NEWS – FRIDAY 27TH NOVEMBER 2020
NEWS – FRIDAY 27TH NOVEMBER 2020
TAX NEWS – FRIDAY 27TH NOVEMBER 2020
Advisory Fuel Rates for Company Cars – updated from 1st December 2020
IFS warn on likelihood of tax rise
The Institute for Fiscal Studies’ analysis of Rishi Sunak’s spending review warns that Conservatives will face calls to break manifesto pledges not to increase taxes, with a larger than expected £40bn public finances black hole identified. IFS deputy director Carl Emmerson commented: “If you want to raise large sums in a relatively straightforward way, the obvious thing to do is to push up the standard rates of income tax or national insurance or VAT, and indeed if we look at past fiscal consolidations that involve tax rises under Labour, Coalition and Conservative governments it has often been the rate of national insurance, or VAT they have reached for, so I wouldn’t be surprised if that was a part of a tax raising Budget.”
The Daily Telegraph The Guardian, Page: 14
SMEs NEWS – FRIDAY 27TH NOVEMBER 2020
New Covid rules “make or break” for many businesses
Business leaders and lobby groups have warned that businesses in regions under the highest level of Covid restrictions will not survive without further support. The Times talks to a slew of hospitability bosses voicing their fears for the industry and notes that UK Hospitality expects £7.8bn in losses for the sector in December compared to the previous year. Mike Cherry, of the Federation of Small Businesses, said the highest level of restrictions may “ultimately lead to some [companies making] very difficult decisions into the new year – without the necessary support, this could be devastating for thousands of small businesses, and tens of thousands of jobs”.
The Daily Telegraph, Business, Page: 5 The Times
Business cries out for Brexit clarity
The Confederation of British Industry (CBI), British Chambers of Commerce (BCC) and the Federation of Small Businesses (FSB) have made a fresh plea for clarity over post-Brexit trade arrangements as the clock ticks down to December 31st. James Sibley, head of international affairs at the FSB, said: “We welcome government efforts to encourage businesses to prepare for those changes that will take effect regardless of the outcome of talks, but until we know exactly what the state of play will be from 1st January, it’s extremely difficult to fully plan,” a sentiment echoed by the BCC’s co-executive director Hannah Essex. Separately, British businesses are stockpiling goods before post-Brexit customs checks come into force on January 1st, leading to a hike in the cost of cross-border deliveries and a reduction in capacity.
The Times Reuters City AM
EMPLOYMENT NEWS – FRIDAY 27TH NOVEMBER 2020
Financial sector workers in remote working survey
New research from Deloitte has found that financial services employees report feeling more productive and well while working remotely. Avoiding the commute was listed by 66% as the main benefit to the current situation, while 60% of respondents believed the ability to meet in person was the most important benefit of working in an office. Some 78% of those surveyed agreed that their employers were prepared for their staff to continue working remotely in the long term.
FCA says industry needs to ‘act quickly’ on diversity
Jonathan Davidson, executive director of supervision at the Financial Conduct Authority, has said effective action must be taken quickly so the financial services industry is “truly reflective” of the people it serves.
CORPORATE NEWS – FRIDAY 27TH NOVEMBER 2020
Sir Brian Leveson appointed by Boohoo to oversee shakeup
Boohoo has appointed Sir Brian Leveson to supervise efforts to overhaul the fashion retailer’s supply chain after a report confirmed there were unacceptable working conditions at supplier companies. Boohoo has brought in Sir Brian to scrutinise its efforts to bring “long-lasting and meaningful change” to its supply chain. KPMG will be among other independent experts appointed to help the programme.
PENSIONS NEWS – FRIDAY 27TH NOVEMBER 2020
RPI change will cost BT Pension Scheme members £34,000 each
Morten Nilsson, head of BT Pension Scheme, has said 82,000 of his members will each be on average £34,000 worse off as a result of the planned changes to the Retail Prices Index announced by the Chancellor on Wednesday. Nilsson described the move as “a massive transfer of wealth” from defined benefit scheme members to the Government. Jos Vermeulen, head of solution design at Insight Investment, one of the biggest holders of index-linked bonds, added that the RPI redefinition was “a big disappointment”. He said: “There’s tens of billions of pounds at stake. This is not the end.”
ECONOMY NEWS – FRIDAY 27TH NOVEMBER 2020
Resolution Foundation foresees prolonged income squeeze
The Resolution Foundation has predicted that the coronavirus crisis will see Britain’s 15-year squeeze on household incomes prolonged, with pay cut by £1,200 annually within the next four years. Torsten Bell, chief executive of the think tank, stated: “The pandemic is just the latest of three ‘once-in-a-lifetime’ economic shocks the UK experienced in a little over a decade, following the financial crisis and Brexit. The result is an unprecedented 15-year living standards squeeze.” The organisation said that most fiscal support in the wake of the crisis will need to be raised from tax rises, noting: “While the priority now is to support the economy, the permanent damage to the public finances will mean tax rises in the future.”
Think tank predicts pandemic effects will be less severe than financial crash
The Institute for Fiscal Studies think tank has claimed that the UK economy is likely to suffer less as a result of the coronavirus pandemic than it did after the financial crisis of 2008. IFS director Paul Johnson remarked: “On central scenarios borrowing will be ‘only’ £100bn or so in 2024-25,” which he said is “not a million miles away from either current budget balance or at least stabilising debt as a fraction of national income.”
OTHER NEWS – FRIDAY 27TH NOVEMBER 2020
Sunak backed by BoE’s Bailey
Chancellor Rishi Sunak’s approach to the public finances has been supported by Bank of England governor Andrew Bailey, who told BBC Radio Devon: “It is absolutely sensible that public resources, resources of the state, are being used to cushion the huge impact of this absolutely unprecedented shock.” He went on: “For the moment the key thing is to use all our resources and all our support. And that’s what the Bank of England and Treasury are doing to cushion and make this huge impact more bearable for people.”
Contact Paul Southward