of small business support network Enterprise Nation, commented: “Encouraging small firms to adopt more digital functionality offers real benefits. For example, having accurate and timely financial information to hand helps companies make better, more informed decisions and using digital tools more broadly, including time management, helps businesses increase productivity. In the longer term we feel Making Tax Digital and the digitisation of tax records will present significant advantages to business.”
Press Release (01/04/2019) Financial Times (01/04/2019) The Times (01/04/2019)
HMRC wins £40m battle against tax avoidance promoters
HMRC has won a legal case over tax avoidance scheme promoter Hyrax Resourcing Ltd which will help the tax authority collect over £40m in unpaid taxes. The victory over Hyrax means the promoter now has to disclose the details of their tax avoidance scheme to HMRC, along with the names and addresses of 1,180 high earners who used it. If the company fails to do so it risks a penalty of nearly £6m as well as £5,000 per day for not fully disclosing the scheme. The tribunal judge agreed with HMRC’s argument that Hyrax was the successor to a previous tax avoidance scheme, called K2, which was used by celebrity comedian Jimmy Carr and others in 2012 and which the then prime minister, David Cameron, described as “morally wrong”. HMRC said it was currently pursing users of the K2 scheme through litigation.
Press Release (28/03/2019) Financial Times (28/03/2019)
MPs order Big Four break up to restore trust in reporting
A report from the Commons Business, Energy and Industrial Strategy Committee (BEIS) on the audit industry has determined that the Big Four firms should be broken up in an effort to restore confidence in the industry. MPs said KPMG, PwC, Deloitte and EY were too conflicted; their consultancy arms earn huge fees from the companies they are also paid to audit, making independent oversight of a client’s books impossible. The Committee’s chair, Labour MP Rachel Reeves, said: “For the big firms, audits seem too often to be the route to milking the cash-cow of consultancy business. Change is needed to deliver for investors, workers and the public. The Big Four may not like it, they may seek to undermine the case for reform, but vested interests should not be allowed to get in the way of positive change. We must not wait for the next corporate collapse.” The decision on the Big Four comes as the industry’s regulator, the Financial Reporting Council, is being disbanded and replaced.
BBC News (02/04/2019) Daily Mail (02/04/2019) Financial Times (02/04/2019) The Guardian (02/04/2019) The Times (02/04/2019) The Daily Telegraph (02/04/2019) Daily Mirror (02/04/2019) The Sun (02/04/2019) Daily Express (02/04/2019
Banks could extend small business disputes scheme
The banking industry will consider extending the scope of a new redress scheme for business owners. As well as a dispute resolution service, on which banks are working with representatives of small businesses, a new scheme will allow the owners of small companies to ask for past grievances against banks to be examined where their complaint has not been assessed by a previous compensation scheme. A spokeswoman for UK Finance, the banking industry trade body, said that the steering group setting up the schemes would consider looking at complaints going back to January 2000. Lewis Shand Smith, the independent chairman of the dispute resolution service implementation steering group, said that the service would be “key to rebuilding a relationship of trust between banks and their small business customers”.
Small businesses share £500m rates cut
Thousands of small businesses will now benefit from a one-third discount on their rates bills as part of a policy announced by the Chancellor in the budget last year. The tax relief will support all retail properties with a rateable value of up to £51,000 for the next two years. Philip Hammond said that would help “up to 90% of all independent shops, pubs, restaurants and cafés”. Councils have set aside £502m this financial year to cover the cost. Meanwhile, the FT reports that online retailers will face higher business rates bills from April 2021 onwards, when the current high rents on warehouses will be used as the basis for setting rates. Finally, the BRC has warned that a “multiplier”, which will come into force from today will costs English retailers an additional £187m.
The Times (01/04/2019) Daily Mirror (01/04/2019) Financial Times (01/04/2019) The Daily Telegraph (01/04/2019) Daily Star (01/04/2019) Daily Express (01/04/2019)
Factories stockpile for Brexit
UK factories stockpiled goods for Brexit at an unexpectedly high rate last month, boosting manufacturing growth to a 13-month high, according to the IHS Markit/CIPS survey. The Purchasing Managers’ Index (PMI) for the manufacturing sector rose to 55.1 in March, from 52.1 in February. A figure above 50 indicates expansion. Samuel Tombs, chief UK economist at Pantheon Macroeconomics, commented: “We continue to doubt that precautionary stockpiling for a no-deal Brexit will boost GDP, because manufacturers primarily are buying imports and are tying up cash that otherwise might have been used for investment. All told, then, the PMI should not instil any confidence about the near-term outlook for the manufacturing sector.”
The Times (02/04/2019) The Daily Telegraph (02/04/2019)