NEWS – FRIDAY 22ND JANUARY 2021
NEWS – FRIDAY 22ND JANUARY 2021
TAX NEWS – FRIDAY 22ND JANUARY 2021
SELF-ASSESSMENT FILING DEADLINE 31ST JANUARY 2021
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Opinion: Workers will pay the price of corporation tax hike
Writing in the Telegraph, Ryan Bourne, the R Evan Scharf chair for the public understanding of economics at the Cato Institute, warns that an increase in corporation tax in March’s Budget would harm business investment and suppress wages. Bourne argues that between 30% and 70% of corporation tax hikes are ultimately borne by workers. “The combination of Brexit and the end of the pandemic makes this a particularly bad time to jack up the corporation tax rate, Bourne says, adding: “New non-tariff barriers on UK-EU trade will impair the GDP potential of the economy, and some companies are figuring out the best places to locate or expand to serve existing or new markets. To add a tax disincentive into the mix by reducing the after-tax return on any UK investments would be a huge own goal.”
Millions of people face tax return fines due to Covid, body warns
Research by the Association of Chartered Certified Accountants indicates that around 2.5m people are likely to be fined a minimum of £100 this year for failing to file a tax return on time – three times as many as last year.
Financial Times Leicester Mercury
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INDUSTRY NEWS – FRIDAY 22ND JANUARY 2021
Mazars boss sounds alarm after third lockdown
David Herbinet, global head of audit at Mazars, has warned that if England is still in national lockdown by mid-March “things could get really, really tricky,” as auditors are struggling to physically carry out necessary tasks to perform their work. The lockdown is particularly affecting audits of businesses with inventory, he said, estimating that around 70 to 80% of companies with inventory have been negatively impacted. Herbinet also stressed that there was a high chance financial results could be pushed back this year as a consequence of the third lockdown. With an international workforce, he added, some Mazars staff were even stuck overseas after visiting family during December.
Sage revenues continue to expand
Quarterly business at the Sage Group was in line with expectations, as recurring revenue increased by 4.7% to £408m. Software subscription growth of 11.3% alone was responsible for £303m. The software company’s total group revenue rose by 1.4% to £447m, reflecting its successful strategic execution.
REGULATION NEWS – FRIDAY 22ND JANUARY 2021
Businesses to spend £7.5bn a year handling customs declarations
Jim Harra, the chief executive of HMRC, has told MPs that British businesses will spend £7.5bn a year, handling customs declarations – as much as they would have done under a no-deal Brexit. He told the public accounts committee that the number of customs forms needed to trade with the EU under the Brexit deal “is not materially different from a no-deal situation”. Mr Harra said revenue estimates from October 2019, which found that the cost of no-deal to UK and EU business would be £15bn a year, still held true under the deal, with half the bill landing on each side. Separately, research by the Chartered Institute of Procurement and Supply reveals 60% of businesses moving goods from the EU to the UK have experienced delays since January 1 due to Brexit red tape and virus restrictions.
Financial Times The Guardian The Times Bloomberg
CORPORATE NEWS – FRIDAY 22ND JANUARY 2021
Beckhams pay themselves £21m despite business losses
David and Victoria Beckham have paid themselves £21m from their sports and media business since 2019, according to their latest accounts. The couple took a £14.5m dividend from David Beckham Ventures Limited (DBVL) at the end of 2019, and a further £7.1m in 2020 despite continued heavy losses. Victoria Beckham Holdings (VBHL) also performed poorly over the period, leading auditors BDO, who signed off on the accounts, to warn that the business was now reliant on shareholder support to keep going which could “cast significant doubt on the company’s ability to continue as a going concern”.
The Daily Telegraph The Times, Page: 37
Next pulls out of race to buy Arcadia
A consortium which included fashion chain Next has withdrawn from the race to buy Sir Philip Green’s Arcadia retail empire out of administration. Deloitte have been looking for buyers for some or all of Arcadia, after a slump in sales caused by the pandemic triggered its collapse. Mike Ashley’s Frasers Group remains in the picture along with US company Authentic Brands, which has tabled a joint offer with JD Sports.
Stuart Rose appointed EG Group chair
Retail veteran Stuart Rose has been brought in as non-executive chair of petrol station empire EG Group to improve governance after its auditors Deloitte resigned over the matter last year. Lord Rose is due to step down as chair of online grocer Ocado in May. EG is now audited by KPMG.
SMEs NEWS – FRIDAY 22ND JANUARY 2021
Scottish small business owners face mental health crisis
Some 40% of Scottish business owners are worried about their mental health amid the economic fallout from the pandemic, according to a survey by the Federation of Small Businesses (FSB). Meanwhile, 55% of the respondents said that they had concerns about the survival of their business. Andrew McRae, FSB’s Scotland policy chair, said: “Speak to any group of people in business in Scotland and you’ll find that the last 12 months has taken a toll on their collective mental health. It is little wonder. They have faced the same life challenges as the rest of the population, with the added pressure of taking endless high-stakes decisions about the future of their business. While we want to see governments in Edinburgh and London take better care of the small business community, we have to take care of each other. That means more people in business seeking out help for themselves or their staff.”
PROPERTY NEWS – FRIDAY 22ND JANUARY 2021
Residential transactions surge in December
UK residential transactions in December were up 13.1% compared to November and were 31.5% higher than in the year prior. The provisional seasonally adjusted estimate of UK residential transactions in December 2020 was 129,400, according to HMRC Property Transaction data. However, HMRC data shows that on an unadjusted basis, a total of 1,047,490 homes were sold in the UK last year, down from 1,176,820 in 2019. Guy Gittens, managing director of London estate agent Chestertons, comments: “With plenty of properties on the market and plenty of buyers still highly motivated to move, we expect this strong market to continue through to the spring.” December’s figures have led to renewed calls for chancellor Rishi Sunak to extend the stamp duty break, which is due to end March 31. Paresh Raja, CEO of Market Financial Solutions, believes an extension to the current deadline could happen but that the chancellor is “unlikely” to scrap stamp duty permanently.
City AM Daily Express The Times, Page: 45
PENSIONS NEWS – FRIDAY 22ND JANUARY 2021
AE threshold frozen at £10k
The Government has confirmed that the threshold for UK workers to be auto-enrolled into a workplace pension will remain at £10,000 for the sixth year running. The Department for Work and Pensions said the decision to freeze the threshold reflected the need to balance affordability with giving people the opportunity to build up a meaningful retirement. Aegon Head of Pensions Kate Smith commented: “Freezing the earnings threshold for another year, means that the real value of the threshold has fallen, allowing an estimated additional 8,000 employees to be auto-enrolled into their employer’s workplace pension.”
ECONOMY NEWS – FRIDAY 22ND JANUARY 2021
Spending slumps by a third in latest lockdown
Consumer spending has fallen further in the latest lockdown, according to credit and debit card data published by the Office for National Statistics, which showed purchases 35% below their February 2020 average in the week to January 14. Spending on discretionary goods such as cars, clothing and furnishings were hit hardest, the data indicated, tumbling by 49% as the closure of non-essential retail pushed shoppers online. “The data tie in with our view that the economy is going to be hit appreciably more by lockdown and restrictions in Q1 2021 than it was in Q4 2020, but the decline in activity will still be nothing like it was in Q2 2020,” said Howard Archer, the chief economic adviser to the EY Item Club. Yael Selfin, chief economist at KPMG, said that the data underlined the impact of the new lockdown but believed the vaccination programme could offset the damage.
North West administrations fall
The number of North West companies falling into administration fell last year, according to KPMG, as COVID-19 support measures continue to provide a lifeline for those adversely affected by the pandemic. The region is reflective of a trend seen nationally, the firm says, with the overall number of insolvencies down 22% on 2019.
OTHER NEWS – FRIDAY 22ND JANUARY 2021
Vegan accountants accused of ‘discriminating’ against bacon lovers
Last month accountancy firm Vegan Accountants posted an advertisement for a new accountant but said only those who were “vegan or plant-based” need apply. The firm has been forced to revise the ad after the Daily Star asked if it was discriminating against meat eaters. Slater and Gordon employment lawyer Doreen Reeves said: “An advertisement seeking a vegan-only accountant could potentially be unlawful direct discrimination.”
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