NEWS – FRIDAY 26TH MARCH 2021

NEWS ROUNDUP

TAX NEWS – FRIDAY 26TH MARCH 2021

Rishi Sunak’s ‘super-deduction’ will benefit London twice as much as Yorkshire

A new report says the Government’s economic recovery policies will benefit the capital over the rest of the UK. The Centre for Progressive Policy (CPP) estimates that the ‘super-deduction’, which allows firms to claim a deduction from their tax bill if they invest in new equipment for their business, offers the greatest advantage to London – leading to a tax break per head of £512.89 in the capital but just £276.14 in Yorkshire and the Humber. Ben Franklin, Head of Research at CPP, says its analysis suggests the Government “has either failed to grasp the nature, scale and urgency of inclusive recovery or has given up on its own levelling up agenda.” A Treasury spokesman said: “We are totally committed to levelling up communities across the whole of the UK as we build back better.”

Yorkshire Post

Labour to propose tax raid on Scotland’s high earners

The Labour party’s Scottish leader has indicated that he is in favour of a tax raid on high earners as the Holyrood elections loom. Anas Sarwar said that while full details of his policy would be unveiled in the party’s manifesto, he supported a “more progressive tax system” to better fund public services. The Telegraph notes that during the campaign for the Scottish Labour leadership, Mr Sarwar suggested a 5% tax rise for those earning more than £150,000 a year and 2% hike for those on salaries of more than £100,000. Separately, a study by the TaxPayers’ Alliance found an independent Scotland would need to more than double the basic rate of income tax to balance its books.

The Daily Telegraph Daily Express

Self-employed urged to appeal HMRC penalties as tax deadline nears

The Express reports on the recent announcement from HMRC that it would delay imposing penalties for the late payment of self-assessment tax by one month to April 1 to help those whose finances have been affected by the pandemic. Additionally, late payments for outstanding tax bills which are charged six and 12 months after the deadline have also been pushed back to August 2021 and February 2022 respectively. However, people with an outstanding tax bill have been incurring interest of 2.6% since the January 31 self-assessment deadline expired, according to analysis from UHY Hacker Young. Partner Graham Boar urges those yet to pay to note the deadline and reassures those incorrectly charged with a penalty: “HMRC has proven that it will hold its hands up if it’s made a mistake.”

Daily Express

British expats resident in Italy face steep rise in wealth tax bills

Britons resident in Italy face tenfold increases in overseas property duties under post-Brexit rule changes. Now that Britain is longer part of the EU, Italy’s 0.76% annual levy on the value of overseas properties will now be based on the current market value rather than calculated using council tax valuations dating back to the early 1990s. This means a property valued at £240,000 in 1991 but worth £3m now will produce a wealth tax bill of more than £20,000, compared to less than £2,000 before.

The Daily Telegraph

CORPORATE NEWS – FRIDAY 26TH MARCH 2021

KPMG hired to check coronavirus loans

The Government has brought in KPMG to check over billions of pounds of government-backed loans to ensure that lenders have complied with the rules. The move comes after it emerged that Greensill, a collapsed supply chain financier accredited for two of the schemes, may have the Government guarantee on £400m of loans removed. Separately, Labour is calling on the Cabinet Secretary to investigate “serious concerns” about David Cameron’s efforts to lobby Whitehall officials on behalf of the collapsed lender.

The Times, Page: 40 The Guardian, Page: 33

UK bosses to invest in more sustainable initiatives

A PwC survey of UK chief executives reveals 70% are concerned about the impact of climate change, with almost a third “extremely concerned” about the issue. “Climate has become a fundamental business issue, and CEOs recognise they need to step up. Companies are starting to transform their business models, supply chains, products and services,” Kevin Ellis, PwC’s chairman and senior partner said. Some 60% of leaders plan to increase their investment in ESG initiatives over the next three years.

City AM

SMEs NEWS – FRIDAY 26TH MARCH 2021

COVID-19 lending schemes back over 1.6m businesses

HM Treasury figures show over 1.6m UK businesses borrowed more than £75bn through government-backed coronavirus lending schemes in the last year. The Bounce Back Scheme was accessed by more than 1.5m firms; the Coronavirus Business Interruption Loan Scheme (CBILS) has provided £23.3bn in financial support to more than 98,000 businesses; and £5.3bn in lending has been provided to 716 businesses through the Coronavirus Large Business Interruption Loan Scheme (CLBILS). Meanwhile, the British Chambers of Commerce has alerted Downing Street to the high levels of debt taken on by businesses, with a recent poll finding more than a quarter described debts as unmanageable or “high and manageable”.

Financial Times Business Money P2P Finance News

Sunak planning to hit self-employed with tax hike

The i reports that Treasury sources have indicated the Chancellor “is minded” to bring NICs for self-employed in line with payments made by employed staff. They said: “The Chancellor believes tax and National Insurance payments should be fair for all earners, and levelling up the National Insurance bands is being considered as one way of doing that.” Nimesh Shah, a partner Blick Rothenberg, suggested Rishi Sunak could make the change in his Autumn Statement, noting that the Government “has not been particularly sympathetic to the self-employed community. In recent years, successive governments have made no secret of their desire to increase taxes for the self-employed.”

The i, Page: 10

PROPERTY NEWS – FRIDAY 26TH MARCH 2021

Government sets aside £1.5bn of support as rates relief appeals denied

Thousands of companies are set to be refused business rates relief after the Treasury said it will legislate to “rule out” Covid-related business rates appeals. Instead the Government will provide a new £1.5bn pot of funding that will be distributed to sectors which have “suffered most economically” outside the retail, hospitality, and leisure sectors. The fund will be administered by local authorities, which will decide whether a business is eligible, and priority will be given to the worst-affected sectors.

Financial Times BBC News Daily Mail The Guardian

ECONOMY NEWS – FRIDAY 26TH MARCH 2021

EY warns of ‘financial cliff edge’ threatening listed British firms

Analysis by EY shows that between March 2020 and March this year, 63 UK listed companies issued at least their third profit warning within a 12-month period, which is almost double the 2019 total of 32. As many as one in five of these companies is likely to collapse into the hands of administrators within a year of the third warning. Once taxpayer-backed Government support comes to an end, the companies in jeopardy could face a “financial cliff edge,” EY warned.

Daily Mail

INDUSTRY NEWS – FRIDAY 26TH MARCH 2021

Richard Houston: Significant audit reforms crucial for investor confidence in UK

Writing in City AM, the CEO and senior partner of Deloitte, Richard Houston, contends that the UK puts at risk its standing as a leading place to invest and do business if there are further delays to audit and corporate governance reforms. The Department for Business, Energy & Industrial Strategy (BEIS) recently published a consultation on Restoring Trust in Audit and Corporate Governance and the challenges facing Britain today are precisely why this is the right time to strengthen the system, Houston says, rather than using those hurdles as an excuse for putting reform off. “Change isn’t always easy. But the damage that corporate failures can inflict means that we, and all stakeholders, have a responsibility to ensure that whatever change lies ahead improves the quality, transparency and resilience of UK capital markets and generates greater trust in business.”

City AM

Sir Jon Thompson: Neds don’t get a free pass

The head of the Financial Reporting Council told an industry forum on Thursday that senior non-executive directors had complained about governance reforms that will see directors held responsible for a company’s accounts. Sir Jon Thompson said non-executive directors who did not believe they were responsible for running a company couldn’t pass the buck. He told an online event hosted by the ICAEW: “In law, you all run the company. You can’t simply turn up, take your fee, not do anything and say, ‘Well, it’s the chief executive’s fault.’ If you’re on the board, you’re on the audit committee, you have to take responsibility for the fact you’ve got obligations to the people who are investing in your company, or investing their pension money in your company.” The Times cites Roger Barker, head of policy at the Institute of Directors, who warns that if regulations are too heavy-handed then bosses will not have enough left to strategise.

The Times, Page: 39

OTHER NEWS – FRIDAY 26TH MARCH 2021

Good Law Project finds Deloitte drafted parliamentary answers

Figures from the Good Law Project show that Deloitte has been awarded public sector contracts worth £323m since the start of the pandemic. The Government has been using Deloitte to help ministers draft parliamentary questions and media lines to defend the ‘test and trace’ system. Good Law Project legal director Gemma Abbott commented: “We have a government so addicted to outsourcing that it has even outsourced being held to account. Does anyone know where the Department for Deloitte ends and the Department for Health begins?”. A Department of Health and Social Care spokesperson responded: “The Government employs contractors in the same vein that private businesses do and responsibility for answering parliamentary questions, freedom of information requests and media enquiries rests firmly with a team of civil service communications professionals within the Department of Health and Social Care,” ; continuing: “Every single response is subject to the highest levels of scrutiny to ensure they are both factual and detailed.”

City AM

Contact Paul Southward

Paul Southward