NEWS – MONDAY 13TH APRIL 2020
NEWS – MONDAY 13TH APRIL 2020
TAX NEWS – MONDAY 13TH APRIL 2020
Cruddas: Cut taxes and red tape when the virus crisis is over
CMC Markets chief Peter Cruddas is urging Rishi Sunak to slash taxes and cut regulation once the coronavirus crisis has abated. He says: “You have to cut taxes to generate growth and inflation. It is no good suppressing companies by overtaxing them and suppressing individuals. You need to incentivise people. Cut stamp duty, get the housing market moving, let the pubs stay open longer. There is so much we can do. There is so much bureaucracy we have inherited from the EU but now we can do what we like.” Cruddas was a keen supporter of Vote Leave and believes the UK would be better off cutting its losses than extending the transition period at the end of December. He also predicts a fracturing in the EU, suggesting if Italy and Spain cannot print their own money and set their own interest rates the EU will disintegrate.
SMEs NEWS – MONDAY 13TH APRIL 2020
Sharma admits poor progress on loan scheme
The business secretary Alok Sharma said on Sunday that he had been in touch with leading banks to emphasise the need for emergency loans to be distributed to businesses quickly. Three weeks after the coronavirus business interruption loan scheme (CBILS) was launched just 4,200 of the estimated 300,000 firms that sought help online have received rescue loans. The Treasury is also under pressure to underwrite 100% of the loans, as Germany and Switzerland have done, removing the risk of default from banks and speeding up the process. Meanwhile, Chancellor Rishi Sunak is preparing to double the amount midsized companies can borrow to £50m following concerns many larger businesses would be left without adequate support.
SME don’t have enough cash to pay debts
Analysis by UHY Hacker Young found that the balance sheets of more than 13,500 SMEs showed the average firm had only 95% of the cash needed to pay debts due in the next 12 months. UHY audit partner Martin Jones said: “It’s worrying to see British SMEs struggling to pay their short-term debts already. Coronavirus disruption is going to make the situation even worse over the coming weeks and months. A lot of SMEs have seen their incomes drop precipitously almost overnight. Cost-cutting isn’t going to fix the problem – many will need emergency support from the government, as well as swifter payments from their debtors to make it through this crisis.”
The Press and Journal, Page: 29
Small businesses to sue after business interruption claims refused
Several insurers in the UK are facing legal challenges after refusing to pay small businesses who had insured against business interruption “due to restrictions imposed by a public authority following an occurrence of a notifiable human disease”. Hiscox and Eaton Gate have both turned down claims. In a statement Hiscox said “general business interruption policies […] were not designed to cover these extraordinary circumstances […] pandemics like coronavirus are simply too large and too systemic for private insurers to cover”.
The Guardian, Page: 31
CORPORATE NEWS – MONDAY 13TH APRIL 2020
Creditors asked to give retailers some space
Lawyers are calling on creditors to give retailers a break and stop issuing winding up orders for the time being. Research by RPC shows retailers have been hit with 52 winding-up petitions since the beginning of the year, with the numbers accelerating since the coronavirus outbreak took hold. Finella Fogarty, a restructuring and insolvency partner at the firm commented: “Even if the winding up petitions aren’t processed they scare off suppliers and possible funders and can have damaging effects on businesses.”
The Daily Telegraph, Business, Page: 3
PROPERTY NEWS – MONDAY 13TH APRIL 2020
Crunch time for emergency grants scheme
With small businesses still waiting for emergency coronavirus grants worth about £10bn from the Government, Craig Beaumont, of the Federation of Small Businesses, has said that this will be a “crunch week” for the scheme. LGA figures show that councils in England have paid out more than £1bn to about 100,000 small firms, with some local authorities having redeployed staff to make sure that money can be distributed quickly through the business rates system. However, the British Chambers of Commerce has expressed concern that councils are “adopting very different approaches to delivering” the grants. LGA spokesperson Richard Watts insisted councils are “working at pace to ensure this vital funding can reach businesses as quickly as possible.”
WEALTH MANAGEMENT NEWS – MONDAY 13TH APRIL 2020
European asset managers suffer £32.9bn outflow in March
Investors pulled €37.5bn (£32.9bn) from European funds in March, according to analysis by UBS, the worst rate of outflows since the financial crisis. The withdrawals equate to 3.1% of AUM but although outflows have continued, they slowed down substantially in the two or three weeks since mid-March.
ECONOMY NEWS – MONDAY 13TH APRIL 2020
UK well-prepared for economic impact of the pandemic – Lord King
Lord Mervyn King, a former governor of the Bank of England, has said Britain is well positioned to cope with the economic fallout of the coronavirus pandemic because of the ten years of austerity imposed following the financial crisis. “I don’t think we should worry today about the extent to which the national debt will rise, as long as we can get the economy back to function sooner rather than later,” he argued. He went on to urge banks to keep their branches open to ensure businesses can access state-backed loans.
Daily Mail, Page: 60 Daily Express
Balance between economy and health sought to end lockdown
The UK government will consider modelling from the Treasury and the Health Ministry over the coming days that will give projections for the effect on the economy and the health of Britons of extending the coronavirus lockdown, or lifting it to allow parts of the economy to begin working again. The Chancellor, Rishi Sunak and Matt Hancock, the Health Secretary, are “taking a holistic approach in trying to find the right balance” sources told the Telegraph.
Contact Paul Southward