NEWS – FRIDAY 8TH JANUARY 2021

NEWS ROUNDUP

TAX NEWS – FRIDAY 8TH JANUARY 2021

US pauses plan for taxes on French imports

The US has suspended plans to put a 25% tariff on certain French goods in retaliation for new taxes on US tech firms. The taxes had been due to go into effect on 6 January. The office of the US Trade Representative said the decision was due to its wider review of the so-called “digital services” taxes that many countries, including the UK, are moving to impose on tech companies. “Given that these… investigations are ongoing and have not yet reached any determinations on what, if any, trade action should be taken, the US Trade Representative has determined that it is appropriate to suspend the action in the France DST investigation indefinitely,” the department said.

BBC News

CORPORATE NEWS – FRIDAY 8TH JANUARY 2021

Around 4,000 financial services firms at risk of failure

The Financial Conduct Authority has warned that up to 4,000 financial services companies across Britain were at a “heightened risk” of collapse even before the second wave of coronavirus struck. In its latest survey of 23,000 companies, the watchdog said a number of insurance, investment management groups, e-money and payment firms had been suffering from a downturn in availability liquidity, cash and borrowings during the spring lockdown. The FCA added that although the prospect of up to 4,000 firms failing was concerning, it stressed that the data was compiled before the vaccine rollout and extension of the furlough scheme to the end of April this year. The research also revealed that 59% of businesses saw a hit to their net income from the first wave of the pandemic and lockdown, of which 72% expected an impact of up to a quarter. Retail lending companies had made most use of government support schemes, with 49% of groups furloughing t heir staff and 36% receiving a government-backed loan.

Financial Times Daily Mail The Scotsman

UK’s biggest nightclub operator sold for £10m

The UK’s largest nightclub operator has been sold for about an eighth of its pre-pandemic value to Scandinavian nightlife group Rekom. Deltic has 52 nightclubs in the UK and appointed BDO to run a sale process in October.

Financial Times, Page: 12 The Daily Telegraph, Business, Page: 3 The Times, Page: 49

EMPLOYMENT NEWS – FRIDAY 8TH JANUARY 2021

How companies are supporting working parents during lockdown

The Telegraph looks at how some companies are implementing policies to help working parents cope better with Britain’s third lockdown. Some have been granting staff extra paid leave or introducing more flexible working options. KPMG, for example, introduced a special leave code last year so that staff with urgent care responsibilities can record any hours when they are unable to work without risking their pay being docked. “We found out during the first lockdown that wasn’t something which was abused, and so I think we were absolutely right to do that,” says Kevin Hogarth, chief people officer at KPMG. He adds that the firm has also been “encouraging our businesses to think about restricting the early meetings so that working parents can get the kids set up at the start of the day, make sure they have had their breakfast and make sure they’re set up for their online classes.”

The Daily Telegraph

Employers resume hiring

Recruitment of permanent staff expanded last month for the first time since September, according to KPMG and the Recruitment and Employment Confederation. “Recruiters indicated that the upturn was driven by increased market activity and greater confidence, partly due to recent vaccine news,” the report said. Meanwhile, demand for temporary workers rose at its fastest in over two years, with an increase in vacancies driving up starting salaries and temporary wages. James Stewart, vice-chairman at KPMG, said: “We will have to see what January brings with a new lockdown sure to fuel economic uncertainty, alongside preparing and adapting to the new relationship with the EU. But there is hopefully light at the end of the tunnel for both business and jobseekers.”

The Times, Page: 42

SMEs NEWS – FRIDAY 8TH JANUARY 2021

SME lending surged in first three quarters of 2020

Gross lending to SMEs in the first three quarters of 2020 hit £54m, more than double the annual total for 2019, according to UK Finance. The value of lending in the second and third quarters was £36bn higher than during the same period of 2019, driven by continued uptake of government-backed support. Loan approval volumes, across both government schemes and commercial lending, for all industries increased through those quarters, with retail, hospitality, travel, tourism and construction receiving particularly high levels of support due to the scale of the pandemic impact. Approval volumes exceeded 150,000 for construction and retail in the period, and 200,000 for the professional and support services sector. In previous quarters, all industries averaged fewer than 20,000 approvals. With the focus of businesses firmly fixed on short-term replacement or preservation of trading cashflow, utilisation of overdraft facilities dropped from 54% in the first quarter to 39% in the third.

Commercial Reporter Business Money The Times, Page: 42 The Sun, Page: 2

PROPERTY NEWS – FRIDAY 8TH JANUARY 2021

Britons with Spanish holiday homes face soaring tax bills

British nationals who own properties in Spain will face higher tax bills following Brexit, according to Blick Rothenberg. Partner Robert Pullen explains: “From January 1, 2021, UK-based owners of Spanish real estate will suffer a 24% tax rate on income, after the previous 19% tax rate expired when the transition period ended on December 31.” In addition, Mr Pullen believes that the Spanish tax authorities will no longer allow any expenses to be deducted which means gross income will be taxed. “This could be a huge increase, disproportionate to any real profit made.”

Daily Express

ECONOMY NEWS – FRIDAY 8TH JANUARY 2021

Retail woes continued in December

Retail sales for December were negative for the first time on record last year, according to research by BDO. Total like-for-like sales declined 1.6% last month, from a strong base of 6.6% growth in December 2019. BDO head of retail and wholesale Sophie Michael said: “Early January spending figures suggest shoppers weren’t simply waiting for discounting, but instead stopping discretionary spend altogether as the nation hunkers down for a long winter lockdown.” Separate research by the British Retail Consortium showed that footfall was down 46.1% in December compared to 2019 levels, but was up 19.3% on the previous month.

City A.M.

REGULATION NEWS – FRIDAY 8TH JANUARY 2021

Luton firm in record HMRC fine

A record £28.3m fine has been levied on Luton-based money transfer company MT Global by HMRC, in connection with “significant” breaches of money laundering regulations over the two years between 2017 and 2019. Bright Line Law barrister Jonathan Fisher QC remarked: “This fine shows that HMRC means business in its role as anti-money laundering regulator. After a slow start, we are witnessing a gradual increase in the level of penalty imposed on firms for money laundering breaches, especially where the larger firms are involved.” Nick Sharp, deputy director of economic crime, fraud investigation service at HMRC, added: “Businesses who fail to comply with the money laundering regulations leave themselves, and the UK economy, open to attacks by criminals. Money laundering is not a victimless crime. Criminals use laundered cash to fund serious organised crime, from drug importation to child sexual exploitation, human trafficking and even terrorism.”

Financial Times, Page: 7 The I, Page: 51 City AM

Contact Paul Southward

Paul Southward