NEWS – MONDAY 30TH NOVEMBER 2020
TAX NEWS – MONDAY 30TH NOVEMBER 2020
HMRC and ASA target tax avoidance
HMRC and the Advertising Standards Authority have launched measures designed to cut out marketing of tax avoidance schemes. A joint enforcement notice aims to protect people from being presented with misleading adverts which may tempt them into tax avoidance. HMRC said: “We’re doing our part to close down these schemes and make it difficult for promoters, but we need the public to play their part too.” The Revenue added: “You really don’t need to be a tax expert to spot an avoidance scheme – anything that sounds too good to be true almost certainly is”.
The Press and Journal, Page: 35
Chancellor warned end of tax-free shopping will hurt the UK
The Office for Budget Responsibility has warned that tourist numbers to Britain will dip if duty-free shopping is scrapped in January, suggesting visitors will opt for Paris or Milan instead. With concern that cutting tax-free shopping will cost the UK tens of millions of pounds a year and put up to 70,000 jobs at risk, more than 40 Conservative MPs have urged Chancellor Rishi Sunak not to push ahead with the change to duty-free shopping after the transition period ends. Heathrow Airport is challenging the plans in court, saying: “Failure to introduce a new tax-free shopping regime will jeopardise the Government’s global Britain ambitions”.
Daily Star, Page: 14
Tax break extension could boost non-essential shops
James Moore in the Independent considers the climate for retailers, suggesting Chancellor Rishi Sunak may want to consider stripping tax breaks from supermarkets while extending them for non-essential retailers that have been hit by lockdowns. He notes that a moratorium on rental payments comes to an end in December, while the business rate holiday draws to a close in April.
The Independent, Page: 47
CORPORATE NEWS – MONDAY 30TH NOVEMBER 2020
Arcadia could owe suppliers £250m
There is concern that Sir Philip Green’s retail empire Arcadia, which is on the brink of collapse and could appoint Deloitte as administrator as early as today, may go bust owing over half a billion pounds to pension scheme members and suppliers. Insurance firm Nimbla estimates that around £250m worth of invoices from suppliers could go unpaid should Arcadia collapse, while Arcadia’s pension fund has a black hole of as much as £350m. Stephen Timms, chair of the Work and Pensions Select Committee, says he will write to The Pensions Regulator “to underline the importance of securing the interests of pension scheme members.” While Arcadia’s pension scheme is eligible to enter the Pension Protection Fund, the value of members’ retirement pots could shrink by up to a quarter. Meanwhile, likening Arcadia to the outsourcing company that went bust owing nearly £7bn , Federation of Small Businesses chair Mike Cherry said: “We are concerned that Arcadia is starting to look like the Carillion of retail”. Separately, HMRC could miss out on revenue if Arcadia enters administration today, with crown preference rules elevating the tax office’s claims above those of other creditors not coming into force until Tuesday.
Firms hand bosses £45m in dividends following tax breaks
The Daily Mail’s Tom Witherow says businesses that saw a strong performance amid the coronavirus crisis should hand back tax breaks, highlighting that five ‘lockdown winners’ paid £45m in dividends to executives while benefiting from business rates relief handed to retailers and hospitality firms. Analysis by the Mail shows that the boards of retailers Tesco, B&M, Pets at Home and Morrisons elected to pay £1.3bn in dividends to shareholders – including £44.6m to bosses – despite receiving a combined £1bn in rates relief, while Sainsbury’s has paid £231m in dividends since March despite receiving rates relief worth £460m. Labour MP Kevan Jones commented: “This is just greed but shows the shambolic way the Government have handled the financial support in the pandemic. It can’t be right multi-millionaires are lining their pockets at taxpayers’ expense.”
Daily Mail, Page: 73
EMPLOYMENT NEWS – MONDAY 30TH NOVEMBER 2020
London leads Europe on job ad decline
A report from Indeed shows that London has suffered the biggest fall in job opportunities among Europe’s biggest cities. It also joins Berlin, Madrid, Paris and Rome as large cities that have recorded a larger drop in new job adverts than elsewhere in their respective countries. The analysis shows that job postings in London fell by 50% in the 12 months to November 6 compared to the same period a year ago. This compares with a 42% decline for the rest of the UK. Madrid suffered the second-biggest decline, at 46%, while job postings elsewhere across Spain were down by 39%. Pawel Adrjan, economist and head of European research at Indeed, said: “’Office workers’ staying at home is sucking the life out of these major cities. They’re not ghost towns yet, but risk becoming shadows of their former selves”.
The Guardian, Page: 34
Are you feeling the strain of remote work?
A PwC poll of US executives has found that 31% are worried about the effects of the coronavirus-prompted shift to remote working on their workforce.
SMEs NEWS – MONDAY 30TH NOVEMBER 2020
1 in 4 SMEs had little or no savings before pandemic
A poll by Nucleus Commercial Finance shows that a quarter of SMEs had little or no savings before the coronavirus outbreak, while fewer than two in five believe they have enough money to see them through the rest of the crisis. The survey of more than 1,000 small business owners shows that most believe their businesses will be affected by the pandemic for up to 16 months. Nucleus Commercial Finance CEO Chirag Shah said: “The effects of the pandemic have clearly had a significant impact on the UK’s SMEs. Not only has it brought about operational challenges, but the loss of income has been devastating for them.”
Daily Express, Page: 45
Vaccine will drive recovery, say Scottish firms
BDO ’s Rethinking the Economy survey shows that 56% of medium-sized firms in Scotland believe they will fully recover from the coronavirus crisis in less than six months once vaccinations are made available. However, 47% said they were less optimistic about the UK’s economic recovery compared to three months ago. Martin Bell, head of tax for BDO in Scotland, said: “News of positive vaccine trials has clearly buoyed Scottish businesses, in terms of their ability to recover quickly from the impact of Covid-19.” “However, there is still a degree of caution amongst Scottish businesses regarding the pace of economic recovery in the UK”, he added.
The Press and Journal, Page: 31
Britain’s small businesses deserve to be heard
The FT looks at concern over gaps in the Self-Employment Income Support Scheme which have left the recently self-employed, some freelancers and directors of limited companies without support amid the coronavirus crisis.
PENSIONS NEWS – MONDAY 30TH NOVEMBER 2020
Pandemic boosts pension funds
Actuaries predict that excess deaths as a result of the coronavirus outbreak and a recession-induced slowdown in the growth of life expectancy are set to give Britain’s traditional pension funds a boost, with XPS Pensions Group forecasting that the liabilities of UK defined benefit schemes will be cut by between 1.5% and 3.5% – or £25bn to £60bn. The Times’ Patrick Hosking says the impact on many defined benefit schemes could be “significant”, pointing to Pension Protection Fund analysis showing that aggregate deficits amounted to £168.2bn as at the end of October.
ECONOMY NEWS – MONDAY 30TH NOVEMBER 2020
Crisis set to hit FDI
Analysis by EY suggests that foreign direct investment (FDI) in the UK’s financial services industry is set to slow over the next 12 months, with the impact of the coronavirus crisis on the global economy affecting investment plans. Just 25% of overseas financial services firms plan to invest in the UK in the next 12 months, down from a 10-year high of 31% in April. Only 10% of global financial services companies plan to establish or expand operations in Britain in the next year, down from 45%. It was also shown that 20% of financial services firms are planning a substantial decrease in investment in the UK over the next 12 months due to the pandemic, with 28% planning a minor cut and 18% putting plans on hold. Just under a quarter of respondents (23%) expect no change to their investment plans, while 10% plan to increase investment. In regard to long-term investment, 53% of financial services companies surveyed expect the UK to be more attractive for FDI in three years’ time – up from 40% earlier in the year and 17% in 2019.
Daily Mail, Page: 73 City AM
Economy suffers despite high Covid spending
FT analysis shows the UK has spent more money battling coronavirus than countries of equal stature but remains at the bottom of league tables for economic performance and Covid-related deaths.
OTHER NEWS – MONDAY 30TH NOVEMBER 2020
Carmakers call for clarity over Brexit
With uncertainty remaining over the UK’s post-Brexit trade relationship with the EU, carmakers are moving cars and parts both ways across the Channel to ensure they are not hit by tariffs if no trade deal is agreed. Michael Woodward, UK automotive lead at Deloitte, comments: “There is concern that Brexit may cause short-term disruption in supply of cars and parts.”
The Guardian, Page: 33
Mancos join forces as Brexit deadline looms
The FT looks at dealmaking among management companies, with PwC’s Olivier Carré saying: “We expect further consolidation and concentration unless there is a change in the regulatory environment.”
Contact Paul Southward