NEWS – FRIDAY 29TH JANUARY 2021

NEWS ROUNDUP

TAX NEWS – FRIDAY 29TH JANUARY 2021

Income tax frozen north of the border

Scotland’s finance secretary Kate Forbes set out her spending plans for 2021/22 at Holyrood yesterday. They included a freeze on income and council tax in the year ahead. “During this time, it is vital that we also continue to support households and families,” Ms Forbes said. “That is why I have ensured that no Scottish taxpayer will pay more income tax in 2021-22 than they do now on their current income and, for a fourth consecutive year, more than half of Scottish income taxpayers will pay less tax than if they lived anywhere else in the UK.” Forbes also extended a business rates holiday and promised a cut in bills once it expires, as part of measures designed to help firms through the coronavirus crisis. “The Scottish Government has resisted the temptation to raise income tax rates and will be welcome news to Scotland’s working population,” Stewart Mathieson, head of tax for EY Scotland, said; ”There is, however, a distinct likelihood that we may see increased taxes down the line in some form as both the UK and Scotland will need to address the deficits caused by coronavirus.”

The Daily Telegraph The Scotsman

EMPLOYMENT NEWS – FRIDAY 29TH JANUARY 2021

Fifth of private sector workers now on furlough

The wages of around 4.6m, or 17%, of private sector employees were being supported by the state in mid-January, according to the Office for National Statistics, up from around 11% a month ago, before the new coronavirus variant forced officials to ramp up restrictions. New HMRC figures also revealed that the cost of the Job Retention Scheme reached £46bn in December with a total of 10m employees using the support during the pandemic. Hannah Essex, co-executive director at the British Chambers of Commerce, urged Rishi Sunak to extend the furlough scheme until at least the end of July. “Further action will be needed in order to avoid a damaging cliff edge for jobs and livelihoods after the scheme ends in just a couple of months”, she said, going on to add that officials “must learn lessons from last October” when it delayed the announcement of an extension to the scheme, piling more pressure on jobs.

The Daily Telegraph

CORPORATE NEWS – FRIDAY 29TH JANUARY 2021

Paperchase rescued

Paperchase has been rescued, three weeks after entering administration. The stationary chain said the deal will save the majority of stores, however a number will close, leaving the business with a “smaller high street footprint”. A total of 90 of its 127 stores will be sold to new owner Aspen Phoenix NewCo, while 37 will permanently close. Approximately 1,000 jobs have also been saved – however 250 employees are at risk and have now entered consultation. Paperchase appoint administrators on January 5 in a bid to save its 127 stores 46 concessions. PwC said the process would give the chain 10 days to start rescue talks.

Daily Mirror The I, Page: 51

Boohoo in talks to acquire remains of Arcadia

Boohoo Group is in advanced talks to acquire the remaining components of Sir Philip Green’s high street empire, according to Sky News. Boohoo is said to have indicated to Deloitte, the administrator to Arcadia Group, that it will pay around £25m for Burton, Wallis and Dorothy Perkins, just days after agreeing to acquire Debenhams’ brand and website for £55m.

Sky News

SMEs NEWS – FRIDAY 29TH JANUARY 2021

Business leaders demand action over customs chaos

Britain’s largest business groups have warned of a significant loss of business if the difficulties exporters are facing at UK ports are not resolved. The CBI, the British Chambers of Commerce, the manufacturers’ group Make UK, the Federation of Small Businesses and the Institute of Directors said the Government needed had complained to Cabinet Office minister Michael Gove during a round table meeting on Thursday about “substantial difficulties faced by firms adapting to the new customs processes, sizeable obstacles to moving goods through the Dover-Calais route and the shortage of informed advice from both government and specialist advisers alongside a number of others.”

The Guardian Bloomberg

UK’s small businesses struggle with Brexit red tape

Some of the UK’s most profitable and innovative small businesses are being put off exporting to the EU because of the cost of the new customs rules impose on them, according to the Federation of Small Businesses. Small firms have been advised to set up EU-based entities to circumvent new trading barriers, but many cannot afford to do so, the Guardian reports.

Financial Times, Page: 3 The Guardian

ECONOMY NEWS – FRIDAY 29TH JANUARY 2021

UK Tech sees rise in business activity

Research from IHS Markit and KPMG shows the UK’s tech sector expanded at a stronger rate than the entire private sector in the fourth quarter. “The final quarter of 2020, saw the UK tech sector demonstrate such resilience in the face of ongoing pandemic disruptions and some client spending delays ahead of the Brexit transition deadline,” Bernard Brown, vice chair at KPMG UK said. Growth was supported by a recommencement of projects as well as healthy appetite for digital services and an uptick in spending in areas like e-commerce.

City AM

Early warnings of Brexit trade trouble emerge in UK data

Early signs of disruption caused by the UK’s departure from the European Union are emerging in economic data. According to IHS Markit, manufacturers and services firms have been hit hard by supply chain and export disruption. British factories reported the steepest increase in supplier delivery times among the six “flash” preliminary PMI surveys published by IHS Markit for the UK, France, Germany, Japan, Australia and the United States.

Reuters The Herald

OTHER NEWS – FRIDAY 29TH JANUARY 2021

Half of remaining cashpoints could disappear in two years

Some 13,000 cashpoints were axed over the last three years, leaving just 54,400 remaining. But this figure could halve again by 2023, Which? has warned. The CEO of the consumer group, Anabel Hoult, has now written to the eight big banks urging them to guarantee they will preserve cashpoints. The news comes just months after a report from PwC and the Local Data Company said an average of 55 outlets closed per month – including 235 in the first half of 2020. Ms Hoult said: “Ensuring the most vulnerable members of society have cash to pay for essential goods and services must be a priority not an afterthought. There is no doubt that more people than ever benefit from digital banking. That does not detract from the need to provide reasonable access to cash for the millions who need it.”

Daily Express, Page: 2

Americans will have stimulus cash taken by IRS if they owe tax

The Internal Revenue Service (IRS) could take money from Americans’ second stimulus checks if they owe tax – despite the agency’s pledge it would not. The direct payments are technically an advance tax credit, called the Recovery Rebate Credit, on 2020 tax returns, and the latest relief package, called the Coronavirus Response and Relief Supplemental Appropriations Act of 2021, cut a provision that allowed people to get the stimulus money regardless of taxes owed.

The Sun

Contact Paul Southward

Paul Southward