NEWS – FRIDAY 31ST JULY 2020

NEWS ROUNDUP

COVID-19 SUPPORT FOR BUSINESS

Rishi gave the powers to the taxman to give away and now the taxman been given the powers to taketh away. Paul Southward comments on penalties and claims. https://bit.ly/3jXIWc3

#covid19 #penalties

TAX NEWS – FRIDAY 31ST JULY 2020

IHT receipts see first dip in a decade

HMRC figures show that the money raised from inheritance tax fell for the first time in a decade last year. The 2019/20 tax year saw the Treasury pull in £5.2bn in IHT, with this £223m down on the inheritance tax take for the previous year, marking a 4% decline. HMRC said the introduction of the residence nil-rate band in the 2017/18 tax year was the main reason IHT receipts – and number of people paying the tax – fell last year. With Chancellor Rishi Sunak reportedly looking at ways to raise cash to cover the nation’s coronavirus bill, Mike Hodges of Saffery Champness suggests non-doms could become a target if IHT bands or rules are changed. He added that while those with non-domicile tax status “will likely be considered a safe target politically”, Mr Sunak “will need to be mindful to not throw the baby out with the bathwater” with such individuals providing a significant source of investment in the economy. Tom Elliot of Crowe adds that if the Treasury is considering an annual wealth tax, “this would provide the perfect opportunity to not just reform IHT but do away with it completely.”

The Daily Telegraph, Page: 9 Financial Times Daily Mail

HMRC targets wealthy in push on tax evasion

HMRC has targeted “the wealthiest and most sophisticated” tax evaders, launching 430 investigations into serious and complex evasion in 2019/20 – a 26% increase on 2018/19 and 65% up on 2017/18.

Financial Times

Paul Southward reminds you that if you or your business face an enquiry from the Taxman, you should contact him for advice and guidance.

Avoiding a bloodbath on the UK high street

The FT looks at support measures the Treasury is considering for high street retailers, noting that an online sales tax and rethink of business rates have been mooted.

Financial Times, Page: 22

EMPLOYMENT NEWS – FRIDAY 31ST JULY 2020

Furloughed staff payoffs to be based on full wage

As of today, furloughed workers losing their jobs will see redundancy pay based on their normal wages as opposed to the furlough rate. The change will apply to redundancy payments, statutory notice pay and other entitlements. Business Secretary Alok Sharma remarked: “It is important that employees receive the payments they are rightly entitled to,” continuing: “The Government is doing everything it can to protect people’s livelihoods.” This comes as experts predict that the number of people made redundant during the coronavirus crisis, which currently stands at around 150,000, will rise, especially once the furlough scheme ends in October. TUC General Secretary Frances O’Grady welcomed the move, saying paying people full redundancy “is the right thing to do”, but called on ministers to extend the furlough scheme, arguing: Without this, we risk an avalanche of redundancies in the autumn.”

BBC News Evening Standard

PROPERTY NEWS – FRIDAY 31ST JULY 2020

Home-working shift set to prompt office exodus

Landlords and property agents believe a mass exodus from offices may be on the cards, with the coronavirus lockdown driving a remote working revolution. A survey by the Royal Institution of Chartered Surveyors (Rics) has seen nine in ten agents and landlords say they expect companies to scale back on office space in the next two years, with rents set to decline as firms opt for smaller, cheaper sites. The poll shows that more than half of respondents expect more businesses to base themselves in suburban offices rather than city centres. Rics said office rents are likely to fall by between 4% to 7% in the next 12 months, while the dip in demand could see retail rents decline by up to 14%. Rics economist Tarrant Parsons comments: “The recent shift into remote working raises many questions across the office sector, with respondents expecting businesses to re-evaluate their office space requirements over the next two years.”

The Daily Telegraph

SMEs NEWS – FRIDAY 31ST JULY 2020

BT offers support to small firms

BT is to offer subsidies and bursaries to small businesses, with its Small Business Support Scheme offering a subsidy of £2,500 to fund the cost of ultrafast business connections for entrepreneurs and tech start-ups. The telecoms firm has also pledged to pay its 4,500 smaller suppliers within days of being invoiced. BT chief executive Philip Jansen, who described small businesses as “the beating heart of the UK economy”, said that as the country looks to emerge from the coronavirus crisis, the economic recovery “hinges on their survival and ability to grow.” “If small businesses fail, our wider economy will fail to rebound,” he added.

The Sun, Page: 47

INTERNATIONAL NEWS – FRIDAY 31ST JULY 2020

Scholz defends handling of Wirecard debacle at Bundestag grilling

German MPs have sought answers regarding why APAS, the watchdog for auditors in the country, had not expressed any doubts about Wirecard’s long-time auditor EY.

Financial Times

ECONOMY NEWS – FRIDAY 31ST JULY 2020

Economic revival under way

Guardian analysis suggests that Britain’s economy has begun to repair the damage from the coronavirus lockdown. Its monthly tracker of economic news shows that while the hardest-hit sectors of the economy remain under severe pressure, the easing of lockdown is enabling business activity and retail sales to return to close to pre-pandemic levels. However, Howard Davies, the chairman of NatWest Group, has warned that the recovery could stutter as government support is gradually removed. He said: “We cannot assume the spending recovery we have seen so far will persist into the autumn. There is a risk that the prospect of job losses will dampen spending.” The analysis by the Guardian focused on eight economic indicators, with its findings showing that GDP returned to growth in May, while retail sales climbed by 13.9% in June. However, the report also cites an Office for Budget Responsibility estimate that the unemployment rate, currently at 3.9% , may double before year end, while Resolution Foundation research suggests the average household has seen the biggest hit to its finances since the 1970s.

The Guardian, Page: 34

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