NEWS – FRIDAY 15TH JANUARY 2021

NEWS ROUNDUP

TAX NEWS – FRIDAY 15TH JANUARY 2021

Brits braced for IHT increase

With ongoing speculation that the Chancellor may increase taxes to help foot the nation’s coronavirus bill, a poll by inheritance lending specialist Tower Street Finance has seen more than half of respondents say they expect policymakers to increase inheritance tax to 50%. A further three in ten said an increase to 60% may be on the cards, while one in seven are expecting the IHT rate to rise to 70%. The poll of 2,000 people saw one in 33 say IHT could be increased to 80%, double the current rate. The survey also saw 45% of respondents say they do not feel the Government should make any changes to IHT or the nil-rate band – the threshold above which an estate has to pay the levy. Andrew Bartle, managing director of Tower Street Finance, said the research shows “the majority of people are bracing themselves for an IHT rise – whether that’s a straight increase from the current 40% charge or a reduction in the nil rate band, or indeed both.”

Daily Express

MPs call for stamp duty holiday extension

A group of Conservative MPs based in northern England have urged the Chancellor to extend the stamp duty holiday. The Northern Research Group has urged Rishi Sunak to extend the tax cut for properties worth less than £500,000 for a further 12 months, as well as calling for extensions of business rates relief, the VAT cut for leisure and tourism and mortgage holidays for furloughed workers. John Stevenson, MP for Carlisle, says the stamp duty holiday, which is set to come to an end on March 31, has been “very, very beneficial for the housing market,” adding that it gave the market confidence and suggesting that maintaining that confidence is beneficial for the wider economy.

The Daily Telegraph

Surely, the plight of the UK’s businesses which have been crippled by lockdown should be higher up the political agenda than SDLT?

Pandemic pressure can explain late filing

HMRC says people filing an annual self-assessment tax return online could avoid paying a penalty if they have a coronavirus-related excuse. The tax office said that it will accept disruptions caused by the pandemic as a reasonable excuse for people missing the deadline, meaning they may be able to appeal the standard £100 fine for missing the January 31 cut-off. Those wishing to cite the pandemic as a reason for a late submission must prove the crisis has had an impact and how it caused a delay.

Daily Star

US says digital taxes in Spain, Austria and UK are discriminatory

The United States Trade Representative says probes into digital taxes in Spain, Austria and the UK show they are “inconsistent with prevailing principles of international taxation” and discriminate against American tech firms.

Financial Times

EMPLOYMENT NEWS – FRIDAY 15TH JANUARY 2021

Kwarteng refutes report on workers’ rights

The Government has rejected a report suggesting that following its exit from the EU, the UK will pull back from employment protections based in EU law, with recently-appointed Business Secretary Kwasi Kwarteng insisting: “We are not going to lower the standards of workers’ rights”. “The UK has one of the best workers’ rights records in the world – going further than the EU in many areas. We want to protect and enhance workers’ rights going forward, not row back on them,” he added. His comments follow a report in the FT which says a plan to overhaul UK labour markets could see an end to the 48-hour maximum working week, changes to rules about breaks at work, and removing overtime pay when calculating certain holiday pay entitlements. Shadow Business Secretary Ed Miliband said the report “exposes the truth about the Government’s priorities, which are way out of step with the needs of workers and their families”.

The Guardian Financial Times

CORPORATE NEWS – FRIDAY 15TH JANUARY 2021

Carillion’s key culprits

With Business Secretary Kwasi Kwarteng launching a legal bid to ban eight former Carillion directors from UK boardrooms for up to 15 years, Alistair Osborne in the Times says former CEO Richard Howson, former finance director Richard Adam and former chairman Philip Green were the “key culprits” in the firm collapsing with almost £7bn of liabilities and just £29m in cash. Mr Osborne says stand-in boss Keith Cochrane, who was in charge when Carillion crashed into liquidation, “is much less to blame”, saying that he “took the poisoned chalice” and could not have been expected to have “spotted all the shenanigans, not least with auditor KPMG asleep on the job.”

The Times, Page: 37

Day buys back Bonmarche

Fashion chain Bonmarche has been sold back to retail tycoon Philip Day after it crashed into administration, with the move saving 531 jobs and 72 stores. Administrators at RSM have sold the remaining stock, as well as the head office and the distribution centres, to Purepay Retail Limited, a subsidiary of secured creditor EWM Group, backed by an international investor consortium. This comes after administrators at FRP Advisory sold sister brands Edinburgh Woollen Mill and Ponden Home to the same entity.

The Daily Telegraph, Business, Page: 3

Leveson offers initial Boohoo report

Sir Brian Leveson has published a report on Boohoo’s supply chain overhaul, having been appointed to monitor its progress after it was last year exposed for sweat shop-style conditions and low pay at factories it uses in Leicester. Sir Brian is overseeing the fashion retailer’s Agenda for Change, with KPMG independently tracking its progress. The report says Boohoo’s efforts have started well, although some areas remained a work in progress.

Daily Mail, Page: 81 The Daily Telegraph, Business, Page: 2 Financial Times The Guardian

Norwegian axes long haul

Low-cost airline Norwegian has culled long-haul services and will now focus on short-haul flights to European destinations. The move means the loss of more than 1,000 jobs at Gatwick where, before the coronavirus pandemic, Norwegian had been the third-biggest carrier. KPMG has been lined up to liquidate the airline’s UK subsidiary.

The Daily Telegraph, Business, Page: 4

PROPERTY NEWS – FRIDAY 15TH JANUARY 2021

House prices set to fall, says Rics

House prices could fall “significantly” in the coming months, with the Royal Institution of Chartered Surveyors (Rics) saying ongoing coronavirus restrictions and the end of the stamp duty holiday are likely to hit values. Rics said that while property prices, sales and buyer demand all increased in December, growth was at a slower pace than seen in previous months. Simon Rubinsohn, chief economist at the Rics, said a poll of surveyors suggests the latest coronavirus restrictions will “impact on transaction activity over the coming months”, adding that this is “most visible in the negative reading for sales expectations over the next three months when typically, with the expiry of the stamp duty holiday approaching, this series would be expected to remain firmly in positive territory.” The Rics poll saw near-term sales expectations slip to post a net balance of -22%, with this the weakest since April 2020. For the twelve months ahead, sales expectations are marginally negative, with a net balance of -6%.

Daily Mail

FINANCIAL SERVICES NEWS – FRIDAY 15TH JANUARY 2021

Experts warn of City’s access to the EU

Industry experts have warned that Britain’s financial services sector faces a political battle to secure access to EU markets, with prominent figures telling the House of Lords EU Services sub-committee that negotiations on post-Brexit financial services arrangements are being driven by political concerns, rather than regulatory or legal issues. They also warned that officials in the bloc could use equivalence rulings to drive business out of Britain and into the EU. Miles Celic, chief executive of TheCityUK, said equivalence is “becoming increasingly politicised”, while Nick Collier, the City of London Corporation’s representative in Brussels, said that there “isn’t really a technical case” for not granting equivalence, arguing “it’s really a political case”. Warning that firms which have moved staff to the continent and secured regulatory licenses in the EU may be unlikely to relocate back to Britain, Mr Celic said: “The longer we don’t have equivalence on the EU side, the more the concrete will set”.

Yahoo! Finance

ECONOMY NEWS – FRIDAY 15TH JANUARY 2021

BCC calls for greater support amid double-dip recession fears

With official figures expected to show that the UK has slipped into a double-dip recession, the British Chambers of Commerce (BCC) has urged the Chancellor to provide more financial support to businesses. Figures from the Office for National Statistics are expected to show the economy crashed in November, with economists forecasting a 5.7% month-on-month fall in GDP, ending six successive months of growth. This would follow the record 19% decline seen in Q2. The BCC has called on Rishi Sunak to expand support, arguing that action is needed immediately as firms cannot afford to wait for any measures that may be announced in the budget on March 3. BCC director general Adam Marshall believes ministers must “urgently adopt a package of measures that covers the whole of 2021”, saying this will remove “the cliff-edges firms face in a few weeks’ time when reliefs, forbearance and furlough are set to end.” Paul Newman of RSM says “urgent clarity on substantial, additional government support is needed now as the March 3 budget may simply be too late.”

The Guardian, Page: 31

Restrictions to hit sales in Q1

The KPMG / Ipsos Retail Think Tank expects a surge in coronavirus cases to hurt the high street in the first three months of 2021, with lockdowns seeing non-essential stores forced to close. It forecasts a two percentage point decline in retail sales, with this following a modest recovery during the final quarter of 2020.

The I, Page: 9

OTHER NEWS – FRIDAY 15TH JANUARY 2021

Business travel on standby

The FT says business travel, which PwC estimates can generate up to 75% of airlines’ revenue on some international flights, may struggle to return to pre-pandemic levels.

Financial Times, Page: 21

Contact Paul Southward

Paul Southward