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Thursday, 18 August 2016

Thursday, August 18, 2016 Posted by Hari No comments Labels:
Posted by Hari on Thursday, August 18, 2016 with No comments | Labels:

Inheritance tax, and how the Dukes of Westminster avoid it on their £9bn fortune
Clever use of trust structures enable the Grosvenor family - whose head is the Duke of Westminster - to pass assets down the generations without attracting inheritance tax, accountants say. The Grosvenors' property fortune is estimated at £9bn. Yet the death of Gerald Cavendish Grosvenor, the sixth Duke of Westminster, and the inheritance of his title by his son Hugh, is not expected to trigger vast death duties. This is because successive generations are "trustees" rather than direct owners of the assets. According to the Grosvenor Estate's own description of its structure, the six trustees (of whom the late Duke was chairman) "hold the assets of the group for the benefit of current and future members of the Grosvenor family". Income and other benefits can be paid out to beneficiaries, who may or may not include the trustees, and who will be taxed on them as normal. Peter Legg, a chartered tax adviser and founder of IHT Planning Matters, said: "Here it would appear that shares in the businesses are owned by family members as trustees, not as individuals." This puts the assets at arms' length and effectively eludes death duties. The Grosvenor property empire includes swathes of London's most prestigious streets and squares, in Mayfair, Belgravia and Chelsea. TELEGRAPH

Takeaway firm Deliveroo abandons plan to force ‘absurd’ new contract for staff
Deliveroo riders have been celebrating after the company confirmed it would not force them to sign new contracts agreeing to a trial pay scheme that could see them earn barely half the National Living Wage. The takeaway firm offered concessions in its pay dispute with workers after staff staged a protest and politicians waded into the row. Deliveroo confirmed it will allow riders to work under their previous pay agreements instead of participating in a trial pay scheme, which pays  £3.75 per delivery rather than the current terms of £7 an hour and £1 per delivery. Riders who have already signed the new contract terms will no longer be bound by it, the union said. The new voluntary trial scheme is due to start on Wednesday. Employees who participated in the six-day strike were also told that there would be no threats of job losses or other victimisation against workers who demanded a guaranteed hourly wage, according to the Independent Workers Union of Great Britain (IWGB). “This strike has exposed Deliveroo and their disingenuous methods for what they really are. A week ago Deliveroo were forcing us to sign a new contract under the immediate threat of losing our jobs, and on the false pretence it was a trial," Tom Hobbert, a Deliveroo courier who took part in the strike, said. Final decision on pay will be taken at the end of the trial scheme on 14 September. At this stage 280 of the 3,000 Deliveroo riders in London are participating in the trial. On Sunday, the Department for Business, Energy and Industrial Strategy insisted Deliveroo employees must be paid the national living wage of £7.20 an hour unless a court or HM Revenue and Customs defines them as self-employed. The National Living Wage of £7.20 for everyone aged over 25 years old – hailed as the new minimum wage – was announced by the former Chancellor George Osborne in April this year. Yet nearly 200 employers have been recently named and shamed for failing to pay that minimum wage to their workers. INDEPENDENT

Tax avoidance: Accountants face tougher penalties
Accountants or advisers who help people bend the rules to gain a tax advantage never intended face tougher fines under new penalties proposed by the Treasury. A fine of up to 100% of the tax that was avoided - including via off-shore havens - has been suggested in the new rules, published for consultation. Currently those who advise on tax face little risk, while their clients face penalties only if they lose in court. The rules would "root out" tax avoidance at source, the Treasury said. The avoidance it's trying to root out involves bending the rules to gain a tax advantage that Parliament never intended, an abuse which costs nearly £3bn a year. The new rules come after the government set up a new task force to investigate allegations of tax-dodging and money laundering in light of the Panama Papers leak, which lifted the lid on how the rich and powerful use tax havens to hide their wealth. Following the Panama Papers scandal the five largest economies in the European Union, the UK, Germany, France, Italy and Spain, agreed to share information on secret owners of businesses and trusts. Richard Murphy, a chartered accountant and academic at City University, told the BBC it was unlikely that cases would come to court, but that the threat of fines would act as an "amazing deterrent" to advisers which would prevent them offering advice on tax avoidance. He said this was partly because it could put at risk their ability to get professional indemnity insurance, which they need to continue their work. "Lawyers and accountants will not take the risk of selling these schemes," he said. "There's a risk of a 100% fine so they'll think they can't afford to do it. Every honest accountant will be jumping for joy this morning that those who have been selling these schemes will be put out of practice." He said that the tax system loses around £10bn per year as a result of tax avoidance, well above the £3bn a year the Treasury says is lost. BBC NEWS

Sports Direct warehouse workers to receive back pay
Thousands of Sports Direct warehouse workers are set to receive back pay totalling about £1m after the retailer admitted breaking the law by not paying the national minimum wage. The sportswear chain and its employment agencies are also facing fines of up to £2m imposed by the Department for Business, Energy and Industrial Strategy (BEIS) after they were found to have been underpaying some of the country’s lowest-paid workers for four years. The move, which follows an undercover Guardian investigation last year that exposed how Sports Direct workers were being paid less than the legal minimum, is to include payments backdated to May 2012 and could be worth up to £1,000 for some workers, trade union officials estimate. The agreement, which is understood to have been struck between the union Unite, the retailer and HM Revenue & Customs, includes about 200 workers directly employed by Sports Direct and around 3,000 staff hired through temporary employment agencies. Two agencies, The Best Connection and Transline, provide most of the labour in the company’s warehouse in Shirebrook, Derbyshire. Those familiar with the deal, however, say that 1,700 Transline agency workers may initially receive just half the back pay they are owed when payments begin from the end of the month. This is because the agency is refusing to refund unpaid wages from before it took over contracts from a rival agency, Blue Arrow, two years ago. Steve Turner, Unite’s assistant general secretary, said: “Investors and customers alike should not be fooled into thinking that everything is now rosy at Sports Direct’s Shirebrook warehouse. Transline, one of the employment agencies involved, is disgracefully still trying to short-change workers by seeking to duck its responsibilities.” GUARDIAN

Two in three families are left stuck on high energy bills after energy watchdog let power giants off over £2bn rip-off
After a two-year investigation, Ofgem announced a crackdown that was supposed to tackle power firms’ poor treatment of loyal customers. But the reforms, all of which were suggested by the powerful Competitions and Markets Authority (CMA), will only curb high prices for four million customers with prepayment meters, who will see their costs fall by around £75 a year from next April. Britain’s remaining 24 million households were instead told they would benefit from a range of measures to boost competition between suppliers. Yet energy experts said the new rules would only make matters worse. They said that one of the proposals - giving firms access to a database of households who don’t switch deals - would only lead to customers being bombarded with junk mail. And they warned that households were in danger of being baffled by hundreds of new offers under plans to remove a ban on each supplier offering more than four tariffs. Price comparison websites are also expected to be given the green light to push customers towards some deals, while hiding others that earn the site less in commission. According to the report, 66 per cent of households are on their supplier’s most expensive deal and overpay by as much as £300 a year. DAILY MAIL

Brexit bazooka: Bank of England cuts interest rates to record low of 0.25% and puts £170bn behind emergency cash for financial system
The Bank of England cut interest rates for the first time in more than seven years to 0.25 per cent today - and delivered another £60billion of quantitative easing, a funding scheme that could amount to £100billion and £10billion of corporate bond buying. The widely-expected rate cut was voted for unanimously by the monetary policy committee and will deliver a boost to borrowers through cheaper mortgages and loans but hit savers who are already suffering from historically low rates. Christopher Metcalfe, investment leader, UK Equities, Newton Investment Management, warned: 'The price of credit for firms is already low and it is difficult to imagine if businesses are scared or unwilling to invest in the wake of Brexit at 0.5% interest, whether a further to 0.25% will induce them to invest.' Policymakers also decided to pump extra money into the economy through the Bank's government bond-buying quantitative easing programme, now totalling £425bn, and also buy up to £10billion of UK corporate bonds. A new Funding for Lending style scheme worth up to £100billion was also announced. DAILY MAIL

Watchdog's banking tech reform 'not enough'
A shake-up in UK retail banking has been criticised by consumer groups and economists as not going far enough. The Competition and Markets Authority (CMA) concluded that new phone-based apps could show customers which banks may offer the best account. Banks will also have to set maximum monthly fees for unarranged overdrafts. The CMA decided against a cross-industry cap, leaving individual banks to set their own charges. Alex Neill, director of policy and campaigns at Which?, said: "It is disappointing that the monthly charge cap is not actually a cap and banks will be allowed to continue to charge exorbitant fees for so-called unauthorised overdrafts, rather than protect those customers that have been identified as among the most vulnerable." Andrew Tyrie MP, chairman of the Treasury Select Committee, said: "The CMA is relying on the rolling out of new technology to do the heavy lifting on competition. But many customers will not have the tools or skills to do this. Customers are also - understandably - wary of the data-sharing required for this to be effective." Diane Coyle , Professor of Economics at the University of Manchester, questioned whether the new measures would increase the rate of switching. "There's a lot of reliance being placed on more information, but consumers will need to give all of their transaction information to third-part providers, and there's the trust question ... do you really want another party to be able to see all the transactions that you make in your bank account and be able to tell other potential competitors about that?" she told the BBC. BBC NEWS

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