NEWS – FRIDAY 5TH FEBRUARY 2021

NEWS ROUNDUP

TAX NEWS – FRIDAY 5TH FEBRUARY 2021

Ministers warned over carbon taxes

With Government departments told to put a “price” on greenhouse gas emissions across all areas of the economy, a move that it is believed could result in new taxes as part of a drive towards net zero emissions by 2050, Labour has urged ministers not to impose carbon taxes on meat, cheese or heating. Shadow Chancellor Anneliese Dodds said that with the UK “in the middle of the worst economic crisis of any major economy … Now is not the time to be hiking taxes on families”. John O’Connell, chief executive of the Taxpayers’ Alliance, said: “New eco taxes would leave slim pickings for struggling families”, insisting ministers “must ease the burden on Brits before any green tax hikes.” The Times says environmentalists fear that if handled poorly, carbon taxes could decrease support for Britain’s climate goals. The Mail cites a Government source who insists ministers “have absolutely no intention” of putting a carbon tax on food products.

The Times, Page: 2 Daily Mail, Page: 31 The Sun, Page: 4 Daily Express, Page: 2

Stamp duty holiday sees tax-free sales jump 127%

HMRC data for England and Northern Ireland show that almost a quarter of a million homebuyers paid no property tax in Q4, while the stamp duty holiday saw a surge in sales. Figures show that home sales rose by 16% in the October-December quarter when compared to the same period in 2019. On a quarter-by-quarter basis, transactions were up 44% on Q3. Of the sales recorded in Q4, 218,300 were entirely tax-free – a 127% jump on Q4 2019’s tax free transactions. Year-on-year, residential stamp duty receipts fell 22% in Q4, with a 33% increase on Q3’s total. Richard Donnell of property website Zoopla said: “More people have saved on stamp duty, but more sales of high value property have reduced the hit on tax revenues.”

The Daily Telegraph

Tax haven fears over free ports

The Guardian’s Gwyn Topham looks at the free ports initiative, with businesses and local authorities this week submitting their bids to establish zones exempt from normal tax and regulation. He says that while those in support of free ports say they can bring investment, jobs and prosperity to deprived regions, critics suggest they are little more than tax havens. Paul Monaghan, chief executive of the Fair Tax Mark scheme, says free ports “are very much mini-tax havens domiciled within the UK.” He adds: “It’s going to leak out into the wider economy – it will result in a massively reduced contribution from business to the Treasury.” A Treasury spokesperson commented: “The Government is committed to combating abusive tax practices, such as avoidance and evasion – these have been a consideration throughout the design of the free ports tax offer.”

The Guardian, Page: 32

EMPLOYMENT NEWS – FRIDAY 5TH FEBRUARY 2021

Labour calls for furlough extension and overhaul

Labour is calling for an indefinite extension and radical reform of the Government’s furlough scheme, saying that action is needed to avert an unemployment crisis. Shadow Chancellor Anneliese Dodds will today urge Chancellor Rishi Sunak to extend the furlough scheme, which is due to stop up at the end of April, until coronavirus-related restrictions are lifted. She will also call for reform, pointing to initiatives in Germany, France and the Netherlands where furlough schemes include incentives and conditions to encourage job retention and training so as to prevent abuse. Business groups including the British Chambers of Commerce have called for the furlough scheme to be extended until the summer, while the TUC has said it should remain in place through 2021.

The Guardian

Remote working could cost economy £95bn a year

Research commissioned by commercial landlord Landsec suggests remote working could cost the UK economy up to £95bn a year. The report found that face-to-face working boosts productivity and innovation, as well as driving investment in residential and commercial property, business events, meetings and travel. It calculates that the direct economic contribution of in-person working typically stands at about £95bn a year.

City AM

CORPORATE NEWS – FRIDAY 5TH FEBRUARY 2021

Dune review could see CVA

Shoe retailer Dune has appointed advisers from KPMG to help it review strategic options, specifically in relation to its property portfolio, a move that could see it opt for a CVA as it looks to trim costs. With lockdown measures hitting business for much of the past year, founder and CEO Daniel Rubin said: “We’ve had constructive dialogue with our landlords since the start of the pandemic, but we now need to engage with them further if we are to safeguard our future.”

The Daily Telegraph, Business, Page: 7 Sky News

PROPERTY NEWS – FRIDAY 5TH FEBRUARY 2021

London leavers on the increase

The Times’ Melissa York looks at whether London’s population could be set to fall for the first time since 1988 as people opt to relocate, with PwC’s latest economic outlook paper suggesting 300,000 residents could move out of the city. An August survey by the London Assembly saw 4.5% of Londoners, or 416,000 people, say they intend to move out of the city within the next 12 months. Data from Hamptons International shows the number of homeowners buying outside of London hit a four-year high in December.

The Times, Bricks and Mortar, Page: 6

Barratt boss backs cladding tax on developers

David Thomas, chief executive of Barratt Developments, says he would support a tax on developers to help cover the cost of the cladding scandal and ensure that buildings meet changes to regulations since the Grenfell Tower fire. Saying that there is a “collective responsibility” to address the issue of buildings covered in flammable cladding, Mr Thomas said: “There’s been talk about how it can be funded and, from our perspective, we would support a prospective levy on the wider industry.”

The Times, Page: 41

PENSIONS NEWS – FRIDAY 5TH FEBRUARY 2021

Savers overcharged £125m in pension tax

Savers have overpaid a collective £125m in pension tax over the course of 2020 after withdrawing money under the pension freedom rules. Close to £26m was reclaimed from HMRC in the last three months of 2020. Over-55s have reclaimed £693m in overpaid pension tax since pension freedoms were introduced in April 2015.

The Daily Telegraph

ECONOMY NEWS – FRIDAY 5TH FEBRUARY 2021

BoE: Vaccines will drive rapid recovery

The Bank of England (BoE) expects the UK’s coronavirus vaccination programme to drive a rapid rebound of the economy later this year, with Bank economists predicting a 4.2% dip in Q1 before an upturn in economic activity. Governor Andrew Bailey said the Bank thinks the inoculation drive will “support a sustained recovery throughout the rest of the year”. The BoE also said it expects GDP to recover to pre-pandemic levels by the first quarter of 2022. It lowered its growth forecast for 2021 as a whole to 5% from November’s 7.25%, but raised its forecast for 2022 to 7.25% from 6.25%. Despite optimism that a recovery is on the horizon, the Bank said it could introduce negative interest rates if the recovery falters, with Mr Bailey saying that while the Monetary Policy Committee could utilise the measure in the event of a downturn, negative rates are not imminent. MPC members voted unanimously to keep the official interest rate at a record low of 0.1%, with the Bank also opting to leave its quantitative easing bond-buying programme unchanged at £895bn. Howard Archer of the EY Item Club said the Bank kept rates on hold as it “chose to look to the brighter longer-term prospects for the economy which will stem from the progressive rollout of the COVID-19 vaccines”.

The Times The Daily Telegraph The Independent The Guardian BBC News Sky News Daily Express

OTHER NEWS – FRIDAY 5TH FEBRUARY 2021

Greece to welcome vaccinated Brits

With Greek authorities reportedly planning to waive quarantine restrictions by as early as May for UK holidaymakers who have had a coronavirus vaccine, the Times notes EY analysis showing that the Greek economy shrank by an additional 10% last year because of an 80% slide in tourism revenue.

The Times, Page: 8

REGULATION NEWS – FRIDAY 5TH FEBRUARY 2021

Directors face fines over accounting failures in overhaul of audit rules

A proposed overhaul of the audit industry could see directors banned or hit with large fines for errors in their companies’ accounts. Plans to make directors personally liable for the accuracy of financial statements are set to be included in a Government consultation and follow independent reviews of audit and regulation, as well as a number of financial scandals. The consultation, which is set to focus on reform of corporate governance, audit firms and regulation, is expected to expand the definition of “public interest entities” whose audits are regulated by the Financial Reporting Council (FRC). It is also reported that the reforms will grant the Audit, Reporting and Governance Authority, which will replace the FRC, powers to enforce a formal split between the audit and consulting arms of big accountancy firms. A Government spokesperson last night said: “Strengthening our corporate governance and audit regime will help to ensure that the UK remains a world leader in corporate transparency and advance its status as a place of the highest standards in audit”. They added that new Business Secretary Kwasi Kwarteng “has been clear that audit reform is a priority for the department.”

The Daily Telegraph, Business, Page: 1 Daily Mail Financial Times, Page: 1 City AM Reuters

REPORTING NEWS – FRIDAY 5TH FEBRUARY 2021

FTSE firms’ climate risk disclosure ‘woefully inadequate’

A study from ClientEarth suggests many top listed UK firms are failing to disclose how climate change will affect their business. Analysis of financial accounts and associated audit reports at the 250 largest LSE-listed companies shows that more than 90% make no reference to climate-change related factors. This comes despite UK law saying large firms must disclose material information about their climate risks. The Government last year announced intentions to make recommendations of the Task Force for Climate-Related Financial Disclosures mandatory across the economy by 2025. The Financial Reporting Council (FRC) and Financial Conduct Authority have powers to sanction companies and auditors, as well as call for new statements. The FRC told City AM companies and their auditors need to consider the impact of climate change and assess whether the financial statements and related disclosures reflect it. “This encompasses a number of accounting standards, such as those relating to asset carrying values and useful lives, decommissioning and other provisions or expected credit losses”, it added.

City AM

Measuring climate change is audit’s vital task

PwC ’s Hemione Hudson says companies’ climate strategies must be reflected in financial statements. She suggests cooperation between all parties involved in corporate reporting is required to deliver a common approach to measurement.

Financial Times, Page: 22

Contact Paul Southward

Paul Southward