CASH-STRAPPED companies will be able to reduce their payments to the Government's pensions lifeboat in return for promising their headquarters to their final salary scheme, according to the Times .
This will be part of new rules to be announced on Friday, when the Pension Protection Fund (PPF) will update companies on the size of its first risk-based levy, says the paper.
Actuaries predict the figure will be £150 million higher than the £300 million originally set out by the Government.
Lawrence Churchill, the chairman of the PPF, is expected to tell companies they can reduce their share of the levy by “pledging” assets such as property to their pension fund, cutting its deficit.
This would reduce the risk posed by the company to the PPF, which was set up in April to cover collapsed employers’ pensions promises. The PPF is funded by a levy on companies with final salary schemes. Next year, for the first time, the levy will take into account the size of a company’s pension fund deficit and the risk of collapse.
Churchill will target the idea at small companies and charities that do not have sufficent cashflow to plug their deficit with money but may hold large property portfolios.
He is likely to say, however, that any such arrangement would be considered on a case-by-case basis. “The PPF knows that not all companies have loads of money sitting in their bank account, so this is all about looking for options,” said a source familiar with the PPF’s proposals.
PLANS TO shake up the penalties regulators can impose on business so that larger fines can be levied for more serious offences without going through the courts, will be omitted from the bill on regulatory reform, according to the Financial Times.
The move is expected to be announced today and follows business lobbying on the better regulation bill. The CBI's submission argued that allowing regulators to impose instant fines on business would "circumvent justice and accountability".
Ministers are expected to respond to such concerns by deferring any legislation to change the penalties regime significantly until after the government-commissioned Macrory review of penalties has reported next autumn.
INFLATION SLOWED to its weakest pace in five months in November thanks to falls in the price of petrol and air tickets, raising hopes that interest rates could be cut again early next year, reports the Guardian.
But gas and electricity prices surged at their fastest pace since 1983 as limited supplies of gas and fears of a cold winter pushed up energy prices.
The Office for National Statistics said the consumer price index last month stood 2.1% higher than a year ago, down from 2.3% in October and the weakest rise since June. It was also within a whisker of the Bank of England's 2% target, having peaked at 2.5% as recently as September.
Mervyn King, governor of the Bank, has made it clear that the monetary policy committee is reluctant to cut interest rates again because inflation had risen sharply over the past 18 months in line with surging oil prices. The Bank is worried that this could lead to higher wage demands, potentially triggering an inflationary spiral, although there is no sign of that happening at present.
EUROPEAN JUDGES yesterday handed victory to Marks & Spencer in a landmark case against HM Revenue & Customs, but spared the taxman the prospect of having to pay billions to other businesses, says the Daily Telegraph.
The European Court of Justice ruled that the Revenue's refusal to allow companies to offset losses from another EU country against profits from their UK businesses contravened EU rules on "freedom of establishment".
M&S had argued that it should be allowed to offset losses incurred in the 1990s from now-defunct German, Belgium and French subsidiaries against profits from businesses in Britain, thereby reducing its tax bill.
Despite the favourable judgment, the court decided a parent company could only adopt losses where it had "exhausted possibilities" of offsetting them in the subsidiary's country. The restriction is intended to prevent "loss-trafficking".
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