Scotland would need to make “substantial” tax rises or spending cuts if it won full control over taxation and spending, a respected think-tank has warned, undermining claims by the Scottish National party it would be able to bring austerity to an end, the Financial Times reported. The Institute for Fiscal Studies has estimated that a Scottish government could face a hole of up to £10bn if it were given responsibility to balance its books over the course of the next parliament. This is equivalent to nearly 5 per cent of Scottish gross domestic product.

Britain is not usually considered the wild frontier of the oil industry, but it is proving to be a tough environment for what had been a fast-growing engineering and construction company called Petrofac, the International New York Times reported. The company on Monday said that it was likely to incur a deeper loss on an $800 million natural gas plant that it has been building for the French oil giant Total on the Shetland Islands north of Scotland. The company’s stock price dropped about 10 percent in trading on Monday.

Unsecured creditors, including HMRC, of collapsed mobile retailer Phones4U will see a return of just 0.4%, PwC said in its latest progress report yesterday, Economia reported. PwC, which was appointed administrator of the mobile retailer after it collapsed in September last year, said secured creditors, who own £430m of senior secured notes which were listed on the Irish Stock Exchange, will receive 20% to 24% of their money, as their debt ranks higher in legal terms.

The British bank HSBC said on Thursday that it had been placed under formal criminal investigation by French magistrates examining whether its Swiss private bank assisted wealthy clients to avoid taxes, the International New York Times reported. Investigating magistrates in France have been conducting an inquiry into whether HSBC Private Bank (Suisse) helped individuals avoid their tax-reporting requirements from 2006 to 2007. In November, the Swiss private banking unit was separately placed under formal investigation.

Ireland could offer itself as a home to some of Britain’s wealthiest residents if a Labour government was elected in the UK and followed through on threats to abolish a rule which allows some people to mitigate their UK tax liability, the Irish Times reported. Labour leader Ed Miliband has declared that, if elected in the forthcoming election, he would end the regime which allows those who are resident, but not domiciled in the UK, to avoid paying tax on their worldwide income.

The UK’s five largest banks cut bonus pools by more than £1 billion last year and most also reduced pay and staff numbers, according to Financial Times analysis, potentially blunting political attacks on banker excess ahead of the general election. The sweeping changes to remuneration are revealed in figures based on the annual financial statements of Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland and Standard Chartered.

Britain’s seven biggest lenders will be assessed on whether they could withstand a severe external shock including a Chinese property crash, a deep eurozone recession and the worst deflation since the 1930s, the Financial Times reported. The Bank of England on Monday presented the scenario for its second annual stress tests, which it said expanded on last year’s exercise to include more of a focus on global risks.

The Solicitors Regulation Authority (SRA) has decided to cease regulating solicitors who act as insolvency practitioners despite opposition from the profession, Accountancy Age reported. A consultation was held on SRA regulation of solicitor insolvency practitioners in November last year in which IPs were opposed to the plans. There are currently 129 solicitors operating as insolvency practitioners.

Small firms in Scotland are at risk of collapse because public bodies are withholding £120 million of debts owed to private construction companies, The National reported. According to research carried out by industry body the Specialist Engineering Contractors (SEC) Group Scotland, “little effort” is being made to ensure secondary or sub-contractors get the same treatment as primary contractors who are paid within 30 days. The primary reason for withholding the cash is to improve the public bodies’ working capital.

Beginning next October, corporate reorganization professionals in Britain are going to have do something quite amazing: At the start of a case, they are going to have to estimate what their total fees will be. And if they exceed that amount, they will have to go back to the creditors and obtain further approval, the International New York Times DealBook blog reported. Various proposals have been floated to help rein in costs, like greater judicial oversight and fixed fees, but the British proposal may have hit on an intriguing idea.