Octopus Property says Nick McAuliffe has left his position as chief operating officer. “In the short term, Nick’s responsibilities will be assumed by the senior management team,” a statement from the company said. Octopus Property earlier this month announced that it would pause on accepting new applications for its BTL products after filling its allocated budget for term funding ahead of schedule.

Bridging and Commercial

The Financial Conduct Authority has said over 1,000 EU firms have signalled interest in taking up the UK’s offer of continued access to the City in the event of a no-deal Brexit. Nausicaa Delfas, the watchdog’s international director, said around 1,300 EU firms were seeking to trade within the FCA’s temporary permission regime, an arrangement that will allow firms and investment funds in the European Economic Area to continue operating in the City without impediment for three years after a no-deal scenario, to minimise cliff-edge risks.

City AM

New analysis from Wyelands Bank has found that mid-sized manufacturers in the UK are sitting on assets worth £252bn, which they could tap to raise finance for growth. According to the research, original equipment manufacturers have the highest proportion of working capital assets, amounting to 28% of turnover on average. Iain Hunter, CEO of Wyelands Bank, said: “Freeing up these potential working capital assets can help provide the finance that businesses need to grow.”

City AM

According to the Sunday Telegraph, big banks are calling on the Financial Conduct Authority and Lending Standards Board to “level the playing field” on regulation of the peer-to-peer lending sector. A source at one high street lender told the paper that the recent float of Funding Circle and problems at property lender Lendy had raised the profile of P2P firms and the need for “adequate regulation”. The FCA has consulted on new rules to tighten regulation of P2P lenders, while the LSB said it was “engaging” with lenders.

The Sunday Telegraph

Anne Boden, the boss of Starling Bank, has said that conditions remain tough for new market entrants despite renewed efforts to boost competition in the banking sector since the financial crisis. While a raft of new firms entered the lending market, Ms Boden said few have managed to push on to launch current accounts for everyday retail customers. Meanwhile, the boss of Metro Bank insists that competition is stronger than it was in 2008. CEO Craig Donaldson said: “There are more challenger banks, I think that there’s an acceptance of new organisations and that people can see the banks are trying to create competition.”

Daily Express

The PMI index for the construction industry, compiled by IHS Markit, rose to 53.2% in October, up from 52.1% the previous month. However, business optimism was the weakest in nearly six years, while new orders dipped from highs over the summer. Howard Archer, chief economic adviser to the EY Item Club, said: “Construction activity clearly benefited over the second and third quarters, making up some of the activity lost in the first quarter to the severe weather, but that help is now likely fading.”

Financial Times

Business confidence has fallen to its lowest level since the financial crisis, according to the latest snapshot index from the ICAEW. The Business Confidence Monitor survey generated an index reading of -12.3 for the current quarter, compared with -0.2 for the third quarter. The survey found that 42% of businesses were less confident about their outlook than they were last year, compared with 31% in the last quarter. A separate survey by EY found that uncertainty was prompting more firms to put M&A plans on hold. EY’s Capital Confidence Barometer found that only 40% of firms were looking to pursue M&A deals in the next year, a fall of 20 percentage points.

The Times

An independent review written by Oliver Letwin MP has claimed that a new set of planning rules should be introduced for sites with more than 1,500 homes, to speed up the property-building process. Among its recommendations are new rules requiring homebuilders to offer a range of different types of properties on big sites, so they can be completed more quickly without “flooding” the market with a large number of identical properties, and incentives for homebuilders to change plans for existing sites so they start offering a variety of property types immediately.

Development Finance Today

Security minister Ben Wallace will today launch a new multi-agency national economic crime centre as part of a crackdown on £100bn of money-laundering in the UK. Mr Wallace told the Guardian that the Government will come down hard on estate agents, solicitors and accountants who enable money-laundering but also other facilitators such as public schools, football clubs and luxury goods suppliers. A £48m funding boost will be provided to the National Crime Agency to recruit more officers to probe domestic and international crime. Professionals who fail to report suspicious activity will face sanctions and jail. He added that in order to ensure the City of London is successful post-Brexit “then it has to have a reputation for cleanliness and security.” The Government is also expected to harden its approach to Scottish limited partnerships, which are thought to be used by foreign criminals to launder dirty money in the UK .

The Guardian

Gareth Lewis, commercial director at MT Finance, has suggested that a third-quarter decline in regulated bridging loans to the lowest level since 2015 could be due to the UK’s impending departure from the European Union. The loans fell to 31.6% of all lending, compared to 36.8% in the previous quarter. Bridging loan volume transacted by contributors hit £213.35m in Q3 2018, an increase of £15.4m on the previous quarter. Mr Lewis said: “The data continues to show that property investors are seeking attractive opportunities to acquire properties where they can add value, a trend that shows no sign of slowing down. Conversely the transaction flow in the regulated space has continued to show signs of slowing down. Is this a direct response to the everyday purchaser taking stock of Brexit and holding fire before looking to commit to the purchase of a new residence?”

Bridging Directory

October 2018

A report from PwC reveals that the world’s biggest businesses drove an extra £3.5bn into R&D in the UK this year as global spending growth jumped to a decade high. The inflow marks an increase of 10.7% on last year, when R&D investment fell by 8.9%, and puts the UK close to the global R&D growth rate this year of 11.4% – the fastest pace of growth since 2008.

The Daily Telegraph

Philip Hammond has tightened the rules on entrepreneurs’ tax relief, so entrepreneurs must, from 2019, own a business for two years before selling in order to qualify for the relief. The relief means owners pay a lower CGT rate of 10% when they sell all or part of their business, compared with a normal rate of 20%. However, the Chancellor also announced that, from October 29th, entrepreneurs must have a greater stake in the business to qualify. Nimesh Shah, partner at Blick Rothenberg, commented: “The overnight change will cause concern for those entrepreneurs who believed they qualified for entrepreneurs’ relief but no longer do so.” Sam Smith, chief executive of broker FinnCap, welcomed the changes, stating: “Making the relief available only to entrepreneurs who have owned their business for over two years should help promote a stronger commitment by owners to their businesses and encoura ge them to plan for the long term.”

Financial Times

Philip Hammond said yesterday that HMRC will become a preferred creditor in insolvencies in a move criticised by R3, which warned it could be “a retrograde and damaging step to UK plc if not thought through carefully.” The Chancellor said the move would “ensure that tax which has been collected on behalf of HMRC, is actually paid to HMRC,” but Michael Wistow, co-head of White & Case, described it as a “retrograde step”. He said: “Every time this has occurred in the past HMRC has abused this power and led the liquidation of otherwise salvageable businesses.” Peter Kubik, partner at UHY Hacker Young, added that the change would “push ordinary trade creditors much further down the pecking order”. The Government will also end the practice of purchasing services through offshore companies.
Financial Times

Philip Hammond’s decision to extend the IR35 system from the public to the private sector could bring in over £1bn in tax revenue in its first year. Large and medium-sized companies will have to review all their contracts with freelance staff and determine whether they should be taxed under IR35 rules. The move, which will come into effect from April 2020, is described by Julian Sansum of PwC as “one of the most significant changes to the operation of employment taxes for many years” which will “put a significant burden on business at a time when contingency planning for Brexit is already stretching resources”. Experts say businesses in the construction and manufacturing sectors are among those most likely to be impacted.

Financial Times

From next April people will be able earn £12,500 a year tax-free and will not pay 40% tax until they earn more than £50,000. Those earning £12,500 will save £130 a year compared to their current income tax bill thanks to the rise in the personal allowance. Those earning £50,000 will keep an extra £860 compared to their current income tax bill, reduced to £520 once NI is taken into account. The announcement by the Chancellor in his Budget yesterday brings forward the Conservative manifesto pledge to raise the thresholds from 2020. The Treasury says the move will cut taxes for 32m people.

Daily Express

Philip Hammond detailed a new UK Digital Services Tax in his Budget that will target tech giants generating £500m or more a year in global revenues by 2020. The Chancellor said he would have preferred a “global agreement” but reaching it was proving painfully slow. However, industry leaders warned that firms could pull their investment as a result of the move. Firms will be taxed 2% on the revenue they make from advertising and online marketplaces from April 2020. Julian David, CEO of TechUK said it “risks undermining the UK’s reputation as the best place to start a tech business or to invest.”

Daily Express

The type of legal action facing Lendy could also be brought against other peer-to-peer lenders, experts have warned. Last week it emerged that Lendy and some of its investors were being threatened with a £10m damages claim by one of the company’s largest borrowers, who accused Lendy of unfairly giving notice on its loans and failing to arrange for it to receive further funds in line with its contract. “There will be more high-profile cases like this and more P2P investments will fail,” says Patrick Connolly, the head of communications at Chase de Vere. Mark Posniak, the managing director of Octane Capital, added that he expects “further fall-outs” because some lenders do not understand the risks involved. Elsewhere, the FT’s Neil Collins says events at Lendy illustrate British investors’ “near-obsession with property, viewed as an asset class which cannot fall in value.”

The Times

Philip Hammond is facing more pressure to act on business rates after Debenhams announced plans to close 50 stores following the worst loss in its 240-year history. The retailer’s chief executive Sergio Bucher highlighted that Debenhams now pays £80m a year in business rates and called on the government to end the “preferential” tax regime for online retailers. The Telegraph’s Jeremy Warner says there is now an urgent need to shift from a tax based on property to one levied on sales in the retail sector. He adds that increasingly, business rates are treated not as a conventional tax but as a money machine for the Treasury.

The Guardian

MPs have called for a drastic overhaul of Britain’s approach to small business lending, citing the “scandalous” treatment of companies at the hands of big banks. A report by the Treasury select committee said commercial loans must be urgently regulated to prevent a repeat of the abuse of thousands of SMEs after the financial crisis. MPs concluded that the Financial Conduct Authority’s decision not to punish RBS for the actions of its Global Restructuring Group (GRG), which the regulator had found to have systematically mistreated small businesses, was a “damning indictment of the regulatory regime and a sad reflection of its inadequacies”.

The Times

Residential flats builder London Square has secured £200m of new funding – £150m from NatWest, HSBC and Allied Irish Bank GB, and a £50m loan from Pricoa Capital. In the year to March the firm completed 490 homes, and notched up sales of £287.5m. Its £2bn pipeline includes sites in Bermondsey and Caledonian Road, north London.

Evening Standard