NEWS – THURSDAY 2ND APRIL 2020
Coranavirus – Support for self-employed
We have posted updated guidance: –
TAX NEWS – THURSDAY 2ND APRIL 2020
Treasury faces £5bn stamp duty hit
The Treasury could miss out on up to £5bn in stamp duty as the coronavirus crisis hits property sales. Estate agency Savills forecasts a drop of between £4.78bn and £3.47bn in the levy this year, figures that would mark a decline of between 40% and 56% on the £8.57bn tax take forecast before the pandemic. Analysis shows that 10,197 fewer properties were put up for sale in the first week of the social distancing measures rolled out by the Government when compared with the weekly average for 2019. The data, from View My Chain, a website which tracks UK property sales, also shows that there were 5,072 fewer house sales agreed and 2,078 more agreed sales fell through. Savills expects transactions and prices to improve in 2021, although the stamp duty haul will be down by between £800m and £1.56bn on previous expectations before bouncing back in 2022.
NHS staff warned over tax dodge schemes
With more than 20,000 former and retired health service staff returning to work to help tackle the COVID-19 outbreak, HMRC has reiterated a warning that rogue firms may target staff with aggressive tax avoidance schemes that promise workers they can take home up to 85% of their pay but risk opening them up to penalties for dodging tax. An HMRC spokesperson said: “It is shocking that unscrupulous promoters of tax avoidance schemes are targeting returning NHS workers during this difficult time.” Heather Self of Blick Rothenberg comments: “It’s an absolute disgrace that when we are relying on thousands of NHS staff to keep this country safe, unscrupulous promoters are offering schemes which put these workers at risk of losing money and falling foul of HMRC.”
Daily Mail, Page: 71
Tech tax comes into force
The UK’s digital services tax has come into force, with the levy to apply to revenues generated by social networks, search engines and online marketplaces. The 2% tax, which affects profitable companies which generate more than £500m a year in global revenues, will apply to any revenues generated through advertising to British users or revenues made through facilitating transactions. Firms liable for the levy will not need to make any payments until 2021, with the Treasury recently telling companies that it does not anticipate any to need to register and pay the tax “for some time”.
SMEs NEWS – THURSDAY 2ND APRIL 2020
Fifth of SMEs at risk despite aid package
Some 20% of UK SMEs are unlikely to receive the funding required to see them through the next four weeks, research from the Corporate Finance Network group of accountants claims, with between 800,000 and 1m firms at risk of going bankrupt. While Chancellor Rishi Sunak said a fortnight ago that firms would be able to discuss Coronavirus Business Interruption Loans (CBILs) of up to £5m with banks, thousands of companies have reported difficulties in contacting lenders or being told they are ineligible for the scheme. Kirsty McGregor, founder of the Corporate Finance Network, has warned that the UK could lose up to a million SMEs within the next month, saying this will be irreversible and “catastrophic” for the economy. Business Secretary Alok Sharma has said it is “unacceptable” for banks to refuse small businesses emergency coronavirus loans and said the financial sector should be doing “everything they can” to help companies. Chance llor Rishi Sunak is tomorrow expected to announce an overhaul of the bailout scheme for businesses, banning banks from asking small firms for personal guarantees on loans and removing a requirement for businesses to demonstrate that they have no other means of accessing funding.
BBC News Daily Mail, Page: 12 The Daily Telegraph, Business, Page: 1 The Guardian Daily Mirror, Page: 9 The Independent, Page: 50 The Sun, Page; 10 The Times, Page: 7 The I, Page: 7 The Scotsman, Page: 11
Owner-director support call
Blick Rothenberg has warned that owner-directors have fallen between the cracks in regard to Government support for the economy during the coronavirus pandemic. The firm’s Richard Churchill said: “Protecting these owner-director microbusinesses now is essential if we want to ensure our economic recovery once this crisis is over.”
Yorkshire Post, Business, Page: 5
CORPORATE NEWS – THURSDAY 2ND APRIL 2020
Finablr appoints CEO while CFO stands down
Finablr has appointed a new chief executive, with Bhairav Trivedi taking the role. The firm, which owns Travelex, also announced that CFO Rahul Pai has quit. Former CEO Promoth Manghat stepped down last month as the firm sought to accommodate requirements laid down by EY, its auditor. EY has since resigned over concerns about the composition of the board, corporate governance, related-party transactions and off balance sheet debt. The Times notes that Finablr last month discovered about $100m of cheques that may have benefited third parties and appointed an accounting firm, believed to be PwC, to prepare for “a potential insolvency appointment with a view to maximising value in the group”.
EMPLOYMENT NEWS – THURSDAY 2ND APRIL 2020
Employers using Zoom could be sued over privacy
Employees working from home who use Zoom to attend virtual meetings could sue their employers if they object to how the web conference tool handles their personal information. Workers who have to use the software, which shares personal data with other companies, may be entitled to a payout. James Castro-Edwards, partner at law firm Wedlake Bell, said: “There is a big risk an employee could ask for compensation… If a workforce was forced to use Zoom to communicate and it transpired that personal data was going to places that they hadn’t agreed to they could claim they had been distressed.”
ECONOMY NEWS – THURSDAY 2ND APRIL 2020
Manufacturing activity contracts
The IHS Markit / CIPS purchasing managers’ index has revealed that in the wake of the COVID-19 outbreak, new orders in the manufacturing sector were down to 47.8 points in March, representing a three-month low on an index where a score of below 50 indicates contraction. Duncan Brock, group director at the Chartered Institute of Procurement and Supply, commented: “The manufacturing sector was knocked sideways by the impact of COVID-19 and into contraction territory, experiencing some of the most challenging trading conditions since PMI records began.” Samuel Tombs, chief UK economist at consultancy Pantheon Macroeconomics, commented: “The PMI likely greatly understates the pace of the downturn now underway in the manufacturing sector,” adding that with consumers clamping down on discretionary spending due to ongoing uncertainty, the manufacturing sector “inevitably will struggle further.”
Contact Paul Southward