NEWS – FRIDAY 20TH NOVEMBER 2020

NEWS ROUNDUP

TAX NEWS – FRIDAY 20TH NOVEMBER 2020

Chancellor urged to resist CGT ‘tax raid’

The Daily Mail’s Alex Brummer says that while the Chancellor will recognise the need for measures to address the state’s coronavirus bill, he must also recognise that the “worst possible way” of doing so would be to impose “swingeing” taxes. Pointing to an Office for Tax Simplification recommendation that would see capital gains taxed at the same rates as income, Mr Brummer says this would “stifle recovery and prosperity” by driving up taxation on enterprise and entrepreneurship, while trimming back tax-fee allowances would hit middle-income workers. He argues that increasing the CGT burden of capital gains on enterprise, savers and second property owners would “destroy the economy’s dynamism.”

Daily Mail, Page: 78

Minimum alcohol pricing would hit tax take

The Institute for Fiscal Studies has analysed the impact of Scotland’s minimum alcohol pricing scheme and calculates that if the 50p minimum unit price were extended to the whole of the UK under the existing system of alcohol taxes, tax revenue would fall by around £390m per year.

The Scotsman, Page: 5

SELF-ASSESSMENT TAXPAYERS WARNED ABOUT SCAMS

HMRC are reminding taxpayers to stay alert for criminals claiming to be from HMRC as the deadline for submitting self-assessment (SA) tax returns approaches. In the last 12 months, HMRC have responded to more than 846,000 referrals of suspicious HMRC contact from the public and reported over 15,500 malicious web pages to internet service providers to be taken down. Almost 500,000 of the referrals from the public offered bogus tax rebates.  Further information can be found at: –

self-assessment-taxpayers-warned-about-scammers-posing-as-hmrc

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CORPORATE NEWS – FRIDAY 20TH NOVEMBER 2020

One in seven businesses in fear of collapse

Around one in seven UK companies say they were at risk of collapse, according to a new report from the Office for National Statistics. The study saw 14% of UK companies say they have “low or no confidence” that they will survive the next three months. While 40% had moderate confidence that their business would survive the next three months, another 40% had high confidence of making it through the period. Pessimism was most apparent among hotels and restaurants where 34% of businesses said they would struggle to make it through the next 12 weeks. It was also found that across all industries, 7% of businesses expect to temporarily or permanently close a site in the next fortnight.

The Guardian City AM BBC News Sky News

Peacocks and Jaeger collapse

Retailers Peacocks and Jaeger have fallen into administration, with owner Edinburgh Woollen Mill Group (EWM) failing to find a buyer for the fashion chains. While no redundancies have been announced and no stores have closed, the collapse puts more than 4,700 jobs and almost 500 shops at risk. EWM said the “continuing deterioration” of the retail sector driven by the coronavirus pandemic has made the process of finding a buyer “longer and more complex” than it would have hoped. Tony Wright of FRP Advisory said Jaeger and Peacocks are “attractive brands”, adding that administrators are in advanced discussions with potential buyers and “working hard to secure a future for both businesses.”

The Guardian, Page: 33 The Times, Page: 37 The Daily Telegraph, Business, Page: 1 The Independent, Page: 51 Daily Mail, Page: 8 Daily Express, Page: 5 Daily Mirror, Page: 2 The Sun, Page; 14 BBC News

Nightclub owner asks for rent holiday

Deltic Group, the UK’s largest nightclub operator, has asked for a break from rent payments, warning that it is likely to collapse unless a sale can be agreed. Deltic put itself up for sale after extended closures during the coronavirus pandemic threatened to force it into liquidation. BDO , which is advising Deltic on the sale process, is reportedly set to select a preferred bidder in the coming days.

City AM

Cineworld mulling CVA

Cineworld is considering putting its business in Britain through a CVA as part of a wider restructuring, a move that would see the world’s second-largest cinema operator seek lower rents and possibly close some of its 127 UK screens. In addition to exploring a CVA, Cineworld is in individual discussions with landlords over possible rent cuts.

The Times, Page; 39 The Daily Telegraph, Business, Page; 3 Daily Mail, Page: 77 The Sun, Page: 49

Capital confidence hit

An index compiled by the ICAEW shows that uncertainty around Brexit and the coronavirus crisis have hit business confidence in London, with the poll of more than 3,500 senior managers showing optimism in the capital is the weakest of any region in the UK, France, Germany and Netherlands. The report said: “The EU is a particularly important market for London’s globally prominent financial and business services sectors. So, uncertainty over whether any trade deal will encompass services or whether there even is a trade deal is likely to be weighing heavily on the capital’s businesses.”

The Times, Page: 40

Cash and capital planning essential

Derek Gemmell of Anderson Anderson & Brown lauds the benefits of planning, saying discussions with businesses operating successfully show that cash management and preservation is critical. Writing in the Press and Journal, he says firms need to have a clear short and medium-term view of cash and working capital, identifying potential gaps early so that solutions can be found.

The Press and Journal, The Business, Page: 4

EMPLOYMENT NEWS – FRIDAY 20TH NOVEMBER 2020

Public sector pay freeze planned

The Times’ Steven Swinford reports that the Chancellor is set to freeze the pay of almost 4m public-sector workers as part of plans to rebalance the books, with public finances hit heavily by the coronavirus pandemic. The Institute for Fiscal Studies think-tank said plans that would see 3.7m workers’ wages frozen would save £3.4bn. Rishi Sunak is said to be preparing to announce the pay freeze, which would exclude NHS workers, in next week’s spending review. Meanwhile, the Centre for Policy Studies think-tank has said freezing public sector pay could save the Treasury £23bn over the next three years, adding that excluding staff within the health service would mean the Treasury would instead save £15bn. It notes that adding a penny to the basic rate of income tax would raise around £16bn over the same period.

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

UK salaries up 1.7%

Private sector employees received a better-than-forecast average salary increase in 2020, with ECA International’s Salary Trends report showing an average increase of 1.7% – beating the 1.1% that had been forecast. The report uses a measure based on the difference between the nominal salary increase (2.5%) and inflation (0.8%). The report says UK workers picking up a pay rise in 2021 are set to see a 1.3% real salary increase. Across Europe, real terms salaries climbed 1.5%, with Ukraine seeing the biggest increase at 3.6%.

City AM

INDUSTRY NEWS – FRIDAY 20TH NOVEMBER 2020

Unpacking the pre-pack review

Writing in the Press and Journal, Michael Reid of Meston Reid & Co looks at a Government review of pre-pack administration and changes draft regulations propose. He highlights a mooted change that would stop an administrator from selling any of the company’s property to a person connected with that company within the first eight weeks of its appointment without obtaining either prior approval from creditors or an independent written report.

The Press and Journal, The Business, Page: 19

INTERNATIONAL NEWS – FRIDAY 20TH NOVEMBER 2020

Wirecard’s former chief refuses to pin collapse on regulators

Markus Braun, former CEO of scandal-hit payments company Wirecard, has told an inquiry into the firm’s collapse that no blame can be levelled at regulators, while auditor EY was “apparently comprehensively deceived”.

Financial Times, Page: 4

ECONOMY NEWS – FRIDAY 20TH NOVEMBER 2020

Treasury’s Scholar: Debt could reach 105% of GDP

The Treasury’s senior civil servant, Sir Tom Scholar, says Government spending rolled out amid the coronavirus crisis could see national debt climb to 105% of GDP. Permanent Secretary Sir Tom told the Commons Public Accounts Committee that while official forecasts from the Office for Budget Responsibility have yet to be released, the economy is likely to see the worst annual contraction in three centuries. Noting that the Bank of England last week said it expects the economy to have contracted by 11% year-on-year in 2020, he said: “It is extremely serious.”

The I, Page: 8 Daily Mail

UK economy sees biggest contraction among G7

Data from the Organisation for Economic Co-operation and Development (OECD) shows that the UK economy contracted more than that of any other G7 nation in the first nine months of the year, with GDP down 9.7% in Q3 compared to end of 2019. With many economies hit by the coronavirus pandemic, the next largest decline across G7 nations was in Canada, which saw a 4.7% contraction, with the US seeing the smallest contraction at 3.5%. Across the 36 OECD nations, GDP fell by 4.3%.

The Independent

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