NEWS – FRIDAY 12TH MARCH 2021

NEWS ROUNDUP

TAX NEWS – FRIDAY 12TH MARCH 2021

Private business owners hurt more by corporation tax hike

Analysis by Blick Rothenberg indicates Rishi Sunak’s corporation tax increases post April 2023 will hurt private business owners harder than the major corporations the Chancellor said it was aimed at. Nimesh Shah, chief executive of Blick Rothenberg, said: “The increase to corporation tax may have been badged to target big business, but the effect for the self-employed is clear. It may not be an obvious attack, but it achieves the Chancellor’s previous warning that the self-employed would face higher taxes. The tax impact for private business owners receiving dividends is far more severe.”

The i, Page: 10

Letter: Fear of Amazon should not drive UK tax policy

Miles Dean asserts that whether Amazon might benefit from the super-deduction tax break announced by Rishi Sunak is “neither here nor there.” Does the policy stimulate the economy?

Financial Times

CORPORATE NEWS – FRIDAY 12TH MARCH 2021

Greensill spoke to insolvency advisers in December

The Telegraph reports that Greensill Capital called in Grant Thornton for restructuring advice as early as December last year, just two weeks after founder Lex Greensill revealed he was “carefully considering” a multibillion dollar listing. Elsewhere, risk managers at Credit Suisse were over-ruled by senior executives who approved a $160m loan to Greensill Capital. Credit Suisse is thought to be exposed to Greensill to the tune of $1bn-$2bn. Meanwhile, the FT details how Greensill tried to raise $1bn despite having lost the insurance that was crucial to its business model. Elsewhere, in the Telegraph, Ben Marlow says Greensill’s collapse should serve as a warning for fintech wannabes: “The lender claimed to be revolutionising small business financing with technology, but all it did was offer IOUs.”

Financial Times Financial Times, Page: 11 The Daily Telegraph The Daily Telegraph, Business, Page: 3

SMEs NEWS – FRIDAY 12TH MARCH 2021

Banks urged to step up support for new business

Crowe ’s managing partner for the Midlands says entrepreneurs are still facing barriers to opening business bank accounts. Johnathan Dudley points out that start-ups and the self-employed launching new businesses played a key role in the recovery from previous recessions, and the exit from the coronavirus pandemic would be no exception. “It is absolutely vital we turn the tap on to provide essential business banking facilities if we are to achieve the rapid return to growth which is vital to the UK’s economic recovery,” he explains.

Express & Star

PERSONAL FINANCE NEWS – FRIDAY 12TH MARCH 2021

Government has ‘no plans’ to reduce Lifetime Isa withdrawal penalty

The Government has said that savers who need to raid their Lifetime Isa pot will soon be charged their own money to do so again to “discourage withdrawals” and “protect its status as a long-term savings product”. The Government said the penalty for withdrawing money from the tax-free account would be increased back up to 25% from 6 April and that it had “no plans to permanently reduce this charge to 20%”. Nathan Long, an analyst at DIY investment platform Hargreaves Lansdown, said: “Given the nation seems to be steeling itself for anticipated job losses as furlough unwinds, the case for the reduced penalty must surely be as strong now as when they first signed off on it.”

Daily Mail

PENSIONS NEWS – FRIDAY 12TH MARCH 2021

Pensions Regulator consults on criminal sanctions policy

The Pensions Regulator (TPR) has published for consultation guidance on how it will use new criminal powers given to it by recently passed legislation, with pensions industry representatives saying it was helpful but unlikely to dispel concerns about unintended consequences. Punishable by an unlimited fine and/or up to seven years in prison, the criminal offences – avoidance of a statutory employer debt and conduct risking accrued defined benefit (DB) savings – have caused considerable industry alarm given that the criminal powers have been widely drawn.

Pensions & Investments Investment & Pensions Europe

ECONOMY NEWS – FRIDAY 12TH MARCH 2021

Sunak worries about risk of rising interest rates

The Chancellor told MPs on Thursday that a reversal of low-cost borrowing would have a “significant impact” on the public finances over the next few years. Explaining his Budget decisions to lawmakers, Rishi Sunak acknowledged the risk of rising bond yields and that the Bank of England’s QE programme amplified these. Ben Wright in the Telegraph explains that the UK’s margin for error when it comes to rates is “vanishingly small” and cites BlackRock’s Vivek Paul who says the country has the least sustainable deficit of any developed nation. “If and when investor sentiment begins to turn, it is likely to hit the UK faster and harder than any other major economy.”

Financial Times The Daily Telegraph

Manufacturing M&A activity set to remain strong

BDO predicts strong manufacturing M&A activity throughout the year with many deals driven by a desire to make supply chains more resilient. Roger Buckley, UK industrials mergers and acquisitions partner at BDO, said: “Deal activity held up remarkably well in 2020, and the market looks set to remain active in 2021. Many corporates have significant cash reserves to invest and private equity firms sitting on considerable stores of dry powder are competing to acquire quality manufacturing businesses that have proven their resilience over the last year.”

Insider Media

Consumer businesses expect to reduce capital expenditure

Research by Deloitte has shown that 73% of CEOs and CFOs in the consumer business sector are planning to accelerate cost reduction programmes this year due to the pandemic.

City AM

REGULATION NEWS – FRIDAY 12TH MARCH 2021

Ministers plan overhaul of capital market rules to boost City

The Treasury is planning a wide-ranging review of UK financial markets rules to improve the City’s competitiveness. City minister John Glen told Bloomberg that the review would be “as broad and as inclusive as possible so that we really look at everything”. The overhaul in the immediate term is likely to focus on Mifid II rules, which critics say have had only marginal benefit and created layers of red tape. The FT reports that the Government wants to hand the Financial Conduct Authority powers to shape future rules, rather than continue to make changes by parliamentary legislation. Rules making it easier for banks to hold capital are also being considered, along with scrapping the share-trading obligation and the cap on the amount of trading that investors can execute on private marketplaces. A Treasury spokesperson said the Government wanted “to make the UK the most open and dynamic financial centre in the world [and] reduce burdens for firms whilst maintaining high standards of regulation”. Separately, entrepreneur Brent Hoberman writes in the FT that a shake-up of UK rules for listed companies is long overdue.

Financial Times The Daily Telegraph Financial Times

INDUSTRY NEWS – FRIDAY 12TH MARCH 2021

Helen Brand: Work towards genuine equality still urgently needed

The ACCA’s chief executive Helen Brand answers questions from City AM on her career and why equality is so important for the ACCA. Brand explains how the Black Lives Matter movement accelerated change and the processes the ACCA subsequently put in place to better understand all members. “It’s a never-ending commitment to do this well,” she says, “which involves listening and engagement.”

City AM

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Paul Southward