NEWS – MONDAY 11TH MAY 2020
NEWS – MONDAY 11TH MAY 2020
TAX NEWS – MONDAY 11TH MAY 2020
Referees send HMRC claim to the bench
The Upper Tax Tribunal has rejected a claim by HMRC that football referees should be reclassified as employees of their representative body for tax purposes. Some 30,000 football referees in England could have faced higher NI charges while the Professional Game Match Officials Limited (PGMOL) would also have had higher tax bills if the case had been lost. HMRC said it intends to appeal.
EMPLOYMENT NEWS – MONDAY 11TH MAY 2020
Furlough scheme to continue to September
The Chancellor is expected to announce changes to the furlough scheme that will see the state continue to pay wages until the end of September – although monthly payouts to furloughed staff will fall from 80% of their normal pay to 60%. Rishi Sunak will also say that furloughed staff returning to work part time will have their wages “topped up” by the Government. The furlough scheme is costing an estimated £16bn a month and the government is under pressure to rein the costs in. Edwin Morgan, director of policy at the Institute of Directors, welcomed plans to make the furlough more flexible, commenting: “Enabling people to return to work gradually can help businesses get back on their feet. With demand still flagging across the economy, and social distancing proving a challenge for many firms, the Government needs to be agile with its support.”
The Daily Telegraph, Business, Page: 1 Daily Mirror, Page: 6
SMEs NEWS – MONDAY 11TH MAY 2020
Government considers investing in start-ups alongside private backers
The government is considering a plan to invest in start-ups alongside investors that use the Enterprise Investment Scheme (EIS). The move comes amid fears innovative firms will be starved of funding as capital investment dries up. The government could co-invest in start-ups alongside private backers through the Treasury’s £500m Future Fund, but it has not yet been decided whether the tax relief that comes with EIS would be maintained. Bruce Macfarlane, the head of MMC Ventures, urged the government to allow EIS investors to match convertible loans made to start-ups from the Future Fund, reducing the amount of debt start-ups would need to take on. Macfarlane also backed the idea of raising EIS tax relief from 30% to 50%, arguing that the 80% proposed by other investors was excessive.
Funding secured by UK-Dutch start-up for instant-result coronavirus test
Anglo-Dutch biotech start-up ViroTact has secured funding thought to value it at up to £10m from Dutch venture capital firm Carduso and John Molina, of US medical business Molina Healthcare. The firm is adapting its “smart molecule” technology used to detect bacteria to develop a fast COVID-19 test. People would just need to put saliva into a vial containing a molecule which reacts to an enzyme excreted by coronavirus. The result comes back in seconds. ViroTact founder Joost Gazendam said the system could be in action within three months.
UK’s emergency loans for small companies likely to bring rash of defaults, say bankers
Blick Rothenberg partner Richard Churchill estimates that a fifth of loans issued through the government’s Bounce Back Loans Scheme (BBLS) are unlikely to be repaid. Elsewhere, the Mail’s Ruth Sunderland fears indebted small businesses will have their “entrepreneurial zest” dampened harming the UK’s economic revival.
Financial Times, Page: 2 Daily Mail, Page: 68
Minister welcomes DMGT’s £3m advert fund
Small business minister Paul Scully has welcomed the Daily Mail and General Trust’s offer to give small businesses advertising space worth £3,000 in its newspapers. Applications can be made via the Federation of Small Businesses from Wednesday May 13.
Daily Mail, Page: 2
CORPORATE NEWS – MONDAY 11TH MAY 2020
UK retailers warn of ‘imminent collapse’
Retailers in the UK have said government COVID-19 relief measures were not sufficient to prevent the “imminent collapse of many businesses”. The British Retail Consortium wrote to ministers stating that the crisis “facing parts of the retail sector […] must be addressed urgently ahead of the June quarter [rent] day”. Retailers urged further action on property costs and called for “intuitive stimulus” to prevent further retail failures. The British Property Federation and Revo, which represents the retail property sector, were also signatories to the letter.
COVID-19 could be the final straw for many hotels
The number of petitions made to wind up hotels has almost doubled in a year, according to Moore, with the figure set to increase dramatically due to coronavirus. Chris Tate, business advisory director at Moore, said: “The hotel industry was already struggling as a result of Brexit-related uncertainty and coronavirus could be the final straw for many hotels. We’d expect to see a rise in insolvencies once government protections to mitigate the impact of the outbreak are lifted.”
The I, Page: 41
PROPERTY NEWS – MONDAY 11TH MAY 2020
Landlords: rent deals should link to turnover
Landlords believe that rents will be more closely linked to footfall and turnover in the wake of the COVID-19 crises. Britain has a tradition of longer leases with upward-only rent reviews. However, many other countries, including France and the US, have shorter leases with a proportion of rent linked to turnover, which encourages greater risk-sharing and a stronger partnership between landlord and retailer. According to Colliers International more than 40% of landlords are more likely to consider factors such as footfall and turnover when deciding an asking rent. Almost 80% of retail property landlords expect the pandemic to bring permanent changes to the terms on which shops are occupied.
ECONOMY NEWS – MONDAY 11TH MAY 2020
Mixed reaction for Johnson’s plan
Business reacted positively to Boris Johnson’s plan to get the country moving again, with Carolyn Fairbairn, the director-general of the CBI describing the measures as the “first glimmer of light for our faltering economy”. “A phased and careful return to work is the only way to protect jobs and pay for future public services,” she added. However, Labour and the unions were less enthused declaring the strategy a “recipe for chaos” with guidance for employers on how to keep workers safe still not published. John Philips, acting general secretary of the GMB union, said: “More mixed messages from the government – saying there’s no end to lockdown, but asking everyone to go back to work. If ministers want the economy moving again, we need strict rules on hygiene and social distancing, enough PPE for everyone, regulations employers can’t just ignore if they fancy it.”
The Times The Guardian
David Davis: Johnson needs to think big to turn economy around
Writing in the Mail, Tory MP David Davis says Boris Johnson will have to “think big” to rescue Britain’s economy, noting that a fifth of small businesses are at risk of collapse and over 60,000 have already gone under. Mr Davis recommends big tax cuts and a large volume of low-cost, high-impact infrastructure projects reminiscent of reforms introduced by Reagan, Roosevelt and Thatcher. Separately, Roger Bootle also looks to history for lessons in how to heal the economy in the Telegraph, stating that raising taxes would be counterproductive.
Daily Mail, Page: 9 The Daily Telegraph, Business, Page: 2
Contact Paul Southward