NEWS – TUESDAY 13TH APRIL 2021
TAX NEWS – TUESDAY 13TH APRIL 2021
American CEOs say Biden’s tax hikes will slash wages, hiring and profits
A majority of CEOs in the US have said the Biden administration’s plans to hike corporation tax from 21% to 28% would have a “moderately” to “very” significant adverse effect on their company’s competitiveness. A Business Roundtable Survey found 98% of American CEOs believe the rate increase will stunt wage growth, weaken expansion, innovation and hiring. Raytheon Technologies CEO Gregory Hayes said: “The tax system needs to support innovation, R&D, capital investment and economic growth.” He continued: “As we look toward recovering from the COVID-19 pandemic, keeping competitive tax policies in place is needed to help reinvigorate the U.S. economy and lead to more opportunity for Americans.” Meanwhile, writing in the FT, Richard Murphy says Biden’s plan for international tax reform would need robust country-by-country reporting if it’s to stop international tax arbitrage. Finally, Conservative MP Sir John Redwood has warned that a new global minimum corporation tax rate of 21% would seriously harm investment flows into Ireland, which has used a 12.5% tax rate to build its economy.
Financial Times Daily Express Daily Mail
UN chief calls for wealth tax on rich boosted by pandemic
United Nations secretary-general Antonio Guterres has urged governments to impose a “solidarity or wealth tax” on rich people who profited during the coronavirus pandemic. “We must make sure funds go where they are needed most. Latest reports indicate that there has been a $5trn surge in the wealth of the world’s richest in the past year,” Guterres told a UN meeting on financing for development. “I urge governments to consider a solidarity or wealth tax on those who have profited during the pandemic, to reduce extreme inequalities,” he added. The call from Guterres follows a similar plea from the International Monetary Fund which has advocated a “temporary COVID-19 recovery contribution” to be levied on those companies and individuals that have benefited financially during the pandemic.
City AM Daily Mail The Independent
SMEs NEWS – TUESDAY 13TH APRIL 2021
City to boost Square Mile’s recovery with fund for SMEs
Catherine McGuinness, Policy Chair of the City of London Corporation, details in a piece for City AM a new Covid Business Recovery Fund to help underpin the Square Mile’s economic recovery. “The scheme is designed to support SME businesses which contribute to the Square Mile’s vibrancy at street level and directly provide services to returning City workers, visitors and residents.” McGuinness adds that most workers are keen to return to the Square Mile while City leaders have stressed their commitment to central London office space. She concludes: “The vibrancy of our unique ecosystem relies on each part of the City community – multinational businesses to domestic SMEs, international workers to local residents – working in partnership. Together we can bring back the buzz of life in the Square Mile.”
SMEs should use delays to customs changes to implement new systems
Experts are warning Britain’s small businesses to get systems in place so they can export smoothly to the EU whilst the rollout of new border procedures are delayed. Management consultant Neil McEvoy said: “Businesses need systems in place that provide scheduling and planning tools, in order to ensure every shipment is compliant when sent to the EU.” He added: “If SMEs get their selling systems ready for May they will survive, because Europe offers ‘low-hanging fruit’, with lots of people looking to spend. There will be many businesses that don’t and they will go to the wall. For those that get it right, the market is huge.”
PENSIONS NEWS – TUESDAY 13TH APRIL 2021
Pandemic fuels ‘all-or-nothing’ retirement plans
Research from Hargreaves Lansdown shows the gap in peoples’ retirement plans has widened as a result of the COVID-19 pandemic. The investment platform found the number of people who wanted to give up work between the age of 50 and state pension age had more than doubled from 4% before the pandemic to 10% after. Conversely, for those that wanted to carry on working full time, the figure increased from 38% to 42%. Hargreaves’ Sarah Coles said the pandemic had forced people to make decisions about their retirement. “While a fifth of people still plan to gradually ease out of the workplace, it has fuelled a rise in all-or-nothing retirement plans,” she said. Meanwhile, Darren Dicks, head of wealth management at Age Partnership, said: “Since February we have seen a marked increase in the volume of clients getting their retirement plans back on track.”
Cost risk for NHS if retirement age extended
A study of more than 7,000 women aged 55 to 65 out of King’s College London warns that raising the retirement age as a means to reduce pension costs would mean a reduction in in-family care resulting in more pressure on the NHS. Research fellow Ludovico Carrino said longer working hours cut the probability of women providing “intensive” or “meaningful” care and urged officials not to consider policies in institutional silos. Sir Steve Webb, former pensions minister and partner at consultants LCP, said: “If governments are going to raise pension ages, much more needs to be done to support people who will be working longer as a result.” The Telegraph notes that the state pension age for men and women will rise to 67 by 2028 with recent increases saving the Government billions of pounds every year.
CORPORATE NEWS – TUESDAY 13TH APRIL 2021
Liberty Steel misses filing deadlines
Liberty Steel has failed to file accounts for some of its biggest British businesses in time. Sanjeev Gupta is urgently seeking finance to shore up his industrial empire after its main backer, Greensill Capital went bust. Credit Suisse, a lender to Greensill, is trying to recover money lent to Gupta’s companies via court action in the UK and Australia. An insider said most of the companies had not filed audited accounts for the year ending on 31 March 2020 because they would no longer represent an up-to-date view of the businesses.
The Guardian, Page: 26
Taxpayers on the hook for Monarch airlift
papers released by KPMG show Greybull, the owner of collapsed budget airline Monarch, lost £25m from the administration process, which was completed last month. The Civil Aviation Authority was forced to charter planes to fly customers back to the UK after Monarch went bust in 2017 and it was hoped some of the costs of the airlift could have been recouped, but tax payers will have to foot the entire £60m bill.
Daily Mail, Page: 79
ECONOMY NEWS – TUESDAY 13TH APRIL 2021
North West business leaders optimistic
With coronavirus restrictions lifting across the country allowing hospitality and non-essential retail to open up again, leaders from across the North West are looking ahead with optimism. Neil Sturmey, a senior partner at Grant Thornton in the North West, noted that it had been “the longest winter” for high street retailers and the hospitality sector, with both “overdue some good news”. “That is coming,” he said. “Most of us are desperate to go out again and many businesses are hoping that we are heading for a golden summer.”
OTHER NEWS – TUESDAY 13TH APRIL 2021
KPMG UK appoints new chief executive
Jon Holt has been voted in as KPMG UK’s new chief executive with partners overwhelmingly backing the appointment, although he was the only candidate put forward by the board. The vacancy was created by the resignation by Bill Michael as chair and chief executive after a staff backlash in February over comments he made at a virtual town hall meeting. Mary O’Connor, who took over the day-to-day running of KPMG on an interim basis after Michael left, will now step aside. The firm’s chair Bina Mehta commented: “I’m delighted that Jon received the overwhelming backing of the partnership. Jon’s extensive experience and inclusive leadership style means he is well placed to deliver the next stage of our growth strategy and support our clients as the country emerges from the pandemic.”
City executive justly fired
An associate director at investment management company Smith & Williamson Corporate Services was sacked fairly, a tribunal has heard, after he gave a colleague a “seven out of ten” rating on a night out. Tom Skinner asked his junior colleague Jessica Lennox what would happen if they were the last people left alive and had to “repopulate the Earth.” During the same evening, he also made inappropriate comments to a woman named as ‘Ms J’ and twice followed her into the toilet and refused to leave. After he was sacked for gross misconduct, he launched an unfair dismissal claim, saying he had been discriminated against because he suffered from anxiety. His case was dismissed by a central London tribunal that ruled his “inappropriate behaviour” meant his sacking was justified.
The Times, Page: 18 The Daily Telegraph, Page: 13 Daily Mail, Page: 32 Daily Star, Page: 15 Daily Express, Page: 21
Contact Paul Southward