Category Archives: News Roundup

NEWS – MONDAY 30TH NOVEMBER 2020


NEWS – MONDAY 30TH NOVEMBER 2020

NEWS ROUNDUP

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.

The Daily Telegraph, Business, Page: 1 The Guardian, Page: 34 The Times, Page: 43 Financial Times Financial Times, Page: 13 Daily Express, Page: 2

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.

Financial Times, Page: 20

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.

Financial Times, Page: 24

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.

The Times

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.

Financial Times, Page: 3

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.”

Financial Times, Page: 10

Contact Paul Southward

Paul Southward


NEWS – WEEKEND TO 29TH NOVEMBER 2020


NEWS – WEEKEND TO 29TH NOVEMBER 2020

NEWS ROUNDUP

TAX NEWS – WEEKEND TO 29TH NOVEMBER 2020

SATURDAY

Treasury cashing in on excess deaths with IHT windfall

The Telegraph’s Matthew Lynn says the Treasury is benefitting from a rise in inheritance tax receipts due to early deaths from COVID-19, but to continue to profit from the wave of Covid deaths is “deeply immoral”. Instead, anyone with Covid on their death certificate should be exempt from death duties, argues Lynn. According to Government figures published alongside this week’s Spending Review an extra £800m is likely to be collected in death duties this year, pushing the total take up to an all-time high of almost £6bn.

The Daily Telegraph, Page: 38

HMRC and ASA launch action to disrupt promoters of tax avoidance schemes

HMRC and the Advertising Standards Authority have today launched new action to cut out misleading marketing by promoters of tax avoidance schemes. The joint enforcement notice aims to disrupt the activity of promoters and protect people from being presented with misleading adverts which may tempt them into tax avoidance. It requires promoters to be clear about the potential consequences of tax avoidance in any online adverts. Immediate sanctions include having their paid advertising removed from search engines and follow-up compliance action, which can include referral to Trading Standards.

International Adviser GOV

Fraudsters jailed for £29m R&D tax relief claim

Three men involved in a fraudulent £29.5m claim for tax relief on a bogus IT project have been jailed for a total of 21 years. Matthew Sutherland, Mohammed Zeb Zaheer and Mohammed Iqbal Khan were prosecuted for Research and Development (R&D) tax relief fraud. Sutherland was the architect of the crime and used his company, Convergica (Clinical Information Systems) Ltd, to claim tax relief of £29.5m against a purported £137m spend on developing an IT healthcare system for two countries in the Middle East. Zaheer and Khan were the frontmen for companies used to carry out the fraud, which came to light when HMRC requested supporting documents for the claim.

Press Release

The Tories cannot avoid the tax question forever

Camilla Cavendish predicts in a piece for the FT that Boris Johnson will end up presiding over two things he is instinctively against: big government and higher taxes.

Financial Times, Page: 14

SUNDAY

Economic recovery could delay tax rises

Christopher Hope in the Sunday Telegraph reports that Treasury ministers hope that the economy will start to recover by mid-2021, delaying any consideration of significant tax rises until the following year. He says senior ministers want to ensure the worst of the coronavirus pandemic has passed before considering increasing taxes, adding that this realistically pushes any large-scale increases to March 2022 at the earliest. A senior Treasury source told the paper that people would have to wait “a bit longer” than the spring Budget to see whether tax increases are required. Mr Hope also highlights comments from Rupert Harrison, an executive at fund manager BlackRock and one-time adviser to former Chancellor George Osborne, who says: “Serious measures which probably will come at some point around taxation and on spending restraint are going to be in a year’s time at the earliest.” Meanwhile, a poll by ORB International for the Sunday Telegraph shows that 38% of people agreed that tax increases should be used to pay for the pandemic, while 31% disagreed and the remaining respondents were unsure.

The Sunday Telegraph, Page: 1

Government warned over Crown preference

The Sunday Telegraph’s Michael O’Dwyer looks at the reintroduction of Crown preference, which puts HMRC ahead of other creditors waiting for payment. He notes calls for the change to be halted, with critics saying it may undermine Chancellor Rishi Sunak’s efforts to support businesses. Crown preference, which was abolished in 2003, means taxes collected by bust companies on behalf of third parties must be paid off before any funds can be repaid to banks that have given loans backed by a floating charge over assets. Nicky Fisher of insolvency and restructuring trade body R3 comments: “The Government is putting more than £1bn of floating charge finance at risk with the introduction of this policy.” She adds: “The Government could easily receive less in tax as a result of this measure, where firms fail because they haven’t been able to secure the funding they need to support expansion or rescue plans.”

The Sunday Telegraph

Taxpayers set to cover coronavirus costs

Harvey Jones in the Sunday Express says the British taxpayer “will ultimately foot the bill” for the Government’s coronavirus-related spending and looks at what taxes may be targeted as ministers look to balance the books. He says Chancellor Rishi Sunak “has little room for manoeuvre” as the Conservative Party’s manifesto pledged that there would be no increase in income tax, National Insurance or VAT. He goes on to suggest changes to capital gains tax, inheritance tax and pensions tax relief may be possible targets. Elsewhere in the same paper, Kate Andrews reflects on the Chancellor’s Spending Review and says tax hikes seem to be “off the cards” for now. She says the absence of tax rises suggest Mr Sunak “is mindful that extra cash brought in by a tax hike wouldn’t outweigh the costs of slowing our economic revival.” Meanwhile, Katherine Denham in the Sunday Times looks at proposals that would see higher-rate tax relief on pensions removed, saying future middle-income families would be the hardest hit.

Sunday Express, Page: 53, 14 The Sunday Times, Business, Page: 13

EU sought to control UK tax policies

A leaked memo suggests the EU wanted to control Britain’s tax policies after the Brexit transition period, with a document written by the European Parliament’s TAX3 secretariat – the EU’s special committee on taxation – in 2018 stating: “The objective is that the UK will abide by the tools adopted at EU level to fight tax evasion/avoidance.” The Sunday Express’ Martina Bet says the desire for alignment on tax reflected a fear in Brussels that Britain could become a low-tax economy and a magnet for business and investment.

Sunday Express

REGULATION NEWS – WEEKEND TO 29TH NOVEMBER 2020

SUNDAY

HMRC probing 5,000 furlough fraud cases

Tax officials are investigating more than 5,000 cases of suspected furlough fraud, with these including cases identified as high risk at the time of payment and a number stemming from 1,033 calls made to a hotline between August and October. While HMRC has 5,079 Coronavirus Job Retention Scheme fraud investigations running, just 58 have been concluded with formal requests for repayment. The HMRC data, which was revealed following a Freedom of Information request by OnePoll, shows that Birmingham has the most live investigations, with 188, followed by Belfast (141), east London (115), west London (114) and Manchester (104).

Sunday Express, Page: 2

CORPORATE NEWS – WEEKEND TO 29TH NOVEMBER 2020

SATURDAY

Arcadia on brink of collapse

Sir Philip Green’s Arcadia Group, which owns Topshop, Topman, Miss Selfridge, Burton, Dorothy Perkins and Evans, is understood to be on the brink of administration, putting 13,000 jobs at risk. The retail group, which has been working with advisers at Deloitte on survival plans for months, is expected to formally appoint them as administrators as soon as Monday. Arcadia said it been “working on a number of contingency options to secure the future of the group’s brands,” but added that stores would be open again as soon as the Government COVID-19 restrictions are lifted next week. It is thought that the administration will lead to a break-up of Arcadia, with the fashion brands sold off individually. The collapse of the group would leave a pension deficit estimated to be as much as £350m by John Ralfe, a pensions expert.

The Times, Page: 6 The Daily Telegraph The Daily Telegraph, Business, Page: 39 Financial Times, Page: 1 The Guardian, Page: 2 Daily Express, Page: 4 Daily Mail, Page: 10

SUNDAY

Four in five businesses worry they are not ready for Brexit

An EY poll of more than 1,700 businesses shows that four in five are not ready for the end of the Brexit transition period, with 80% saying they did not “know the full extent of Brexit risks” or “have sufficient preparations in place”. Sally Jones, EY’s Brexit strategy and trade leader, said: “There is an alarming number of businesses expecting ‘business as usual’ after the transition period ends, despite the inevitability of significant disruption and upheaval”. Meanwhile, businesses have been warned there will be significant disruption and bureaucracy, even if a trade deal with the EU is agreed, with Deloitte analysis showing that a company moving goods around the single market will have to fill in 54 forms rather than the current nine. Elsewhere, the Sunday Times looks at the impact of Brexit on several sectors, with Tim Sarson of KPMG offering insight into what the pharmaceutical industry can expect.

The Sunday Telegraph, Business, Page: 3 The Sunday Times, Business, Page: 4

Ashley offers Arcadia a rescue loan

With Arcadia said to be preparing to appoint Deloitte as administrators, Mike Ashley’s Frasers Group has reportedly offered a rescue loan of £50m to Sir Philip Green’s retail empire. Meanwhile, former CEO Lord Rose believes breaking up Arcadia – which owns Topshop, Topman, Burton, Dorothy Perkins, Miss Selfridge, Wallis and Evans – is “the only way” forward. He told BBC Radio 4’s Today programme the while people will “come and pick over the carcass”, not all Arcadia brands are likely to sell. Elsewhere, Sir Philip has been urged to ensure Arcadia’s pension scheme is fully funded if administrators are called in, with Lucy Powell, shadow minister for business and consumers, saying he “should do what is right” and cover Arcadia’s pension deficit to ensure “hardworking people don’t pay the price.” Separately, Oliver Shah in the Sunday Times looks at Sir Philip’s career, noting that issues which arose at BHS under the tycoon saw PwC fined £6.5m.

The Observer, Page: 15 The Mail on Sunday, Page: 16 The Sunday Telegraph The Sunday Times, Page: 2 The Sunday Times, Business, Page: 9 The Independent, Page: 12 Sunday Express, Page: 2 The Sun, Page: 21 Sky News BBC News

JD’s Debenhams bid uncertain

JD Sports is considering backing away from a proposed rescue of Debenhams, with the retailer’s chairman Peter Cowgill understood to be concerned over uncertainty around further pandemic-prompted restrictions in the new year. Restructuring firm Hilco has been lined up to liquidate Debenhams if a buyer for the entire business cannot be found. JD, which entered into exclusive talks with Debenhams adviser Lazard and its administrator FRP Advisory last week, is expected to clarify its intentions in the coming days.

The Sunday Telegraph, Business, Page: 1 The Sunday Times, Business, Page: 1 The Mail on Sunday, Business, Page: 123

Netflix to declare revenues to HMRC

Netflix is to start declaring the revenues it makes from British subscribers to UK tax authorities, a change that is likely to increase the amount it pays in UK corporation tax. Netflix’s UK-generated revenue has gone through accounts at its European headquarters in the Netherlands since the streaming service launched in Britain in 2012. Netflix received a €57,000 tax rebate from the UK government in 2018, despite making £700m from UK subscribers, and declared just €48m in UK revenues in 2018. Revenue from British subscribers is estimated to have hit £1.14bn this year. The Observer says Netflix’s move is “likely to ramp up pressure” on tech firms which funnel revenues through overseas tax jurisdictions.

The Observer

Founder prepares bid for Deltic

Stephen Thomas, founder of Deltic Group, is working on a potential bid for the nightclub owner with Shoreditch Bar Group. Deltic last month hired BDO to run a sale after the coronavirus crisis hit business and saw it cut 1,000 jobs. Private equity firms Greybull Capital and Aurelius have shown interest in Deltic, which is owned by its management team.

The Sunday Telegraph, Business, Page: 3

Hospitality bosses call for greater support

In an open letter to the Prime Minister, a number of Britain’s biggest hospitality companies have warned that financial support being offered by the Government is not enough to ensure the survival of the sector amid the latest coronavirus-related restrictions. Voicing concern that existing grants are not enough to compensate for sales lost under Tier 2 and Tier 3 restrictions, bosses across the sector have called on ministers to consider extending the business rates holiday and VAT cut for the entirety of next year.

The Sunday Telegraph

FINANCIAL SERVICES NEWS – WEEKEND TO 29TH NOVEMBER 2020

SATURDAY

Brussels raises doubts over City access

Diplomats were told in a behind-closed-doors meeting in Brussels that the British Government’s failure to offer assurances over the future regulatory outlook for the City of London after January 1st was holding up decisions on equivalence. Additionally, the UK had not revealed what new regulators would be established, making understanding of future policy more difficult. Chris Chapman, a partner at the international law firm Mayer Brown, points out that the equivalence mechanism is seen by some as protectionist and that even if it was granted, the EU can unilaterally revoke it, providing Brussels with leverage on an ongoing basis. The Guardian notes that the European Commission has agreed time-limited equivalence for clearing houses, and a decision was made in favour of continued access to the European market for UK-based central securities depositories on Wednesday owing to concerns over Europe’s financial stability.

The Guardian, Page: 46

PROPERTY NEWS – WEEKEND TO 29TH NOVEMBER 2020

SATURDAY

Landlord tax campaign hauls in less than hoped

Efforts by HMRC to chase unpaid tax from landlords, begun in 2013 with its Let Property campaign has fallen way short of its target but has persuaded overseas owners to come clean about what they owe, writes the Times’ David Byers. Landlords are more likely to be expats who still have property in the UK than foreign citizens. Luci Parry, a partner at Moore Stephens, said: “The tax affairs of buy-to-let landlords has been a key area of focus for HMRC and it shows no signs of letting up. HMRC’s latest initiative involved thousands of letters to landlords asking them to declare their income.” HMRC originally estimated that up to 1.5m landlords had underpaid or failed to pay up to £500m in the tax year 2009-2010. But in August, the taxman revealed that 58,779 landlords, including those living overseas, had come forward and paid a total of £163m since the start of the campaign.

The Times, Page: 68

SUNDAY

90% home loans trickle back

First-time buyers’ hopes of getting on to the property ladder have been boosted as banks have started to relaunch 90% mortgages. Moneyfacts analysis shows that the number of 90% loans available fell from 779 in March to 56 at the start of November but with smaller lenders testing the water in recent weeks, larger lenders including TSB and Yorkshire Building Society have started to expand their offerings, with 80 deals requiring a 10% deposit now available.

The Sunday Telegraph, Business, Page: 9

SMEs NEWS – WEEKEND TO 29TH NOVEMBER 2020

SATURDAY

Amazon backs charity’s support for small firms

Amazon has signed up as a donor to the Tide Charity, which will provide grants of £1,000 to businesses hit hard by the pandemic. The charity, a partnership between small business bank Tide and the Federation of Small Businesses (FSB) has raised just over £200,000 since the Mail helped to launch it earlier this month. John Boumphrey, UK country manager at Amazon, said: “These grants will help companies most at risk and provide access to much-needed funds.”

Daily Mail, Page: 1019

They’ve saved Christmas — now save small businesses

Politicians, it would appear, have saved Christmas writes Claer Barrett, but now it’s time to focus on supporting the millions of self-employed who were excluded in Wednesday’s Spending Review.

Financial Times, Money, Page: 6

Starting a business in the midst of a pandemic

Former EY accountants Luke and Rebecca Tonks feature in an FT piece providing advice for aspiring entrepreneurs thinking about setting up a business during the pandemic.

Financial Times

SUNDAY

SME confidence climbs

A poll by Hitachi Capital Business Finance saw 55% of SMEs say they are borrowing to finance their 2021 plans, a two-percentage point increase on a year ago, while more than a quarter are predicting growth over the next three months, up from 13%. Hitachi Capital Business Finance’s head of insight, Joanna Morris, said: “Despite a bruising year for small business in the UK, confidence levels are starting to return among some sectors, not far off levels we saw before the pandemic outbreak.”

Sunday Express, Page: 52

PENSIONS NEWS – WEEKEND TO 29TH NOVEMBER 2020

SATURDAY

Why cutting pension tax relief is not that simple

James Coney in the Times says that if pension tax relief were reduced, contributions to government departments would go down too, forcing them to find extra money to fund pensions. LCP partner Steve Webb says: “The question would be where these additional funds would come from. Would you ask taxpayers to pay a greater contribution, or would you expect individual government departments to take it out of their existing budgets?”

The Times

INTERNATIONAL NEWS – WEEKEND TO 29TH NOVEMBER 2020

SATURDAY

Deutsche Bank’s head of accounting probed over Wirecard

Deutsche Bank’s head of accounting, Andreas Loetscher, is being investigated by Germany’s audit watchdog over potential misconduct in his previous role at EY, where he was one of the partners responsible for the audits of Wirecard. Alexander Geschonneck, a KPMG partner who led a special audit of Wirecard, told lawmakers on Thursday that EY should have spotted the fraud earlier. “What we did [in the special audit] was not rocket science,” he said.

Financial Times, Page: 15 The Irish Times Bloomberg

ECONOMY NEWS – WEEKEND TO 29TH NOVEMBER 2020

SATURDAY

Capital Economics upbeat about vaccine impact on economy

Capital Economics has posted bullish economic forecasts for the UK, saying “game-changer” vaccines will wipe out the damage of coronavirus by the middle of the decade, meaning tax rises will be unnecessary. Capital’s chief UK economist, Paul Dales, said that “by this time next year much of our lives may have returned to normal”, while the consultancy is unconvinced that Covid will cut the economy’s growth potential. He said: “Permanent hits to supply are most likely to happen after recessions associated with financial crises and wars, as they reduce the supply of credit or destroy large parts of the capital stocks. Neither of those things have happened this time.”

The Daily Telegraph, Page: 37

New tax-free shopping regime carries economic risk, says OBR

The Office for Budget Responsibility (OBR) has warned that scrapping duty-free shopping will lead to tourists abandoning Britain whilst only raising £195m a year – £300m less than original estimates. The Treasury has said that as of January 1, tax savings on goods bought by outbound travellers will apply only to alcohol and tobacco. Ministers are also abolishing the VAT rebate scheme for tourists, which will hit shopping centres across the country and put up to 70,000 jobs at risk. A spokesman for the UK Travel Retail Forum commented: “The OBR’s analysis of the Treasury’s decision to remove airside tax-free sales shows the Treasury can expect to recover only a very minor amount of revenue – and almost certainly less than the combined economic impact travel retail could have had on the economy if tax-free sales had been extended to travellers after Brexit.”

Daily Mail, Page: 29

SUNDAY

CEBR: Tiers will cost £900m a day

Analysis by the Centre for Economic and Business Research (CEBR) suggests the latest round of coronavirus restrictions will cost the UK £900m a day. The report says the tiers being rolled out across England this week will see the country’s GDP fall by 13% compared to December 2019, a decline of more than £20bn over the month. The forecast reflects the fact that 31% of England’s economy will be placed in Tier 3, while 68% will be in Tier 2. CEBR deputy chairman Doug McWilliams said: “My suspicion is that the shutdowns imposed by Whitehall will end up doing more economic damage than can be justified on medical grounds.” Elsewhere, Andrew Goodwin, chief UK economist at Oxford Economics, said it expects GDP to fall by almost 3% in the fourth quarter. Saying that the tier system “should be less damaging” to activity than November’s lockdown, he added: “Therefore, we should see a modest recovery in activity when we switch from lockdown to the tiered system.”

The Sunday Telegraph, Page: 7 The Mail on Sunday

OTHER NEWS – WEEKEND TO 29TH NOVEMBER 2020

SATURDAY

Graham Brady: Government’s Covid plans are destroying Britain

Writing in the Mail, Sir Graham Brady says he will be voting against the Government’s new Tier system of Covid restrictions. “In practice, the new regime is just as heavy-handed as lockdown,” he says, adding: “Riddled with contradictions and unsupported by compelling scientific evidence, these restrictions will cause immense further damage to the economy, cripple our civil liberties and worsen the nation’s health. In short, they threaten to destroy the social fabric that makes up Great Britain.”

Daily Mail, Page: 4-5

Contact Paul Southward

Paul Southward


NEWS – FRIDAY 27TH NOVEMBER 2020


NEWS – FRIDAY 27TH NOVEMBER 2020

NEWS ROUNDUP

TAX NEWS – FRIDAY 27TH NOVEMBER 2020

Advisory Fuel Rates for Company Cars – updated from 1st December 2020

See here:

Advisory-Fuel-Rates-from-1-Dec

IFS warn on likelihood of tax rise

The Institute for Fiscal Studies’ analysis of Rishi Sunak’s spending review warns that Conservatives will face calls to break manifesto pledges not to increase taxes, with a larger than expected £40bn public finances black hole identified. IFS deputy director Carl Emmerson commented: “If you want to raise large sums in a relatively straightforward way, the obvious thing to do is to push up the standard rates of income tax or national insurance or VAT, and indeed if we look at past fiscal consolidations that involve tax rises under Labour, Coalition and Conservative governments it has often been the rate of national insurance, or VAT they have reached for, so I wouldn’t be surprised if that was a part of a tax raising Budget.”

The Daily Telegraph The Guardian, Page: 14

SMEs NEWS – FRIDAY 27TH NOVEMBER 2020

New Covid rules “make or break” for many businesses

Business leaders and lobby groups have warned that businesses in regions under the highest level of Covid restrictions will not survive without further support. The Times talks to a slew of hospitability bosses voicing their fears for the industry and notes that UK Hospitality expects £7.8bn in losses for the sector in December compared to the previous year. Mike Cherry, of the Federation of Small Businesses, said the highest level of restrictions may “ultimately lead to some [companies making] very difficult decisions into the new year – without the necessary support, this could be devastating for thousands of small businesses, and tens of thousands of jobs”.

The Daily Telegraph, Business, Page: 5 The Times

Business cries out for Brexit clarity

The Confederation of British Industry (CBI), British Chambers of Commerce (BCC) and the Federation of Small Businesses (FSB) have made a fresh plea for clarity over post-Brexit trade arrangements as the clock ticks down to December 31st. James Sibley, head of international affairs at the FSB, said: “We welcome government efforts to encourage businesses to prepare for those changes that will take effect regardless of the outcome of talks, but until we know exactly what the state of play will be from 1st January, it’s extremely difficult to fully plan,” a sentiment echoed by the BCC’s co-executive director Hannah Essex. Separately, British businesses are stockpiling goods before post-Brexit customs checks come into force on January 1st, leading to a hike in the cost of cross-border deliveries and a reduction in capacity.

The Times Reuters City AM

EMPLOYMENT NEWS – FRIDAY 27TH NOVEMBER 2020

Financial sector workers in remote working survey

New research from Deloitte has found that financial services employees report feeling more productive and well while working remotely. Avoiding the commute was listed by 66% as the main benefit to the current situation, while 60% of respondents believed the ability to meet in person was the most important benefit of working in an office. Some 78% of those surveyed agreed that their employers were prepared for their staff to continue working remotely in the long term.

City AM

FCA says industry needs to ‘act quickly’ on diversity

Jonathan Davidson, executive director of supervision at the Financial Conduct Authority, has said effective action must be taken quickly so the financial services industry is “truly reflective” of the people it serves.

FT Adviser

CORPORATE NEWS – FRIDAY 27TH NOVEMBER 2020

Sir Brian Leveson appointed by Boohoo to oversee shakeup

Boohoo has appointed Sir Brian Leveson to supervise efforts to overhaul the fashion retailer’s supply chain after a report confirmed there were unacceptable working conditions at supplier companies. Boohoo has brought in Sir Brian to scrutinise its efforts to bring “long-lasting and meaningful change” to its supply chain. KPMG will be among other independent experts appointed to help the programme.

The Times, Page: 44 Financial Times, Page: 12 The Daily Telegraph, Business, Page: 3 The Guardian, Page: 37 Daily Express, Page: 59

PENSIONS NEWS – FRIDAY 27TH NOVEMBER 2020

RPI change will cost BT Pension Scheme members £34,000 each

Morten Nilsson, head of BT Pension Scheme, has said 82,000 of his members will each be on average £34,000 worse off as a result of the planned changes to the Retail Prices Index announced by the Chancellor on Wednesday. Nilsson described the move as “a massive transfer of wealth” from defined benefit scheme members to the Government. Jos Vermeulen, head of solution design at Insight Investment, one of the biggest holders of index-linked bonds, added that the RPI redefinition was “a big disappointment”. He said: “There’s tens of billions of pounds at stake. This is not the end.”

The Times

ECONOMY NEWS – FRIDAY 27TH NOVEMBER 2020

Resolution Foundation foresees prolonged income squeeze

The Resolution Foundation has predicted that the coronavirus crisis will see Britain’s 15-year squeeze on household incomes prolonged, with pay cut by £1,200 annually within the next four years. Torsten Bell, chief executive of the think tank, stated: “The pandemic is just the latest of three ‘once-in-a-lifetime’ economic shocks the UK experienced in a little over a decade, following the financial crisis and Brexit. The result is an unprecedented 15-year living standards squeeze.” The organisation said that most fiscal support in the wake of the crisis will need to be raised from tax rises, noting: “While the priority now is to support the economy, the permanent damage to the public finances will mean tax rises in the future.”

The Times Financial Times, Page: 2 City AM Evening Standard

Think tank predicts pandemic effects will be less severe than financial crash

The Institute for Fiscal Studies think tank has claimed that the UK economy is likely to suffer less as a result of the coronavirus pandemic than it did after the financial crisis of 2008. IFS director Paul Johnson remarked: “On central scenarios borrowing will be ‘only’ £100bn or so in 2024-25,” which he said is “not a million miles away from either current budget balance or at least stabilising debt as a fraction of national income.”

City AM

OTHER NEWS – FRIDAY 27TH NOVEMBER 2020

Sunak backed by BoE’s Bailey

Chancellor Rishi Sunak’s approach to the public finances has been supported by Bank of England governor Andrew Bailey, who told BBC Radio Devon: “It is absolutely sensible that public resources, resources of the state, are being used to cushion the huge impact of this absolutely unprecedented shock.” He went on: “For the moment the key thing is to use all our resources and all our support. And that’s what the Bank of England and Treasury are doing to cushion and make this huge impact more bearable for people.”

City AM

Contact Paul Southward

Paul Southward


NEWS – THURSDAY 26TH NOVEMBER 2020


NEWS – THURSDAY 26TH NOVEMBER 2020

NEWS ROUNDUP

COVID-19 SUPPORT FOR BUSINESS

SELF EMPLOYED INCOME SUPPORT SCHEME (SEISS) GRANTS

Full details of the third SEISS grant to support self-employed people affected by coronavirus (COVID-19) have been published on GOV.UK.

The rules for eligibility have changed but taxpayers will still need to have submitted a Self-Assessment tax return for the tax year ended 5 April 2019, showing self-employment income in order to claim.  (Exceptions may apply).

The third grant, which offers 80% of three months’ average trading profits, paid out in a single taxable instalment capped at £7,500, will be available covering the period from 1 November 2020 to 29 January 2021. Self-employed people who are eligible and in need of support will be able to claim the third grant at any time from 30 November 2020 to 29 January 2021.

Here is what you need to do: –

Check your eligibility to claim: –

SEISS

We can check for you, but you must make the claim yourself.  Claiming should be simple and only takes a few minutes.

For the third SEISS grant you must:

  • either be currently trading but are impacted by reduced activity, capacity or demand, or have been previously trading but are temporarily unable to do so due to coronavirus
  • declare that you intend to continue to trade, and that they reasonably believe that the impact on their business will cause a significant reduction in their trading profits
  • only claim if the reduction in profits is caused by reduced business activity, capacity or demand, or inability to trade due to coronavirus – reduction in profits due to increased costs (such as having to buy masks) does not count for this purpose.

We can assist you with the process

The business must have been impacted on or after 1 November 2020. You must keep evidence to show the impact and reduction in their business activity across the qualifying period.

Get in touch with your usual KSK contact for further information.

TAX NEWS – THURSDAY 26TH NOVEMBER 2020

Despite warnings over tariffs, France demands digital tax payments

The French finance ministry has begun demanding digital tax payments on the 2020 earnings of technology giants, including the US firms Google, Amazon, Facebook and Apple. The move comes despite threats from Washington that tariffs could be imposed on French imports in retaliation. The 3% tax will apply to digital companies that have global revenues of over €750m (£669m), and French revenues over €25m. About 30 companies, mostly based from the US, but also from China and Europe, will be affected. The UK is due to begin collecting its own 2% digital tax in April. The EU, meanwhile, has threatened to go it alone with a technology tax if the OECD does not act.

The Daily Telegraph, Business, Page: 7 Financial Times, Page: 6

Home working costs Treasury £9bn in tax receipts

Tax revenue has slumped as millions of workers undertake their duties from home, reducing spending on commuting and business trips, leading to losses on fuel duty and air passenger duty. Car fuel duty income is set to plummet by £5.7bn this year, while ministers expect £3.6bn less from air passenger duty. Tom Selby, senior analyst at AJ Bell, said: “Having the vast majority of the country working at home for much of the year has played havoc with the Treasury’s tax receipts.” Meanwhile, home workers are costing an extra £25m in tax relief.

Daily Mail, Page: 82

EMPLOYMENT NEWS – THURSDAY 26TH NOVEMBER 2020

OBR: Unemployment to hit nearly 3m by spring

The Office for Budget Responsibility (OBR) has warned that 2.6m Britons will be jobless by the second quarter of 2021 when the Chancellor’s support for millions of workers is withdrawn. Unemployment will reach a peak of 7.5%, well above the current level of 4.8%, but lower that the 12% predicted by the OBR in the summer. The jobless rate is forecast to return to 4.5% by 2024. In yesterday’s Spending Review, Rishi Sunak confirmed a “targeted” public sector pay freeze but said the Government will still provide an increase in wages for NHS workers. In addition, the 2.1m public sector workers that earn less than the median wage of £24,000 will be guaranteed a pay rise of at least £250. The national living wage will still increase by 2.2% to £8.91 next year, which combined with an increase in the minimum wage will benefit around 2m Britons. The Chancellor also announced a three-year £2.9bn Restart scheme to provide the long-term unemployed with tailored and intensive jobs support. Some £1.4bn will be provided to increase Job Centre Plus capacity.

The Daily Telegraph The Daily Telegraph BBC News The I, Page: 8 Daily Mail, Page: 6

FINANCE NEWS – THURSDAY 26TH NOVEMBER 2020

Taxpayer faces £40bn bill for emergency loans

The Office for Budget Responsibility (OBR) has warned that between £30bn and £40bn will be lost to soured coronavirus loans, an increase on earlier predictions. The figures come as banking industry chiefs warn that billions of pounds of Government money is being lost to fraudsters. Virgin Money chief executive David Duffy said yesterday that his bank had decided to only hand out Bounce Back loans to existing customers in order to reduce fraud. Meanwhile, the Government-backed British Business Bank (BBB) estimates that 5% to 20%of the large businesses who have borrowed under CLBILS could default on their debt. The BBB also expects 10% to 25% of smaller CBILS borrowers and 35% to 60% of Bounce Back borrowers will become unable to pay back their debt.

Daily Mail, Page: 81

SMEs NEWS – THURSDAY 26TH NOVEMBER 2020

Mixed response to Spending Review

Business groups have given a lukewarm response to the Chancellor’s Spending Review, describing it as “sobering” and requiring bold decisions on the ground to deliver the sort of impetus the economy needs. The infrastructure bank plans were lauded by the British Chambers of Commerce as an important step in overcoming the nation’s “longstanding infrastructure deficit”, but the Federation of Small Businesses said the review was a “missed opportunity” to help smaller employers aid an economic recovery. Mike Cherry, national chairman, said: “A government which claims to be pro-enterprise had very little to say today about the importance of business and private sector job creation.” Darren Jones, chairman of the BEIS committee also said an opportunity was missed to “spell out more targeted support for sectors such as hospitality who continue to bear a terrible strain”.

The Times, Page: 42

HMRC data on Eat Out to Help Out scheme released

HMRC figures reveal that a total of almost £850m was claimed under the Government’s Eat Out to Help Out initiative, with some 93% of claims made by small businesses with only one outlet, while a total of 172 large businesses including the likes of McDonald’s and Pizza Express represented 18,134 outlets which had claimed during the scheme.

Evening Standard

CORPORATE NEWS – THURSDAY 26TH NOVEMBER 2020

Fraud investigation hits Lookers results

An investigation by Grant Thornton into car dealership Lookers which uncovered cash expenses fraud has led to a £25.5m hit to the chain. Lookers reported a £45.5m pre-tax loss in 2019, compared to a £41.9m profit in the year earlier period. Executive chairman Phil White remarked: “The last 12 months have been extremely challenging for Lookers with the ongoing impact of COVID-19 and the accounting issues. Significant restructuring activity has been necessary to ensure we lay the right foundations for the future.”

The Daily Telegraph, Business, Page: 7 Financial Times, Page: 12 Daily Mail, Page: 84

PENSIONS NEWS – THURSDAY 26TH NOVEMBER 2020

Millions of pension payouts to be cut under RPI reform

Millions of retirees will see the future value of their pension cut owing to a planned change in the way payments are calculated from 2030. The retail prices index measure of inflation will be altered in February 2030, saving the Government £2bn a year in interest payments on RPI-linked bonds. The Pensions Policy Institute has calculated that members of defined benefit schemes that use RPI will be about 9% worse off over their lifetimes. About 64% of schemes in the private sector are upgraded by using RPI. Holders of index-linked government bonds were told that they would receive no compensation for the change, which has been estimated to cost them as much as £100bn over the decades to come.

Money Marketing Daily Mail Daily Mirror

INDUSTRY NEWS – THURSDAY 26TH NOVEMBER 2020

Government harms business by delaying audit reform

The Government has been accused of damaging the reputation of the accounting sector by failing to act on reforming the industry regulator. It is almost two years since Sir John Kingman’s review recommended replacing the Financial Reporting Council with a tougher regulator. The Government has also not responded to Sir Donald Brydon’s recommendations for reforming the purpose of audits, which he published last December, and the Competition and Markets Authority’s recommendations for improving choice in the market. Alok Sharma, the business secretary, failed yesterday to offer a timeline for publishing its proposals for reform, leading Michael Izza, chief executive of the ICAEW, to say: “This question mark of trust over the regulator and the profession needs to be addressed. The longer that it goes on, the more damage potentially is being done to the profession and by extension business and UK prospects.” Scott Knight, head of audit at BDO, added: “We have long been saying there’s a risk that this will get kicked into the long grass, overshadowed by Brexit and the necessary economic recovery from COVID-19. It’s important for the international standing of UK plc that this legislation gets an appropriate hearing.”

The Times, Page: 47

Big Four taking bigger slice of legal pie

Research from Thomson Reuters found that British companies spent 13% more on alternative legal service providers than last year as they shift away from traditional law firms and choose to get legal advice from the Big Four accountancy practices. The increase elsewhere in Europe was about half that, at 7%.

The Times, Page: 59

INSOLVENCY NEWS – THURSDAY 26TH NOVEMBER 2020

Insolvency rules relief extended

A relaxation of insolvency rules designed to help business owners to trade through the pandemic has been reinstated and will now run until April 30 next year.

The Times, Page: 50

ECONOMY NEWS – THURSDAY 26TH NOVEMBER 2020

Sunak warns of ‘economic emergency’ as borrowing hits record £394bn

The Chancellor yesterday warned that the economic emergency made manifest by the coronavirus pandemic has only just begun and that there will be lasting damage to growth and jobs. The Office for Budget Responsibility (OBR) predicts that GDP will plummet by 11.3% this year and not return to its pre-crisis size until the end of 2022. Unemployment will hit 7.5% by the middle of next year with 2.6m people out of work. The UK is expected to borrow £393.5bn this financial year to help pay for economic relief measures. Borrowing is also forecast to remain above £100bn-a-year – or 4% of the size of the UK economy – in five years’ time. The head of the OBR, Richard Hughes, warned that Rishi Sunak will need to find £20bn to £30bn in spending cuts or tax rises if he wants to balance revenues and day-to-day spending, and stop debt rising by the end of this parliament.

Financial Times, Page: 1 The Daily Telegraph, Page: 1, 4 The Daily Telegraph The Times, Page: 1, 2 The I, Page: 8 The Guardian Daily Mail

Spending Review – key announcements

The Chancellor yesterday announced that the foreign aid budget would be reduced from 0.7% of GDP to 0.5% in 2021 but intends to return it to 0.7% when the fiscal situation has improved. Rishi Sunak also confirmed a new National Infrastructure Strategy that will invest £600bn over five years and £100bn next year – a £27bn year-on-year increase in real terms. Broadband, housebuilding and new roads are a key focus of this. A new National Infrastructure Bank based in the North of England has been launched and a new “levelling up fund” worth £4bn was unveiled. Health spending will increase, as will funds for schools while the Ministry of Defence has secured an additional £16.5bn over four years, making the department one of the big winners from the Spending Review.

Financial Times The Daily Telegraph The Times

OTHER NEWS – THURSDAY 26TH NOVEMBER 2020

UK local councils banned from making risky property bets

The Treasury announced on Wednesday that local authorities would be banned from accessing the Public Works Loan Board as a source of cheap finance to fund risky property investments.

Financial Times

Contact Paul Southward

Paul Southward


NEWS – TUESDAY 25TH NOVEMBER 2020


NEWS – TUESDAY 25TH NOVEMBER 2020

NEWS ROUNDUP

COVID-19 SUPPORT FOR BUSINESS

Here is an update on the latest information on the Coronavirus Job Retention Scheme and the VAT Deferral New Payment Scheme, see what actions you may need to be taking: –

Coronavirus Job Retention Scheme (CJRS)

The CJRS has been extended to 31 March 2021 for all parts of the UK.  From 1November, the UK Government will pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month. The government will review the terms of the scheme in January.

Employers and their employees do not need to have benefited from the scheme before to claim for periods from 1 November.

Time limits you need to be aware of

  • Submit any claims for periods up to 31October on or before 30 November – they will not be accepted after this date. Claims are subject to eligibility and the rules in force at the time.
  • Submit any claims for November, no later than 14 December. You can claim before, during or after you process your payroll as long as your claim is submitted by the deadline.
  • Keep any records that support the amount of CJRS grant you claim, in case HMRC needs to check them. You can view, print or download copies of your previously submitted claims by logging onto your CJRS service on GOV‌.UK.

For claim periods from 1 December, employers cannot claim CJRS grants for any days that their employee is serving a contractual or statutory notice period, including notice of retirement or resignation.

You can check if you’re eligible, and work out how much you can claim using HMRC’s  CJRS calculator and examples – here:

Gov.CJRS

Claims deadlines

There are now monthly deadlines for claims. Claims for periods starting on or after 1 November must be submitted within 14 calendar days after the month they relate to, unless this falls on a weekend in which case the deadline is the next weekday. The deadline to make claims for employees furloughed in November is Monday 14 December.

Here is a summary of the CJRS deadlines:

Claim for furlough days in;Claims must be submitted by:
November 202014 December 2020
December 202014 January 2021
January 202115 February 2021
February 202115 March 2021
March 202114 April 2021

Publishing employers’ information

HMRC will publish the names, an indication of the value of claims and Company Registration Numbers of employers who make CJRS claims for periods from December onwards. HMRC will notify you with details of when this information will be published.

For claim periods from December, employees will also be able to check if their employer has made a CJRS claim on their behalf through their online Personal Tax Account.

VAT Deferral New Payment Scheme

Businesses who deferred VAT due from 20 March to 30 June 2020 will now have the option to pay in smaller payments over a longer period. Instead of paying the full amount by the end of March 2021, businesses can make up to 11 smaller monthly payments, interest free. All instalments must be paid by the end of March 2022. They will need to opt-in to the scheme, and for those who do, this means that their deferred VAT liabilities do not need to be paid by the end of March 2021.

The VAT Deferral New Payment Scheme will require a Direct Debit to be set up as part of the digital opt-in process and this must be done by the authorised bank account holder. Because of that, HMRC is unable to provide an agent service for the scheme. Businesses that can pay their deferred VAT should still do so by 31 March 2021.

You can find further information on GOV.UK by searching ‘Pay VAT deferred due to coronavirus’.

TAX NEWS – TUESDAY 25TH NOVEMBER 2020

UK bosses rush to sell stakes over capital gains tax fears

City brokers and accountants say they had been swamped with calls from company bosses preparing to sell down stakes in businesses ahead of a potential increase in capital gains tax next year. Tim Stovold, partner at Moore Kingston Smith, calculated that selling a business worth £5m at current CGT rates would see an entrepreneur pay £900,000 in tax – a 10% CGT rate on the first £1m and 20% on the remaining £4m. However, if CGT and income tax rates were aligned and business asset disposal relief scrapped, an additional rate income taxpayer would pay CGT at 45% on the £5m business – a total of £2.25m. Heather Self, partner at Blick Rothenberg, said many of her clients who had been thinking about selling were bringing forward plans since a review commissioned by Rishi Sunak last week recommended aligning CGT with income tax. Separately, research by private equity firm Growthdeck found Londoners pay nearly 30% of the UK’s CGT despite being home to just 13% of the population, with taxpayers in Kensington and Chelsea paying the most. Gary Robins, head of business development at Growthdeck, said: “For over £500m of capital gains tax to be paid a year in Kensington & Chelsea is astonishing […] More taxpayers should look into whether EIS investment might be a sensible way for them to defer enormous CGT bills, as well as saving on income tax and inheritance tax.”

Financial Times, Page: 10 City AM

Energy industry calls for UK to adopt carbon trading after Brexit

The UK has been urged to reject calls for a carbon tax after Brexit and instead opt for a carbon trading system, arguing that this would be the most efficient way to cut pollution.

Financial Times, Page: 3

SMEs NEWS – TUESDAY 25TH NOVEMBER 2020

Government urged to tell shoppers to snub Black Friday sales

Retail and business groups have urged the Government to tell shoppers to avoid the Black Friday sales and save their Christmas spending for the high street. They warned that small shops could disappear from communities if they do not receive support when they reopen. Mike Cherry, chairman of the Federation of Small Businesses, said: “After eight months of disruption, and fresh restrictions on the way, small businesses need your help now more than ever. We’re calling on all shoppers to buy from independents over Black Friday and beyond – be that online, or safely in-person when they’re allowed to re-open their doors. It would be fantastic to see politicians of all stripes getting behind this message.”

The Daily Telegraph, Page: 5

New council powers to tackle COVID-19 breaches

Downing Street has announced new powers for local authorities, allowing them to shut down businesses for up to a week for breaching coronavirus regulations. The new measures will allow councils to “formally request rapid improvement” from offending firms, and close premises for 48 hours or seven days “where appropriate through the issuing of notices”, according to the Prime Minister’s spokesman. Breaking improvement notices and restriction notices will attract fines of £2,000 and £4,000 respectively. Business leaders warned against a “heavy-handed” approach. “The last thing a small business needs right now is the return of Captain Clipboard,” warned Craig Beaumont of the Federation of Small Businesses.

The Daily Telegraph, Business, Page: 1 Daily Mail

Ministers told to extend access to Ombudsman

Hundreds of thousands more small companies must be granted access to independent redress services, the Government has been told, in order to address an “imbalance of power” with telecoms and energy suppliers. The size of businesses able to make a complaint about telecoms or energy, for example, is different – with the limits described as “arbitrary” by the FSB. Matthew Vickers, chief executive of Ombudsman Services, said that it was regularly forced to “turn away” businesses because they were too large and that dispute resolution in energy and telecoms should be brought into line with financial services.

The Times, Page: 50

EMPLOYMENT NEWS – TUESDAY 25TH NOVEMBER 2020

Sunak pledges £4.5bn to help the unemployed back to work

Rishi Sunak will today pledge to spend £2.9bn to help a million unemployed people back into work. As part of his Spending Review, the Chancellor will announce a new “Restart” programme that will see those who have been out of work for more than 12 months provided with intensive and regular support that is tailored to their circumstances. Additionally, Mr Sunak will put another £1.4bn into extra help for those who have been jobless for more than three months. There will also be £1.6bn for the Kickstart scheme, launched in August, which the Treasury has said will create up to 250,000 state-subsidised jobs for young people. Matthew Fell, policy director of the CBI, said the chancellor was right to focus on job creation as the economy looked to recover in 2021. “COVID-19 has swept away many job opportunities, for young people in particular,” he said. “The scarring effects of long-term unemployment are all too real, so the sooner more people can get back into work the better.”

BBC News Financial Times The Times The Guardian Daily Mail

PROPERTY NEWS – TUESDAY 25TH NOVEMBER 2020

Property boom as buyers trade up

With the stamp duty holiday boosting the property market earlier this year, residential transactions were up 8.1% to 105,630 in October compared to the year earlier period. “Residential transactions have increased incrementally each month [since May], reflecting the gradual easing of coronavirus public health restrictions for the property market and the introduction of residential transaction tax holidays within the various UK administrations,” HMRC said. Growth has been driven at the higher end of the market by householders looking to trade up for bigger homes, but analysts said some of this demand was starting to fade due a reduction in stock on the market.

The Times, Page: 48 City AM

PENSIONS NEWS – TUESDAY 25TH NOVEMBER 2020

Government tipped to introduce 25% flat rate pensions tax relief

Rishi Sunak’s rumoured move to create a flat rate on pensions tax relief of 25% could leave a “big dent” in top earners’ pension pots according to Aegon. The Chancellor is said to be “very attracted” to the idea of moving to a flat rate, which could be announced in today’s spending review and would help the Government recoup some of the costs of COVID-19. Analysis from Aegon found under a flat rate of 25%, a basic rate taxpayer paying £100 a month into their defined contribution pension would see this topped up to £133.33 rather than the current £125, an extra £8.33. However, a higher rate taxpayer who currently sees their £100 increased to £166.66 would see this reduced by £33.33.

Pensions Age Professional Adviser FT Adviser Daily Express

CORPORATE NEWS – TUESDAY 25TH NOVEMBER 2020

Booming retailers told to return coronavirus aid

The CEO of online electricals retailer AO World has urged fellow retail executives to reconsider their decision to keep business rates relief and furlough cash handed out during the pandemic. John Roberts said the argument that business rates were unfair was a separate issue – this is about whether it is right to pay out dividends on profits after taking taxpayers’ cash. Mr Roberts said: “The pandemic is a societal challenge, and I think all people and individuals and businesses should do their bit.” He added: “We live by the mantra of if I had to explain my actions to my mum over dinner tonight, would she be proud? Everyone knows what that means for their businesses. Maybe they [the supermarkets] should go and ask their mum.”

The Times, Page: 45 The Guardian, Page: 37 The Independent, Page: 52 Daily Mail, Page: 75

ECONOMY NEWS – TUESDAY 25TH NOVEMBER 2020

Chancellor to unveil spending plans for the coming year

Rishi Sunak will unveil the Government’s spending plans for the coming year today with his Spending Review expected to include details on public sector pay, NHS funding, the state of the economy and a new jobs programme. The Chancellor will announce that the foreign aid budget will be cut by £4bn a year to £10bn as part of moves to shore up Britain’s finances as the country recovers from the pandemic. Ministers will introduce legislation to allow spending to be kept at a reduced level for several years. There have also been reports that the Chancellor is considering a pay freeze for all public sector workers except frontline NHS staff. The economy is projected to be 10% smaller than it was pre-virus with tax revenues dramatically down and public borrowing forecast to rise to £372bn, compared to the £55bn the Government had originally expected to borrow.

BBC News The Sun, Page: 10 The Daily Telegraph, Page: 1, 2

OTHER NEWS – TUESDAY 25TH NOVEMBER 2020

Accountants and bankers swear the most at work

A survey of 1,400 employees at 100 UK companies commissioned by Savoy Stewart found that bankers, accountants and lawyers are the most foul-mouthed during internal meetings across British workplaces. Accountants and bankers lead the league table in a survey of 14 business sectors. Lawyers were in second position, followed by workers in travel and hospitality and sales. The preferred expletive for bankers and accountants was the old Anglo-Saxon stalwart of f***. Lawyers, on the other hand, were more partial to bullshit, presumably in reference to their opponents’ legal arguments. The research found that media professionals were mostly fond of bollocks. Those working for charities and volunteering were found to be the least likely to swear during meetings.

The Times, Page: 28

Contact Paul Southward [Tax Consultant]

Paul Southward


NEWS – TUESDAY 24TH NOVEMBER 2020


NEWS – TUESDAY 24TH NOVEMBER 2020

NEWS ROUNDUP

TAX NEWS – TUESDAY 24TH NOVEMBER 2020

Brexiteer lobby group calls for end to corporation tax

The Brexit-backing Independent Business Network is urging the Chancellor to scrap corporation tax and reform foreign takeover rules as part of efforts to boost British industry through Brexit and the pandemic. The lobby group called corporation tax a “disproportionate administrative burden” for companies, and added: “Without corporation tax, businesses will have more cash on their balance sheets, which can be deployed more effectively through greater investment in improving productivity, higher wages, lower consumer prices and higher dividends. Elsewhere, the Telegraph’s Matthew Lynn suggests Rishi Sunak’s Spending Review seem pointless without a review of tax – ruling out short-term rises and moving towards a simpler system. Finally, Paul Johnson, the director of the Institute of Fiscal Studies, outlines some of Mr Sunak’s options in a piece for the Mail, along with other experts including Andrew Sentance an d EY’s Chris Sanger, who calls for a “clear strategic path, shared with the public”.

The Times, Page: 40 The Daily Telegraph, Business, Page: 2 Daily Mail, Page: 72

Temporary halt put on loan charge work

Mel Stride, the chairman of the Treasury Select Committee, has written to Philip Dunne MP informing him that the committee has decided to not do any work on the loan charge in the near term despite concerns that loan scheme promoters are targeting NHS workers. Mr Stride said the committee had decided to focus on other areas, such as the economic impact of coronavirus.

Yorkshire Post, Business, Page: 1

PERSONAL FINANCE NEWS – TUESDAY 24TH NOVEMBER 2020

Some 18m people forced into debt since start of pandemic

Research by debt charity Turn2Us shows that 18m people in the UK have had to use credit cards, go into their overdraft or borrow from friends and family since the start of the pandemic. The findings also show that people on furlough were considerably more likely to be borrowing money, with half of those who have been furloughed since March falling into debt, compared to 23% of people who have seen no change to the employment. Thomas Lawson, chief executive at Turn2us, commented: “Even if a vaccine for COVID-19 became available tomorrow, the damage has been done to people’s finances. People have spent their savings and used up their rainy day funds, there is nothing left.”

The Independent

PENSIONS NEWS – TUESDAY 24TH NOVEMBER 2020

Inflation shake-up would hit incomes for 10m private pensions

Industry experts have warned that more than 10m pension incomes linked to the retail prices index (RPI) will lose out if the chancellor announces a move to a lower inflation measure in Wednesday’s spending review. Rishi Sunak is expected to announce that RPI will be replaced by the consumer prices index including housing costs (CPIH) – a measure of inflation that is typically far lower. The reform will save the taxpayer money, benefit commuters and help students but also reduce annual increases in incomes from defined benefit pension schemes linked to RPI. LCP partner Sir Steve Webb commented: “This is potentially a real loss for millions of present and future company pensioners, there is no getting away from that.”

The Daily Telegraph, Business, Page: 1

CORPORATE NEWS – TUESDAY 24TH NOVEMBER 2020

Leon cooking up new rent plan

Leon, the restaurant chain launched in 2004 by Henry Dimbleby, an adviser to Boris Johnson, is considering a company voluntary arrangement to cut its rent bill. The firm appointed Quantuma in June to advise it on seeking new terms from landlords in the light of the pandemic but us now shifting attention to a possible CVA.

The Times, Page: 37

JD Sports in talks to buy Debenhams

JD Sports has entered into exclusive talks with Debenhams’ adviser Lazard and administrators at FRP Advisory about a rescue takeover of the department store chain.

The Times, Page: 37

EMPLOYMENT NEWS – TUESDAY 24TH NOVEMBER 2020

Covid crisis threatens UK boom in self-employed work

The FT considers how self-employed workers have been hit hardest the pandemic and without support the upward trend in this model of working may be severely curtailed.

Financial Times, Page: 2

City group seeks to loosen public school grip on top jobs

A new task force created to increase diversity in the Square Mile will be backed by PwC and Deloitte, among others, and chaired by Catherine McGuinness, policy chair at the City of London Corporation.

Financial Times, Page: 3

ECONOMY NEWS – TUESDAY 24TH NOVEMBER 2020

Haldane: Vaccine success boosts UK economic outlook

In evidence to the House of Commons Treasury select committee on Monday, the Bank of England’s chief economist Andy Haldane said news of three successful coronavirus vaccine trials meant the UK’s economic outlook was brighter than the Bank’s forecast earlier this month. However, he warned against the public dropping its guard triggering a third wave of COVID-19. Also speaking with MPs on the Committee, the Bank’s governor Andrew Bailey said the economic cost of a no-deal Brexit would have a greater long-term impact than the damage caused by the pandemic. Models suggested the longer-term consequences were due to the time required to adjust to a new trading relationship, he added.

Financial Times The Daily Telegraph The Guardian

IHS Markit PMI shows November slowdown

IHS Markit’s purchasing managers’ index fell to 45.8 in November from 51.4 the previous month, the lowest level since May. Chris Williamson, IHS Markit’s chief business economist, commented: “A double dip is indicated by the November survey data, with lockdown measures once again causing business activity to collapse across large swathes of the economy.”

The Daily Telegraph Financial Times, Page: 3 City AM

OTHER NEWS – TUESDAY 24TH NOVEMBER 2020

Council inadequately positioned ahead of Covid

A draft audit report into Leeds City Council’s accounts by Grant Thornton warned that it did not have sufficient general reserves and was not “sufficiently robust” ahead of the COVID-19 pandemic, compared with other large UK local authorities.

Yorkshire Post, Page: 4

Four million illicit cigarettes uncovered in Glasgow warehouse

Three men have been charged and 4.2m suspected illicit cigarettes seized by HMRC. Officers made the discovery when they attended a Glasgow warehouse. The goods found are believed to be worth an estimated £1.6m in lost duty and taxes.

The Scotsman, Page: 13

Contact Paul Southward

Paul Southward


NEWS – MONDAY 23RD NOVEMBER 2020


NEWS – MONDAY 23RD NOVEMBER 2020

NEWS ROUNDUP

TAX NEWS – MONDAY 23RD NOVEMBER 2020

Sunak pledges no return to austerity as tax rises loom

The Chancellor has said this Wednesday’s spending review will not usher in a return to austerity, rather there will be an increase in spending on public services. Rishi Sunak warned that forecasts revealed this week would lay bare “the scale of the economic shock” caused by the COVID-19 crisis with the economy “experiencing significant stress” with more to come. Although tax rises haven’t been explicitly mentioned, Treasury insiders admit there will have to be some “big” decisions on taxation ahead of a spring Budget. Mr Sunak hinted there could be a freeze on public sector pay saying any settlements would have to be considered fairly and in the context of what is happening with wages and employment across the economy. Unions reacted angrily at the prospect of a pay freeze with Frances O’Grady, head of the TUC refusing to rule out the possibility of strike action.

The Daily Telegraph, Page: 1 Financial Times, Page: 1 The Times, Page: 4 The Times, Page: 43 Daily Mail, Page: 6 The Independent, Page: 7

Anders Povlsen: Tax should be measured against impact on natural world

Danish billionaire and Scotland’s largest landowner Anders Povlsen has said tax breaks should be granted to companies that reduce their carbon footprint as part of efforts to tackle climate change. Povlsen told the Sunday Times Magazine: “In the future, you should have to prove that you are carbon-neutral, that you’re not subtracting from the natural world, and I run a fashion business, so it’s challenging, right? I think there has to be a different kind of a firm way of measuring a company’s tax, in relation to the natural world and impact.” Povlsen has acquired about 230,000 acres covering 13 Scottish estates and harbours visions for a 200-year “rewilding” plan.

The Times The Sunday Times

HMRC issues scammers warning

HMRC is warning those who submit self-assessment tax returns that scammers are targeting people ahead of the January 31 deadline. Fraudsters are promising a “tax refund” or “rebate” in an attempt to gain access to personal details to sell on or raid bank accounts.

Daily Express, Page: 26

But you read this first from last Friday’s News Roundup:

SELF-ASSESSMENT TAXPAYERS WARNED ABOUT SCAMS

HMRC are reminding taxpayers to stay alert for criminals claiming to be from HMRC as the deadline for submitting self-assessment (SA) tax returns approaches. In the last 12 months, HMRC have responded to more than 846,000 referrals of suspicious HMRC contact from the public and reported over 15,500 malicious web pages to internet service providers to be taken down. Almost 500,000 of the referrals from the public offered bogus tax rebates.  Further information can be found at

self-assessment-taxpayers-warned-about-scammers-posing-as-hmrc

SMEs NEWS – MONDAY 23RD NOVEMBER 2020

Public primed to support small businesses over Christmas

A survey of over 2,000 consumers by the Post Office suggested that more than one in five are more likely to buy Christmas gifts from small businesses this year. Many of those questioned said it was important to offer support to businesses affected by COVID-19. Mark Siviter, managing director of mails and retail at the Post Office said: “The support for small and local businesses is one of the positive outcomes we’ve seen as a result of the pandemic and it’s reassuring to see the prediction that this sector is expected to thrive over the festive period.”

Daily Express, Page: 45

Chancellor urged to help excluded entrepreneurs

A consortium of professional bodies is urging Rishi Sunak to consider proposals for a “directors income support scheme” to help entrepreneurs who have missed out on coronavirus financial support packages.

Financial Times, Page: 3

Cynergy partners with Google for new banking service

Google has teamed up with Cynergy Bank to provide a mixed digital and personal banking service, the Times reports. The aim is to establish and develop a presence in the market for small business owners and professionals.

The Times, Page: 40

PENSIONS NEWS – MONDAY 23RD NOVEMBER 2020

Pandemic puts further pressure on pension schemes

The Telegraph examines the financial impact of the COVID-19 crisis on pension scheme deficits. Close to one in 10 schemes allowed employers to defer contributions during the pandemic but this has now reduced to less than 5%, according to a client survey by Isio. Meanwhile, the new Pensions Schemes Bill is expected to discourage trustees from investing in riskier assets in pursuit of returns. However, Baroness Ros Altmann warns: “If you stop the schemes from buying so called higher risk assets you’re forcing companies to put much more money into pensions and making the company’s business weaker than it needs to be”. The regulator says it is too early to predict the outcome of consultations on a new funding code but Baroness Altmann says higher costs for companies are “inevitable” and that she plans to mount further resistance in the House of Lords. Meanwhile, LCP partner Sir Steve Webb says the Government may take a pragmatic view and quietly delay major changes if the economic picture darkens and insolvencies rise as furlough comes to an end.

The Daily Telegraph Yahoo! Finance

PROPERTY NEWS – MONDAY 23RD NOVEMBER 2020

Working from home shift rocks office projects

Construction of new offices in central London has fallen by 50% over the last six months, according to Deloitte Real Estate, with developers saying weak demand for office space was putting them off starting new projects. “Developers are pausing schemes because leasing sentiment is difficult at the moment,” Mike Cracknell, director at Deloitte Real Estate, said. “Occupiers are struggling to get people back into their offices, let alone worrying about a lease expiry that’s coming up.”

Daily Mail, Page: 67 The Times, Page: 45

CORPORATE NEWS – MONDAY 23RD NOVEMBER 2020

Frasers warns against sweetheart deal for Edinburgh Woollen Mill

Frasers Group has warned FRP Advisory – administrators to Peacocks, Jaeger and Edinburgh Woollen Mill – that they must avoid giving a preferential deal to the former owners of the collapsed retail group.

Financial Times, Page: 11

ECONOMY NEWS – MONDAY 23RD NOVEMBER 2020

Chancellor could save £300bn by trimming the fat

Analysis by the TaxPayers’ Alliance suggests the Chancellor could save £300bn over the course of the next five years without increasing taxes. Rishi Sunak would have to tackle waste and make dramatic cuts to public expenditure including scrapping public sector pay rises and bringing overseas aid to an end. John O’Connell, chief executive of the TPA, said: “The Government’s manifesto commitments and the economic challenges of the coronavirus crisis can only be met with bold action that protects taxpayers. Ministers must refuse the tired argument that there is no more fat left to trim.” Separately, the Daily Mail claims public sector waste and extravagance has cost the taxpayer £5.6bn this year, with Whitehall mandarins taking home at least £42m in bonuses last year while £81m was paid to public-sector workers to carry out union tasks. Meg Hillier, chairman of the public accounts committee, said: “There is no magic money pot – this is taxpayers’ money that’s being spent at a time when the low-paid and hard-working people have seen a massive cut in income or lost their livelihood.”

Daily Express Daily Mail, Page: 1, 10-11, 18

Brexit and Covid spark reshoring switch

The coronavirus pandemic and Brexit have prompted businesses to bring production back to the UK with factories predicted to make up to £4.8bn more goods for British retailers in the next 12 months. A report by Alvarez & Marsal and the research group Retail Economics says structural weaknesses in global supply chains, highlighted by the pandemic, and the threat of tariffs through a no-deal Brexit combined with increased demand for sustainable products, has persuaded retailers to consider alternatives to sourcing from the far east, for example. Separately, PwC expects Black Friday spending to fall 20% to £6.2bn following a slump in sentiment, particularly among those at risk of losing their job.

The Guardian, Page: 35 The I, Page: 22

OTHER NEWS – MONDAY 23RD NOVEMBER 2020

EU spending mostly suspect

The European Court of Auditors has refused to give the 2019 EU budget a clean bill of health, branding more than half of last year’s £142bn expenditure as “high-risk”.

Daily Express, Page: 4

Contact Paul Southward

Paul Southward


NEWS – WEEKEND TO 22ND NOVEMBER 2020


NEWS – WEEKEND TO 22ND NOVEMBER 2020

NEWS ROUNDUP

TAX NEWS – WEEKEND TO 22ND NOVEMBER 2020

SATURDAY

UK facilitates a third of tax dodging

Analysis by the Tax Justice Network suggests that the UK and its overseas territories are responsible for more than a third of global tax avoidance each year. The report says abuse of tax systems by multinational firms and wealthy individuals deprived countries of $427bn, with more than $160bn facilitated by the UK and its territories and dependencies – with the UK itself responsible for $42bn of tax losses. The study says Europe lost the equivalent of one-eighth of its health budget to tax dodging last year. It also highlights that wealthy countries are responsible for 98% of tax avoidance. The Tax Justice Network is calling on governments to introduce an excess profits tax to recoup money from multinationals that have “short-changed” nations, with CEO Alex Cobham adding that a wealth tax alongside this “would ensure that those with the broadest shoulders contribute as they should”.

The Independent, Page: 40

Stamp duty receipts rise 27%

HMRC figures show that stamp duty receipts for Q3 were 27% higher than in Q2. Overall transactions were up 68%, with the easing of the coronavirus lockdown measures and the introduction of the stamp duty holiday driving activity in the property market. The number of residential transactions were up by 72%, with non-residential deals up 38%. However, year-on-year comparisons show transactions in Q3 were down 18% on the third quarter of 2019 to 228,900, while receipts dropped by 43% from £2.4bn to £1.35bn. Meanwhile, ministers have been warned that the housing market could go into sharp reverse next year if the stamp duty holiday is not extended beyond the current cut off at the end of March 2021. Andrew Wishart, a property economist at the consultancy Capital Economics, believes that policymakers should extend the holiday “to avoid a damaging downturn”.

The Times, Business, Page: 54 The Independent, Page: 42 Financial Times, Money, Page: 3 The Guardian Daily Express The Sun, Page: 2

CGT plan would make the UK ‘an outlier’

City AM ’s Hannah Buttle compares CGT to similar levies in other countries, saying that an Office for Tax Simplification recommendation that would double the CGT rate would make the UK an “outlier”. The proposed shift would see the rate for those in higher income tax brackets jump to 40%, a move Miles Dean at Andersen says would see wealthy foreigners “shunning” the UK and wealthy Brits leaving. Ms Buttle notes that Germany and France levy CGT at 25% and 30% respectively, while in Norway, Sweden, Finland and Denmark top rates range from 30% to 42%, while Iceland’s top rate is 22%. In the US, the top rate is 20% but individual states can levy additional CGT. Belgium, New Zealand, Singapore and Switzerland are among nations that have no capital gains tax.

City AM

Sunak plots pensions tax relief cut

The Times reports that Rishi Sunak is considering plans to cut pensions tax relief for higher earners in a bid to boost Britain’s coronavirus-hit finances. The paper says the Chancellor has been mulling an array of options for raising taxes as he looks to balance the books but his options are limited by the Prime Minister’s insistence that income tax, VAT and national insurance must not increase.

The Times, Page: 18

IDS: Spend and borrow binge would deliver a tax hit

Former Conservative leader Sir Iain Duncan Smith has warned that a “spending and borrowing binge” to help the country foot the coronavirus bill would only serve to “cripple the business sector with higher taxes”. His warning came in a report by the Centre for Social Justice think-tank which says the path to saving the economy post-pandemic is not “an ever-increasing rollercoaster of tax and spend”.

The Daily Telegraph, Page: 9

Wealth tax risks worsening the CGT regime

Edward Troup, a former first permanent secretary at HMRC, has told the Treasury Select Committee that “defects” in the existing tax system need to be fixed before a wealth tax is considered.

Financial Times, Money, Page: 3

Capital gains tax should be fairer and simpler

Paul Lewis in the FT says he was surprised that reform of CGT proposed by the Office for Tax Simplification has drawn criticism, arguing it could deliver a simpler and fairer tax.

Financial Times, Money, Page: 7

SUNDAY

Sunak prepares to begin rebalancing finances this spring

In an interview ahead of the Government spending review this week, Rishi Sunak has revealed that he intends to begin “returning to sustainable public finances” by the spring. Figures on the state of the economy to be published this week will mean “people will see the scale of the economic shock laid bare”, he said. “Right now, the focus should be on supporting the economy, protecting as many jobs as possible and providing the money required to combat the coronavirus.” He added: “Obviously, you can’t sustain borrowing at this level indefinitely.” When asked whether returning to sustainable public finances meant tax rises were on the way, the Chancellor said: “Once we get through [the crisis], we’ll have to figure out what the best way [forward].” The Sunday Times points out that Mr Sunak is looking at raising capital gains tax and cutting higher-rate pensions tax relief. In a speech on Wednesday, he is expected to announce £3bn of new money for the NHS to help it cope with the COVID-19 crisis.

The Sunday Times, Page: 1 The Sunday Telegraph, Page: 2

HMRC has little chance of recovering stolen furlough cash

HMRC would need to double its work force in order to pursue fraudsters who stole billions in furlough and bounce back loan cash, according to analysis carried out by the legal services firm, Integrated Dispute Resolution. Kevin Humphreys, tax expert at IDR, said: “HMRC would need 54,500 staff to claw the coronavirus losses back, broadly speaking, its entire UK workforce.” He said one solution might be for the Government to work with private firms to target fraudsters and tax dodgers. Separately, Blick Rothenberg has warned small businesses that have claimed under the furlough scheme that they could face extra tax scrutiny. It warns clients to be prepared for “random or selective” investigations.

The Sunday Telegraph, Page: 12

Taxing our way out of crisis will backfire, Sunak told

The Chancellor has been warned that using tax rises to extricate the UK from its financial woes “would massively backfire” on the Government and risks permanent economic stagnation. David B Smith, a former City economist, argued in a Politeia paper that Britain’s tax burden already appeared close to the upper limit of “historic sustainability” before the pandemic, with public spending at the “high end of danger zone”. He adds: “The concern now is that the recent UK growth trend of around 1.5% each year will collapse to zero, or remain negative, even after the COVID-19 crisis has burned itself out.”

Sunday Express, Page: 12 The Sunday Telegraph, Page: 2

SMEs NEWS – WEEKEND TO 22ND NOVEMBER 2020

SUNDAY

Britain and Canada sign post-Brexit Continuity Agreement

The UK and Canada have signed a trade agreement designed to provide continuity for businesses and workers in both countries post-Brexit in a move expected to pave the way for negotiations on a tailor-made deal between the two countries next year. The UK-Canada Trade Continuity Agreement, which is subject to final legal checks, will not only protect the flow of £20bn worth of goods and services between the countries after Brexit, but is “also part of a much bigger strategic play to deepen trading ties with nations beyond Europe,” the Department for International Trade said. Mike Cherry, Federation of Small Businesses chairman, said: “There was always a danger that the end of the transition period would mean losing wider international market access that we enjoyed as part of EU membership. The fact that this new agreement upholds the small business chapter that was previously in place is very welcome.”

The Sunday Telegraph, Page: 2 Reuters Sunday Express, Page: 8

PENSIONS NEWS – WEEKEND TO 22ND NOVEMBER 2020

SUNDAY

Majority of over-55s unaware of triggering Covid tax trap that cuts pension limit by 90%

Hundreds of thousands of savers have dipped into the pension during the coronavirus pandemic. However, NFU Mutual notes that 80% of those aged between 55 and 64 are unaware their future pension contributions will be capped after making a withdrawal. Withdrawing income from some types of pension triggers the money purchase annual allowance (MPAA), which reduces the amount a saver can pay in with tax relief by 90%, from £40,000 to just £4,000. More than 347,000 people made a withdrawal from their nest egg between June and September, an increase of 20,000 compared with 2019, according to data from HMRC. Ian Browne from Quilter called on the Chancellor to relax the MPAA triggers for at least the current tax year so people were able to recover the funding gap when their finances were in better shape. However, Aviva’s Alistair McQueen said the Treasury was unlikely to listen to these calls as the Government deficit was approaching £ 400bn. Mr McQueen advised savers against relying on Mr Sunak to relax the purse strings further while the ­pandemic was still ongoing.

The Sunday Telegraph

REGULATION NEWS – WEEKEND TO 22ND NOVEMBER 2020

SATURDAY

FRC calls for end to easing of pre-emption rules

The Financial Reporting Council (FRC) says listed companies will have to resume first-refusal rights for existing shareholders when they raise capital, bringing an end to a relaxation of pre-emption rights rolled out in March. The FRC-based Pre-Emption Group has said the relaxation in pre-emption rights, which was designed to speed up capital-raising for companies hit by the pandemic, will not be extended beyond the November 30 deadline. This means that as of December, firms will have to resume giving existing shareholders first refusal on new share issues.

Financial Times The Times, Page: 51 Reuters City AM

SUNDAY

City should have been championed in Brexit talks

The Lord Mayor of London, William Russell, has accused the Government of “missing the point” of the City as a key national asset after failing to champion financial services in Brexit talks. Russell said the Government’s approach to financial services in the talks was “disappointing” as the Square Mile faces up to the loss of passporting rights and regulatory equivalence from January. He said the City “would have loved to have had more representation”, claiming that the UK’s financial sector has been a victim of its own success. A Treasury spokesman said the Government planned to “renew the UK’s position as the world’s pre-eminent financial centre”. The spokesman added: “By bolstering the dynamism, openness and competitiveness of the sector, we will ensure the UK moves forward as an attractive and well-regulated market, leading the world in pioneering new technologies and shifting finance towards a net-zero future.”

The Sunday Telegraph, Business, Page: 3

FINANCIAL SERVICES NEWS – WEEKEND TO 22ND NOVEMBER 2020

SATURDAY

Treasury: Banks best placed to chase coronavirus loans

The Treasury insists banks should be responsible for chasing up and restructuring loans made to struggling businesses during the coronavirus crisis, despite City lenders calling for government help in dealing with the issue. With analysis suggesting that around £35bn of lending could become unsustainable, lobby group TheCityUK and EY had called on ministers to offer support, saying a ‘UK Recovery Corporation’ could turn risky debts into more manageable forms like tax liabilities. Responding to a Treasury Committee report highlighting the issue, the Treasury said: “We remain of the view that accredited lenders, not the government, are best placed to support borrowers [to] repay government-guaranteed loans.”

City AM

CORPORATE NEWS – WEEKEND TO 22ND NOVEMBER 2020

SATURDAY

Landlords approve Clarks’ rent plan

Shoe business Clarks has seen landlords back its rescue plan, with 90% of its creditors voting in support of a CVA that will see the firm pay no rent on a number of stores. The retailer, which was rescued in a £100m investment by private equity firm LionRock Capital earlier this month, says that all 320 stores will remain open, with rent cut to zero at 60 while the rest will see rent calculated on the store’s earnings. Deloitte’s Gavin Maher said the CVA and proposed investment from LionRock “will provide a stable platform upon which the management’s transformation strategy can be delivered.”

The I, Page: 78 Daily Star, Page: 2 Daily Mail

SUNDAY

KPMG hired to probe Russian gold miner’s deals

London-listed Russian miner Petropavlovsk has hired KPMG to conduct a forensic probe into several related-party transactions over the past three years as the company’s refreshed board attempts to move on from its troubled past.

The Sunday Times, Business, Page: 2

PROPERTY NEWS – WEEKEND TO 22ND NOVEMBER 2020

SATURDAY

House building falls by a third

Housebuilders are set to deliver a third fewer new homes this year, with some of the decline attributed to the impact of the coronavirus crisis. Britain’s seven largest house builders – who account for 43% of the country’s new housing supply – have reported property completion figures that are down by 35% on average from a year ago. A survey from the Home Builders Federation and development finance provider Close Brothers Property Finance saw 44% of developers identify the pandemic as a barrier to new completions, while 83% cited delays in securing planning permission or discharging conditions as a factor.

Daily Mail

EMPLOYMENT NEWS – WEEKEND TO 22ND NOVEMBER 2020

SATURDAY

Youth unemployment at four year high

One in twenty young people are currently unemployed, according to the Office for National Statistics, with this the highest level in four years. The analysis shows that 350,000 people aged 16-24 were classified as unemployed between July and September. The report says 7% of young men are unemployed, with the rate at 3% among young women.

City AM

SUNDAY

Scrapping duty-free shopping could cost 40,000 jobs

The Association of International Retail (AIR) has warned Rishi Sunak that 25,000 retail staff and 15,000 factory workers who make luxury goods for top British brands face redundancy after the decision to axe the tax-free perk at the end of the year.

The Mail on Sunday, Page: 17

ECONOMY NEWS – WEEKEND TO 22ND NOVEMBER 2020

SATURDAY

Government borrowing set to hit £400bn

The cost of the coronavirus pandemic has seen the national debt climb to its highest level in 60 years. Government borrowing totalled £214.9bn in the first seven months of the financial year, putting it on track to reach almost £400bn over the full year. This would be a record and more than double that seen following the global financial crisis a decade ago. The UK’s national debt has risen to £2.08trn and has exceeded the size of the economy since May. It is now worth 100.8% of national income, a level not seen since the start of the 1960s. Howard Archer, chief economic adviser to the EY Item Club, said it was difficult to estimate the annual deficit amid uncertainty over coronavirus restrictions, but said he expected it to hit £400bn. He added: “The likely renewed economic contraction in the fourth quarter, caused by lockdown in England, will reduce receipts and further put up the deficit”. Dr Jonathan Gillham, chief economist at PwC, said people should not be “overly concerned” by the debt levels, with the Bank of England having committed to buy another £150bn of public debt, while the UK’s credit rating is relatively stable and borrowing remains cheap.

The Times, Page: 52 Daily Mail, Page: 99 The Guardian, Page: 40 The Independent BBC News

Retail sales rise by 1.2% in October

Figures from the Office for National Statistics show that retail sales rose in October, with sales volumes climbing 1.2% compared to September to deliver the sixth consecutive monthly increase. Year-on-year, October’s sales were up 5.8% on October 2019. While instore sales fell 3.3% year-on-year as some regions were placed under tougher restrictions due to coronavirus case numbers, online sales were up 52.8% on last October. Some of the increase recorded last month has been attributed to people bringing forward Christmas shopping in anticipation of further restrictions being rolled out. Ian Geddes, head of retail at Deloitte, said 2020 has seen “significant behavioural change” among consumers, adding that some lockdown habits look set to stay, with the shift to online shopping the most notable. Lisa Hooker, consumer markets leader at PwC, comments: “Looking ahead to December, with online delivery capacity already stretched to its limits, retailers will be hoping for a swift lifting of lockdown restrictions and that consumers continue to show they can bounce back into spending mode. ”

The Daily Telegraph, Page: 38 Daily Express, Page: 73 The Independent, Page: 39 Daily Mail The Scotsman, Page: 39

SUNDAY

Treasury set to borrow almost £500bn this year

The Office for Budget Responsibility is expected to confirm this week that the Treasury will borrow almost £500bn this year, more than double the £227bn gilt sales in the year after the financial crisis. The Treasury’s Debt Management Office committed to at least £385bn in gilt sales by the end of November, already more than double its original March pre-Covid £156.1bn estimate for the entire financial year. Antoine Bouvet, senior rates strategist at ING, said: “The total figure could well rise above the £500bn market depending on the length and take-up of the furlough scheme, among other factors.” Meanwhile, Paul Johnson, the director of the Institute for Fiscal Studies, said he did not see “any possibility of the books being balanced this decade, if not for longer”.

The Sunday Telegraph, Business, Page: 1

OTHER NEWS – WEEKEND TO 22ND NOVEMBER 2020

SATURDAY

Sage to invest in expansion

Accountancy software group Sage has revealed an intention to expand its cloud-based business. CEO Steve Hare said it plans to invest an extra £50m to £60m in research, development, sales and marketing to grow the business and improve its offering across accounting, payroll and human resources. Sage said that its investments would squeeze profit margins next year but “drive recurring revenue growth and new customer acquisition, generate efficiencies and, over time, lead to significant value-creation through sustainable profit and cash generation”. Sage reported a 3.7% decline in underlying operating profit to £391m for the year to September.

The Daily Telegraph, Page: 36 The Times, Page: 57

Contact Paul Southward

Paul Southward


NEWS – FRIDAY 20TH NOVEMBER 2020


NEWS – FRIDAY 20TH NOVEMBER 2020

NEWS ROUNDUP

TAX NEWS – FRIDAY 20TH NOVEMBER 2020

Chancellor urged to resist CGT ‘tax raid’

The Daily Mail’s Alex Brummer says that while the Chancellor will recognise the need for measures to address the state’s coronavirus bill, he must also recognise that the “worst possible way” of doing so would be to impose “swingeing” taxes. Pointing to an Office for Tax Simplification recommendation that would see capital gains taxed at the same rates as income, Mr Brummer says this would “stifle recovery and prosperity” by driving up taxation on enterprise and entrepreneurship, while trimming back tax-fee allowances would hit middle-income workers. He argues that increasing the CGT burden of capital gains on enterprise, savers and second property owners would “destroy the economy’s dynamism.”

Daily Mail, Page: 78

Minimum alcohol pricing would hit tax take

The Institute for Fiscal Studies has analysed the impact of Scotland’s minimum alcohol pricing scheme and calculates that if the 50p minimum unit price were extended to the whole of the UK under the existing system of alcohol taxes, tax revenue would fall by around £390m per year.

The Scotsman, Page: 5

SELF-ASSESSMENT TAXPAYERS WARNED ABOUT SCAMS

HMRC are reminding taxpayers to stay alert for criminals claiming to be from HMRC as the deadline for submitting self-assessment (SA) tax returns approaches. In the last 12 months, HMRC have responded to more than 846,000 referrals of suspicious HMRC contact from the public and reported over 15,500 malicious web pages to internet service providers to be taken down. Almost 500,000 of the referrals from the public offered bogus tax rebates.  Further information can be found at: –

self-assessment-taxpayers-warned-about-scammers-posing-as-hmrc

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CORPORATE NEWS – FRIDAY 20TH NOVEMBER 2020

One in seven businesses in fear of collapse

Around one in seven UK companies say they were at risk of collapse, according to a new report from the Office for National Statistics. The study saw 14% of UK companies say they have “low or no confidence” that they will survive the next three months. While 40% had moderate confidence that their business would survive the next three months, another 40% had high confidence of making it through the period. Pessimism was most apparent among hotels and restaurants where 34% of businesses said they would struggle to make it through the next 12 weeks. It was also found that across all industries, 7% of businesses expect to temporarily or permanently close a site in the next fortnight.

The Guardian City AM BBC News Sky News

Peacocks and Jaeger collapse

Retailers Peacocks and Jaeger have fallen into administration, with owner Edinburgh Woollen Mill Group (EWM) failing to find a buyer for the fashion chains. While no redundancies have been announced and no stores have closed, the collapse puts more than 4,700 jobs and almost 500 shops at risk. EWM said the “continuing deterioration” of the retail sector driven by the coronavirus pandemic has made the process of finding a buyer “longer and more complex” than it would have hoped. Tony Wright of FRP Advisory said Jaeger and Peacocks are “attractive brands”, adding that administrators are in advanced discussions with potential buyers and “working hard to secure a future for both businesses.”

The Guardian, Page: 33 The Times, Page: 37 The Daily Telegraph, Business, Page: 1 The Independent, Page: 51 Daily Mail, Page: 8 Daily Express, Page: 5 Daily Mirror, Page: 2 The Sun, Page; 14 BBC News

Nightclub owner asks for rent holiday

Deltic Group, the UK’s largest nightclub operator, has asked for a break from rent payments, warning that it is likely to collapse unless a sale can be agreed. Deltic put itself up for sale after extended closures during the coronavirus pandemic threatened to force it into liquidation. BDO , which is advising Deltic on the sale process, is reportedly set to select a preferred bidder in the coming days.

City AM

Cineworld mulling CVA

Cineworld is considering putting its business in Britain through a CVA as part of a wider restructuring, a move that would see the world’s second-largest cinema operator seek lower rents and possibly close some of its 127 UK screens. In addition to exploring a CVA, Cineworld is in individual discussions with landlords over possible rent cuts.

The Times, Page; 39 The Daily Telegraph, Business, Page; 3 Daily Mail, Page: 77 The Sun, Page: 49

Capital confidence hit

An index compiled by the ICAEW shows that uncertainty around Brexit and the coronavirus crisis have hit business confidence in London, with the poll of more than 3,500 senior managers showing optimism in the capital is the weakest of any region in the UK, France, Germany and Netherlands. The report said: “The EU is a particularly important market for London’s globally prominent financial and business services sectors. So, uncertainty over whether any trade deal will encompass services or whether there even is a trade deal is likely to be weighing heavily on the capital’s businesses.”

The Times, Page: 40

Cash and capital planning essential

Derek Gemmell of Anderson Anderson & Brown lauds the benefits of planning, saying discussions with businesses operating successfully show that cash management and preservation is critical. Writing in the Press and Journal, he says firms need to have a clear short and medium-term view of cash and working capital, identifying potential gaps early so that solutions can be found.

The Press and Journal, The Business, Page: 4

EMPLOYMENT NEWS – FRIDAY 20TH NOVEMBER 2020

Public sector pay freeze planned

The Times’ Steven Swinford reports that the Chancellor is set to freeze the pay of almost 4m public-sector workers as part of plans to rebalance the books, with public finances hit heavily by the coronavirus pandemic. The Institute for Fiscal Studies think-tank said plans that would see 3.7m workers’ wages frozen would save £3.4bn. Rishi Sunak is said to be preparing to announce the pay freeze, which would exclude NHS workers, in next week’s spending review. Meanwhile, the Centre for Policy Studies think-tank has said freezing public sector pay could save the Treasury £23bn over the next three years, adding that excluding staff within the health service would mean the Treasury would instead save £15bn. It notes that adding a penny to the basic rate of income tax would raise around £16bn over the same period.

The Times, Page: 1 The Daily Telegraph, Business, Page: 1

UK salaries up 1.7%

Private sector employees received a better-than-forecast average salary increase in 2020, with ECA International’s Salary Trends report showing an average increase of 1.7% – beating the 1.1% that had been forecast. The report uses a measure based on the difference between the nominal salary increase (2.5%) and inflation (0.8%). The report says UK workers picking up a pay rise in 2021 are set to see a 1.3% real salary increase. Across Europe, real terms salaries climbed 1.5%, with Ukraine seeing the biggest increase at 3.6%.

City AM

INDUSTRY NEWS – FRIDAY 20TH NOVEMBER 2020

Unpacking the pre-pack review

Writing in the Press and Journal, Michael Reid of Meston Reid & Co looks at a Government review of pre-pack administration and changes draft regulations propose. He highlights a mooted change that would stop an administrator from selling any of the company’s property to a person connected with that company within the first eight weeks of its appointment without obtaining either prior approval from creditors or an independent written report.

The Press and Journal, The Business, Page: 19

INTERNATIONAL NEWS – FRIDAY 20TH NOVEMBER 2020

Wirecard’s former chief refuses to pin collapse on regulators

Markus Braun, former CEO of scandal-hit payments company Wirecard, has told an inquiry into the firm’s collapse that no blame can be levelled at regulators, while auditor EY was “apparently comprehensively deceived”.

Financial Times, Page: 4

ECONOMY NEWS – FRIDAY 20TH NOVEMBER 2020

Treasury’s Scholar: Debt could reach 105% of GDP

The Treasury’s senior civil servant, Sir Tom Scholar, says Government spending rolled out amid the coronavirus crisis could see national debt climb to 105% of GDP. Permanent Secretary Sir Tom told the Commons Public Accounts Committee that while official forecasts from the Office for Budget Responsibility have yet to be released, the economy is likely to see the worst annual contraction in three centuries. Noting that the Bank of England last week said it expects the economy to have contracted by 11% year-on-year in 2020, he said: “It is extremely serious.”

The I, Page: 8 Daily Mail

UK economy sees biggest contraction among G7

Data from the Organisation for Economic Co-operation and Development (OECD) shows that the UK economy contracted more than that of any other G7 nation in the first nine months of the year, with GDP down 9.7% in Q3 compared to end of 2019. With many economies hit by the coronavirus pandemic, the next largest decline across G7 nations was in Canada, which saw a 4.7% contraction, with the US seeing the smallest contraction at 3.5%. Across the 36 OECD nations, GDP fell by 4.3%.

The Independent

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NEWS – THURSDAY 19TH NOVEMBER 2020


NEWS – THURSDAY 19TH NOVEMBER 2020

NEWS ROUNDUP

TAX NEWS – THURSDAY 19TH NOVEMBER 2020

MPs told wealth tax would be costly and complex

Experts have told MPs that a wealth tax would be inefficient and difficult to impose. With a wealth levy among possible options as the UK looks at ways to cover the cost of the coronavirus crisis, analysts have told the Treasury Select Committee that a tax on the value of property, pensions and assets is likely to be counterproductive, saying that such policies have often proven unsuccessful in other countries, with many nations eventually abandoning them. Sir Edward Troup, a former first permanent secretary at HMRC, warned that calculating the wealth to be taxed would prove extremely difficult, telling the committee that while a wealth tax is possible, it would be complex and expensive, adding that it is unclear whether the resources it would require would “justify whatever you would raise from it.” Barrister Emma Chamberlain commented: “I am not sure we want to turn our nation into a nation of bookkeepers and valuers, which an annual wealth tax may well force us into,” while Arun Advani at the University of Warwick suggested ministers would be better off focusing on reform of inheritance and capital gains taxes, dismissing a wealth tax as “a poor second best”.

The Daily Telegraph, Business, Page: 3

Treasury defends tax-free shopping plan

Treasury Minister Kemi Badenoch has defended plans to scrap tax-free shopping once Britain leaves the EU, saying keeping VAT-free shopping in place would see the UK handing visitors from the EU a subsidy of almost £1bn-a-year. With business leaders questioning the Treasury’s decision, saying it will lead to job losses and cost the economy £3.5bn, the Treasury Select Committee has turned its attention to the matter. In a letter to committee chair Mel Stride, Ms Badenoch said that leaving tax-free shopping as it currently stands would mean visitors from the EU will be able to reclaim VAT on goods, resulting in a “deadweight loss” by subsidising their spending. While the VAT retail export scheme costs HMRC around £500m-a-year, Ms Badenoch said extending it to EU citizens would drive the annual bill to £1.4bn, an increase of £900m.

The Daily Telegraph, Business, Page: 3

Proposed CGT shift worries entrepreneurs

Sam Smith, CEO of stockbroker finnCap, says some business owners and entrepreneurs are looking to sell their companies ahead of a potential increase in capital gains tax (CGT). Pointing to recommendations in an Office of Tax Simplification review which suggests cutting CGT allowances and aligning the tax more closely with income tax rates, Ms Smith said: “Companies will move out of Britain if CGT on selling your business fundamentally changes.” Noting that people are nervous about a potential reform of CGT, she said some businesses have started to move overseas already. She added: “We think the reward for investing in a business needs to be recognised in tax rates.”

The Daily Telegraph

Scotland unlikely to see tax hikes

Finance Secretary Kate Forbes says people in Scotland are unlikely to face tax rises or fresh austerity cuts in the upcoming budget, telling MSPs that “now is not the time” to raise taxes. Ahead of her 2021/22 budget, which is to be published in January, she told Holyrood’s finance committee that think-tanks broadly agree that “now is not the time for fiscal consolidation.” Ms Forbes also said the relative performance of Scottish taxation compared with the rest of the UK was “critical”.

The Scotsman, Page: 4

CORPORATE NEWS – THURSDAY 19TH NOVEMBER 2020

Multinationals pull back on UK investment plans

Analysis from EY shows that just 43% of overseas multinationals are pursuing UK investments planned before the coronavirus pandemic, down from 72% in April. This would equate to a drop of as many as 499 projects, a decline of up to 45% on 2019 when 1,109 projects were recorded. The study found that 5% of companies had cancelled their investment plans, 35% had scaled back projects and 17% had put them on hold. The proportion of overseas companies intending to invest in the UK in the next year has fallen to 25%, marking a decline from a decade high of 31% in April. Earlier this year, EY found that, for the first time in two decades, the UK was not Europe’s top destination for foreign investment, with France preferred. However, EY’s Alison Kay says the overall outlook for the UK is stronger than that for Europe”, pointing to a solid base of digital technology, research and development and manufacturing.

The Times, Page: 47

M&C Saatchi’s three amigos to go

M&C Saatchi has announced that CEO David Kershaw, executive chairman Jeremy Sinclair and executive director Bill Muirhead – dubbed the “three amigos” within the industry – will all step down from the advertising group. The departures come in the wake of an accounting scandal that unfolded last year and prompted the resignation of Lord Saatchi and three directors. The firm was found to have overstated its accounts by £14m after PwC unearthed irregularities dating back to 2014. Mr Kershaw will be succeeded as chief executive by Moray MacLennan, while Gareth Davis will take over from Mr Sinclair as chair.

The Daily Telegraph, Business, Page: 1 Financial Times, Page: 12 The Times, Page: 45 Daily Mail, Page: 79

Lockdown hits the high street

The Yorkshire Post considers the climate for high street retailers, citing a PwC report showing that more than 11,000 shops closed during the first half of 2020 amid to the coronavirus lockdown, resulting in a record net decline of over 6,000 stores.

Yorkshire Post, Business, Page: 3

EMPLOYMENT NEWS – THURSDAY 19TH NOVEMBER 2020

Freelance shift points to hidden unemployment

A new Institute for Fiscal Studies (IFS) study suggests that some of the surge in self-employment may reflect “hidden unemployment” rather than a desire to be an entrepreneur or “people pursuing appealing business opportunities”. The report says the increase in the number of self-employed people from 2.3m in 2000 to nearly 4m last year has been “entirely driven” by sole traders and owner-managers of companies with no employees. It adds that these people “appear to be an increasingly marginalised group compared with employees”, saying their increasing prevalence may partly reflect a lack of opportunities in traditional employment. IFS analysis shows that in 2019/20, the self-employed earned 30% less than their employed counterparts, while a quarter of the newly solo self-employed were most recently unemployed. Andy Chamberlain, director of policy at the Association of Independent Professionals and the Self-Employed, has questioned the IFS’ findings, saying the “vast majority” of people have made “a positive choice to move into the sector”, pointing to research showing that just 5% of people said they began working for themselves because they had lost their previous job.

The Times, Page: 24

Report flags barriers to LGBTQ+ progression

Research commissioned by the Financial Reporting Council (FRC) has revealed that LGBTQ+ people have made a significant contribution within the business community, yet the barriers to their progression and extent of discrimination has often been stark. The report found that too often corporate culture has not been a welcoming environment for LGBTQ+ people to be themselves. In progressing to the highest ranks of corporate leadership, the leaders interviewed for the report often faced discrimination and had to make personal sacrifices. As a result, many chose not to disclose their LGBTQ+ identity until late into their careers. The FRC says firms should set clear policies and targets to nurture their next generation of LGBTQ+ leaders and diversify the workforce. The report adds: “To drive change, companies should regularly capture and transparently report the experiences of LGBTQ+ employees”.

Daily Mail The I Reuters

PROPERTY NEWS – THURSDAY 19TH NOVEMBER 2020

Record high UK house prices in September – ONS

Office for National Statistics (ONS) figures show that the average UK house price climbed by 4.7% in the year to the end of September, hitting a record high of £245,000. The ONS says pent-up demand and the stamp duty holiday are likely to be among factors that drove the increase in typical values. In England, average prices were up 4.9% to £262,000, while homes in Scotland saw the typical price climb 4.3% to £162,000. Wales recorded an increase of 3.8%, taking the average to £171,000, and Northern Ireland saw a 2.4% increase as the average hit £143,000. The report also reveals that London registered a record high, with the typical house priced at £496,000 in September.

The Independent, Page: 56 Daily Mirror, Page: 21 Financial Times, Page: 2 Daily Mail City AM BBC News Sky News

ECONOMY NEWS – THURSDAY 19TH NOVEMBER 2020

Inflation rises in October

UK inflation reached higher-than-expected levels in October after increases in the cost of clothing and food, with the Consumer Prices Index up to 0.7% from 0.5% a month earlier. Although this exceeded analysts’ forecast that inflation would remain flat at 0.5%, it still falls short of the Bank of England’s 2% target. Office for National Statistics (ONS) figures show that the rising price of clothing and second-hand cars fuelled the increase, with the cost of food also up slightly. ONS deputy national statistician Jonathan Athow commented: “The rate of inflation increased slightly as clothing prices grew, returning to their normal seasonal pattern after the disruption this year.” PwC economist Hannah Audino said the gradual increase in consumer prices could be temporarily cut short as England’s second national lockdown restricts activity and demand but says a pick-up in household spending in the run-up to Christmas “could put upwards pressure on prices”.

The Times, Page: 42 The Independent, Page: 52 The Daily Telegraph, Business, Page: 3 The Guardian, Page: 34 Daily Mail, Page: 77 Financial Times City AM BBC News

BoE’s Haldane: Digital currencies could lower risk

Bank of England chief economist Andy Haldane believes risk in the financial system could be lessened by the use of digital currencies. He told TheCityUK’s annual conference that a “widely-used” digital currency could help manage record-low interest rates, saying it could provide a simpler way for rates to be levied on assets, mitigating against concern that lower rates would not be passed on to borrowers. Mr Haldane also noted that a shortfall in lending to SMEs could be addressed through the use of an open data platform that gives lenders more information on smaller firms, with banks often charging more for lending to entities they have less data on.

City AM

OTHER NEWS – THURSDAY 19TH NOVEMBER 2020

Experts fear £12bn pledge may not deliver net-zero emissions

While experts have welcomed the Government’s 10-point plan for putting the UK on track for net-zero carbon emissions by 2050, the Guardian says many fear that the planned £12bn of public investment may not be enough to deliver the necessary shift in the economy. The paper cites a PwC estimate that suggests £400bn of investment in green infrastructure is required in the next decade to meet the net-zero target, with the firm’s head of energy and utilities, Paul Jennings, saying: “Government is signalling an intent and an ambition, which is really positive, but the £12bn investment … may not be enough.” The Times also notes the PwC estimate.

The Guardian, Page: 22 The Times, Page: 6

Contact Paul Southward

Paul Southward