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HMRC’s elite Offshore, Corporate and Wealthy (OCW) Unit secured convictions totalling 67 years of prison time for tax evaders last year, far exceeding the 23 years secured a year earlier. Analysis by law firm Pinsent Masons suggests that HMRC’s strategy of using targeted criminal investigations, rather than just civil penalties, is paying off. Andrew Sackey, partner at Pinsent Masons, said: “HMRC is proving that wealthy tax evaders who engage in deliberate dishonesty at the expense of the tax man don’t just get fines – they go to prison … The perception that wealthy people who evade tax only get financial penalties is increasingly untrue.” A previous study by the law firm found that the average prison sentence for tax evasion last year rose to 2 years 11 months, up from 2 years and 1 month in 2015/16. The OCW Unit was established in the wake of the Panama Papers scandal in 2016 and investigates serious non-compliance by businesses and the wealthiest taxpayers. The threshold for wealthy individuals to be investigated by HMRC’s specialist OCW Unit means anyone with an income of over £200,000 per year falls within its jurisdiction.

 

City A.M.

Concerns have been voiced over Financial Conduct Authority (FCA) plans to reform its decision-making process to enable it to make faster and more effective decisions. The City watchdog is consulting on moving some decision-making from its Regulatory Decisions Committee (RDC) to its authorisations, supervision and enforcement divisions, shifting responsibility from board level to senior staff members. This, it says, will allow it to stop and prevent harm more swiftly. Emily Shepperd, executive director of authorisations at the FCA, said: “The proposed changes will allow us to be more efficient by making best use of the breadth of expertise across the FCA and by putting certain decisions back to the subject matter experts.” However, Imogen Makin, head of financial services regulatory investigations at DWF, said that while the firm and those it represents would welcome faster and more effective action, the plans “could be a recipe for the exercise of more arbitrary – and potentially excessive - power in relation to authorised firms struggling with compliance issues and individuals who merely made mistakes.” Pippa Tasker, a financial services partner with CMS, said the removal of the objective decision-maker from the critical authorisation and permissions processes  “could create a dangerous cocktail for firms.”

 

FT Adviser

City A.M.

Credit Suisse has recorded a 78% fall in second-quarter net profit after the bank took a hit from the collapse of family office Archegos Capital. Revenues were down by 41% to $1.7bn compared to a year earlier. A Credit Suisse-commissioned report by law firm Paul, Weiss, Rifkind, Wharton & Garrison said the lender's “lackadaisical” attitude to risk and a lack of action on red flags led to its $5.5bn loss from the collapse of Archegos. Credit Suisse said that it will “put risk management at the heart of our decision-making processes” as a result of the Archegos failure.

 

Financial Times

The Times

Daily Mail

A House of Lords committee created to look at post-Brexit trading agreements in Northern Ireland says the protocol could become a permanent problem in UK-EU relations, warning that such a scenario could unfold if both sides refuse to change their “fundamentally flawed” approaches to resolving the current dispute. The peers have suggested that unless a compromise is found, Northern Ireland could become a “permanent casualty” of Brexit. Reflecting on the stances taken by both sides, the committee said the UK approach had a “lack of clarity, transparency and readiness” while the EU’s position showed a “lack of balance, understanding and flexibility.” Chair of the committee, Lord Jay of Ewelme, called the disagreement “a real worry,” adding: “That won’t be easy, but it is an absolute necessity that the UK and the EU should now work together urgently to identify solutions if Northern Ireland is not to become a permanent casualty of the Brexit process.”

 

The Independent

Arla Foods UK, the largest milk processor in the UK, warns that milk supplies are under threat from a growing shortage of delivery drivers. Brexit-related issues have been compounded by the pandemic, with thousands of UK drivers told to self-isolate by the NHS Test and Trace app. Arla Foods UK managing director Ash Amirahmadi said this means 600 of the 2,4000 stores the company routinely supplies have missed out on shipments. He said: "Since around mid-April we have been experiencing driver shortages, particularly in southern England. It's progressively got worse and our assessment is that the food industry is now in a driver shortage crisis." National Farmers' Union dairy board chairman Michael Oakes added: "We are getting drivers that don't normally do the job and that is due to the high demand.'' There are up to 100,000 unfilled driver vacancies, but the government has so far refused to add driving to the list of "shortage" occupations or designate it a skilled profession, which would allow drivers from the EU to work in the UK.

 

Daily Mail

Daily Star

Dating app Bumble has said its 700 employees can take unlimited paid leave providing their manager approves it. It is understood that the unlimited holiday is contingent on staff still managing to complete their work. The firm, which temporarily closed its offices in June to combat workplace stress, said the pandemic had made it "reflect on" the ways staff worked and prompted a new policy. As well as announcing plans for unlimited paid leave, Bumble will also look to shut its office for a week twice a year. Bumble said when the firm shuts down, some customer staff across its offices in Austin, Barcelona, London and Moscow will still work in case any of the app's users experience issues. BBC News notes that the coronavirus crisis has seen a number of firms reflect on working practices, with PwC telling staff they will be able to work from home a couple of days a week and start as early or late as they want; Nationwide saying staff can choose whether to work at home or in the office; and BP telling office staff they can spend two days a week working from home. Several banks are also examining hybrid home-office arrangements.

 

BBC News

CNBC

The Trades Union Congress (TUC) has urged ministers to ban the use of umbrella companies to employ agency workers, amid concern over some such entities being linked to the abuse of workers and fraud. TUC general secretary Frances O'Grady said: “These scandalous workplace practices have no place in modern Britain. But our inadequate regulations let dodgy umbrella companies off the hook – allowing them to act with impunity.” She added that employers “shouldn’t be able to wash their hands of any responsibility by farming out their duties to a long line of intermediaries.” Research from the Low Incomes Tax Reform Group suggests that as many as half of all agency workers are employed through umbrella companies – firms that sit between workers and recruitment agencies and which supply staff to the companies who need labour.

 

The Guardian

Sky News reports that workers are still being exploited in Leicester's textile industry. The anti-slavery charity Hope of Justice says the audit and enforcement approach to clamping down on workforce exploitation is not working "because factory bosses are getting really creative and innovative" in how they hide it.

 

Sky News

Online fashion retailer Asos has appointed external law firm Lewis Silkin to investigate allegations of sexual harassment, in response to anonymous posts published on Instagram accusing the company of being a "boys' club." The allegations, posted in the spring, claimed that inappropriate behaviour had occurred, while the Telegraph also understands that the company received a number of complaints from men and women with regard to inappropriate behaviour at both the firm's head office and customer service centre, including allegations of sexual harassment, racism, bullying and homophobia. A spokesperson for the retailer said that Asos takes any concerns raised by staff "extremely seriously," adding: "As soon as we became aware of the allegations about us and other brands - we launched an internal review, supported by legal experts."

 

The Daily Telegraph

The German Federal Court of Justice, the country’s top court, has confirmed an earlier regional court ruling in a trial over so-called cum-ex tax fraud and upheld fines amounting to millions of euros against a bank and two London share traders. The court classified all such trades as illegal tax fraud. Cum-ex fraud sees traders use a legal loophole to trick governments and receive millions in tax repayments for taxes they had never paid. The Bonn district court had earlier issued a fine of around €14m ($16.5m) for one of the traders held responsible for cum-ex trades and ordered the private German bank MM Warburg to pay back around €176m. The sentence also included suspended jail time. The Federal Court confirmed that "there could be no doubt" regarding the intentions of the accused.

 

Deutsche Welle

The Bank of England is to end a facility allowing British-based financial institutions to access funds in euros, saying improved market conditions have removed the need for the Liquidity Facility in Euros (LiFE) programme. The facility was started in March 2019 amid concerns over a disorderly Brexit. Its last scheduled operation will take place on September 29th and the facility will close on October 1st. The Bank said: “The Bank of England, in co-ordination with the European Central Bank, stands ready to re-adjust the provision of euro liquidity, including restarting LiFE, as warranted by market conditions.”

 

Reuters

Mortgage borrowing hit a record monthly high in June, Bank of England (BoE) data show, climbing to £17.9bn. This marks a 163% jump on the £6.8bn recorded in May. The increase came as buyers looked to complete deals before the stamp duty holiday started to taper. The BoE report also showed that mortgage approvals reduced over the last month, falling 6% to 81,300, having totalled 86,950 in May. The figures also show that households increased deposits with banks and building societies by £9.8bn in June, with this outdoing the £7.3bn increase recorded in May. While June’s deposits were down from the £14.7bn average seen in the six months to May, the total was still far above pre-pandemic levels.

 

City A.M.

Reuters

The Daily Telegraph

The Times

Canadian security and privacy tech start-up 1Password has announced a $100m fundraising round led by Silicon Valley venture capital firm Accel, valuing the company at $2bn. 1Password CEO Jeff Shiner noted the increasing cybersecurity challenges faced by organisations. For example, employees using apps an employer may not know about, and the difficulty of tracking employee usernames and passwords that has led to IT employees continuing to have access to their former employers' system.

 

TechCrunch

Reuters

British drone insurer Flock has raised $17m from investors in an early-stage funding led by Social Capital. Flock provides so-called usage-based insurance, adjusting premiums according to real-time information such as weather conditions and distance travelled. CEO Ed Leon Klinger said trends such as ride-sharing and same-day delivery require new types of insurance as the world also looks ahead to driverless cars.

 

UKTN

Online fashion retailer Boohoo has ended its partnership with rapper DaBaby, after he made homophobic comments onstage at a Florida music festival. "Diversity and inclusion are part of the Boohoo Group's DNA and we pride ourselves on representing the diverse customers we serve across the globe", the company said in a statement. "We stand by and support the LGBTQ+ community, and do not tolerate any hate speech or discrimination in any form."

 

BBC News