While many were sensibly away relaxing on sunloungers this week, HM Revenue & Customs and HM Treasury were busy at work, making sure financial journalists had something to write about.
The government’s latest diktats make up a couple of the five main news themes to emerge over the last five days, which are now served here for your delectation:
1. Treasury tax avoidance fines
On Wednesday, the Treasury announced that advisers and accountants who help clients avoid paying tax could face hefty fines.
New proposals could mean advisers have to pay a penalty of up to 100 per cent of the tax owed to HMRC, as part of the government’s continued crackdown on tax avoidance.
A consultation published the following day explained its plans to tackle avoidance “enablers” by improving the transparency of tax arrangements and awareness of the risks involved.
This could involve requiring the promoter of a tax avoidance scheme to provide HMRC with a list of all those the scheme is being marketed to, so it can send them warnings and alerts.
Advisers were understandably sceptical about the government’s measures, pointing out that tax avoidance still falls into a legal grey area.
Provisio Wealth Management director Andrew Whiteley commented: “Without any clarification on what is considered avoidance that’s acceptable and avoidance that is unacceptable it is impossible to know whether this is good or not.”
2. HMRC lays out future tax policy
Following on from HMRC’s revelations around limiting tax and national insurance contributions savings from salary sacrifice schemes this time last week, on Monday and Tuesday this week the tax office published some more proposals for reform.
First of all, the government suggested changes to the way landlords pay tax, in a bid to make the system simpler.
Under the new rules, unincorporated property businesses would be taxed on the cash basis for trading income, rather than using the accruals accounting basis.
The consultation paper stated using the cash basis would make sure tax would not be paid on profits before the cash associated with those profits has actually been received, providing landlords with more certainty over their cash flow positions.
Secondly, HMRC put forward plans for landlords and sole traders to use a voluntary pay-as-you-go tax system from April 2018.
This would allow businesses to use a digital tax account to find out what their estimated liabilities are and make a payment towards them, allowing the government to allocate the money from their account when taxes are due.
3. Are you Sipp-ing comfortably?
As the capital adequacy deadline draws ever closer for self-invested personal pension providers, FTAdviser talked to several stakeholders to get an idea of whether the regulator would get its seemingly desired shake-out of smaller players.
A resounding yes came back, although smaller players falling into administration may not be quite as orderly and consumer-friendly as the Financial Conduct authority is hoping.
In recent weeks there have been a few distressed buyouts at the lower end of the market, but there are still clearly many firms out there that are takeover targets - ‘bad books’ of business in the jargon but representing people often experiencing poor investment outcomes and shoddy service.
That brings us to Harlequin, the oft-cited example of what went wrong with the Sipp sector.
On Monday, our news editor Laura Miller wrote an impassioned piece about the devastating consequences for Sipp administrators and financial advisers that the unregulated overseas property investment’s collapse continues to have.
As estimates of losses keep on climbing, it’s becoming increasingly clear that the compensation scheme will only go so far, and firms will pay the price once compensation claimants get organised.
4. Ombudsman still embroiled
Along with risky Sipps, the Financial Ombudsman Service is another regular target of adviser ire, with this week’s story surrounding accusations of ombudsmen ignoring key details of complex complaints, being a case in point.
Mortgage Claims Bureau chairman Peter O’Donnell said his clients have been left in limbo for months and subject to “lucky dip decisions”.
The criticism follows changes in how the Fos deals with claims, revealed last month, which have been lambasted by some of Fos’ own staff for risking the wrong decisions being taken.
As ever, coverage of published Fos decisions continues to be popular, with this week seeing Prudential told to compensate a couple it sold a mortgage endowment to back in 1997, due to the ages of the clients at the time it sold the policy, plus deteriorating health and the sale of a business.
5. Corbyn jumps on the bandwagon
Following on from last week’s fractions within the Women Against State Pension Inequality campaign, this week saw Labour leader Jeremy Corbyn seek to address their grievances, as he fights to retain his position.
The confirmation came during a televised debate with his challenger Owen Smith on Wednesday, where Mr Corbyn put the issue at the centre of his pensions policy.
Unsurprisingly at this stage, details of how a promised backing for the Waspi women and continuation of the triple lock would be paid for were rather thin on the ground.
peter.walker@ft.com
