NEWS – MONDAY 15TH FEBRUARY 2021

NEWS ROUNDUP

TAX NEWS – MONDAY 15TH FEBRUARY 2021

Chancellor warned over tax hike on ‘fragile’ self-employed

The Chancellor, who has previously suggested he would consider increasing national insurance contributions to even out an “inconsistency” between independent workers and employees, has been urged not to raise taxes on the self-employed. Andy Chamberlain, director of policy at the Association of Independent Professionals and the Self-Employed (IPSE), has warned Rishi Sunak that people are “in an extremely fragile state”, with an increased tax burden “the last thing they are going to need”. A tax increase, he warned, could be the “straw that breaks the camel’s back”. He added that “If we care about our employment rate, if we care about people ’s business and if we care about the economy we should not be considering tax rises right now .”

Daily Express

Industry calls for reform of R&D tax credits

Trade bodies representing businesses focused on research and development have called for a reform of tax credits, saying this would boost the economy and attract investment into the UK. A report commissioned by industry bodies including the Confederation of British Industry warns that “outdated” rules do not allow companies to claim R&D tax breaks on capital spending, unlike in other countries including France, Spain and Japan. This, the report argues, means there are “far stronger incentives to physically locate new research facilities in other countries.” The trade bodies say altering the R&D tax credit regime so as to include capital spending could incentivise companies to invest in Britain, adding £4bn a year to the economy within a decade and creating at least 12,000 jobs.

The Daily Telegraph, Business, Page: 5

HMRC reduces checks on online sellers despite VAT fraud risk

Analysis by UHY Hacker Young shows that HMRC sent online retail platforms 80 data requests about sellers between April and December 2020, down from 2,684 requests in the 2019/20 tax year.

Financial Times, Page: 1

EMPLOYMENT NEWS – MONDAY 15TH FEBRUARY 2021

AI can give bosses a boost

Jonty Bloom of BBC News considers the implications of AI taking a greater role in the workplace and whether workers would be willing to take orders from a machine. Jeff Schwartz, a senior partner at Deloitte and a global adviser on the future of work, says he hopes AI bosses may help human counterparts improve their performance, suggesting that with a machine taking on more mundane leadership tasks such as compiling rotas and performance monitoring, human bosses will be freed up to concentrate on being better team leaders.

BBC News

Online classrooms democratise corporate training

The FT looks at executive training programmes, citing Deloitte’s Erin Clark who says a shift toward online learning opens leadership development training up to a wider number of people.

Financial Times, Page: 18

CORPORATE NEWS – MONDAY 15TH FEBRUARY 2021

Payday lenders criticised for not detailing compensation

High-interest lenders and their auditors have been criticised for failing to reveal how much they could owe customers who were mistreated, with many not detailing the cost of payouts over claims they breached City rules by offering customers unaffordable credit. Alan Campbell, founder of Salad Money, has warned that unaffordable borrowing continues partly because auditors do not always force companies to reveal the full liability they may face from potential compensation claims in their accounts. He believes that unaffordable lending practices will change if lenders “are burdened by the liability” of it being disclosed in their accounts. Michael O’Dwyer in the Telegraph notes that the auditors have not been accused of wrongdoing. He also highlights that a number of high-interest and payday lenders have gone bust despite their accounts being signed off by audit firms including Grant Thornton and Mazars.

The Daily Telegraph, Business, Page: 3

Voke creditors to take big hit

Unsecured creditors in Kind Consumer who are owed £46.5m are set to suffer heavy losses after it was sold via a pre-pack administration. The firm, which developed the Voke nicotine inhaler, was sold to OBG Consumer Scientific for £1.6m in a pre-pack sale agreed by administrator Smith & Williamson. The sale came last November, before legislation changes that reintroduced HMRC as a preferential creditor.

The Times, Page: 39

Sport bail-outs on the way

The Telegraph looks at a £300m Government bail-out for sports hit by the coronavirus crisis. The payouts, which will come mainly as loans rather than grants, follow audits by Sport England and Deloitte which have analysed the impact on clubs and competitions. The paper looks at “fault lines” which have appeared in several sports, with a number of debates over the allocation of money and level of support being offered.

The Daily Telegraph, Sport, Page: 25

Cruise ship retailer deploys CVA on the high seas

Harding Retail, which operates boutiques on cruise ships, has appointed KPMG to implement a CVA. Harding is reportedly asking suppliers to accept reduced amounts in settlement of unpaid invoices.

Financial Times, Page: 11

Rolls-Royce set to name CFO

Engineering group Rolls-Royce Holdings is expected to name former Deloitte partner Panos Kakoullis as its new CFO this week.

The Times, Page: 35 Sky News

New fund to support BAME entrepreneurs

The Times looks at Create Equity Fund, a new investment vehicle that will focus on investing in black, Asian and minority ethnic entrepreneurs with fledgling creative businesses, noting that KPMG is helping to hone the business plan.

The Times, Page: 40

‘Authentic’ leaders who lack adaptability, empathy and kindness are sure to fail

Andrew Hill reflects on corporate leadership amid the pandemic, considering the writings of sociologists Gareth Jones and Rob Goffee and commenting on Bill Michael’s departure as chairman of KPMG.

Financial Times, Page: 18

FINANCIAL SERVICES NEWS – MONDAY 15TH FEBRUARY 2021

London will remain Europe’s financial capital, says Raab

The biggest competition to the UK’s financial services sector will come from Asia and the US, says Foreign Secretary Dominic Raab, who believes that while EU financial capitals may “nick a bit of business here and there from the City” post-Brexit, they will not challenge London’s status as Europe’s global financial capital. Mr Raab said that while EU financial capitals may be able to compete with the UK for some business, “the problem is the measures they will take to achieve this will undermine their own competitiveness.” “The challenge to London as a global financial centre around the world will come from Tokyo, New York and other areas rather than those European hubs. Particularly if they start to erect barriers to trade and investment,” he added.

City AM

INTERNATIONAL NEWS – MONDAY 15TH FEBRUARY 2021

EY China faces mismanagement allegations

EY is facing whistleblowing claims in China, with the firm accused of looking the other way when large client Xinwei Group failed to disclose a risky stock purchase. Claims circulating on Chinese social media site Weibo have seen a whistleblower say that when she raised concerns, she was told by senior managers that the investment was not risky and the matter should be dropped. She claims her warnings were ignored by senior employees, with EY failing to raise them in the audit. A spokesman for EY China said the firm is “fully committed to offering the highest standards of audit services by leveraging robust audit methodology, tools and policies”. The claims come in the wake of Chinese regulators telling Deloitte to investigate similar claims made by a whistleblower who alleges there were five serious breaches of good practice between 2016 and 2017.

The Daily Telegraph, Business, Page: 3

ECONOMY NEWS – MONDAY 15TH FEBRUARY 2021

Financial crisis made sandwich generation more resilient

More than three fifths of those aged 40 to 59 feel they are better equipped to deal with the economic impact of the coronavirus crisis due to lessons learnt during the 2008 financial crisis. People in this age bracket – known as the ‘sandwich generation’ as they are likely to have responsibilities toward their children and their parents – say they built resilience amid the banking crisis and ensuing recession. A poll by investment house Killik & Co saw a fifth say they are now more cautious about spending, while one in ten have increased their emergency savings. The research comes as Financial Conduct Authority analysis reveals that more than 14m adults in the UK have low financial resilience, with a third expecting to cut back on essentials, one in ten likely to use a food bank and one in six expecting to take on more debt.

Daily Mail

OTHER NEWS – MONDAY 15TH FEBRUARY 2021

Why Michael had to go

Ruth Sunderland in the Mail looks at the departure of KPMG chairman Bill Michael, saying that while his supporters believe “mollycoddling employers have created a generation of snowflakes on the staff”, to say Mr Michael is the victim of a workplace culture war is “nonsense” She says Mr Michael “had to go” as the controversial views he expressed in an online meeting – “whether right or wrong” – are incompatible with leading a top accountancy firm. Ms Sunderland says the Big Four, as large employers of graduates and apprentices, can “play a part in creating a fairer, more socially-mobile and prosperous country”, adding that if you become a partner at one of the firms, “you sign up to be a champion of diversity.” Meanwhile, Max Pemberton in the same paper expresses his support for Mr Michael’s comments, saying he was right to tell staff they were in “a very lucky sector” and should stop whingeing.

Daily Mail, Page: 71, 49

Contact Paul Southward

Paul Southward