NEWS – FRIDAY 3RD APRIL 2020
NEWS – FRIDAY 3RD APRIL 2020
CORONAVIRUS – SUPPORT FOR BUSINESS
Rishi Sunak bows to pressure to revamp rules for the Business Interruption Loan Schemes. Check back here for full details.
TAX NEWS – FRIDAY 3RD APRIL 2020
2020 – 21 TAX TABLES
HMRC ‘likely to extend deadlines’ amid crisis
Dawn Register, partner and head of tax dispute resolution at BDO, writes in City AM on the Treasury’s moves to raise an extra £4.7bn through a crackdown on tax evasion and avoidance, advising recipients of letters from HMRC that deadlines for responses are likely to be extended given the ongoing coronavirus crisis. It is also noted that HMRC’s Connect system “can identify individuals who hold assets in multiple jurisdictions.”
Premier League urged to act on player pay
Julian Knight, chairman of the Digital, Culture, Media & Sport select committee, has called on the Government to impose a “windfall tax” on Premier League clubs that refuse to impose pay cuts on their players while applying for a public bailout to cover wages for non-playing staff. Voicing concern that clubs are taking advantage of the Coronavirus Job Retention Scheme, Mr Knight has written to Chancellor Rishi Sunak demanding that top flight clubs “do the right thing.”
EMPLOYMENT LAW NEWS
From the 1st April national minimum wage rates have risen as follows:
|Year||25 and over||21 to 24||18 to 20||Under 18||Apprentice|
|April 2020 (current rate)||£8.72||£8.20||£6.45||£4.55||£4.15|
|April 2019 to March 2020||£8.21||£7.70||£6.15||£4.35||£3.90|
NB: where you are furloughing employees, we understand that ACAS has advised that the 80% of salary the furloughed employees get will not have to be increased in line with the increase in national minimum wage rates because the furlough reimbursement is based on past hours worked/paid, not what they might earn going forward. Check to make sure that this advice remains current as changes could be made later.
The government’s Good Work Plan:
- All workers who start work for you on or after the 6th April must be given an employment contract (or written statement of particulars of employment) on or before their first working day. You used to have up to 8 weeks to provide this.
- Annual leave: How a week’s pay is calculated for holiday entitlement will change from 6 April 2020. For those of your employees who do not have regular hours or regular pay, you’ll need to look at the average pay they received over the previous 52 weeks, instead of 12 weeks, in order to calculate their holiday entitlement.
Parental Bereavement Leave (Jack’s Law):
From the 6th April, parents who lose a child under the age of 18, or suffer a stillbirth from the 24th week of pregnancy, on or after this date, will have the right to two weeks’ leave. This leave will be paid at the same statutory rate as other family friendly rights (eg maternity pay), if the employee has 26 weeks service. Don’t forget that parents are already entitled as a day one right to take a reasonable amount of unpaid time off to deal with emergencies involving a dependent, including dealing with a dependent’s death.
INDUSTRY NEWS – FRIDAY 3RD APRIL 2020
Accountants adapt to audits amid lockdown
As the audit season commences for companies in a period where the COVID-19 outbreak has restricted movement amid a Government lockdown, some auditors are turning to cameras to help compile annual accounts. Hemione Hudson at PwC comments: “Normally we have significant teams out counting but we are now looking at different ways of doing this.” Mazars’ Bob Neate says one option is to use cameras already installed in a company’s warehouse to verify its stock levels. Scott Knight of BDO notes that difficulties arise from not being able to discuss issues in person, “and not being able to physically observe the controls that are used to run a company”. The Financial Reporting Council has issued guidance saying auditors should agree what can be done remotely, what can be done using technology and where confirmation depends on being physically present.
Accountancy can ‘reset’
Recruiters at Core-Asset Consulting have warned that issues in the accounting sector are at risk of intensifying in the fallout from the coronavirus pandemic, pointing to concerns over succession planning driven by cuts and a lack of graduate opportunities that have led to a shortage of middle management. On issues it feels the sector must address, the firm highlights flexible and home-working, compassionate leave and the importance of supportive workplaces. It says the pandemic gives accountancy firms a chance to “reset” their values.
The Scotsman, Page: 34
CORPORATE NEWS – FRIDAY 3RD APRIL 2020
RSM: Insolvencies estimate ‘alarmist’
RSM has questioned reports that 800,000 to 1m businesses UK businesses could collapse as a result of the coronavirus crisis, describing the figure as “alarmist at best”. Pointing to the estimate, which comes from an unnamed accounting firm cited by the British Chambers of Commerce, RSM partner Gareth Harris said: “I don’t believe that is a realistic number. That would be genuinely unprecedented and while we are in strange times I don’t believe that is a fair reflection.” He suggested a total in the 70,000-100,000 range was more realistic, adding: “You are going to see a pretty sharp spike in insolvencies for businesses that were struggling before any of this happened.”
Coronavirus ‘already damaging businesses’ – BCC
The British Chambers of Commerce (BCC) has released the first COVID-19 Business Impact Tracker study, cautioning that small businesses have only three months or less of cash reserves and that there has already been a “sharp and significant” reduction in domestic and overseas revenue. BCC director general Adam Marshall commented: “While businesses have welcomed the unprecedented size and scope of the Government support packages, our findings highlight the urgent need for that support to reach businesses on the ground as soon as possible.”
SMEs NEWS – FRIDAY 3RD APRIL 2020
Loan scheme revamped
The emergency loans scheme for businesses struggling amid the coronavirus pandemic has been revamped, with Business Secretary Alok Sharma saying changes to the initiative will make it easier for smaller firms to access loans. The Treasury said it had received more than 130,000 loan enquires from firms but fewer than 1,000 had been approved. While government-backed loans for small businesses were only available to firms that had been turned down for a commercial loan from their bank, the rethink will mean applications will not be limited to businesses that have been refused a loan on commercial terms. With concern that support for firms in the middle bracket came up short, the revamped scheme will offer government-backed loans of up to £25m to firms with revenues of between £45m and £500m. Changes set out by Chancellor Rishi Sunak will also see banks banned from asking company owners to guarantee loans with their own savings or prope rty when borrowing up to £250,000. Carolyn Fairbairn, head of the Confederation of British Industry, welcomed the rejigged scheme, describing the changes as a “big step forward”.
Small firms missing out on grants
The Telegraph reports that a number of small firms are missing out on £10,000 grants earmarked to help them through the COVID-19 crisis as local authorities, which are distributing the money through the business rates system, are unable to get in touch. Councils tend not to have financial information on businesses that have never paid rates – including those qualifying for rates relief – so are writing to them. However, some cannot be reached as they are closed due to the lockdown. Commenting on the struggles faced by smaller firms, ICAEW chief executive Michael Izza said: “Businesses are struggling to access the finance they urgently need and that struggle is getting worse.”
Start-ups face ruin due to missing support
Researchers and professors from Manchester Metropolitan University and the Enterprise Research Centre have warned that hundreds of new start-ups could be put out of business because of gaps in the Government’s rescue package for the self-employed. The researchers noted that anyone who created their business after April 2019 will not be eligible for help from the self-employment income support scheme. An estimated 750,000 sole traders could miss out, while separate research from the Institute for Fiscal Studies put the figure at almost 2.2m.
Daily Mirror The Daily Telegraph
PROPERTY NEWS – FRIDAY 3RD APRIL 2020
Property market ‘grinding to a halt’
Figures from Nationwide show that house prices rose 3% year-on-year in March, outdoing the 2.3% increase recorded in February, On a month-by-month basis, UK house prices were up 0.8% in March, compared with a 0.3% climb in February. The analysis shows that the average house price in the UK hit £219,583 in March. Nationwide notes that the figures gauge the period just before the coronavirus outbreak started to impact the market, with the bank saying housing market activity is “grinding to a halt” as Government requests to stay at home prevent in-person viewings. Nationwide’s chief economist Robert Gardner said a lack of transactions “will make gauging house price trends difficult in the coming months”. Howard Archer, chief economist at the EY Item Club, offers that while housing market activity “should progressively pick up” once restrictions on movement are lifted, “the housing market looks unlikely to return to the levels seen at the start of 2020 for some time.”
Daily Mail City AM
EMPLOYMENT NEWS – FRIDAY 3RD APRIL 2020
Between-jobs workers penalised in Government scheme
The Treasury is understood to be in talks to fix problems with the coronavirus job retention scheme after it emerged that workers starting new jobs or moving between jobs would be excluded from it. Money Saving Expert’s Martin Lewis has encouraged those who have found themselves in this situation to request that their former employers rehire, and then furlough, them.
Job losses jump despite rescue package
The FT looks at how 950,000 have applied for universal credit despite Government support for employers, with KPMG’s Yael Selfin saying some firms are uncertain over the help they’ll receive.
LEGAL NEWS – FRIDAY 3RD APRIL 2020
Banks loses inheritance tax appeal
Arron Banks has lost a bid to use European human rights law to overturn a six-figure inheritance tax bill on political donations to UKIP. HMRC assessed the businessman as owing just over £160,000 on almost £1m in donations to the party between October 2014 and March 2015. Mr Banks challenged the decision at the first-tier tribunal, arguing the law on political donations being exempt from inheritance tax breached his human rights and breached EU law.
The Daily Telegraph, Page: 13 The Guardian, Page: 22 Daily Mail The Independent, Page: 25
ECONOMY NEWS – FRIDAY 3RD APRIL 2020
Retail sees record lows
The coronavirus pandemic has prompted a record decline in retail sales in the UK, with the fall driven by the closure of non-essential stores and a slide in footfall as the Government rolled out restrictions on movement. BDO analysis shows that like-for-like sales at physical stores fell by a record 34.1% in March, while for combined in-store and online like-for-like sales there was a 17.9% fall. Online like-for-like sales increased by 13.7% with shoppers turning to e-commerce platforms as physical stores locked their doors. Sophie Michael, head of retail and wholesale at BDO, said “it’s no surprise” that March was the worst month on record for the high street, with uncertainty making consumers more cautious with their money. She added that the outbreak is likely to have “sped up the shift away from in-store shopping as consumers become even more accustomed to buying online.”
Coronavirus set to trigger deep recession
Ratings agency Fitch has predicted a deep global recession in 2020 following the coronavirus outbreak. It expects worldwide economic activity to decline 1.9% in 2020, with US GDP to slip 3.3% while the eurozone will see a 4.2% decline and UK GDP will fall 3.9%. Brian Coulton, Fitch’s chief economist, said: “The forecast fall in global GDP for the year as a whole is on a par with the global financial crisis but the immediate hit to activity and jobs in the first half of this year will be worse.”
OTHER NEWS – FRIDAY 3RD APRIL 2020
Weighing the benefits of WFH
James Dean in the Times considers the merits of working from home, including the savings made on office facilities and transport. He notes that KPMG reportedly gives each of its 16,000 employees a £3.50-a-day lunch allowance, calculating that if staff were to eat at home instead the firm would save £13.2m a year.
The Times, Page: 39
Contact Paul Southward