NEWS – FRIDAY 19TH FEBRUARY 2021

NEWS ROUNDUP

TAX NEWS – FRIDAY 19TH FEBRUARY 2021

Chancellor set to extend rates relief and furlough

The Telegraph’s Ben Riley-Smith reports that the Chancellor is set to keep the furlough scheme going until the summer and extend the business rates holiday for the retail, hospitality and leisure sectors beyond the end of March. He says the moves are set to be outlined in Rishi Sunak’s March 3 budget, adding that the Chancellor is also considering freezing personal income tax allowances in a move that could bring in up to £6bn by 2024/25. Other changes under consideration as Mr Sunak looks to balance the books after heavy coronavirus-related spending reportedly include increases in corporation tax and capital gains tax. However, Mr Riley-Smith says Mr Sunak is expected to leave the more significant tax rises he is considering until his autumn budget, when the economy may be stronger. Meanwhile, Nigel Morris in the I says Mr Sunak has abandoned plans to announce tax rises in next month’ s budget, with the Chancellor instead to focus on protecting jobs and providing extra support for businesses struggling to survive after the third lockdown. He notes that Mel Stride, chairman of the Treasury Committee, believes Mr Sunak should “definitely not” increase taxes at the moment, but must use the budget to outline his roadmap to paying back borrowing.

The Daily Telegraph The I, Page: 12

Next boss calls for tax on warehouses

Next boss Lord Wolfson has rejected the idea of a 2% online sales tax, saying he believes “ultimately the consumer will pay the price of that”. He told the BBC: “An online tax isn’t going to get people back… it is going to put a hole in consumers’ pockets.” He added that while some people have suggested an online sales tax could prevent corporation tax dodging, “a better way of doing that is to say if you’re an online business, pay either 2% of your turnover or 19% of your profits, whichever is the higher.” Lord Wolfson has also suggested a hike in business rates on warehouses, saying they should be subject to an increase of up to 50% while high street stores could see a 35% reduction in a bid to level the playing field between online giants like Amazon and chains located in expensive city centre stores. Robert Hayton of real estate adviser Altus Group warned against a rates hike, noting that online retailers represent only a small part of the warehouse occupier base, with Jerry Schurder, head of business rates at property consultancy Gerald Eve, offering a similar sentiment, pointing to “the tens of thousands of warehouse-based firms that have nothing to do with online retail”. Meanwhile, the FT reports that the Chancellor will today announce he is delaying a report on a review of business rates – which will also consider the case for an online sales tax – until later this year.

The Daily Telegraph BBC News Financial Times

HMRC denies misleading MPs over contractors’ tax avoidance

HMRC has been accused of “misleading” a parliamentary committee over its use of contractors who used tax avoidance schemes. The All-Party Parliamentary Loan Charge Group says at least 15 contractors using disguised remuneration schemes had worked for HMRC and its Revenue and Customs Digital Technology Services division between 2016 and 2020. The MPs said HMRC’s attempts to evade questions on the matter are “disgraceful” and “a clear attempt” to cover up an “embarrassing fact.” The group added that the “whole farce of the loan charge fiasco” is demonstrated by the fact that HMRC used contractors engaged in what it now describes as aggressive and defective tax avoidance arrangements. HMRC refutes the claims, arguing that it is possible for contractors to use such schemes without the participation or knowledge of those that hire them.

The Guardian Yorkshire Post

UN report proposes carbon taxes

A UN report has suggested carbon taxes should be introduced amid a number of measures required to solve the “triple planetary emergency” caused by climate change, biodiversity loss and pollution. The Making Peace with Nature report calls for countries to stop tax breaks and other subsidies for fossil fuels. Separately, a group of climate finance experts have suggested taxes on international transport could help developing countries finance measures to reduce greenhouse gas emissions and cope with the climate crisis.

The Times, Page: 16 The Guardian, Page: 17

Think-tank: Tax wealth to support children

The Intergenerational Foundation think-tank has urged the Chancellor to raise £50bn in tax on unearned income and wealth, saying the money raised could go toward addressing the attainment gap in children’s lost education. It says money could be raised by charging landlords national insurance contributions on rental income, taxing dividend income, and removing capital gains tax exemptions or relief.

Daily Mirror, Page: 2

Praise for PAYE

Looking at taxation and financial policy, Ed Conway in the Times lauds the creation of PAYE, saying the system has been exported and copied around the world. He says it is easier for taxpayers to digest as tax is taken before they ever see it, suggesting: “It is no coincidence that council tax is among the least popular of all taxes, because you actually see it leaving your bank account.”

The Times, Page: 26

SMEs NEWS – FRIDAY 19TH FEBRUARY 2021

Roadmap out of lockdown must support SMEs

ACCA chief executive Helen Brand says the Government’s roadmap on how the UK will exit lockdown and recover from the pandemic needs “signposts and barrier-free routes to help SMEs”. She says she hopes to see “a focus on policies that help existing and new entrepreneurs”. Ms Brand also reflects on the findings of the SME Tracker from the ACCA and Corporate Finance Network, noting that February’s update shows 8.5% of small firms said they would be affected by new off-payroll (IR35) rules, with responsibility for determining the tax status of contractors delivering more work and the risk of penalties.

City AM

Survey points to SME optimism

UK SMEs should expect an average 8% growth in revenues for 2021, according to the Barclaycard Payments Barometer, which has found that almost a quarter have surpassed their pre-pandemic levels of output. The survey warned, however, that only three in ten SMEs say they are prepared for the easing of lockdown measures. It was also found that 25% have seen an increase in job applications. Rob Cameron, CEO of Barclaycard Payments, said: “While the world may be returning to some form of normal this year, small businesses have realised the benefits of flexible working and digital skills, with many already looking at what improvements they can take forward into 2021.”

City AM

EMPLOYMENT NEWS – FRIDAY 19TH FEBRUARY 2021

Firms urged to get recruitment right

The Recruitment & Employment Confederation (REC) says recruitment could play a key factor in the UK’s economic recovery, with recruiters boosting productivity by £7.7bn a year. The sector body has warned firms against “wasteful approaches” to the hiring process, with REC chief executive Neil Carberry saying that while many CEOs have described people as their biggest asset, they have often “left the process of bringing staff into the business as something to be done at low cost and high speed.”

City AM

BCC calls for furlough scheme extension

A new survey from the British Chambers of Commerce has found that a quarter of UK businesses expect to lay-off employees if the furlough scheme is not extended beyond April. The BCC has called on ministers to extend financial support measures for businesses throughout 2021, urging the Chancellor to target further support at sectors hardest hit by the pandemic.

City AM

CORPORATE NEWS – FRIDAY 19TH FEBRUARY 2021

Share schemes in the spotlight

Marianna Hunt in the Telegraph looks at the benefits of share schemes but warns that if companies do not follow the right procedures, they can end up landing themselves and their employees with significant tax bills. Mike Hodges of Saffery Champness notes that there may be long-term benefits for shareholders if a firm offers incentives to employees that make them more invested in its growth while conserving cash for other expenses.

The Daily Telegraph

Silence isn’t golden, whistleblowers are

The FT reflects on last year’s 35% increase in whistleblower cases involving financial services firms, noting that Deloitte has warned of a new “whistleblower environment” amid the pandemic.

Financial Times, Page: 23

ECONOMY NEWS – FRIDAY 19TH FEBRUARY 2021

Starmer outlines economic policy

Labour leader Sir Keir Starmer has outlined the party’s economic policy direction, saying that under his leadership “Labour’s priority will always be financial responsibility” and arguing that “a fair society will lead to a more prosperous economy”. Saying that Labour must build “a strong partnership with businesses” if it is to deliver a more just and equal society, he added that “for too long the party saw business as “something just to be tolerated or taxed”. Mr Starmer also proposed a “British recovery bond”, a saving scheme with a competitive interest rate that would help people invest in the UK’s post-pandemic future. The Labour leader also said he would end the public sector pay freeze, extend business rate and VAT relief, and boost the furlough scheme. Labour, he added, would create 100,000 start-ups in the next five years.

The Guardian Financial Times City AM BBC News

OTHER NEWS – FRIDAY 19TH FEBRUARY 2021

PwC: Northern Ireland is the best place to live, post-pandemic

PwC ’s latest Future of Government report has found that Northern Ireland is the best place to live compared with the rest of the UK as people continue to trade cities for the countryside after a year spent at home.

City AM

Contact Paul Southward

Paul Southward