NEWS – FRIDAY 30TH OCTOBER 2020
NEWS – FRIDAY 30TH OCTOBER 2020
TAX NEWS – FRIDAY 30TH OCTOBER 2020
Surcharge on all corporate card payments to HMRC from 1st November 2020
Payments to HMRC using a corporate credit card have been subject to a surcharge for some time, from 1st November the surcharge will also apply to corporate debit cards. There is no surcharge for payments with a personal debit card. Avoid a surcharge by using Direct Debit, Faster Payments, BACs, or CHAPs.
Tax reform call
Ryan Bourne in the Telegraph considers the merits of tax reform, saying taxation “is one of the most powerful economic tools at any Government’s disposal.” He says that despite ten years of Conservative rule, “a genuine effort at pro-growth tax reform has been lacking”, arguing that despite cuts to the headline corporation tax rate and “sensible” reforms to the structure of stamp duty, “there has been little rethink of how government could raise revenue in a less damaging way.” Mr Bourne points to a Centre for Policy Studies report offering a “revenue-neutral tax reform agenda” and suggests that stamp duty could be scrapped while business rates could be replaced with a land tax on the value of the business site. He also moots reform that would remove the additional 45p rate of income tax.
HMRC in scam warning
With tomorrow marking the deadline for paper self-assessment tax returns being submitted and the January 31 cut-off for online submissions fast approaching, HMRC has issued a number of warnings, reminding taxpayers to be wary of phishing emails and fake websites. The Revenue also urged people to stay alert over calls, emails or texts claiming to be from HMRC and offering a tax refund or warning them they owe tax. Meanwhile, HMRC’s interim director general of customer services, Karl Khan, says HMRC is “determined to help customers during this difficult time”, saying: “We know many customers will have been adversely affected by the coronavirus pandemic, or will need help to spread the cost of their tax bill.”
BUSINESS RATES NEWS – FRIDAY 30TH OCTOBER 2020
North unfairly hit by rates system
A report from economic think-tank Centre for Cities suggests that the business rates system “penalises companies in poorer areas of the north of England”, with businesses in the north overpaying the tax while businesses in southern England underpay. This, it argues, undermines attempts to “level up” regional economies. The report calls for more frequent revaluations in an effort to better reflect local economic realities. It also calls for revaluations to be devolved to local government instead of the centralised Valuation Office Agency. The Centre for Cities report also found that taxes paid by bricks-and-mortar stores effectively subsidise online retailers, with the rates system having been slow to adapt.
SMEs NEWS – FRIDAY 30TH OCTOBER 2020
Small business confidence slips in Q3
Analysis by the Federation of Small Businesses (FSB) in Scotland shows that a quarter of business-owners believe that conditions will severely deteriorate over the next three months. The FSB’s small business confidence index for Scotland fell to -26.3 points in Q3, down from -10.5 points earlier in the year. The UK-wide index fell to -32.6 points, down 28 points on the previous quarter. A poll found that 24% of SME leaders north of the Border expect conditions to worsen over Q4, a fifth believe they’ll get slightly worse, while 11% expect a big improvement. More than half of the Scottish businesses surveyed reported a drop in revenue growth in Q3. Across the UK, one in four small firms reduced headcounts over the past quarter, while nearly a third expect to trim their workforce in the next three months.
The Scotsman, Page: 42
PROPERTY NEWS – FRIDAY 30TH OCTOBER 2020
Mortgage approvals up in September
Bank of England data show that approvals of mortgages for house purchase increased to 91,500 last month from 85,500 a month earlier, with pent-up demand and the stamp duty holiday said to have driven the housing market boom. September’s total marks the highest level since 2007. Net mortgage borrowing in September was at £4.8bn, an increase from August’s figure of £3bn. Andrew Montlake, managing director of mortgage broker Coreco, warned that a surge in activity may soon draw to an end, saying: “The post-lockdown bull run is already over … Lenders have been pulling down the shutters due to ongoing struggles with capacity and concerns over rising unemployment levels, specifically the impact on house price growth.”
City AM Financial Times Reuters
EMPLOYMENT NEWS – FRIDAY 30TH OCTOBER 2020
1,700 firms planned redundancies in September
Data released to the BBC following a Freedom of Information request shows that British employers planned making redundancies at near record levels in September, with 1,734 employers notifying the Government of plans to cut 20 or more posts. This is near to highs seen in June and July. The analysis shows that 82,000 positions were identified as being at risk by companies in September – three times the level seen in the same month last year. Tony Wilson, director of the Institute for Employment Studies, said: “What we may be seeing is firms who were intending to bring people back deciding that they can no longer do it because of the worsening economic climate. ”
Firms urged to explore JSS details
The Press and Journal looks at the Job Support Scheme (JSS), which is set to replace the Job Retention Scheme and will see the government pay 61.67% of the wages of every employee for hours not worked up to a monthly cap of £1,541.75. Katy Christiansen, payroll director at Anderson Anderson & Brown, advises firms to familiarise themselves with the different rules under the JSS “and how they tie in with the restrictions and corresponding tier in which they are operating”.
The Press and Journal, Page: 3
CORPORATE NEWS – FRIDAY 30TH OCTOBER 2020
Hotel will not reopen
The 100-bedroom Hilton Garden Inn hotel in Aberdeen has gone into liquidation with the loss of 34 jobs. It shut its doors to guests in March due to the coronavirus pandemic and will not reopen. Blair Nimmo and Geoff Jacobs of KPMG have been appointed as joint liquidators.
The Press and Journal, Page: 10
ECONOMY NEWS – FRIDAY 30TH OCTOBER 2020
IMF downgrades forecast for UK economy
The International Monetary Fund (IMF) has downgraded its forecast for the UK economy and predicted it will shrink by 10.4% in 2020. This marks a decline on the 9.8% hit to GDP that the IMF forecast two weeks ago. It said that the UK’s economic recovery is likely to be weaker than expected because of the second wave of coronavirus hitting Europe and ongoing Brexit uncertainty. The IMF warned that the coronavirus crisis could leave a legacy of “persistently higher unemployment”, and while IMF managing director Kristalina Georgieva praised the Government for spending heavily to support jobs, incomes and businesses, she urged Chancellor Rishi Sunak to roll out further spending to ease the impact of the pandemic, saying continuing government support is “essential ” for the economy. The IMF’s longer -term forecast suggests the UK economy will see growth of 5.7% in 2021.
OTHER NEWS – FRIDAY 30TH OCTOBER 2020
Ministers urged to publish TfL report
The Telegraph’s Oliver Gill looks at plans that would see extending the London congestion charge zone set as a condition of a bailout of the capital’s transport authority, Transport for London (TfL). He notes that Transport Secretary Grant Shapps is under pressure to publish the Government’s independent review of TfL’s finances, with KPMG having been hired to review measures that could be imposed on the transport authority in return for financial support.
Council on brink of bankruptcy
A Government taskforce has been sent to oversee Croydon Council in London after a report by Grant Thornton found that the local authority is on the verge of bankruptcy. The auditors revealed a £60m black hole in Croydon’s budget, and just £10m of financial reserves. Grant Thornton said COVID-19 has “ruthlessly exposed” the council’s fragile underlying financial position.
The Guardian, Page: 31
Contact Paul Southward