Sunak urged to suspend tax shake-up

New Chancellor Rishi Sunak has been urged to suspend a huge tax shake-up for self-employed workers, with warnings that it could cause “enormous damage” to contractors. The Recruitment & Employment Confederation (REC) and the Association of Independent Professionals and the Self-Employed (IPSE) have warned of confusion over complying with the new IR35 rules, with changes coming into force in April in an effort to clamp down on tax avoidance by “disguised employees”. The IR35 employment status is currently declared by the contractor but the reforms will shift the responsibility to businesses. Concern over the switch has prompted some firms to say they will stop using contractors, while a survey by IPSE shows that a third of self-employed workers say they will stop freelancing. Neil Carberry, chief executive of the REC, said “lots and lots of companies” are unsure about how to abide the new IR35 rules, while Andy Chamberlain, deputy director of policy at IPSE, said “IR35 rules, when they apply and don’t apply, are so complex that no one understands them, even HMRC”.

The Daily Telegraph, Page: 1

Sunak urged to deliver tax reductions, while rises ‘feel inevitable’

Roger Bootle, chairman of Capital Economics, looks at former Chancellor Sajid Javid’s fiscal rules and whether his successor Rishi Sunak could seek to deviate from them. Writing in the Telegraph, Mr Bootle says under the new regime “there is now hope, not only that we won’t see these tax increases, but also that tax cuts may be possible.” He argues that tax reductions should be “at the heart of the coming Budget,” adding that these “should be an initial down payment as part of a long-term plan to substantially reduce the burden of taxation.” Elsewhere, Paul Johnson, director of the Institute for Fiscal Studies, looks at the fiscal framework in the Times. He suggests that the Government has “essentially no room to increase day-to-day spending unless accompanied by tax rises.” He offers that, economically speaking, tax rises are “perfectly feasible” and, “in the longer run … feel all but inevitable.”

The Daily Telegraph, Business, Page: 2 The Times, Page: 41

Red wall voters want tax loopholes closed

Research by Tax Justice UK and Survation shows that former Labour voters in “red wall” seats want the Prime Minister to close tax loopholes, offer fairer pension relief rates and increase capital gains tax.

The Guardian, Page: 9


Javid hints at opposition to rates increases

Sajid Javid has waded into a growing Conservative row over the prospect of tax rises in Rishi Sunak’s first Budget as chancellor. Mr Javid liked a tweet which suggested that Britain is already “overtaxed” with the highest tax burden for a generation. His move comes amid signs of unease on the Tory benches over hints that Boris Johnson wants next month’s Budget to mount a tax raid on Middle England. Former Cabinet minister John Redwood has said that instead of tax rises the Government should be drawing up a list of targeted tax cuts, including stamp duty, to stimulate growth. He said: “You cannot tax people into prosperity. You do not make the less well-off rich by taxing entrepreneurs to take fewer risks and run fewer businesses.” The tough decisions facing Mr Sunak were spelled out by the Institute for Fiscal Studies, which said that tax rises cannot be avoided if spending is allowed to rise. IFS director Paul Johnson said: “If he keeps [their] manifesto promise to balance current budget he won’t have money for increasing day-to-day spending.” An editorial in the Telegraph calls for tax cuts, stating that the tax burden is at a generational high. The paper notes that international evidence has showed that tax cuts are the most potent weapon the Treasury possesses in its battle to level up the regions.

The Daily Telegraph, Page: 2 Evening Standard Daily Mail, Page: 6 The Sun, Page: 2

Higher earners could face cut to pension tax relief

According to the Times, Boris Johnson and Rishi Sunak are considering cutting pension tax relief for higher earners and relaxing spending rules as they prepare for detailed budget talks tomorrow. The Treasury has drawn up plans to cut the rate of relief for higher earners from 40% to 20%, the same level as lower earners, in a move that would raise £10bn a year. Meanwhile, City economists have suggested that Mr Johnson could look to abolish the Office for Budget Responsibility to erode its independence after demanding greater control of the Treasury. Philip Shaw, UK economist at Investec, said: “To take an extreme scenario, one has to ask whether the OBR will exist given the events of the past week.”

The Times, Page: 4

Sunak urged to suspend IR35

Employment groups have called on Rishi Sunak to suspend the new IR35 tax regulations for self-employed workers or risk damaging the economy. Industry bodies said the new rules will lead to a third of self-employed contractors stopping freelancing over noncompliance fears. Andy Chamberlain, deputy director of policy at the Association of Independent Professionals and the Self-Employed (IPSE), said that the new regulations would present “clear and imminent danger not only to contractors, but also the businesses… and the wider economy.”

City AM, Page: 9

Chancellor urged to review business rates

A group of shopping centre bosses have joined forces to issue a list of priorities for new Chancellor Rishi Sunak to consider to help the struggling High Street. David Atkins, boss of Hammerson, said: “An immediate and substantial overhaul of the business rates system that overly burdens the retail sector is required,” while Ed Cooke, chief executive of retail property organisation Revo, called for a “new and fundamental” review of business rates, to include a digital tax for online firms to make competition fairer.

Evening Standard

Flybe tax could be axed

The Telegraph reports that a tax cut agreed as part of a rescue package for struggling airline Flybe could be axed by Rishi Sunak. According to the paper, Mr Sunak is against a cut to air passenger duty which his predecessor Sajid Javid had backed as part of a rescue deal last month. Flybe is still in talks over a taxpayer-funded £100m bridging loan which could go ahead regardless of the decision on the tax.

The Daily Telegraph, Business, Page: 1 City AM, Page: 3


Controversy over proposed pension tax relief reductions

With Prime Minister Boris Johnson to meet new chancellor Rishi Sunak for detailed discussions on plans for next month’s Budget, senior government figures have cautioned that nearly 4m people would be affected by Treasury plans to cut the rate of pension tax relief for higher earners from 40% to 20%. Former Conservative leader Iain Duncan Smith told the Times: “We are beginning to think like socialists. We are uneasy and uncomfortable with people who make money. That’s not the Conservative way.” Steve Baker, a Conservative member of the Treasury select committee, stated: “Given we have had low-interest rates for more than a decade the chancellor will be extremely cautious before further disincentivising saving.” Maurice Tulloch, chief executive of Aviva, writes in the Telegraph on pension saving, noting that in 2019 just 6% of adults took financial advice on the issue. He comments that: “Those retiring today mig ht still be benefitting from generous final salary pension schemes, but future generations will not be so fortunate – especially if pension tax relief is diluted in the Budget.” Meanwhile the Independent notes that research by Tax Justice UK “suggests the default Conservative position is deeply unpopular with an important group of voters: those who shifted allegiance to the party chiefly because of Brexit and disaffection with Corbyn’s Labour,” and that “Sunak, himself a former Goldman Sachs analyst and no fan of big government, has reportedly been called to report to the 1922 Committee of backbench Tory MPs to explain himself before the Budget.”

The Independent, Page: 16 The Times, Page. 7 The Daily Telegraph, Page. 6 The Daily Telegraph, Business, Page. 4

Cayman Islands tops financial secrecy list

The Tax Justice Network is urging tighter regulation, with a report published yesterday claiming that Britain has moved up in the global rankings for financial secrecy. British overseas territory the Cayman Islands, along with the United States and Switzerland, does most to help the globe’s richest citizens hide and launder money, according to the study. Alex Cobham, chief executive of the Tax Justice Network, said the “Anglo-American axis of secrecy” was exacerbating corruption and tax abuse. The Cayman Islands is among four countries and jurisdictions to have been added to the EU’s list of tax havens. Palau, Panama and the Seychelles make up the other additions, all accused by the EU of unfairly offering tax avoidance schemes.

Financial Times, Page. 2 Daily Mail The Independent, Page. 23 The Daily Mirror, Page. 33

Thomson Reuters faces freelancer backlash over UK tax changes

Freelance workers are demanding assurances from Thomson Reuters that their pay will not be reduced when the government’s IR35 crackdown on tax avoidance comes into force.

Financial Times, Page: 17



Landlord low

The number of private landlords has hit a seven-year low, with 222,570 leaving the sector since the Government began to cut tax reliefs, according to estate agency Hamptons International. A 3% stamp duty surcharge on additional homes and tighter mortgage lending regulation was introduced in 2016, while 2017 saw the start of mortgage interest rate relief being replaced with a tax credit. The number of privately rented homes has fallen by 156,410 since its peak of 5.29m in 2017. There were 2.66m landlords in 2019, the fewest since 2012’s 2.58m.

The Times, Page: 40 The Daily Telegraph, Page: 10 The Independent, Page: 51 The I, Page: 41

Asking prices up £2,500

Analysis by Rightmove shows that asking prices are up by more than £2,500 over the past month, with the average hitting £309,399 in February – just £40 below the all-time record. The figures are based on the 108,107 asking prices recorded on the site over the past month, equal to 95% of the UK market.

The Guardian



Late payments hit £23bn

Analysis by the Federation of Small Businesses (FSB) shows that almost four in 10 small businesses that made successful finance applications in Q4 2019 used the money to manage their day-to-day spending. Some 23% used the money to update equipment, 16% used finance to expand their business and 2% spent the money on recruitment. The FSB report also highlights the impact of late payments, which forces 50,000 small companies to close every year, with Bacs data showing that SMEs were owed £23.4bn in overdue bills last year, an increase of £10.4bn on 2018. Mike Cherry, chairman of the FSB, has urged ministers to “make ending the UK’s late payment crisis a top priority.” He added: “We fought hard for … late-payment reforms under the last administration. Frustratingly, it was put on ice due to the general election. We’ll be working closely with the new small business commissioner to resurrect it.”

The Times, Page: 39 The I, Page: 40 The Scotsman, Page: 34 Yorkshire Post, Page: 7

HMRC delays cause cash crunch at UK start-ups

A scheme allowing SMEs to deduct 130% of their R&D costs from their annual profit saw delays to tax credits which forced a number of start-ups to raise emergency funds in 2019.

Financial Times, Page: 2


Retail body demands digital sales tax under rates overhaul

Revo, which represents hundreds of retailers, high street landlords and consultants, has written to the Treasury calling for an urgent overhaul of the business rates system. It wants the Government to fast-track the “fundamental” review of business rates promised at the Queen’s Speech in December. Proposed changes from Revo include introducing a digital sales tax that would offset a reduction in business rates for bricks-and-mortar stores. The body also wants the immediate removal of downwards transitional phasing, a system that means rates do not decrease in line with falling rents. Additionally, Revo wants ministers to support town centres by expanding its £3.6bn towns fund, which includes £1bn of funding for local authorities to reshape town centres and high streets.

The Times, Page: 36



Skilled Worker Visa applications down

A report from BDO shows that the number of skilled workers from overseas applying for jobs in private companies has fallen by almost a tenth since the Brexit vote. The number of applications for Skilled Worker Visas made by non-EU workers seeking to work in the UK’s private sector dropped to 44,300 in 2018/19 from 48,600 in 2015/16. Stuart Lisle of BDO noted an existing skills shortage in industries such as technology and manufacturing, adding: “It is now vitally important that British businesses are still able to bring in talented workers from overseas where necessary, once our exit from the EU is completed.” “We want to see the Government prioritise the creation of a worker visa system that attracts the best talent with economically relevant skills that prioritises the needs of UK businesses,” he added.

The I, Page: 8 Yorkshire Post, Page: 4



Investment market boost

Scotland’s deals market is set to see increased activity in 2020, according to PwC, with the firm predicting an increase in the sale of owner-managed businesses.

The Press and Journal, Page: 11


Problems mount for NMC Health

Short-seller Muddy Waters has said that the resignation of BR Shetty as chairman of NMC Health suggested there was “systemic rot and corruption” at the firm. Muddy Waters founder Carson Block said: “We strongly suspect that today’s resignations are due to more than misreported share ownership. We believe the share ownership and pledge debacle is a symptom of systemic rot and corruption at NMC.” UK financial regulators have launched an investigation into the firm, and NMC said it had launched a legal review. Meanwhile, the FT’s Lex says that banks, brokers and accountants who avoided NMC, which is listed in London, should congratulate themselves on their foresight.

Financial Times, Page: 14 City AM, Page: 3

William Hill names new CFO

William Hill has appointed Adrian Marsh as its new CFO. Mr Marsh joins from packaging firm DS Smith. He was previously group director of tax, treasury and corporate finance at Tesco.

Yorkshire Post, Business, Page: 3 The I, Page: 42

Entrepreneur Michael Spencer taken to the cleaners by Laundrapp demise

The Icap founder Michael Spencer is among the investors to have suffered heavy losses following the collapse of Laundrapp. FRP Advisory was appointed as administrator to the start-up last week.

Financial Times, Page: 1


Beales department stores to shut remaining branches

Beales is to shut its remaining 11 remaining department stores after it fell into administration last month. Administrators KPMG have announced that there are “a number of interested parties,” with the firm’s Will Wright remarking: “We understand that the failure to achieve a sale so far will come as disappointing news, but can assure staff that we will continue in our efforts to secure some form of positive outcome.” The 139-year-old high street chain is the latest UK retailer to fall victim to increasing rising business rates, falling customer numbers and online competition.

The Daily Telegraph, Business, Page. 1 The Times, Business, Page. 45 Daily Mail, Page: 65



China plans tax cuts to mitigate coronavirus impact

China is planning tax cuts to underpin growth as the coronavirus threatens to hit its already slowing economy. Finance minister Liu Kun says Beijing will use “targeted and phased” measures to cut taxes such as VAT for firms providing essential goods or logistics. He added: “While large-scale rolling back of taxes and fees may increase short-term challenges, the nation must take a longer-term view and make resolute steps to implement tax and fee cuts.”

The Daily Telegraph, Business, Page: 1


Financial transaction tax proposed by Bloomberg

As part of his proposals for regulating Wall Street and strengthening the financial system, Democratic presidential contender and former New York City mayor Michael Bloomberg has proposed a financial transactions tax of 0.1% and a merger of government mortgage providers Fannie Mae and Freddie Mac.

The Daily Telegraph, Business, Page: 7



Financial advisers turning away pension transfer work

The Personal Finance Society has warned that financial advisers are being forced to turn away pension transfer work because they can no longer obtain adequate insurance cover.

Financial Times



Jupiter agrees deal to acquire rival

Jupiter Fund Management has agreed to pay £370m to buy rival Merian Global Investors in a deal which will create the UK’s second-largest retail asset management group. The enlarged group will have £65bn under management, although analysts said the deal was essentially a defensive merger of two struggling businesses. Ben Yearsley, director of Shore Financial Planning, said: “Ever since Andrew Formica joined Jupiter it was obvious corporate activity was on the cards. ‘Buy or be bought’ was clearly the mantra. Gone are the days of small being better in fund management. Now seemingly big is better.” Commenting on the deal, the Telegraph’s Ben Marlow suggests that instead of just getting bigger, fund managers should concentrate on just getting better. The Telegraph also carries a guide on what the deal means for investors.

Daily Mail, Page: 68 The Daily Telegraph, Business, Page: 2 The Daily Telegraph, Business, Page: 2 City AM, Page: 2



Growth in consumer credit slowing

A report from the EY Item Club suggests consumer credit is to grow at its slowest pace in six years, hitting 3.2% this year. While lending rose slightly at the end of 2019, the 2020 forecast remains significantly down from 2017’s peak growth of 8.3%. EY’s Omar Ali said: “The growth in lending at the back end of 2019 has given cause for cautious optimism,” but he added: “It is still too early to tell whether these early green shoots will translate into a full and sustained economic recovery.”

The Times, Page: 40 Daily Express, Page: 45 City AM, Page: 6

Budget may be delayed, says Shapps

Transport Secretary Grant Shapps has told the BBC’s Andrew Marr that the Budget may be delayed. With it suggested that the Budget, which had been set for March 11, may be moved due to the surprise resignation of Chancellor Sajid Javid, Mr Shapps said the Government had not confirmed the Budget would “definitely go ahead on the same date as mentioned before”. Saying the date would be a matter for Mr Javid’s replacement, Rishi Sunak, Mr Shapps added: “The guy’s only been in place for a few days, let’s give him a few days to decide on the date.” Separately, Mr Shapps told Sky’s Sophy Ridge programme that plans were “well advanced” but Mr Sunak “may want time”.

BBC News The Times, Page: 9 The Daily Telegraph, Page: 8 The Guardian, Page: 9


Household finances hit record outlook

IHS Markit’s UK Household Finance Index (HFI) hit 47.6 in February, from 44.6 in January, as UK households’ perceptions of their financial wellbeing rose to its highest ever levels. Joe Hayes, an economist at IHS Markit, said: “Post-election survey data so far scores a fairly good chance a first quarter GDP pickup following a flat end to 2019.” The Future Household Finance Index – which measures expected change in financial health over the next 12 months – also rose to 52.7 in February, from 49.6 last month, in a further sign of the UK’s positive outlook.

The Daily Telegraph City AM


UK wages top 2008 peak as employment hits record high

UK wages topped their pre-financial crisis peak for the first time at the end of 2019, according to the Office for National Statistics (ONS), as UK employment hit a record high of 32.9m people. The employment rate reached 76.5% over the three months, while unemployment fell by 16,000 to 1.29m. Average regular pay rose to £512 per week in December, which in real terms is £1 higher than it was in August 2007.

The Times, Page: 2 Financial Times, Page; 2 City AM The Guardian, Page: 14 Daily Mail, Page: 21



Premium bond prizes plummet

National Savings & Investments has slashed the payouts on its savings accounts and Premium Bonds. NS&I said that the odds of any £1 bond number winning any prize will decrease from 24,500-1 to 26,000-1 from the May 2020 draw. Meanwhile, from May 1st, the rate on NS&I’s Direct Saver will be cut from 1% to 0.7% and the Investment Account rate will tumble from 0.8% to 0.6%.

Daily Mail, Page: 1-2 The Times, Page: 1, 4


Access to Cash review urges action by chancellor

The authors of the Access to Cash review, led by the former Financial Ombudsman Service boss Natalie Ceeney, are urging new chancellor Rishi Sunak to include measures protecting access to physical money in the budget, cautioning that over 8m adults in the UK would struggle to adapt to a cashless society. With around 13% of free-to-use ATMs in the UK closing and the proportion of ATMs which charge a fee increasing from 7% to 25%, Ceeney remarked: “The UK is fast becoming a cashless society – without knowing what this really means for consumers or for the UK economy.” Jenny Ross of consumer group Which? noted that: “Without legislation many more communities will be cut off from cash or forced to pay hefty fees to access their own money. The new chancellor must seize this opportunity and guarantee long-term access to cash in the budget, while developing a clear strategy to ensure that the transition to digital payments doesn’t leave anyone behind.”

The Guardian, Page. 30 The Daily Telegraph, Page: 5

Budget will go ahead on March 11

The Budget will go ahead on 11 March as planned, new Chancellor Rishi Sunak has confirmed. He is due to meet Boris Johnson today to discuss the Budget, amid expectations that the Prime Minister wants more leeway to borrow large sums to fund infrastructure projects in the North.

The Guardian City AM The Independent Financial Times

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