NEWS – FRIDAY 9TH OCTOBER 2020

NEWS ROUNDUP

TAX NEWS – FRIDAY 9TH OCTOBER 2020

Airbnb hosts in HMRC’s sights over unpaid tax

Following an investigation into Airbnb’s tax affairs the company handed over income details of Airbnb’s 225,000 UK hosts for the tax years 2017-18 and 2018-2019. Experts say people who have earned money from their properties via Airbnb could be landed with bills for unpaid tax, interest and penalties. Fiona Fernie, a tax dispute and resolution partner at Blick Rothenberg, said: “It does not just relate to the last tax year; HMRC are going to look back over several years, so now is the time for people to come clean if they have not paid what they owe to HMRC.” A spokesman for HMRC said: “People with additional income streams may not be fully aware of their tax obligations and so we have taken steps in HMRC to consider sectors, such as short-term property letting, where we may not be collecting the full amount of tax owed. We would encourage customers to check their tax affairs, seeking advice where necessary, in order to put right any honest mistakes or omissions.”

The I, Page: 5

Read our report and commentary on this story from earlier this week:

British Airbnb Hosts face probe after company is forced to share letting details with UK tax authorities:

The Airbnb UK accounts for the year ended 31 December 2019 included a statement that the company will share data with HMRC about the earnings of hosts in the UK for the years 2017/18 and 2018/19.  Paul Southward comments that anyone who rents out UK properties through the Airbnb platform should review their letting activity for the last few years.  If they have declared the income and paid tax on their rental activity, then they should be fine.  If income has not been declared to the tax authorities, they should consider whether or not a declaration should be made even if they believe there is no tax liability.  Read Paul’s guide here: Airbnb-Tax-enquiries

End tax-free shopping and thousands of jobs will be lost, Sunak told

The Chancellor has been asked to provide a cost analysis for removing tax-free shopping for tourists amid warnings the move will lead to thousands of job losses at British luxury goods groups. Mel Stride, Conservative chairman of the Commons Treasury committee, has written to Rishi Sunak warning that the move “may cause very significant financial loss to retailers serving the tourism sector, particularly at a time when they are already suffering considerable stress due to the impact of Covid”. The VAT rebate cost the Treasury £521m last year, but retail groups have said that scrapping duty-free shopping could lead to a £3.5bn loss in revenue for businesses, which could reduce tax receipts by up to £680m.

The Times, Page: 36 The Daily Telegraph, Business, Page: 3

Stamp duty holiday set to save homeowners £500m

Research from the estate agency Benham and Reeves shows 85% of homebuyers have paid no tax on their newly bought property as a result of the Chancellor’s stamp duty holiday. However, the figure excludes properties bought as buy-to-lets and homes bought in September. Land Registry figures reveal the stamp duty holiday cost the Treasury £100m in July and August. Marc von Grundherr, a director at Benham and Reeves, estimates that the total sum could be as large as £524.9m.

The Times, Bricks and Mortar, Page: 3

Chappell denies tax evasion charges

Former BHS owner Dominic Chappell stands accused of evading tax on the £2.2m income he received from buying the failed high street chain from retail tycoon Sir Philip Green. Mr Chappell is accused of dishonesty regarding VAT, corporation tax and income tax between January 2014 and September 2016. He denies three charges of cheating the public revenue.

Financial Times, Page: 10 The Guardian, Page: 35 The I, Page: 6 The Times, Page: 21 Daily Express, Page: 8

REPORTING NEWS – FRIDAY 9TH OCTOBER 2020

UK regulator calls on companies to make reports more accessible

The Financial Reporting Council has published a discussion paper proposing a future for corporate reporting based on a principles-based framework. It outlines a more agile and flexible approach to ensure information better meets the needs of investors and other stakeholders. The paper considers a common criticism that annual reports are too long, and information difficult to access. “As the UK’s corporate reporting framework has evolved, annual reports have become a vehicle of convenience for ever-more information, however, this has undermined their purpose and usability”, said Mark Babington, the FRC’s executive director of regulatory standards. “To build trust in business we need a modern corporate reporting system that is transparent, flexible and puts users of corporate reporting at its heart.

Financial Reporting Council Financial Times, Page: 12 Accountancy Daily Bloomberg Tax IPE IAS Plus

EMPLOYMENT NEWS – FRIDAY 9TH OCTOBER 2020

Sunak to announce local furlough scheme today

Rishi Sunak will announce a local furlough scheme today in which the Government will subsidise two thirds of the wages of workers in pubs, restaurants and other businesses that are forced to close to stop the spread of the coronavirus. The Times reports that, under the scheme, employers will be able to access the scheme for as long as pubs, restaurants and other businesses are closed. The Telegraph carries news that hospitality bosses are calling for the original furlough scheme to be extended to save the sector, arguing that the Chancellor’s replacement job support scheme is inadequate. The paper’s Ben Marlow says “publicans and restaurateurs are being hung out to dry on the basis of little, if any, scientific evidence,” adding: “The very least that the Government should be doing is providing targeted relief otherwise many pubs simply won’t open again and that would be a huge loss to the fabric of this country.”

The Times The Daily Telegraph, Business, Page: 1, 2 Reuters

INDUSTRY NEWS – FRIDAY 9TH OCTOBER 2020

Over 1,000 Deloitte consultants working on Test and Trace

Newly released documents from the Department of Health and Social Care show some 1,114 consultants from Deloitte are now working on the Government’s Test and Trace programme. The firm charges up to £2,360 a day for each of its consultants. Deloitte is one of a number of private sector firms involved in the Pillar 2 COVID-19 testing operation. McKinsey, BCG, PwC, KPMG and EY are also employed – however their combined numbers total 144. Tamzen Isacsson, chief executive of the Management Consultancies Association (MCA), said that outsourcing had “enabled the Government to work quickly and with intensity on major initiatives”.

Sky News The Times, Page: 6

PROPERTY NEWS – FRIDAY 9TH OCTOBER 2020

City firms look to cut office space

A survey by the CBI and PwC has found that 74% of financial services firms are reviewing their office space needs amid an increase in remote working during the pandemic. Of the 133 firms polled, 88% said there had been a shift to remote working, with half saying most of their staff could work from home. More than two-thirds of the firms were investing in their IT infrastructure, but overall, jobs were tipped to be cut back. Separately, a study by the Office for National Statistics has found that twice as many businesses saw productivity fall when staff worked from home compared with the proportion that found it improved.

BBC News The Daily Telegraph, Page: 8

Council warned investments may be unlawful

A Surrey council has been warned that its £1bn bet on commercial property may have been unlawful. KPMG told Spelthorne borough council it has “material concerns” about the use of powers to borrow to invest in properties between 2017 and 2018 and “the level of risk” to which the council is exposed from those transactions. The auditor said there was a risk that Spelthorne had failed to comply with the prudential code, which requires councils to ensure that investment plans are made with sufficient regard to potential risks to the authority. The council said it refutes any suggestion that it acted unlawfully.

The Times, Page: 37

SMEs NEWS – FRIDAY 9TH OCTOBER 2020

Start-ups stifled as banks reject account applications

The BBC talks to entrepreneurs who are being denied business accounts by banks with major lenders either closed to new applications or warning of long delays. Mike Cherry, national chairman of the Federation of Small Businesses, said: “We appreciate banks were swamped with bounce-back applications, but refusing to open business accounts for new customers will stifle start-ups just at the moment we need them most.”

BBC News

PENSIONS NEWS – FRIDAY 9TH OCTOBER 2020

WPC chairman says transfer rules ‘must be changed’

Stephen Timms MP, chairman of the Work and Pensions committee, has warned transfer rules must be changed if the industry wants to put a stop to pension scams. At the second reading of the Pension Schemes Bill this week, Mr Timms told the House of Commons savers should not be entitled to their right of transfer in cases where the receiving scheme or destination is listed on the Financial Conduct Authority’s warning list.

FT Adviser

ECONOMY NEWS – FRIDAY 9TH OCTOBER 2020

Risks ahead for Scotland’s economy

The Scottish Chambers of Commerce (SCC) has said in its latest quarterly economic indicator that the outlook was looking “grim in all sectors”, particularly for businesses in retail and tourism. Employment levels were found to be negative across all sectors with significant risk of these rising further over the winter. The SCC also reported that the number of financial and business services companies reporting concern about rising taxation was the highest on record.

The Scotsman, Page: 9

Bailey says Bank still has firepower

Andrew Bailey has said policy makers are not “out of firepower” and will take prompt action to support the economy should a second or third wave of coronavirus materialise. Speaking at a virtual conference on banking stability, the Bank of England Governor warned that the risks to the UK economy were “very much to the downside” due to rising numbers of COVID-19 cases and measures to bring it under control.

The I, Page: 13 Daily Express, Page: 7

OTHER NEWS – FRIDAY 9TH OCTOBER 2020

Owner of 62 pizza franchises accused of Eat Out to Help Out fraud

The Mail reports on a suspected £250,000 Eat Out to Help Out fraud which saw the owner of over sixty Papa John’s franchise restaurants claim for thousands of non-existent meals. Whistleblowers say Raheel Choudhary ordered staff to record thousands of “phantom covers” while the Government scheme was running. One manager told the paper: “It was pure greed. He didn’t need extra money. His franchises were doing very well during coronavirus, because more people were ordering takeaways. Anyone who raised concerns got sacked or warned they would have their hours cut.”

Daily Mail, Page: 4

Contact Paul Southward