NEWS – FRIDAY 29TH MAY 2020
NEWS – FRIDAY 29TH MAY 2020
COVID-19 BUSINESS SUPPORT ROUNDUP OF MEASURES TO MAY 2020 UPDATE
TAX NEWS – FRIDAY 29TH MAY 2020
Claims for IHT refunds double
New data reveals that the number of people reclaiming overpaid inheritance tax (IHT) as a result of falling share prices has more than doubled in the last two years. Figures show that 1,850 people claimed back overpaid IHT in 2019/20. This was an increase of almost 1,000 compared to the 2017/18 tax year, when fewer than 860 submitted refund requests. While IHT must be paid by the estate within six months of a death it can take more than a year for assets to be sold and released among inheritors. With the COVID-19 pandemic seeing a sharp downturn in the stock market, some estates will have paid taxes on money that no longer exists. Sean McCann of advisers NFU Mutual said many executors would be in a position to make a claim for a refund due to declines across stock markets, noting that an expected dip in property values could also prompt refund claims.
Combining taxes would simplify UK contributions
A letter to the FT suggests that combining income tax with employees’ and employers’ National Insurance tax into a two-rate tax could see personal taxation “greatly simplified”.
CORPORATE NEWS – FRIDAY 29TH MAY 2020
Monsoon Accessorize on the brink
Monsoon Accessorize is expected to file a notice of intention to appoint administrators, in a move that would put 3,500 retail jobs at risk. Peter Simon, the retailer’s founder, is thought to be considering another rescue deal despite pumping £12m into the business last year. However, it is believed that FRP Advisory is set to be appointed to run an insolvency process. The chain is also in talks with landlords to secure a rent holiday until business is more stable again.
HMRC accuses General Electric of fraud in $1bn tax deductions dispute
HMRC has accused General Electric of fraud in a $1bn dispute over tax deductions, alleging that conglomerate made fraudulent misrepresentations and double-claimed tax relief in both the UK and Australia.
Branson joins list of Virgin Australia creditors
Virgin Australia co-founder Sir Richard Branson has joined the queue of creditors owed money following the airline’s collapse. Deloitte is preparing to narrow down a shortlist of bidders looking to relaunch the carrier.
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EMPLOYMENT NEWS – FRIDAY 29TH MAY 2020
Vacancies fall almost 60%
Job vacancies in the UK are down nearly 60% this month as the coronavirus crisis saw the fastest rise in unemployment in over 70 years. Figures released by the Office for National Statistics and job search engine Adzuna revealed that vacancies fell from 820,000 at the beginning of April to 373,000 in May. Low-income workers have been hardest hit by the crisis, with 64% of job losses hitting workers earning between £15,000 and £25,000. Andrew Hunter, co-founder of Adzuna, commented: “The direct impact COVID-19 has had on sectors such as hospitality and retail has been catastrophic and is likely to take some time to recover. I’m given some solace by the fact that in the last two-three weeks, the analysis suggests hiring looks to be turning a corner and returning to growth, albeit from a low base.”
Employers to pay 20% under furlough scheme change
Chancellor Rishi Sunak is expected to announce a change in the Job Retention Scheme that would see employers required to pay a portion of the wages of their furloughed staff from August. While the Government currently pays 80% of wages for workers, the Treasury is set to announced that employers will be required to put forward 20% of this amount as of August – as well as covering their national insurance and pension contributions. The move would mean furloughed staff receive the same amount while the Government’s share of the burden is reduced. Reports suggest that the scheme will also be closed to new entrants from the end of June.
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Test-and-trace plan sees employers asked to pay wages of self-isolating staff
Health secretary Matt Hancock has said employers should pay self-isolating staff members’ wages to under the new coronavirus test-and-trace system. He remarked: “If you are instructed by the NHS, for public health reasons, to stay at home then that is the equivalent in employment law to being ill and it is very important that employers are flexible about this.”
INDUSTRY NEWS – FRIDAY 29TH MAY 2020
IASB adjusts lease rules to help firms during crisis
The IASB is to issue firms leasing property with an optional accounting exemption for rent reductions during the COVID-19 pandemic. IASB Chair Hans Hoogervorst commented: “The amendment is designed to make it easier for lessees, especially those with a lot of lease contracts, to account for COVID-19-related rent concessions,” with the amendment to the lease standard effective from June 1 and applicable apply immediately in any financial statements not yet authorised for issue.
SMEs NEWS – FRIDAY 29TH MAY 2020
SMEs face large costs due to coronavirus
SMEs in the UK will face costs of £12,000 each on average due to the COVID-19 pandemic, a survey by business insurer Simply Business reveals. The study shows that two in five small business owners fear their business is at risk of permanent closure. A poll of 3,700 SMEs saw three quarters say they expect to begin trading again soon but more than one in four expect to be out of business within six months. It was also shown that two thirds had paused trading and three in five respondents felt they had been supported by the Government.
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ECONOMY NEWS – FRIDAY 29TH MAY 2020
Consumer confidence among millennials climbs
Research from PwC shows that consumer confidence among millennials has risen during the coronavirus lockdown, with sentiment on expectations of future disposable income and shopping behaviour among the 25 to 34 age group up from minus seven in April to 16 this month. Those between 55 and 64 were the most worried about their financial prospects, with a net sentiment of minus 31. Overall sentiment was minus 12, marking an improvement on April’s minus 26. The study saw 19% of respondents say they had lost some or all of their income through job losses or furlough, while 39% said that their financial situation had not been adversely affected since March and 19% had saved more money. Lisa Hooker at PwC said: “The results show that some consumers do expect to have more disposable income, and are willing to spend it,” adding: “So, with the planned loosening of restrictions on non-essential retail in June coupled with policies to achieve social distancing, the high street has the potential to benefit from some bounce back and quickly.”
BoE policymaker: Economy may struggle to recover
Bank of England policymaker Michael Saunders has warned that Britain’s economy is unlikely to recover fully from the “searing experience” of the coronavirus over the next two to three years. He warned: “If unchecked, there are risks of a vicious circle, whereby the economy gets stuck in a self-feeding loop of weak activity, pessimistic expectations and low investment.”
OTHER NEWS – FRIDAY 29TH MAY 2020
Premier League agrees June 17 restart following coronavirus suspension
With the Premier League set to restart its season next month, KPMG analysis suggests playing out the remaining fixtures behind closed doors will mean clubs face £152m-£161m in lost gate receipts.
Contact Paul Southward