NEWS – FRIDAY 23RD OCTOBER 2020
NEWS – FRIDAY 23RD OCTOBER 2020
COVID-19 BUSINESS SUPPORT
EMPLOYMENT NEWS – FRIDAY 23RD OCTOBER 2020
Chancellor announces more generous UK jobs support scheme
Chancellor Rishi Sunak has revised the Government’s Job Support Scheme – set to replace furlough in November – amid fears for the survival of businesses affected by Tier 2 coronavirus restrictions. Employers will be required to pay just 5% of workers’ unworked hours, down from 33% previously. The state will pay 62% of the hours not worked, and the employee will forgo about a third of their unworked wages. Worth an estimated £13bn over six months, the package will also include a new round of funding for the self-employed, grants for whom will be doubled from 20% of previous earnings to 40%. Cash grants worth £3,000 a month will be made available for hospitality firms forced to close under Tier 3 restrictions, which will be backdated. Businesses in Tier 2 areas can access grants worth up to £2,000.
TAX NEWS – FRIDAY 23RD OCTOBER 2020
Hong Kong immigrants will boost tax revenues
Home Office estimates suggest over 1m people from Hong Kong could immigrate to Britain in the next five years, with up to 500,000 possibly arriving in the first year. The UK Government announced a new route for British overseas nationals (BNOs) in the territory to settle in Britain after Beijing imposed strict new security laws on Hong Kong. The arrivals are projected to boost the economy by up to £2.9bn net over five years through extra tax revenue.
The Times, Page: 4 Daily Express, Page: 16 The Daily Telegraph, Page: 2
EFL seeks delay on tax payments for clubs
The English Football League has asked for permission to defer tens of millions of pounds of tax payments until the Government ban on crowds is lifted. Approximately half of clubs’ salary bills goes to HMRC in tax and national insurance, but the EFL says it is losing a combined £22m a month playing behind closed doors and is seeking a postponement of the payments.
The Times, Sport, Page: 77 The Daily Telegraph, Sport, Page: 4
CORPORATE NEWS – FRIDAY 23RD OCTOBER 2020
Dutch ‘departure tax’ is illegal, Unilever told
A proposed “departure tax” that will hit Dutch companies leaving Holland has been deemed illegal by the boss of Unilever, which is looking to move its legal base to London as it looks to end its dual Anglo-Dutch structure. Alan Jope said two out of three of the law firms the company consulted said the legislation would contravene EU law and multiple tax treaties.
FRAUD NEWS – FRIDAY 23RD OCTOBER 2020
Furlough fraudsters stole as much as £3bn, HMRC says
HMRC believes between £2bn and £3.9bn may have been fraudulently paid out under the Treasury’s Job Retention Scheme, which saw £39bn paid out to employers to support furloughed workers. The estimates from HMRC were used in a National Audit Office report which said there was evidence of “significant levels of furlough fraud” from both organised gangs “hijacking” claims and employers taking money collected on behalf of staff. Meg Hillier, who chairs the public accounts committee commented: “HMRC has paid out billions of pounds to fraudsters. Most of this is likely to be gone for good.”
Paul Southward comments “How can this be acceptable and no-one in government and/or public office be accountable, no doubt a few small employers will be identified as having made fraudulent claims and will be hung out to dry, but organised criminals will be laughing all the way to the bank”.
FINANCE NEWS – FRIDAY 23RD OCTOBER 2020
Government lending schemes see £62bn paid out to firms
New Treasury figures reveal that the total value of loans paid out under the coronavirus business lending schemes provided by the Government reached nearly £62bn as of mid-October. This is up from £57.3bn the previous month, with a total of £17.2bn paid out to 73,094 firms as part of the Coronavirus Business Interruption Loan Scheme (CBILS), £4.57bn of financing approved for 623 larger firms under the Coronavirus Large Business Interruption Loan Scheme (CLBILS), £770.8m paid out under the Future Fund to 745 businesses and the Bounce Back Loan Scheme (BBLS) seeing a total of 1,336,320 loans worth £40.20bn approved.
PROPERTY NEWS – FRIDAY 23RD OCTOBER 2020
Property boom could be hit by ‘perfect storm’ of collapsed sales
The Telegraph looks at how logistical delays could put a strangle hold on the property market “mini-boom” as buyers are increasingly pulling out of sales. The summer surge in buyer demand combined with reduced processing capacity after lockdown means that lenders, local authorities, conveyancers and surveyors are overwhelmed, with sales at serious risk of being dragged beyond the stamp duty and Help to Buy scheme deadlines at the end of March. The Daily Telegraph
Paul Southward comments: “I have reported before that it is no surprise that a SDLT rate cut would lead to a short-term housing boom, that will undoubtedly come to an end when rates rise again. I advise all buyers and sellers to use their “business head” when making such a major purchase and or sale. Do not forget to consider the tax consequences and seek appropriate advice where necessary. ”
ECONOMY NEWS – FRIDAY 23RD OCTOBER 2020
Drop in UK consumer confidence fuels double-dip recession fears
Data from research company GfK show a fall in consumer confidence in the first half of October as coronavirus infections rose and restrictions tightened, fuelling fears of a double-dip recession. Joe Staton, client strategy director at GfK, said: “There’s a worrying threat of a double dip in consumer confidence as concerns for our personal financial situation and even deeper fears over the state of the UK economy drag the index down six points this month. The prospect of rising unemployment is severely depressing our outlook. Worryingly, this data was collected before the new restrictions came into force and the end of the furlough scheme, so this will negatively impact the index in the run-up to Christmas.”
UK manufacturing decline slows – survey
The CBI’s industrial trends survey has shown that UK manufacturing activity continued to fall in the most recent quarter, but at the slowest pace since March. Output dropped in ten of the seventeen manufacturing sub-sectors followed in the CBI’s industrial trends survey, with aerospace leading the falls. Separately, a survey by Lloyds Bank has found that 31% of manufacturers believe that a no-deal Brexit would be good for business while 81% said they had made the necessary preparations for operating outside the EU. Those who thought business would improve cited increased demand from domestic buyers and the ability to be more competitive with EU rivals on pricing.
OTHER NEWS – FRIDAY 23RD OCTOBER 2020
Brits suffer largest erosion of wealth
A study by Credit Suisse has found that Britain has suffered the biggest hit to household wealth of that in any of the world’s major economies this year. Total wealth in the UK fell from $14.6trn to roughly $13.7trn in the six months to the end of June while the number of ultra-high net worth individuals – with assets of more than $50m – declined by 1,544 between the start of 2019 and the middle of this year. Over the same 18-month period the number of super-wealthy adults in the US rose by 14,008 and in China by 4,148. The report suggested currency fluctuations driven by Brexit concerns and a failure of equity markets in the UK to recover from the onset of the pandemic have created a “perfect storm” leaving the UK the biggest casualty of the pandemic among major economies.
Contact Paul Southward