Category Archives: News Roundup





Businesses urge Sunak to extend VAT holiday

A poll conducted for the Telegraph by the Chartered Management Institute found 57% senior managers across private and public sectors think ministers should extend the VAT deferral scheme which helps businesses stay afloat during the coronavirus crisis. Between April and June, companies deferred a total of £27.5bn in VAT payments. Chancellor Rishi Sunak declined to renew it after it expired at the end of June. The survey also revealed that 35% of managers expect their organisation to shed jobs by the end of the year, although 53% agreed with the decision to end the furlough scheme.

The Daily Telegraph, Business, Page: 3

Tax us to pay for Covid recovery, world’s rich say

An open letter signed by 84 of the world’s richest people calls on governments around the world to hike taxes on the wealthy permanently to help pay for the economic recovery from the COVID-19 crisis. They are calling on politicians to “address global inequality and acknowledge that tax increases on the wealthy, and greater international tax transparency, are essential for a viable long-term solution”.

The Guardian. Page: 3

Chancellor must set out long-term recovery plan

Andrew Harding at the CIMA says the Chancellor needs to provide certainty on future tax and regulatory frameworks as part of efforts to “lay the groundwork to drive the long-term economic recovery”.

Financial Times, Page: 20

Decision due on Apple tax row

A ruling from the European General Court on Apple’s appeal against a €13bn bill for back taxes the European Commission says is owed to the Irish government is scheduled for Wednesday.

The Times, Page: 36


Triple-lock unlikely to survive the year

Experts have said that pensioners should brace themselves for the end of the state pension triple lock guarantee in the autumn. The Chancellor is reportedly planning to scrap the policy amid concerns that it has become unaffordable. It guarantees that the state pension rises every year by the highest of wage growth, inflation or 2.5%. But a sharp rebound in wages predicted next year could add £10bn to the benefits bill. Steven Cameron of Aegon said a double-digit increase in the state pension would be a hard sell and could spark intergenerational tensions. Retirees would have to foot their share of the pandemic bill, including a sacrifice of the annual boost in state pension.

The Daily Telegraph


Itsu puts CVA on the table

The Asian food chain Itsu has appointed Alix Partners to look at options for the company including a company voluntary arrangement (CVA). Itsu has been hit by the lack of commuting office workers, particularly in London, during the pandemic. Alix Partners is also handling the administration of Casual Dining Group, which has entered exclusive talks over a sale to Epiris, a private equity firm.

The Times, Page: 33


Work begins on tackling corporate debt pile

The Treasury is looking at possible solutions to the expected growth in corporate debt, with £45bn lent to SMEs which MPs would prefer were contributing to the recovery rather than struggling under their debt.

Financial Times, Page: 2


Output remains at 10-year low despite rise

Business output rebounded last month as service companies and factories reopened, according to the business trends report by BDO. However, activity remained drastically below normal levels. Overall, the output index rose by 11.16 points to 66.50 last month, still well short of the 95 level that represents positive growth, and significantly below the lowest point of the last recession, which hit a low of 79.28 in April 2009. Kaley Crossthwaite, a partner at BDO, said: “Although economic activity remains considerably suppressed, the recovery in output is an encouraging signal that the easing of restrictions has breathed life into certain sectors.”

The Times, Page: 35 The Daily Telegraph, Business, Page: 7

High street could see 250,000 job losses

Retail experts say as many as 250,000 jobs could be lost in the sector as the public shifts to online shopping and the Government’s support schemes start to come to an end. The prediction comes after John Lewis and Boots announced a raft of store closures and thousands of redundancies. Prof Joshua Bamfield, of the Centre for Retail Research, told the Sun that closures announced to date are the tip of the iceberg. He added: “All big retailers will be having talks as to how many stores they really need open in 2021.”

Daily Mail The Sun


Merkel’s government pressed to release conversations with former Wirecard chief

Conversations between Germany’s deputy finance minister Jörg Kukies and former Wirecard chief executive Markus Braun have been classified by the government in a move the left-wing Die Linke party described as “utterly unacceptable”.

Financial Times, Page: 4


HMRC investigator lost job after claiming Satan was on his PC

A fraud investigator lost his job in Risk and Intelligence Services at HMRC after telling managers he had begun to see demons. Paul O’Connor, a devout Christian, claimed his computer needed to be doused with holy water after Satan had appeared on his system, an employment tribunal has been told. Mr O’Connor was ultimately paid 12 weeks’ notice and compensation of more than £25,000 after being signed off work and subsequently deemed unfit to return. Mr O’Connor maintained that they had discriminated against him due to his religious beliefs – a claim dismissed by a judge.

The Daily Telegraph, Page: 10

Contact Paul Southward.

Paul Southward






Recession will put HMRC under pressure to raise revenue

After HMRC revealed that the tax gap had been reduced to a record low of 4.7%, or £31bn, experts point out that large slices of this is put down to “taxpayer error”, “failure to take reasonable care” or “legal interpretation” – where tax is not legally due, but HMRC was expecting it because it misunderstood the law. John Barnett at the Chartered Institute of Taxation, commented: “If even HMRC does not understand the law to the tune of £4.9bn, what hope is there for ordinary taxpayers faced with the same complexity in the system?” With the tax gap predicted to increase and tax revenue to shrink as the economy contracts, there is likely to be more pressure on HMRC to raise revenue. Tom Selby, a senior analyst at the wealth manager AJ Bell, said: “These efforts are likely to focus on people breaking or bending the rules to artificially reduce the amount of tax they pay. However, simplification of the rules that people are required to navigate and efforts to further modernise the system of reporting could also go a long way to reducing tax errors.” HMRC said: “We provide a wide range of support and guidance so all our customers can access all the information that they need to get their tax right.”

The Times, Page: 57

A data foundation for tax automation

As tax authorities have become more sophisticated about their own data management, they’re requiring more data, more frequently, from tax departments. At the same time, new regulations require finer levels of transaction detail, and U.S. tax reform has created ever more complexity. “Data management is a constant challenge for tax,” says Deloitte Tax partner Emily VanVleet. “Despite a host of new automation technologies that can be deployed for greater efficiency—including workflow tools, robotics, and AI – much of the actual data retrieval and processing is still done manually with spreadsheets.” Data wrangling is a fundamental process that can support and complement many of the latest technologies because of its ability to retrieve and aggregate raw data from multiple sources and in different formats, making it readily available for analysis and reporting. “Data wrangling can be deployed relatively easily, which makes it very inviting to tax functions because users can see real benefits soon after implementation,” says Joel Hermes, a partner at Deloitte Tax LLP. “It can offer quick wins while establishing a platform for more widespread tax automation. We like to think of this in terms of think big, start small, and act fast.”

CFO Journal

Labour conflicted over wealth taxes

Labour is fighting with itself over whether the party supports a wealth tax or not. Following reports that the shadow chancellor was no longer calling for tax rises, Dan Carden, the shadow financial secretary, broke ranks to dismiss as “false” reports that leader Sir Keir Starmer had abandoned plans for a new tax on wealth. Mr Carden said: “Labour is clear that the cost of the crisis should be borne by those with the broadest shoulders. We are following very closely the academic research under way by LSE Inequalities, CAGE Warwick and others on how a UK wealth tax would work.”

The Times, Page: 14


Planning overhaul and tax cuts planned for ‘freeports’

Under Government plans for a post-Brexit economic revolution, Chancellor Rishi Sunak is preparing to introduce tax cuts and an overhaul of planning laws in up to 10 new “freeports” within a year of the UK becoming fully independent from the EU in December. Mr Sunak will use his autumn budget to invite bids from towns and cities to become freeports, where tax and regulatory changes will be introduced, including research and development tax credits, generous capital allowances, cuts to stamp duty and business rates, and local relaxations of planning laws. The Government believes the policy can transform ports into “international hubs” for manufacturing and innovation. Meanwhile, Michael Gove has announced that the Government is spending £705m to ensure that Britain’s “new borders will be ready when the UK takes back control on January 1 2021”, with or without a post-Brexit trade agreement. The work will lay the foundations for “the world’ s most effective border by 2025”.

The Sunday Telegraph, Page: 1, 2 The Sunday Telegraph The Sunday Times, Page: 2 The Mail on Sunday, Page: 4

Tories will struggle with inevitable need for tax rises, says Gauke

Former Tory Treasury minister David Gauke says in a piece for the Observer that tax rises will have to do “most of the heavy lifting” when it comes to paying for the state intervention needed to rescue the economy from the shock of the coronavirus pandemic. Mr Gauke says the country is heading towards an annual deficit of £350bn and that for the first time since the early 1960s the size of government debt will exceed the size of the UK economy. “The political challenge in raising tax by the necessary amount will be immense. Any plan will need to be seen as being fair – those with the broadest shoulders will have to bear the greatest burden – but must not undermine our attractiveness as a location for investment and wealth-creating individuals.” He goes on to add, however, that it is “not yet clear that the Conservative Party as a whole is reconciled to the reality that sound public finances wil l require higher taxes.” A range of other voices echo these sentiments and consider how various tax rises could make a dent in the country’s debt.

The Observer, Page: 1, 9, 45 The Sunday Times, Business, Page: 9

Labour’s wealth tax plans would cost £2,500 each

A tax on wealth by the Labour party could land six million people with an annual bill of £2,500, according to an estimate from the Conservative Research Department. The Tories claim that Labour is eyeing a system in operation in Norway – where everyone with savings and property worth more than £126,000 is hit with an annual charge of 0.85% above that amount. Labour appears split over the wealth tax policy with several members of the front bench taking different positions. The Express cites Paul Falvey, a tax partner at BDO, who believes “a UK wealth tax would probably take account of homes”.

The Mail on Sunday, Page: 6 Sunday Express, Page: 19 The Sun, Page: 2



Standard Life Aberdeen dumps Boohoo stock amid ethical concerns

One of Boohoo’s biggest investors has sold down its stake and labelled the retailer’s response to illegal pay allegations “inadequate”. Standard Life Aberdeen has now sold most of its 3% holding in the company which is embroiled in a scandal over claims its suppliers are paying staff less than the minimum wage and that Leicester factories where its clothes are made failed to protect staff from coronavirus. Multiple sources report of instances where staff are paid as little as £3 per hour with a dossier on another retailer, Quiz, put together by the Times now in the hands of the National Crime Agency and the Gangmasters and Labour Abuse Authority. Questions are being asked about the lack of enforcement, undocumented workers, collusion between bosses and workers who want to continue to receive benefits, and VAT fraud. One source told the Times: “It’s an open secret there are an army of accountants and lawyers who h elp these factories in Leicester shut and reopen by phoenixing companies.” The FT cites David Metcalf, the former director of labour market enforcement at HMRC, who said recently: “Often, HMRC doesn’t go after the people who don’t have records.” The Mail talks to one factory operator who freely admits to paying staff £4 per hour and a machinist who says she’s paid £5 per hour but her payslip reads £8.72.

The Daily Telegraph The Times, Page: 19 The Times, Page: 19 The Times, Page: 45 Financial Times, Page: 17 The Guardian Daily Mail, Page: 32


M&C Saatchi’s profits set to crash

There is speculation that the 2018 profits at M&C Saatchi could be marked down to zero by the advertising agency’s auditor PwC in another blow to investors. The company was hit by an accounting scandal last year that prompted four directors to leave. PwC has been carrying out an independent review of the agency’s accounts after KPMG, the firm’s auditor since 2012, resigned last September after clashing with the agency over fees.

The Mail on Sunday, Page: 112

Byron Burger staff braced for job cuts

Burger chain Byron filed notice of its intention to appoint administrators for a second time on Friday as KPMG continues its attempts to sell the chain. Byron, which has 1,200 staff across 52 outlets, is said to have received interest from three suitors. The Sunday Times says a pre-pack administration is the most likely outcome.

The Sunday Times, Business, Page: 1

Private hospital company NMC Health set to be sold

Alvarez & Marsal , the administrators to NMC Health, have appointed advisers from US firm Perella Weinberg to find a buyer for Aspen Healthcare as part of a break-up of the company. NMC Health collapsed into administration in April after a £5.2bn debt pile was unearthed.

The Mail on Sunday



New P2P COVID-19 loans for the self-employed

A new emergency COVID-19 loans scheme has been launched to help some of the freelancers and self-employed workers who have missed out on Government support. The Small Business Interruption Loan Service has been unveiled by a fintech-led group in association with EXCLUDEDUK – which has been joined by tens of thousands of self-employed and small business owners not eligible for Covid financial help. It works as a peer-to-peer lending platform, which has been provided by P2P lender JustUs.

Daily Express, Page: 57


High street banks hampered SME crisis lending

Peter Evans reports in the Sunday Times that high street banks, including RBS, Lloyds, HSBC and Barclays objected to plans to allow fintech lenders indirect access to funding from the Bank of England so they could sell loans to small businesses through the Government’s emergency bounce back loan scheme (BBLS). Without access to the same cheap funding, fintech must rely on private backers, meaning the soon run out of cash leaving them unable to lend to thousands of small firms applying for emergency loans. The scheme would have required the big banks to funnel cash from the Bank’s term funding scheme to alternative lenders. But sources say commercial banks did not want to help their competitors.

The Sunday Times, Business, Page: 1



Graduates left out of kickstart programme

Rishi Sunak’s “kick-start” scheme to get young people into work is focused on low-paid jobs in industries such as hospitality, construction and care, experts argue. The Government’s scheme will do nothing for aspiring lawyers, accountants and other ambitious graduates, the Telegraph reports. The £2bn package will l see the state pay the wages of young people on Universal Credit for six months, but most university leavers will be excluded and those who can take part can only work for 25 hours a week, paid at the national minimum wage.

The Daily Telegraph, Money, Page: 4

Jobless total rose by 250,000 last month

Official figures next week are forecast to show that roughly 250,000 people lost their jobs in June, with Capital Economics predicting that the quarter-on-quarter employment figure will fall by 290,000.

The Times, Page: 49


Furlough brings fall in wages while jobless rate jumps

Official figures will this week reveal that average wages have fallen for the first time in six years, driven down by the Coronavirus Job Retention Scheme which has resulted in a pay cut for many. Furloughed workers only receive 80% of their pay to a maximum of £2,500 and many employers have not taken up the option of topping up this up. The overall jobless rate is expected to rise to 4.5% over the quarter, but this excludes furloughed workers and economists fear as many as 20% could be laid off as the scheme is wound up. Kallum Pickering, Berenberg’s senior UK economist, said: “We estimate the actual underlying rate of unemployment is somewhere between 8% and 9%.” Some good news is that May growth figures are likely to reveal a record 5.3% surge in output. But this revival is set to “struggle for traction beyond August”, says Samuel Tombs, chief UK economist at Pantheon Macroeconomics, as social distancing and an increase in redundancies hampers the recovery.

The Sunday Telegraph

Police let illegal sweatshops go unchecked due to racism fears, says Patel

Priti Patel has reportedly raised concerns that police have declined to investigate exploitation in the garment industry due to fears they would be viewed as racist. A source close to the Home Secretary said: “This scandal has been hiding in plain sight and there are concerns cultural sensibilities could be in part to blame for why these appalling working practices haven’t been properly investigated.” Shares in Boohoo slumped last week following news workers were being paid as little as £3.50 an hour to pack clothes destined for the fast-fashion retailer. Sara Thornton, the independent anti-slavery commissioner, says the Modern Slavery Act needs to be tightened up while Robert Jenrick, the communities secretary, has ordered an investigation. The Sunday Times suggests this could lead to the Government seizing control of Leicester city council, which has been accused of repeatedly failing to address the issue. HMRC, which is responsible for enforcing the minimum wage, has also come under fire, with a senior Home Office source saying they have “been asleep on this issue for ages.”

The Sunday Times, Page: 1, 6



Separating COVID-19 impact in results “inappropriate”

Some companies are deciding to simply exclude the impact of the coronavirus pandemic from their earnings leading investors and market watchdogs to speak out against the practice. They say that turning the commonly used Ebidta (earnings before interest, depreciation, taxes and amortization) into Ebidtac (c for coronavirus) can give a misleading impression. Ebidtac is a measure that’s emerged in recent months as a way for borrowers to show what their performance might have been had it not been for the impact of the pandemic. Proponents of Ebidtac say it provides continuity with past results and some banks have been sympathetic, but regulators are cautious. The European Securities and Markets Authority has said businesses should be wary of separating the impact of the virus in profit and loss statements while the Financial Reporting Council has warned that measures which attempt to show “normalized” results are likely to be “highly subjective” and “potentially unreliable”. Ratings agencies and investors echo these views.

Washington Post



New State regulator for tax advisers

The Treasury is launching a consultation on whether to create a new regulator to oversee tax advisers, the Mail on Sunday reports. “Many tax advisers are competent and adhere to high professional standards,” said the Treasury. “But some are incompetent, some unprofessional, a few actively corrupt.” Glyn Fullelove, head of the Chartered Institute of Taxation, said: “We are greatly in favour of raising standards, but believe this ought initially to be based on the professional bodies. It would raise tricky conflict-of-interest questions were the State to be the regulator.”

The Mail on Sunday, Page: 12



Tax cut announced for Scottish home buyers

Kate Forbes, the Scottish finance secretary, has announced a temporary cut to the transaction tax on house sales and extra support for first-time buyers. The starting point for land and buildings transaction tax (LBTT) is to rise from £145,000 to £250,000 from Wednesday.

The Scotsman, Page: 7


Pensions savers forced to wait for cash

Pension Bee has found that one in seven savers who requested access to their pension pots have had to wait more than five months. The research also found that a fifth of savers abandoned their plans to withdraw their cash to reinvest or spend it because they found their pension company’s process too complicated. Romi Savova, the chief executive of Pension Bee, said the delays were concerning. “Companies should develop straightforward and flexible products to help consumers draw down their pension funds simply and efficiently,” she said. Ros Altmann, a former pensions minister, defended the delays, saying, “if accessing your pension is as simple as a click of a button, people may think it is just like their bank account, which it’s not supposed to be at all.”

The Sunday Times, Page: 15

Families of women who died with underpaid state pensions will get paid

The Government has confirmed that the heirs of elderly women who die without realising they were underpaid massive sums in their state pension will receive the money. According to research by the Mail on Sunday, tens of thousands of women are owed a fortune in lost state pension due to the blunder. In another breakthrough, women will be shielded from unfair income tax bills on their back payments, the Labour Party has established after pressing the Government on the scandal.

The Mail on Sunday


Pensions savers forced to wait for cash

Pension Bee has found that one in seven savers who requested access to their pension pots have had to wait more than five months. The research also found that a fifth of savers abandoned their plans to withdraw their cash to reinvest or spend it because they found their pension company’s process too complicated. Romi Savova, the chief executive of Pension Bee, said the delays were concerning. “Companies should develop straightforward and flexible products to help consumers draw down their pension funds simply and efficiently,” she said. Ros Altmann, a former pensions minister, defended the delays, saying, “if accessing your pension is as simple as a click of a button, people may think it is just like their bank account, which it’s not supposed to be at all.”

The Sunday Times, Page: 15

Families of women who died with underpaid state pensions will get paid

The Government has confirmed that the heirs of elderly women who die without realising they were underpaid massive sums in their state pension will receive the money. According to research by the Mail on Sunday, tens of thousands of women are owed a fortune in lost state pension due to the blunder. In another breakthrough, women will be shielded from unfair income tax bills on their back payments, the Labour Party has established after pressing the Government on the scandal.

The Mail on Sunday



UK FDI up 4% in the latest financial year

Britain attracted 1,852 new inward investment projects in the latest financial year, up 4% on the year before, according to official figures. Data from the Department for International Trade shows that the US continues to be the No 1 source of foreign direct investment in the UK, delivering 462 projects and 20,131 jobs. Liz Truss, international trade secretary, said: “These figures demonstrate the resilience of the UK economy and the work of the government to continue to build and attract inward investment into the UK.”

The Times, Page: 52

UK expected to suffer worst crash of any big economy

Credit ratings agency Moody’s expects the UK to suffer the worst economic crash of any major economy in 2020, with Brexit acting as a drag after the coronavirus crisis. Analysts said they thought the UK will suffer the biggest drop in GDP in the G20 this year, with the economy shrinking by 10.1%. Moody’s also predicted that government debt as a share of national income will increase by 24 percentage points compared to its 2019 level.

City AM


Labour calls for a back-to-work budget

The Labour leader is calling for a back-to-work budget with jobs at its heart. Sir Kier Starmer told a virtual Durham Miners’ Gala that working people should not have to pay for the costs of the crisis. “It is not of your making and many of you, and your families, have been on the front line, in our hospitals, our shops, our care homes, keeping schools open for the children of key workers and in so many other jobs that have been undervalued and underpaid for too long,” he said.

The Mail on Sunday



Just one in five people feel safe dining out

A new survey by the Office for National Statistics indicates just one in five people are ready to return to restaurants as they reopen following lockdown. The ONS survey of 2,500 people – which was conducted before the Chancellor’s ‘eat out to help out’ meal voucher scheme was announced – found just 20% of adults were comfortable with eating at restaurants either indoors or outdoors, compared with 60% of respondents put off by the idea. Among the over-70s, two-thirds of all respondents rated themselves either “uncomfortable” or “very uncomfortable” with eating out. “The reluctance of consumers to go to restaurants and cinemas fuels concern that the UK’s recovery will be held back by persistent cautious behaviour even after restrictions are eased,” said Howard Archer, chief economic adviser at the EY Item Club.

The Daily Telegraph Financial Times, Page: 3


BlueBay bets on sterling drop from hard Brexit

BlueBay Asset Management is predicting a 10% slide in sterling against the euro as the chances of a comprehensive trade deal between the UK and the EU grow increasingly unlikely.

Financial Times

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Paul Southward





Rishi Sunak promises £30bn to supercharge economy and save jobs

Read the KSK summary of highlights here: –



As announced in the Government’s Economic Statement on 8th July 2020, reduced rates of Stamp Duty Land Tax (SDLT) will apply for residential properties purchased from 8th July 2020 until 31st March 2021 inclusive.  See details here: –



Economists warn of day of reckoning

Paul Johnson, director of the Institute for Fiscal Studies (IFS), has warned of likely tax rises as a result of a coming recession. He said getting the UK’s £2trn debt mountain under control will take decades and is likely to require the Treasury to raise an extra £35bn to £40bn a year once the immediate crisis subsides. He added: “The time to pay for this will come, but not this year and not next.” Deputy director Carl Emmerson said it was too early to predict the scale of the hikes as it depended on how quickly the economy recovered but said “it could be quite a chunky tax rise.” The Chancellor Rishi Sunak yesterday refused to rule out future tax rises to pay for the record public spending during the pandemic. He said it was “too early to speculate”. Meanwhile, research by Redfield & Wilton Strategies for the Mail found that 71% of the public expect taxes to rise to pay for the coronavirus bailout package.

The Daily Telegraph, Page: 1, 2 Financial Times, Page: 3 The Times, Page: 10 Daily Mail, Page: 9 Evening Standard The Guardian, Page: 6 The Sun, Page: 2

Tax gap falls to lowest recorded rate

HMRC confirmed yesterday that the tax gap for 2018-19 is 4.7%, its lowest recorded rate. The tax gap is the difference between tax that should be paid and what is actually paid. HMRC collected £628bn in tax revenue in 2018-19. Jesse Norman, Financial Secretary to the Treasury said: “At 4.7%, the 2018-19 tax gap is the lowest on record. The coronavirus pandemic has highlighted the importance of everyone playing their part and paying the tax that is due.” This is the first year that a stand-alone tax gap for wealthy taxpayers has been included in the report. The total wealthy tax gap stands at £1.7bn and represents a very high collection rate of all tax due within this group. The wealthy tax gap is the smallest proportion of the total gap by customer group, making up 6% of the total tax gap.

Press Release

Apple files accounts showing £6.2m paid in UK tax in 2018

Accounts filed today for Apple Retail reveal that the firm’s UK retail arm paid £6.2m in tax last year on sales of nearly £1.4bn. Profit before tax was £35.8m in 2019, down from £105.6m in 2018, while costs were up 94% to £173.7m from £94.8m in the year earlier period. This comes as Apple awaits the result of an appeal against the European Commission over €13bn in back taxes due to the Irish government. George Turner, director of Tax Watch UK, said: “Apple’s US accounts disclose that the company moves tens of billions of dollars a year out of Europe and into tax havens.” A spokesman for Apple said: “We always pay all that we owe.”

City AM Daily Express, Page: 2 Daily Mail, Page: 14


Sunak’s £1,000 job retention bonus red-flagged

The head of HMRC wrote to Chancellor Rishi Sunak requesting a “ministerial direction” to proceed with the roll-out of £1,000 bonuses for firms who bring staff back from furlough, according to reports. Jim Harra stressed that there was a “sound policy rationale” for going ahead with the radical plans but it had “proved difficult to establish a counterfactual” for the schemes, adding that “the advice that we have both received highlights uncertainty around the value for money of this proposal”. He also requested written direction to proceed with the £10-per head meal voucher scheme. Paul Johnson, the director of the Institute for Fiscal Studies, also raise doubts about the effectiveness of the scheme saying in a majority of cases the money will go to employers who would have brought people back from furlough anyway. The Chancellor told BBC Radio 4’s Today programme that he accepted that payments would go to support jobs which were not under threat but said that this was an inevitable consequence of the need to act swiftly to an unprecedented challenge.

The Daily Telegraph The Times, Page: 10 Daily Mail The Independent, Page: 6


FCA demands safeguards at payments businesses

The Financial Conduct Authority has told payment service providers and electronic money businesses that they must strengthen the way in which they safeguard customers’ money after Wirecard’s catastrophic failure brought greater scrutiny to the industry. New guidance issued by the regulator said it had found “material issues” in a number of areas including the failure to properly manage financial crime risks and misleading claims about service and pricing. The regulator indicated that its intervention had been hastened by fears that the COVID-19 pandemic may pose a risk to the viability of payments firms. A spokesman for the FCA said that its work “makes very clear our expectations of what payments firms must do to protect customers’ money robustly”. “The sector has reached the scale where more regulation is required,” said Matt Hopkins, of the global bank team at BDO. “This is the end of light-touch regulation of e-money and payment institutions.”

The Times, Page: 43 Financial Times, Page: 12


Pools, gyms, team sport and outdoor events to return

Culture Secretary Oliver Dowden has announced that pools, gyms, nail bars and tattooists will be able to open their doors to customers again. Outdoor performances will also be able to resume with limited audiences. Outdoor pools and open-air theatre and concert venues will open on Saturday when amateur team sports including cricket will also be able to resume. Nail bars, beauty salons, tattoo parlours and other “close contact” personal services will be open from Monday, with indoor sports venues including gyms, pools and courts following on July 25. However, beauty businesses were left distraught when they were told no treatments to the face would be allowed, such as make-up application and eyebrow treatments. Mike Cherry, chair of the Federation of Small Businesses, called the news a “welcome shot in the arm for the health, wellbeing and happiness of the wider public”, but warned that independent operators would need further support to be compliant with safety guidelines.

The Times The Daily Telegraph BBC News BBC News Reuters Financial Times, Page: 3 The Guardian The Sun, Page: 10


Stamp duty aid should be more targeted, critics say

The Institute for Fiscal Studies (IFS) has warned that first-time buyers could be priced out of the market after the Chancellor scrapped stamp duty on properties worth up to £500,000. The think tank suggested landlords could drive up prices as could homeowners seeking to move up the ladder. Stamp duty used to kick in at £125,000, but first-time buyers only started paying at £300,000 so that advantage has now been lost. However, the IFS still praised the move and said it would boost the economy by powering up activity in the property market. Labour said the move also provided a subsidy for second homeowners and said the tax break was not an appropriate use of money at a time when millions are going through financial hardship.

The Daily Telegraph, Business, Page: 1 The Independent, Page: 7


Laura Ashley collapse to be probed by second administrator

A second administrator has been appointed to examine the finances of collapsed retailer Laura Ashley, with FRP Advisory set to investigate the role of firm’s former directors. The Pension Protection Fund (PPF) requested the additional administrator’s appointment, stating that: “Members of the Laura Ashley retirement benefits scheme, which remains in PPF assessment, can be assured of our ongoing protection.”

The Guardian, Page: 30


British high street loses a further 5,300 jobs

The British high street took a double hit yesterday after Boots announced 4,000 job cuts while John Lewis said it would close eight of its 50 department stores putting 1,300 jobs at risk. Separately, Burger King said it could close up to 10% of its 530 UK restaurants, putting 1,600 jobs at risk. The UK economy shrank by 25% in March and April and could be heading for its biggest fall in 300 years in 2020, with an unemployment rate on course to more than double to about 10%, according to official projections. Julie Palmer, partner and restructuring expert at Begbies Traynor, predicted further significant job losses on the high street. “Many of the biggest companies have been fighting against the tide of destruction before this crisis and there is a huge dam of distressed businesses building and waiting to break.”

Financial Times, Page: 1 Reuters City AM The Daily Telegraph The Times The Times, Page: 35 Daily Express, Page: 8

IFS advises against tax rises and spending cuts

The Institute for Fiscal Studies (IFS) has said the country’s budget deficit could reach £350bn this year and £150bn in 2021. This comes as the latest figures from the Treasury show that public spending during the pandemic rose to almost £190bn.

Financial Times The Daily Telegraph, Business, Page: 2, 3 City AM Evening Standard


West Midlands man arrested on suspicion of £495,000 furlough fraud

A West Midlands man has been arrested as part of an HMRC investigation into a suspected £495,000 Coronavirus Job Retention Scheme fraud. HMRC officers executed a search warrant on Wednesday in the Solihull area and arrested a 57-year-old. This is the first arrest in connection to alleged fraud relating to the furlough scheme.

The Times Financial Times, Page: 2 The Daily Telegraph, Page: 2 The Guardian, Page: 6

Contact Paul Southward

Paul Southward's News Roundup





Rishi Sunak promises £30bn to supercharge economy and save jobs

In his summer statement, Chancellor Rishi Sunak said that the government will cut VAT on hospitality, introduce a stamp duty holiday, and spend up to £9bn rewarding employers that bring back furloughed staff, as part of a £30bn plan to prevent mass unemployment. VAT on food, accommodation and attractions will be cut from 20% to 5% next Wednesday; it will apply to eat-in or hot takeaway food and non-alcoholic drinks from restaurants, cafes and pubs, accommodation in hotels, B&B’s, campsites and caravan sites, attractions like cinemas, theme parks and zoos. He also introduced the “Eat Out to Help Out” plan, which he said would help protect 1.8m jobs, at cost of £0.5bn. Meals eaten at any participating business, Monday to Wednesday, will be 50% off in August, up to a maximum discount of £10 per head for everyone, including children. An immediate stamp duty holiday for homes sold for up to £500,000 in England and Northern Ireland, until 31 March, was also announced, as was a £1,000 bonus for employers for each one of the 9.4m staff furloughed since March that return to work. A £2.1bn “Kickstart Scheme” will subsidise six-month work placements for people on Universal Credit aged between 16 and 24, who are at risk of long-term unemployment. The Institute for Employment Studies praised the statement, describing the detail of Mr Sunak’s speech as akin to “a how-to kit for dealing with consequences of a big recession”.

The Daily Telegraph The Times The Guardian Evening Standard

Read the KSK summary of highlights here: –



As announced in the Government’s Economic Statement on 8th July 2020, reduced rates of Stamp Duty Land Tax (SDLT) will apply for residential properties purchased from 8th July 2020 until 31st March 2021 inclusive.  See details here: –


Covid-19: HMRC amend coronavirus testing BIK guidance

Released 07 July 2020

HMRC have made a rapid U-turn after publishing guidance indicating that employees would face a taxable benefit-in-kind (BIK) when their employer pays for coronavirus testing, following an outcry from MPs.

Updated guidance on how to treat certain expenses and benefits provided to employees during the Covid-19 crisis, which HMRC published on 6 July, included the information that if an employer paid for a coronavirus test, their employee would be required to pay income tax on that benefit.

A Treasury spokesman said: ‘Given the importance of widespread testing, we want to ensure that all employers who wish to provide third-party testing to their employees can do so without increasing their tax liability.

‘So, we will introduce a new income tax exemption for Covid-19 antigen tests provided by employers. HMRC will amend its guidance as soon as possible to reflect this change.’

For further guidance, see: –

How to treat certain expenses and benefits provided to employees during coronavirus (Covid-19)


Tourism and hospitality firms welcome VAT boost

The hospitality industry has welcomed Rishi Sunak’s announcement that tourism and hospitality VAT will be cut from 20% to 5% for the next six months. Plans to give people a 50% discount, up to £10 per head, to eat out in restaurants in August were also well received. Russell Nathan, senior partner at HW Fisher, said: “Our restaurants, pubs, shops and hotels are struggling. This is a timely announcement from Government as businesses are in desperate need of a clear action plan.” However, the CBI and lobby group UKHospitality point out that capacity has been slashed dramatically due to social distancing rules, leaving firms keen to make up the shortfall. Russell Lynch suggests in the Telegraph that this could be partly achieved by increasing the cost of meals “to reflect the Government’s £10 a head largesse.” Meanwhile, Alison Horner, indirect tax partner at MHA MacIntyre Hudson, said premises serving alcohol would have to reprogramme their tills to deal with three different VAT rates: alcohol at 20%, zero-rated cold takeaway foo d and 5% for everything else. Finally, retailers lamented the fact that the VAT cut had not been extended to shops with Helen Dickinson of the British Retail Consortium describing it as a “missed opportunity”. The aerospace and motor industries also warned that a lack of targeted support for manufacturers could cost jobs.

The Daily Telegraph, Business, Page: 1 The Daily Telegraph The Times, Page: 6 Financial Times, Page: 4 Daily Mail, Page: 8

Labour now not calling for tax rises

The Labour Party has dropped its demands for a wealth tax with shadow chancellor Anneliese Dodds conceding that further levies, combined with public service cuts, would “damage demand and inhibit our recovery”. On Monday, Sir Keir Starmer told LBC Radio the party supported a wealth tax in principle.

The Times, Page: 6


Chancellor warned his job boosting package may fall flat

Unions have said Rishi Sunak’s economic statement yesterday did not go far enough to save jobs with Unite’s Len McCluskey warning that: “Redundancy notices are already flying around like confetti.” He went on to say that with the end of the job retention scheme in October now confirmed the flood of job losses would “surely only gather pace.” Garry Young, a deputy director of the National Institute for Economic and Social Research, agreed this could “precipitate a rapid increase in unemployment” as the incentives offered to employers “look too small to be effective” and employers will now be reluctant to continue to top up the wages of furloughed workers. Peter Cheese, chief executive of the Chartered Institute of Personnel and Development, backed this assessment as did Clare McNeil, associate director at the Institute for Public Policy Research, who described the bonus a s a “halfway house reform – not a proper wage subsidy”. The Chancellor pledged to pay firms £1,000 for each worker they bring back from furlough. It will cost £9bn if the 9m individuals currently furloughed return to work. Dame Carolyn Fairbairn, director general of the CBI, said: “The job retention bonus will help firms protect jobs, but with nearly 70% of firms running low on cash, and three in four reporting lack of demand, more immediate direct support for firms, from grants to further business rates relief, is still urgently needed.”

Financial Times Financial Times BBC News The Guardian, Page: 9 Daily Mail, Page: 76


Company directors overlooked in Sunak’s mini-Budget

The Institute of Directors (IoD) have said that small businesses have been overlooked in the Chancellor’s latest stimulus package with no help forthcoming for company directors, who have not been able to receive income support during the pandemic. Jonathan Geldart, of the IoD, said: “A glaring omission throughout this pandemic has been the exclusion of small company directors, many of whom have not been able to access income support. Widening grant schemes could help those who have been left struggling without assistance and help more firms to re-open.” Mike Cherry, chairman of the Federation of Small Businesses, agreed while Gina Broadhurst, of the #ForgottenLtd Campaign for small company directors, added: “The Government’s strategy is premised on businesses remaining solvent, but hundreds of thousands of small business owners employing millions of people have received zero support and are on the verge of collapse. At this rate more businesses will fall, never to be seen again.” Additionally, Andy Chamberlain, of the Association of Independent Professionals and the Self-Employed, said freelancers were “noticeable by their absence” in Rishi Sunak’s statement. He urged the Chancellor to introduce a tapered end to the Self-Employment Income Support Scheme as well as the furlough scheme.

The Daily Telegraph BBC News The Guardian, Page: 7

Funding Circle boosted by business interruption loans

Shares in Funding Circle rose 5% yesterday after the online lender announced that it had approved £460m of emergency loans to small companies. The platform was cleared to offer the Government’s coronavirus business interruption loans in April. It has arranged £8.5bn of loans to 80,000 businesses since it was founded in 2010. CEO and co-founder Samir Desai said that demand for the scheme showed how many companies had struggled to secure the credit from a traditional bank.

The Times, Page: 42 Daily Mail, Page: 76


Stamp duty cut welcomed

Rishi Sunak has confirmed that the threshold for paying stamp duty will be raised from £125,000 to £500,000 immediately in a bid to help the UK housing market out of the coronavirus lockdown. The Chancellor said the stamp duty holiday, which will run to March 31 next year, will result in an average saving of £4,500 and will benefit nine in 10 house buyers. John Tonkiss, chief executive of housebuilder McCarthy and Stone, said the move is a “no-brainer to reinvigorate the economy,” while according to Jonathan Evans, real estate director at Deloitte, based on the average price of a home in England, a purchaser can now expect to save almost £2,500 by not paying stamp duty. In addition, Evans notes, the average property in London (£485,000) will also be exempt and save £14,200. But Tim Stovold, head of tax at Moore Kingston Smith, said it was a blow for first-time buyers, who would find themselves “competing in a market full of landlords keen to cash in.”

Financial Times, Page: 4 The Guardian, Page: 6 The Times, Page: 8 The Daily Telegraph, Page: 7



Bell Pottinger bosses face bans

Former bosses at the failed PR firm Bell Pottinger face potential director bans under action by the Insolvency Service, the Times reports. Under the Company Directors Disqualification Act (1986), the Insolvency Service can pursue bans of between two and fifteen years for conduct that does not meet integrity standards. The firm collapsed in 2017 after a scandal in South Africa, where it was accused of inciting racial hatred in a campaign for the Gupta family. BDO has been liquidating the company and has been considering lawsuits against partners for their role in the failure.

The Times, Page: 45


Watchdog fears UK employers will seek to cut pensions bill

The UK’s pensions ombudsman, Antony Arter, told MPs yesterday that he expected the COVID-19 crisis will lead to more employers trying to persuade staff to quit their pensions.

Financial Times


UK public borrowing to exceed £350bn with Sunak’s stimulus plan

The Chancellor’s £30bn stimulus plan to heave Britain out of recession brings the Government’s crisis spending to £188bn and public borrowing to over £350bn this financial year. The FTSE 100 fell 11.50 points following Rishi Sunak’s statement and closed 29 points, or 0.5% down at 6,160.

Financial Times, Page: 1 The Daily Telegraph Daily Mail

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Paul Southward's News Roundup





The Chancellor Rishi Sunak will deliver the economic statement to parliament this afternoon, outlining plans to kick-start the economy as lockdown eases.  Full details of the proposals will be posted to our website news pages.


Plans to force workers to pay for COVID-19 tests scrapped

The Chancellor has dropped plans to force workers to pay income tax on coronavirus tests if their employers order them. HMRC guidance published this week had made clear that employees will face a taxable benefit in kind for private tests carried out in the workplace. Mel Stride, chair of Westminster’s Treasury Select Committee, said: “This new guidance is unclear and will worry a large number of workers. If these tests are to be treated as a taxable benefit in kind, the tax bill for workers could soon mount up.” The Government last night removed all references to the tax on tests from its website. A Treasury spokesman said: “Given the importance of widespread testing, we want to ensure that all employers who wish to provide third-party testing to their employees can do so without increasing their tax liability. So, we will introduce a new income tax exemption for COVID-19 antigen tests provided by employers. HMRC will amend its guidance a s soon as possible to reflect this change.”

The Daily Telegraph, Page: 4 Daily Express, Page: 5 Daily Mail, Page: 13 The Times, Page: 11

Crisis creates platform for radical tax changes

The Telegraph’s Jeremy Warner says the coronavirus crisis provides the Government with an opportunity to push through radical tax reforms. He goes on to consider three proposals: wealth taxes, a point-of-sales tax partially or wholly to replace the increasingly broken business rates system, and the transformation of national insurance into a fully hypothecated system of social insurance to fund health and social care.

The Daily Telegraph, Business, Page: 2


Sunak to unveil ‘kickstart jobs scheme’ for young people

Rishi Sunak will today announce a new scheme to stave off youth unemployment as part of attempts to revitalise the economy following the COVID lockdown. A new £2bn “kickstart scheme” will subsidise six-month work placements for people on Universal Credit aged between 16 and 24, who are at risk of long-term unemployment. The Government said it would lead to “hundreds of thousands of new, high-quality government-subsidised jobs”. The Chancellor is expected to make his summer statement at 12:30 BST after PMQs, with changes to stamp duty and VAT also expected, alongside a £3bn programme to make homes and public buildings more environmentally friendly.

Financial Times BBC News The Guardian Daily Mail, Page: 10 Daily Express, Page: 4 Reuters

Unemployment could reach 15% if second wave strikes

The Organisation for Economic Co-operation and Development (OECD) says joblessness in the UK could hit 15% by the end of the year if there is a second wave of COVID-19. The OECD says the UK is in any case headed for an unemployment rate of 11.7% by the end of this year due to the pandemic and lockdown. Self-employed people, younger workers, women and those on low pay will be the worst affected, the OECD said. The OECD also urged governments to start scaling back emergency wage subsidy schemes to encourage workers to move out of shrinking sectors as it predicted steep rises in unemployment.

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

Furlough scheme inflicts massive damage on productivity

Latest official data for the first quarter of the year show that productivity measured by output per worker plunged 3.1% compared to a year earlier – the biggest decline over a single quarter since 2009. The headline measure of output per hour fell 0.6% in January to March from a year earlier, the ONS said, and unit labour costs grew 6.2%, the biggest increase since 2006. The Government’s furlough scheme has led to a disparity between the otherwise closely aligned output per hour and output per worker measures by causing employment to stay in line with pre-pandemic levels, whereas hours worked have declined.

Bloomberg The Daily Telegraph


One in ten small firms making redundancies

A new study by the Federation of Small Businesses (FSB) of more than 1,000 firms has found that small businesses are having to make redundancies, cancel training programmes and scale-back investment following weeks of COVID-19-linked disruption. The research finds that 67% of UK small firms have furloughed staff as a result of the pandemic, while others have been trimming back capital investment (37%), reducing working hours (25%) and cutting training initiatives (14%). One in ten have had to make staff redundant. Ahead of the Chancellor’s intervention, the FSB is urging the Government to take broad measures to aid job retention and creation, including cutting Employer’s National Insurance Contributions (NICs), or uprating the targeted Employment Allowance, while extending NICs holidays.

Press Release

Banks lend £31bn in Bounce Back Loans

New government data indicate that UK firms have received £30.9bn worth of Bounce Back Loans to help support them following the impact of COVID-19. The figures from the Treasury show that 1.01m such loans have been made. The Treasury also said that more than 53,500 Coronavirus Business Interruption Loans have now been approved, providing £11.5bn worth of funding, and 783 applications worth more than £2.5bn have now been approved for larger firms using the Coronavirus Large Business Interruption Loan Scheme (CLBILS). Meanwhile, the Times reports that fintech firm Tide has been forced to stop lending under the Bounce Back Loan Scheme because third-party funders were not willing to provide the capital. Finally, HSBC has left small businesses waiting a month or more for their loans, according to a report in the Mail.

Daily Mail, Page: 37 Daily Express, Page: 5 The Times, Page: 35 Evening Standard


Bookkeeping: auditors in the crossfire

The FT’s Due Diligence briefing reports on the renewed calls for accountability for auditors after the Wirecard scandal and the Financial Reporting Council’s demand that the Big Four separate their audit practices by 2024. Separately, a letter to the FT suggests Wirecard’s supervisory board should take more of the heat for the company’s fraud.

Financial Times Financial Times, Page: 22


Chain restaurants forced to revise business model

The coronavirus pandemic is accelerating an inevitable decline in the casual dining sector, experts say, with figures from UHY Hacker Young showing over 1,400 restaurants collapsed into insolvency in the 2018-19 financial year, a quarter more than the previous 12 months. Although insolvencies have slowed in recent months due to the Government’s moratorium on winding-up petitions and a temporary ban on business evictions, UHY Hacker Young expects this number to increase as government support begins to taper off. Christian Mole, EY‘s head of hospitality for the UK and Ireland, adds: “The thing to say about the casual dining sector is that unlike a lot of hospitality, it was a sector that was struggling way before Covid anyway. In a similar way that you could argue that the pandemic has accelerated a move within retail from bricks and mortar to the internet – it’s accelerating the fallout that was always likely to happen in the casual dining sector.”

The Daily Telegraph, Business, Page: 8


Chancellor to announce immediate stamp duty cut

Rishi Sunak is expected to announce an immediate cut to stamp duty to boost the housing market. However, it is not yet known whether the temporary tax break will apply just to first-time buyers or all house purchases. The Chancellor is expected to raise the threshold from £125,000 to £500,000 – properties costing £500k accounted for nine in 10 of all transactions last year.

The Daily Telegraph, Page: 1, 2


SJP clients have questions about potential wealth tax

St. James’s Place says it has been getting “lots of questions” from clients about the possibility of a wealth tax being introduced to pay for the coronavirus crisis. SJP’s private client director Alex Loydon said that the prospect of a wealth tax is a “hot topic” for clients. She added that business in the private client space for the wealth manager is “ahead of where it was this time last year” and the firm has seen an “awful lot of activity” in the area. Ms Loydon continued: “What we are saying to clients is don’t make any rash decisions. And this is where the value of advice comes in and having a financial adviser there to sort of hold your hand, for want of a better phrase, in times of uncertainty.”

Money Marketing


GDP to fall 11% this year, providing there’s no second wave

A report by BDO and the Centre for Economics and Business Research forecasts GDP will fall 11% this year – but only if there is no large-scale second wave of coronavirus or another national lockdown. It warns that another peak in the pandemic and lockdown would send Britain’s GDP tumbling 19% and see exports fall by 23%. Peter Hemington, head of M&A at BDO, said: “We should assume that the full extent of economic damage will not be revealed until the Government’s job retention scheme comes to an end in October.”

Yorkshire Post, Page: 5


Italian mafia bonds sold to global investors

Documents seen by the FT show how international investors bought bonds backed by the crime proceeds of Italy’s most powerful mafia. In one case, consulting services were provided by EY.

Financial Times, Page: 1

Contact Paul Southward

Paul Southward





On Wednesday 8th July Rishi Sunak will deliver a Summer Economic Update to Parliament.  As the UK is slowly emerging from the lockdown, what can Rishi deliver to turn the country’s economy around.  There is no shortage of advice being offered to Rishi. Think-tanks, industry bodies, parliamentarians and other commentators having put forward suggestions including; extension of the furlough scheme; a cut to the main rate of VAT; National Insurance cuts for employers; infrastructure spending, wages subsidies and many more.

We will be reporting in full on The Chancellor’s statement and explaining what the measures introduced will mean for you and your business.


A wealth tax is now the only answer to save the country

The Guardian’s Polly Toynbee says a wealth tax is now the only solution to save the arts and all the other things “we regard as essential for civilisation.” Ms Toynbee cites a claim by Professor Arun Advani, one of a team of people working on an Institute for Fiscal Studies, who says a one-off windfall tax of 10% on all wealth would yield £1trn – enough to save every sector stricken by the coronavirus. She also points to Gus O’Donnell, the former head of the civil service and a long-time Treasury official, who said recently that the Conservatives have been presented with an opportunity to prove their promise for one nation Conservatism – only the Tories with a huge majority can push through reforms that would see earnings from wealth and work more evenly taxed.

The Guardian, Journal, Page: 1, 2


Wirecard executive arrested in Munich on suspicion of fraud

Wirecard executive Oliver Bellenhaus, who ran the company’s CardSystems unit in the Middle East, has been arrested by prosecutors in Munich. Meanwhile, the Times reports that Mastercard was warned about Wirecard’s links to an alleged laundering network in 2016. Evidence was passed to Paul Paolucci, a vice-president at Mastercard, and Howard Fields, head of anti-money laundering, alleging that fake ecommerce sites with a series of supposed connections to Wirecard were being used as a front for channelling online gambling proceeds through Mastercard’s system.

Financial Times, Page: 7 The Times, Page: 36 Daily Mail, Page: 79

Eddie Stobart reports jump in losses, due to accounting error

Annual losses at logistics group Eddie Stobart have jumped significantly, following a £169m charge in December as a result of an accounting blunder. The company sacked its chief executive and suspended trading in its shares in August last year, after an accounting investigation found its 2018 profit had been overstated by £2m. Losses before tax rose to £238.9m for the 12 months to the end of November 2019, up from £22.3m a year earlier. Exceptional costs were reported of £200.2m, up from £5.1m, to factor in the £169.2m impairment charge.

City AM

Companies pause frantic fundraising to assess pandemic damage

Companies are pausing for breath after racing to secure cash, the FT reports, drawing down bank credit lines, agreeing government rescue finance and issuing new debt and equity to outlast the coronavirus crisis.

Financial Times


UK banks ‘draw up code of conduct’ for coronavirus business loan defaults

UK Finance and the state-owned British Business Bank (BBB) have begun talks with commercial lenders in the hope of setting up industry-wide debt collection standards for government-backed coronavirus interruption loans, amid fears a high proportion of the loans will never be repaid. Loans granted under the flagship coronavirus business interruption loans scheme (CBILS) and bounce back loan scheme for SMEs (BBLS) have a one-year repayment free period, with the first repayments due in spring 2021. However, Bank of England governor Andrew Bailey was warned by an industry group last month that up to £36bn of emergency loans to SMEs risk turning toxic, with banks warning that up to 50% of BBLS were unlikely to be repaid. British banks are keen to avoid being perceived as pursuing SMEs for loan repayments too aggressively after a series of scandals surrounding lenders’ treatment of small firms following the global financial crisis.

City AM


Stamp duty holiday could save average English buyer £7,000

Chancellor Rishi Sunak is expected to announce plans in his Summer Statement for a temporary stamp duty holiday that could save the average English buyer £6,915 – and make 88% of English property transactions exempt from the tax, according to Savills. Mr Sunak is predicted to raise the threshold at which buyers start paying tax on their purchases from £125,000 to as much as £500,000. The holiday would come into effect at the moment analysts are expecting the economic impact of coronavirus to hit the property market hard. Both mortgage holidays and the furlough scheme are due to end in the autumn, meaning there could be a spike in forced sellers, and a fall in the number of people able to purchase.

The Daily Telegraph

“Covid refugees” drive up price of prime country homes

Londoners fleeing the capital in search of rural homes more conducive to comfortable lockdowns and home working are driving up prices, particularly in the prime bracket, with some buyers paying as much as 17% over asking price. The flood of interest has led agents to warn of a bubble developing. Fiona Pengelly of Strutt & Parker in Salisbury described most of her buyers as “Covid refugees”. She said: “Since the market reopened, I have sold a third of our stock off market in excess of guide price.”

The Daily Telegraph


Over two-fifths of employers plan redundancies

A survey by the think tank Bright Blue has found that 44% of businesses using the Government’s job retention intend to make redundancies when the support is withdrawn in October. Economists fear that redundancies will start rising from next month, when companies have to start paying national insurance and pension contributions, representing 5% of employment costs. Medium-sized businesses were most concerned about meeting these obligations from August, with 65% saying they would cut jobs when the scheme ends in October. Former Chancellor Norman Lamont says in the Telegraph that the Government should temporarily suspend or reduce Employers’ National Insurance Contributions to prevent a “tsunami of unemployment.”

The Times The Daily Telegraph, Page: 16


Sunak to spend £3bn on green projects

Rishi Sunak will set aside £3bn to create green jobs and improve the energy efficiency of public buildings when he announces plans to kickstart the economy on Wednesday. As much as £2bn will be set aside for a green homes grant which will give households vouchers to spend on energy efficiency schemes such as loft lagging and floor insulation. The Chancellor’s package would include a new £40m fund dedicated to cleaning up nature and planting trees which would back up to 5,000 new jobs, the Treasury said.

Financial Times, Page: 2 The Daily Telegraph The Times, Page: 11 Reuters

Financial services saw volumes slump at fastest pace on record

A survey of the financial services sector by the CBI and PwC reveals that volumes fell at their fastest pace on record during the lockdown while jobs were cut at the fastest pace in a decade. Business volumes fell by 12% on average and profitability slumped at the fastest rate since the financial crash. General insurance companies were the only sub-sector to defy the downturn.

The Times, Page: 41

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Dodds suggests support for wealth tax

Shadow chancellor Anneliese Dodds has suggested a wealth tax could help the country’s coronavirus recovery but, when pressed on what such a levy may involve, opted against offering detail over the proposal. In interviews on both the BBC’s Andrew Marr programme and Sky’s Sophy Ridge on Sunday, Ms Dodds said the burden of higher taxation ought to fall on those with the “broadest shoulders” but said debate over the policy would take place only if the pandemic delivers a severe recession. Ms Dodds, who had previously suggested ministers “need to look at” the idea of a wealth tax, said the proposed levy was a “complicated area” but offered: “It is my view that if we do need to see an increased tax take we shouldn’t see it coming from those low and middle-income people … Instead we should have a focus on the very best-off people.”

The Times, Page: 2 The Daily Telegraph, Page: 4 Daily Express

Should pandemic prompt tax rises?

Ben Chu in the Independent considers the economic impact of the coronavirus crisis, with public borrowing set to pass 10% of GDP this year and Office for National Statistics data showing public debt is roughly equivalent to the size of the total economy. He says that with the Prime Minister ruling out a return to austerity, the “spotlight has turned to taxation.” While the Conservative manifesto pledged no increase in VAT, national insurance or income tax, the Prime Minister recently refused to rule out upping taxation. Mr Chu argues that there is a case for temporary tax cuts in the current climate.

The Independent, Page: 8

Think-tank urges tax rethink

Conservative think-tank Onward has suggested tax reform should be considered as the UK looks to ensure that borrowing ramped up amid the coronavirus crisis is brought under control without harming growth. This could involve a thorough review of tax relief and pushing ahead with new digital taxes. The think-tank’s Bounce Back report also suggests taxpayer money should be used to take a stake in businesses that were given government loans to help navigate the pandemic but are unlikely to ever be able to repay them.

The Times, Page: 4


FRC to carry out Autonomy hearing

The Financial Reporting Council will this week conduct a two-day disciplinary hearing into Deloitte and Richard Knights and Nigel Mercer, members of the ICAEW, over the auditing of Autonomy before Hewlett-Packard bought the firm in 2011.

The Times, Page: 35


Counting whisky casks was all part of the audit

A letter to the FT expresses surprise at the chief executive of Grant Thornton saying that an audit was “not designed to look for fraud”.

Financial Times, Page: 20


Retail insolvencies affect 56,000 jobs

A total of 2,630 stores and nearly 56,000 jobs have been affected by insolvencies in the retail sector so far this year, according to the Centre for Retail Research. This compares with 2,051 stores and 46,500 jobs affected during the whole of 2019. With a number of retailers falling into insolvency having been hit hard by the coronavirus lockdown, 24,000 jobs have been lost across the sector already in 2020. Joshua Bamfield, director at the Centre for Retail Research, said the end of the furlough scheme and the end of a moratorium on lease forfeits could see further cuts. “The second half of the year could be disastrous for high streets,” he warned.

The Daily Telegraph, Business, Page: 1


Wirecard’s core business has been lossmaking for years, audit shows

A special audit conducted by KPMG suggests Wirecard’s core business in Europe and the Americas has been lossmaking for years, with profits in EY-audited financial reports existing largely on paper.

Financial Times, Page: 1

Manufacturing key to Yorkshire economy

A report from manufacturers’ organisation Make UK and BDO shows that the manufacturing sector accounts for 14% of Yorkshire’s economy. It also shows the region’s reliance on EU market for exports, prompting Make UK to stress the need for a deal with the EU that avoids trade barriers.

Yorkshire Post, Page: 12

Owner secured for golf club

Jobs have been saved at Leeds Golf Club after Begbies Traynor completed the sale of the business and assets to Leeds Golf Club 1896 Limited.

Yorkshire Post, Page: 12


Small firms call for support

In a letter to Chancellor Rishi Sunak on behalf more than 120 UK SMEs, Blick Rothenberg has called for support including a reduction in VAT to at least 15% for a two-year period, a reduction in national insurance to 10%, and a reduction in business rates. Milan Pandya, a business advisory partner at Blick Rothenberg, said: “SMEs are crying out for government to create a medium-term stable environment”, arguing this would “generate clarity and confidence to allow strategic decisions to be made.”

The I, Page: 42

SMEs back trade talk plan

Industry leaders have welcomed plans for a summit to discuss how to improve small businesses’ ability to trade with the United States. International Trade Secretary Liz Truss has confirmed that the UK and US will hold a roundtable focused on small business. Emma Jones, founder of small business adviser network Enterprise Nation, has backed efforts to make it easier for SMEs to export, while Mike Cherry, national chairman of Federation of Small Businesses, said: “As we enter a new era for global trade, it’s critical that small firms are placed front and centre of negotiators’ minds.”

The Times, Page: 41


Government to provide 30k new traineeships

The Government is pledging to deliver 30,000 new traineeships to get young people into work, with a £111m programme to give English firms £1,000 for each work-experience place they offer and £21m going toward similar schemes in Scotland, Wales and Northern Ireland. A Treasury statement detailing plans to expand the traineeship programme warned that “young people’s employment prospects are expected to be disproportionately affected by the economic fallout of coronavirus”. The Treasury said that while three quarters of young people who complete a traineeship moved on to employment or further study within a year, three quarters of 18-24 year-olds who are not in education, employment or training for three months will remain out of work and education for a full 12 months.

BBC News The Independent

Teaching tech

James Titcomb in the Telegraph looks at technology and the education system, considering whether schools and colleges are producing enough graduates with the technical skills required to support the growing technology industry. A 2019 study by KPMG and Harvey Nash found that 67% of 3,600 chief information officers polled were struggling to find suitable people to hire, particularly in big data and analytics, cyber security and AI.

The Daily Telegraph, Business, Page: 5


Stamp duty holiday looks to boost home sales

Chancellor Rishi Sunak is expected to this week announce a temporary stamp duty holiday that will set a threshold between £300,000 and £500,000. The move, which will seek to reignite the housing market in the wake of the COVID-19 crisis, comes with Halifax data showing property values slipped 0.2% in May, a third consecutive monthly decline. HMRC data shows that April saw just 38,060 transactions completed, which is less than half the number seen in April 2019.

The Times, Page: 1 Daily Mail, Page: 2


Germany empowers watchdog

German finance minister Olaf Scholz is to grant BaFin, the country’s financial watchdog, greater powers following the scandal at Wirecard, with it to be handed more authority over financial reports. The fallout of the issues at the fintech company may see auditors rotated to ensure independence.

The Daily Telegraph, Business, Page: 6


Arts handed £1.5bn support

The Government has announced a £1.57bn support package to help culture, arts and heritage organisations navigate the disruption caused by the coronavirus crisis. The £1.15bn support pot for cultural organisations in England is made up of £880m in grants and £270m of repayable loans, with ministers saying the latter will be “issued on generous terms”. Northern Ireland is to see funding of £33m, with £97m going to Scotland and £59m to Wales. Arts Council chairman Sir Nicholas Serota was among those to welcome the announcement.

The Daily Telegraph, Page: 1 BBC News ITV News


Lockdown drives a green recovery

Jillian Ambrose in the Guardian suggests “countless” businesses are poised to profit from a green economic boom after the coronavirus pandemic. Steven Jennings at PwC says the lockdown has triggered a shift for consumers and companies that is accelerating developments in sustainability, saying: “One of the unintended consequences of the coronavirus crisis is the opportunity for businesses to think about the future. If a company has to rebuild itself, it makes sense to reconfigure how it works to be more sustainable.” Ms Ambrose notes that PwC has set out five-pillar plan to “build back better”.

The Guardian, Page: 28

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Paul Southward






Labour says wealth tax can help pandemic recovery

Labour has urged ministers to consider a wealth tax, saying rolling out a levy for wealthier people can help drive the recovery from the coronavirus pandemic. Shadow chancellor Anneliese Dodds said policymakers should “not increase taxes or cut support for low and middle-income people” during the crisis, saying those with “the broader shoulders” should be asked to make more of a contribution. She added that a “new settlement” was needed to address the injustice of the worst-off paying more tax proportionally than high earners. With Chancellor Rishi Sunak due to set out his latest update on the economy next week, Ms Dodds said the Government should consider imposing a wealth tax which would target assets rather than income.

The Guardian Financial Times, Page: 3 Daily Mail, Page: 6 Daily Express

Wealth levy a taxing matter

Patrick Hosking in the Times looks at calls for wealth taxes and complications that may arise, noting that while most proposals suggest that wealth taxes should be levied on assets less borrowings, and exclude pensions and primary residences, this causes an issue for the Government as it “immediately wipes out most of the tax base.” On taxation of wealth, he argues that taxing income from investments at the same rate as income from employment would be “a good start.” He also says that voters are “content for a wealth tax – just so long as they are not personally affected” and points to a poll showing that 61% of people favoured a levy on those with nest-eggs exceeding £750,000.

The Times, Page: 49


Sunak to act on VAT, business rates and stamp duty

Chancellor Rishi Sunak is expected to outline targets for cuts in VAT and stamp duty in a budget statement that will look to boost the economy. With Wednesday’s statement not a full Budget, the Chancellor’s options for rethinking taxes are limited, the Sunday Times notes, saying he will be able to change VAT rates without the need for a finance bill or a vote in parliament. Whitehall sources have told the paper that Mr Sunak is seeking cuts for a fixed period, with this likely to deliver six-month reductions in VAT on the hospitality industry. Business rates relief and a moratorium on businesses filing VAT returns rolled out to ease pressure brought about by coronavirus pandemic are expected to be extended. While stamp duty is unlikely to be altered this week, the Chancellor will reportedly outline plans for changes that will come in his autumn Budget. The Observer looks at what Mr Sunak may announce, saying he has faced calls to cut VAT to boost consumer spending.

The Sunday Times The Observer, Page: 55

Pay now or face a taxing time in January

Accountants have warned that taxpayers who pay through self-assessment may face a double bill in January due to support rolled out amid the COVID-19 crisis. With officials saying the July payment could be deferred until next January so as to help those whose finances have been put under pressure, Fiona Fernie at Blick Rothenberg says: “It is important to remember that the postponement of the July 31 payment on account merely delays the liability – it does not wipe it out.” “Taxpayers will still have the problem of how they pay their tax bills in January 2021. I would urge them, if they can, to pay now so that they are not faced with a potential multiple bill next January,” she added.

The Sunday Times, Business, Page: 12

HMRC owed £1.5m for embassy rates

HMRC is owed £1.5m in unpaid business rates by more than 30 countries, according to research from real estate consultant Altus. Sudan owes the most at £164,178, followed by Iran at £143,217. The US embassy owes £23,694, while Russia’s bill is £47,642. “Many of these embassies operate from prime central London real estate and are intentionally refusing to pay their tiny tax contributions,” said Robert Hayton, head of UK business rates at Altus.

Sunday Express, Page: 43



After Wirecard: is it time to audit the auditors?

The FT assesses whether reform of the audit sector is required, with ICAEW chief executive Michael Izza saying auditors need a “renewed focus on internal controls, going concern and fraud.”

Financial Times, Page: 9


FRC review set to show increase in inadequate audits

Oliver Shah in the Sunday Times reports that a Financial Reporting Council (FRC) review to be published in July 14 is expected to show that the number of audits considered inadequate has increased over the past 12 months. He says a third of the 88 audits inspected by the FRC either failed its quality test or required “material” further work, whereas a quarter of sample audits fell below the acceptable standard over the previous year. He notes that cases will be scrutinised to see whether they should be investigated, and firms penalised. A source tells Mr Shah that an area of FRC focus is “challenge to management,” adding: “Are auditors still believing what management tell them without kicking the tyres?” The review, it is noted, focuses on work carried out by Deloitte, PwC, EY, KPMG, BDO, Grant Thornton and RSM.

The Sunday Times, Page: 9

Wirecard scandal highlights need for audit reform

The Sunday Times’ Oliver Shah says the scandal at Wirecard, which fell into insolvency after it was found that €1.9bn of cash balances probably did not exist, is the latest sign that “something has gone systemically wrong with auditing.” He says the Wirecard fiasco is “like Groundhog Day”, arguing that “confidence in the simple checking of companies’ accounts … has never been lower.” Mr Shah highlights that of the six biggest firms in the sector, the Big Four and Grant Thornton have all been involved in headline-making corporate scandals, with only BDO not “tangled up in similar woes”. He says the Wirecard case, which has prompted criticism of EY, has “rightly renewed calls for a root-and-branch overhaul of the industry”, warning that any change “has to be cultural as well as practical, and it should be holistic”, including directors of audited companies as well as those doing the auditing. Mr Shah says that in commissioning the Kingman Review of the Financial Reporting Council, Sir Donald Brydon’s review of the audit industry and Lord Tyrie’s Competition & Markets Authority review, ministers “put cart before horse.” Considering reform measures Mr Shah says may be beneficial, he muses on a British version of Sarbanes-Oxley, saying it would show bosses and auditors “they are in it together”. Operational separation of accounting firms’ auditing and advisory businesses looks inevitable, he adds.

The Sunday Times, Business, Page: 9



Pandemic revives the pre-pack

The Times looks at the pre-pack, saying the fast-track insolvency process that grew in prevalence during the financial crisis is making a return amid the coronavirus crisis. It notes that while critics suggest pre-packs reward incompetence at the expense of successful companies, supporters such as R3, the trade association for insolvency professionals, say they are an efficient way to rescue struggling businesses, save jobs and maximise returns to creditors. A poll by R3 found that a third of insolvency experts expected administration to be the insolvency and restructuring option they most commonly recommend over the next year. Richard Fleming of Alvarez & Marsal says the rise of pre-packs was “no surprise when some sectors are on fire”, while KPMG’s Will Wright praises the role of the Pre-Pack Pool, which is supposed to provide independent over-sight of connected-party sales, in ensuring transparency in such transactions.

The Times, Page: 48



Administrators investigate gambling link to Wigan woes

Wigan Athletic’s administrators have opened an investigation following allegations the football club falling into administration may be linked to a bet on the team’s relegation from the Championship. Gerald Krasner of Begbies Traynor has confirmed a case has been opened into the takeover four weeks ago, noting that “lawyers have been instructed.” This comes after Rick Parry, chair of the English Football League, was secretly filmed telling a fan that there “all sorts of rumours” about the club’s position, adding: “There’s rumours that there is a bet in the Philippines on them being relegated.”

The Daily Telegraph, Sport, Page: 5 The Guardian, Sport, Page: 6 The Times, Sport, Page: 6 Daily Mail, Page: 121

Poundstretcher restructuring backed

Discount chain Poundstretcher is close to shutting nearly half of its stores with the likely loss of 2,000 jobs after landlords and other creditors approved a rescue restructuring. Will Wright of KPMG, the joint supervisor of the CVA, said: “The approval of the CVA provides a stable platform from which the company can continue to operate across a more focused store portfolio.”

The Guardian, Page: 38 Yorkshire Post, Page: 26

New Look plans CVA

Retailer New Look is said to be preparing its second CVA in as many years, having engaged advisers to explore restructuring options and negotiate with landlords on a switch to turnover-linked rent for its stores.

The Times, Page: 48

Restaurant group on the menu for investment firm

The Times reports that Azzurri, the casual dining group behind the Ask Italian and Zizzi chains, may be put through a pre-pack administration to facilitate a sale of the business to an American investment firm. Azzurri, which is being advised by KPMG as it weighs its options in the wake of the coronavirus crisis, is understood to be in negotiations over a sale to Towerbrook Capital Partners.

The Times, Page: 49

Intu chief steps down as restructuring begins

Intu CEO Matthew Roberts has stepped down, with his departure coming a week after the shopping centre group entered administration. Intu is in the process of a restructuring overseen by KPMG.

Financial Times, Page: 16

Curtain comes down on theatres

Nuffield Southampton Theatres will not reopen after the lockdown ends after administrators failed to find viable buyers for its two venues. Smith and Williamson said theatres located in the city centre and at the University of Southampton will be closed permanently, with 86 people being made redundant.

Daily Express, Page: 11


Insurance support to get cameras rolling

Ministers are said to be preparing taxpayer support to get film and television productions back underway after the COVID-19 lockdown, with producers saying they are unable to secure insurance. Treasury officials are reportedly being advised by specialists from PwC and Frontier Economics, which is chaired by former Cabinet secretary Gus O’Donnell, on how best to “unlock” insurance for productions, with taxpayer guarantees likely to be used to underwrite policies.

The Sunday Telegraph, Business, Page: 1

Sports bar chain plots survival

Sports bar firm Rileys is working with FRP Advisory on options to secure its survival, but has filed notice of intent to appoint administrators. Private equity firm Weight Partners Capital bought the chain in December 2014 after it was put into administration by Greybull Capital, who had bought Rileys out of insolvency in 2012.

The Sunday Telegraph, Business, Page: 3

New Look lands loan extension

New Look has agreed terms on an extension to an £80m credit facility. This comes with the fashion chain looking to agree a deal with landlords that would see a switch from fixed rent contracts to turnover-linked payments. Sources in the sector say a CVA remains a possibility, with New Look, likely advised by Deloitte, not expected to make a final decision on how to proceed until next month.

The Mail on Sunday, Page: 122



Bounce Back initiative drives SME loans

While lending to small businesses has seen flat growth in recent years, with a record of £589m seen in September 2016, the Government’s coronavirus support initiative has delivered a huge jump. Loans to SMEs rose 11.8% in May, with the Bounce Back Loan Scheme seeing borrowing soar.

The Sunday Times, Business, Page: 16



Inheritance battles soar

Ministry of Justice figures show that the number of inheritance battles at the High Court hit an all-time high last year, with 188 cases brought by people claiming they were entitled to a share or a larger portion of an estate in 2019. This marks a 47% increase on the 128 claims made in 2018, with the Sunday Times saying there has been a greater incentive to challenge wills as increasing house prices over recent years have driven up the value of estates, while an increase in unmarried couples, who do not have automatic legal inheritance rights, may have contributed to the rise in case numbers.

The Sunday Times



CEBR chief in jobs warning

While the Centre for Economics and Business Research says unemployment is expected to peak at a record 3.3m this year, chief executive Doug McWilliams has warned this could get far higher amid growing job losses. Mr McWilliams said: “What we don’t know is what happens after furlough ends. If there are job losses and companies fail and there is quite a long period of nothing happening, it will all unwind pretty damn quickly.”

The Daily Telegraph, Page: 33


Furloughed workers gain protection from redundancies

The Sunday Telegraph reports that employers planning mass redundancies of furloughed workers face restrictions that may see them forced to pay back taxpayer money. The Treasury has reworded the purpose of the Coronavirus Job Retention Scheme to say it is “integral” that the money is “used by the employer to continue the employment of employees”. This, the paper says, has panicked some businesses while giving campaigners hope that bosses may now think twice before cutting jobs. MP Huw Merriman is tabling an urgent question asking the Treasury to clarify the changes. Eleena Misra, employment barrister at Old Square Chambers, said the rewording could be interpreted as signalling a crackdown on fraud, while law firm Lewis Silkin notes that HMRC had said the furlough scheme could be used during both redundancy consultation and notice periods, but not for redundancy pay. HMRC told the Telegraph: “This change is just setting out the intended purpose of the scheme … employees remain eligible while on their statutory notice period.”

The Sunday Telegraph, Business, Page: 1

Sunak urged to extend furlough

Chancellor Rishi Sunak has been urged to extend the furlough scheme, with Nye Cominetti, senior economist at the Resolution Foundation, calling on the Treasury to extend support to the sectors hardest hit by the virus, such as retail, hospitality and leisure. “With the scheme due to be phased out between August and October, a second wave of unemployment is expected later this year. How big will depend a lot on how Government responds to the next phase and if the Chancellor extends support for the hardest hit sectors,” he added. EY Item Club analysis suggests the unemployment rate will rise from 3.9% during the first quarter to 7.5% in Q3, with chief economic adviser Howard Archer warning: “The jobs situation looks increasingly worrying.”.

Daily Express, Page: 43



Sunak mulls stamp duty holiday

The Sun reports that a six-month stamp duty holiday may be introduced in a bid to revive the housing market, with Chancellor Rishi Sunak understood to be considering raising the levy’s threshold as part of his autumn Budget. While under current brackets, nothing is paid on the first £125,000, then 2% up to £250,000 and 5% up to £925,000, a source has told the paper that the new lower limit could be £300,000 – but may be set as high as £500,000. Another measure reportedly under consideration is removing stamp duty land tax on vacant plots to boost the development of new housebuilding projects.

The Sun, Page: 2



Consumer confidence rising

UK consumer confidence is beginning to pick up, according to Growth from Knowledge’s (GfK) fourth flash report, which indicates that, with lockdown restrictions easing, confidence increased three points over the last two weeks to -27. The small rise, recorded between 18-26 June, comes after the index fell to its lowest ever level of -36 last month. The overall score is based on five measures, four of which improved over the 14-day period. The biggest rises were in the major purchase index, which climbed seven points to -25, and in the 12-month general economic situation, which rose six points to -42. GfK client strategy director Joe Staton comments: “Economic headwinds could easily blow any recovery off-course with confidence remaining fragile and volatile amid few signs of stability.”

City AM

Services sector sees turnaround

The IHS Markit/Cips purchasing managers’ index (PMI) for the services sector rebounded to a reading of 47.1 in June from 29 in May, which had followed an all-time low of 13.4 in April on a scale where any reading below 50 denotes contraction. Tim Moore, economics director at IHS Markit, said: “June data highlights that the worst phase of the service sector downturn has passed as more businesses start to reopen and adapt their operations to meet social distancing requirements.”

The Times, Page: 50 The Daily Telegraph, Business, Page: 33 Daily Express, Page: 58 The Scotsman, Page: 33


Danker: Smart thinking can add £130bn to economy

Tony Danker, the incoming director general of the Confederation of British Industry (CBI), says the coronavirus crisis can be a catalyst for a move toward a more efficient economy. Mr Danker, who will replace Dame Carolyn Fairbairn at the CBI in November, says that Britain has struggled to address productivity issues since the financial crisis , and identifies infrastructure spending and improving skills as important, but slow-burning, boosters for productivity. With this in mind, he suggests: “Government can’t fix the productivity problem; business has to”. Mr Danker says firms are showing a thirst for efficiency, technology and innovation, adding that it is “a tragedy that it’s taken a global pandemic” to stimulate new ways of thinking. He adds that a 10% increase in productivity across the smallest 75% of firms could add £130bn to the economy.

The Mail on Sunday, Page: 125

OBR chair in debt warning

Robert Chote, chairman of the Office for Budget Responsibility, has warned Chancellor Rishi Sunak over the risks of taking on large amounts of debt. With state support amid the coronavirus pandemic of around £132bn driving up the nation’s debt as a share of the economy, Mr Chote said: “A sensible government is not merely going to look how cheap it is for governments to borrow today but what difficulties will be created if it became more expensive.”

The Sunday Telegraph, Business, Page: 1



Tax adviser dodged £30k in stamp duty

Tax adviser David Hannah, who avoided paying £30,000 in stamp duty, has been fined £60,000 for failing to warn a client that HMRC was clamping down on a similar tax avoidance scheme. Last year, First Tier Tax Tribunal judge Victoria Nicholl ruled that Mr Hannah avoided paying £30,600 in stamp duty on a £765,000 home, having participated in a complex overseas-based annuities scheme that misrepresented the house’s value as £38,250 to the taxman. It has now emerged that he has been ordered to pay nearly £60,000 in penalties, fines and court costs after the Taxation Disciplinary Board found that he had downplayed the risks of a stamp duty avoidance scheme to a client.

The Sunday Times, Business, Page: 11

Contact Paul Southward





O’Donnell foresees tax reform

Former civil service head Gus O’Donnell believes the coronavirus crisis has created “a clear burning platform” for tax reform, arguing that a wealth tax is now more likely than ever. Speaking at an online event organised by the Institute for Fiscal Studies, the former cabinet secretary said that while people may once have favoured spending reductions over tax increases, “people now mostly say they prefer tax increases to spending reductions.” Meanwhile, Martin Sandbu in the FT suggests wealth taxes could provide a new way of raising government revenue as ministers seek to address the financial effects of the pandemic.

The Guardian, Page: 29 Financial Times Financial Times

Digital tax call from internet advocacy

The Internet Association has published a six-point plan for a future UK-US trade deal which urges policymakers to guarantee against unilaterally imposing taxes on digital services companies. It argues that any potential new taxation on digital services should be set up in “an internationally coordinated manner”. Internet Association director of trade policy Jordan Haas commented: “The US and the UK lead the world in digital technology and this agreement should include policies that will bolster that success. The provisions in our white paper would strengthen both countries’ digital trade leadership – at a time when other nations are pushing very different, closed visions of the internet.”

City AM

Sunak damps hopes of big UK tax cuts

Looking ahead to Rishi Sunak’s economic statement next week, the FT notes that the Chancellor has told MPs not to expect big tax cuts to boost the economy.

Financial Times, Page: 1


Corporate debt levels unsustainable?

David McIlroy in an opinion piece for City AM warns of growing concern that levels of corporate debt are unsustainable. He says companies have been loaded up with levels of debt via Bounce Bank Loans and the Coronavirus Business Interruption Loan Scheme which would be unthinkable were interest rates not close to zero. He points to a report from TheCityUK’s Recapitalisation Group, which last month predicted that UK businesses would have £100bn of unsustainable debt by March 2021, with around half of this owed by SMEs. This, he suggests, “will be a significant barrier to economic recovery.” On taxation, Mr McIlroy notes that companies receive tax relief on the interest payments on their debt, whereas money paid to shareholders as dividends is taxed, arguing that there is no economic rationale for this “tax bias”.

City AM

Restaurant owner falls into administration

Casual Dining Group, the owner of restaurant chains Café Rouge and Bella Italia, has gone into administration. More than 90 outlets will close immediately, with 1,900 of the firm’s 6,000 staff losing their jobs. Some 159 of the group’s 250 outlets will remain open. Administrators Alix Partners are seeking offers for all, or parts, of the remaining business. The firm says it has already received “multiple offers” for the business. Turnaround fund Aurelius Equity Opportunities has reportedly made an offer to take over Cafe Rouge and Bella Italia, while Endless is said to be competing with private equity investor Trispan for control of the Las Iguanas brand. Considering the hit COVID-19 has dealt the sector, Julie Palmer at Begbies Traynor comments: “The casual dining sector was in distress before this crisis, but this is what will tip many over the edge and towards collapse.”

The Daily Telegraph The Guardian, Page: 27 Financial Times BBC News

Prezzo considering sale after appointing advisers

Italian restaurant firm Prezzo is seeking new funding to survive the coronavirus pandemic, appointing FRP Advisory to lead an auction of the business. Leadership at the company, which is part-owned by US buyout firm TPG, is believed to favour simplifying its ownership structure.

The Times, Page: 45 Daily Mail, Page: 77 City AM

Wage concern for Wigan

The administrator for Wigan Athletic has admitted there is no guarantee that the club’s players and staff will be paid. Gerald Krasner of Begbies Traynor also said that there was only a 75% chance that the club would be able to fulfil its remaining six fixtures as it struggles to meet running costs. Begbies Traynor says it will probe the circumstances of the administration and the club’s ownership.

The Guardian, Page: 39 The Independent, Page: 62 The Daily Telegraph, Sport, Page: 5 The Times, Page: 69 Daily Express, Page: 54 Daily Mirror, Page: 53 Daily Star, Page: 53 The Scotsman, Page: 59

Car sales driven online?

Tim Kiek looks at car sales, noting that some analysts predict an increase in online activity. Andrew Burn, head of automotive at KPMG, expects a “step change” to online sales, saying: “A number of dealership groups have been trying to transition to internet sales models.”

The Daily Telegraph, Business, Page: 4


IPPR: Youth unemployment set to exceed 1m

Analysis by the Institute for Public Policy Research (IPPR) think-tank has warned that youth unemployment is set to hit a record high of more than 1m this year. It says 410,000 18 to 24-year-olds are already jobless and expects 620,000 to be added to the total by the end of 2020. Harry Quilter-Pinner, senior research fellow at the IPPR, warned that this would be “a huge waste of talent and potential”. The IPPR has urged the Government to set up a £3bn job guarantee scheme to get every under 25 in work, on an apprenticeship or in training, while also suggesting a £1.5bn apprenticeships fund and reform of unemployment benefits should be rolled out.

The Times, Page: 40 The Sun, Page: 10


Pandemic forces audit firms to tighten viability checks

The Financial Reporting Council (FRC) says the UK’s audit firms have strengthened their tests of the financial viability of companies as a result of the coronavirus outbreak, with a review by the watchdog gauging emergency measures that have been rolled out. These, the review found, include significantly increasing the number of consultations on going concern assessments. The FRC said one firm has required audit teams to give an explanation if going concern is not a significant risk, while another has identified sectors facing the steepest challenge from the pandemic to assess whether extra support would be needed. The watchdog’s review covered the procedures of the seven largest audit firms, which include the Big Four. The FRC says it will consider the challenges of the present environment when it carries out its audit quality review for the period.

The Times, Page: 40


Housing bosses call for stamp duty cut

Business leaders from the housing sector have written to Rishi Sunak calling for a new Help to Downsize scheme they believe will boost the property market, driving its recovery by freeing up larger homes. In a letter to the Chancellor, the signatories argue that waiving stamp duty for older homeowners moving to smaller, more suitable homes will help open up space on the property ladder for families seeking larger homes and first-time buyers. The letter says that a quarter of people will be 65 or over by 2040, with this equating to 18m people – up 5m on the current number. However, it adds, the UK’s housing stock “is not adequate to meet this change.”

Daily Mail


Executives expect unemployment to rise and sales to dip

A Bank of England poll of British business executives suggest that unemployment will rise to 3.5m this year. Across the 2,776 people surveyed, the average expectation was that the jobless rate would hit 11% by year end, far exceeding the official unemployment rate of 3.9% recorded in April. Firms taking part in the survey also said that, on average, 30% of employees had been furloughed in June, down from 36% in May, with this expected to fall to 18% in Q3 and 5% in the final three months of the year. The poll also found that executives expect sales to be 38% lower than they would have been had there been no coronavirus outbreak, foreseeing a 26% dip in Q3 followed by a 16% hit in Q4 and a 10% slide in Q1 2021. The firms quizzed also said they expect costs to be 7% higher in the next quarter than they would have been had the pandemic not occurred.

The Independent

Sales down in June despite online surge

BDO ’s high street sales tracker shows that total like-for-like sales were down 14.4% year-on-year in June, despite online sales rising by 102.6%. The 14.4% fall marks an increase on the 18.3% dip seen in May but still represents the fifth consecutive month of negative like-for-like sales. Sophie Michael, head of retail and wholesale at BDO, said: “Despite the opening of non-essential retail and a strong performance of non-store sales in June, retailers have a long way to go to claw their way back following three months of closure.”

The Times, Page: 39 The I, Page: 50 Daily Express, Page: 48 The Sun, Page: 47

Contact Paul Southward

Paul Southward





OECD: US remains part of tax talks

The OECD has said the US is still taking part in discussions around a global digital tax, despite American officials suggesting the contrary. US treasury secretary Steven Mnuchin has said the US would pull out of talks if European countries did not halt their plans for independent digital taxes, while US trade representative Robert Lighthizer recently said the US was “no longer involved in the negotiations”. Despite these comments, OECD general secretary Angel Gurria yesterday insisted: “To be clear, contrary to some earlier media reports, the US has not pulled out of the negotiations.” Since the US suggested it was stepping away from talks, finance ministers from the UK, France, Italy and Spain have exchanged correspondence with American officials over the matter, with it suggested the European nations have offered to take a “phased approach” to their individual taxes so as to get US officials back around the table. Meanwhile, Mr Gurria has stressed the need for international agreement on a plan that will “ensure that a minimum level of tax will be paid, no matter how much clever tax planning is undertaken by multinationals.”

City AM Reuters

MPs call for digital tax amendment

A cross-party group of 22 MPs have called for an amendment to the Digital Services Tax that would force large technology companies to disclose country-by-country detail of their revenues and profits. Under the existing system, the information is disclosed to the taxman for all multinational companies but is not made public. In 2016, MPs voted in favour of releasing the information for all multinational companies so as to help tackle tax avoidance but the necessary legislation has yet to be brought forward.

The Times, Page: 33

Business bosses back online sales tax

A poll of company leaders suggests that business rates should be replaced with an online sales tax, with the majority backing the move. With many digital businesses prospering amid the coronavirus crisis and lockdown, BDO‘s Paul Falvey said it is “logical to pay tax based on online sales to help the economy recover”.

Daily Mirror, Page: 12


UK firms cut 12,000 roles

More than 12,000 UK workers are set to lose their jobs after a number of firms announced plans to lay off staff over the past two days. Job losses announced include: up to 5,000 at Upper Crust owner SSP Group; 1,700 at plane-maker Airbus; 700 at Harrods; 600 at shirtmaker TM Lewin; up to 900 at management consulting firm Accenture; 300 across Virgin Money, Clydesdale Bank and Yorkshire Bank; Arcadia, whose chains include Topshop and Dorothy Perkins, is shedding 500 of its 2,500 head office staff; and 1,300 crew and 727 pilots at EasyJet are facing redundancy. John Lewis has also said it will close stores but has yet to detail job losses, while firms including WH Smith and Bensons for Beds have announced plans to reduce staff numbers. BBC News says the cuts come ahead of the Government’s furlough scheme being pared back before ending in October, suggesting that with firms having to consult on redundancies for 30-45 days, “some will feel that now is the time to act”. With the retail sector among the hardest hit, Milan Pandya of Blick Rothenberg has urged Chancellor Rishi Sunak to deliver a “clear and comprehensive plan” to support the sector, commenting: “If the redundancies continue, the Government has a real long-term problem of unemployment.”

BBC News The Independent, Page: 22 Daily Mirror, Page: 6 The Sun, Page: 2

BoE warning on unemployment

Bank of England interest rate-setter Jonathan Haskel has said the UK economy could be affected by the pandemic more severely than previously thought. He told the Brighton Chamber of Commerce that “Worryingly the indicators of rising unemployment are already revealing themselves, with unemployment claims recorded to date enough to put us back to levels of unemployment not seen since the financial crisis.”

City AM

Pandemic hits female workforce

Writing in the Mail, Dame Helena Morrissey looks at the impact the coronavirus and lockdown has had on working women. She notes PwC research showing that if the UK increased the female employment rate to the same level as Sweden, the economy would grow by almost 9%, equivalent to £180bn.

Daily Mail, Page: 41


Letter: Auditors and the collapse of Kingston Cotton Mills

In a letter to the FT, Cameron Scott, former executive counsel at the Financial Reporting Council, suggests it may be time for the role of auditors to be fundamentally reassessed.

Financial Times, Page: 20


Wigan woe as club enters administration

Wigan Athletic has become the first club in professional English football to enter administration following the coronavirus pandemic. This comes just four weeks after Hong Kong-based consortium Next Leader Fund took over the Championship club, promising to secure its future. Administrators from Begbies Traynor say the immediate objective is to “ensure the club completes all its fixtures and to urgently find interested parties to save Wigan and the jobs of the people who work for the club”. Under league rules, Wigan face a 12-point deduction for entering administration.

The Times, Page: 63 Financial Times, Page: 10 Daily Mail, Page: 85 The Independent, Page: 64 The Guardian, Page: 40 The Scotsman, Page : 60

Lookers results delay leads to suspension from trading

Shares in car dealership firm Lookers have been suspended from trading after the company failed to publish its final results. An accounting probe carried out by Grant Thornton is ongoing after a £19m hole in Lookers’ accounts was identified. Auditor Deloitte has said it will resign as soon as the accounts for last year are released, while five directors at Lookers, including its chairman, are due to step down.

City AM

Sainsbury’s sees sales climb in lockdown

Sainsbury’s saw sales climb 8.5% for the 16 weeks to 27 June but expects the coronavirus pandemic to deliver a £500m-plus hit to profits. Julie Palmer of Begbies Traynor says new CEO Simon Roberts is facing the task of “navigating the supermarket through the murky economic waters of COVID-19.”

The Scotsman, Page: 34


Annual house prices see first fall in eight years

House prices in the UK fell for the first time on an annual basis in eight years in June, according to Nationwide, slipping 0.1% year-on-year, having increased 1.8% in May. Month-on-month, prices slipped 1.4% as the coronavirus lockdown hit the property market. Figures show the typical home was worth £216,403 in June. Nationwide’s chief economist, Robert Gardner, commented: “While latest data from HMRC showed a slight pick-up in residential property transactions from April’s low, in May they were still 50% lower than the same month in 2019.” He added that with lockdown measures set to ease further, market activity is likely to edge higher in the near term but remain below pre-pandemic levels.

BBC News The Guardian The Daily Telegraph Financial Times, Page: 3 City AM


Lloyd’s of London calls for SME support

A new report by Lloyd’s of London calls for the insurance industry to do more to help SMEs recover from the impact of the coronavirus crisis, with chairman Bruce Carnegie-Brown saying: “COVID-19 has demonstrated that there is much more we can do to support our customers by providing protection for the changing risks they face.” Business interruption insurance designed to help SMEs during future crises, by pooling non-damage business interruption coverage among participants in Lloyd’s insurance market, is one suggestion set out in the report.

City AM


Police raid Wirecard offices

Police have raided Wirecard offices on the continent as investigations into the €1.9bn accounting scandal intensify. Prosecutors and police officers were supported by police IT experts as they swept five properties in Germany and Austria, including Wirecard’s headquarters near Munich. Meanwhile, Felix Hufeld, head of regulator BaFin, has refuted suggestions it fell short in investigating Wirecard, saying its ability to act was limited as the firm was not classified as a financial services provider.

The Daily Telegraph Financial Times, Page: 4


Manufacturing fuels hope of a V-shaped recovery

Manufacturing activity grew in June, prompting hope that the UK may see a V-shaped economic recovery following the hit from the coronavirus pandemic. The IHS Markit/Cips manufacturing PMI, where scores below 50 show decline and above 50 show growth, rose from 40.7 in May to 50.1 in June, having hit an all-time low of 32.6 in April. James Brougham of industry lobby group Make UK said: “Manufacturers are leading the economic recovery.” Considering the data, Pantheon Macroeconomics’ Samuel Tombs warned that “it remains highly unlikely that manufacturing output will recover to its pre-coronavirus level on a sustained basis within the next year”. Meanwhile, the survey raised concern over jobs in the sector, with employment falling for a fifth straight month in June. Rob Dobson, a director at IHS Markit, said: “Concerns are rising about the potential for marked job losses, especially once the phase out of government support schemes begins.” Dave Atkinson, UK head of manufacturing at Lloyds Bank, warned that manufacturers are “bracing themselves for the second half of the year in the knowledge that a reckoning looms.”

The Daily Telegraph, Business, Page: 5 Daily Mail City AM

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Paul Southward