NEWS – MONDAY 18TH JANUARY 2021

NEWS ROUNDUP

TAX NEWS – MONDAY 18TH JANUARY 2021

Chancellor eyes corporation tax rise

Chancellor Rishi Sunak is considering an increase in corporation tax in his March budget as he looks to balance the books in the wake of the coronavirus crisis, reports the Times’ Steven Swinford. Mr Sunak is considering partially reversing cuts made by former Chancellor George Osborne under which corporation tax has fallen from 28% to 19%. Mr Swinford says the Treasury could target corporation tax as it is considered one of the few “genuine revenue raisers” in the Government’s arsenal, but notes that cabinet colleagues may not be receptive to an increase, suggesting it could deter business. He adds that the move could also put Mr Sunak at odds with Boris Johnson, with the Prime Minister having suggested that taxes for businesses should be cut as Britain tries to seize on the opportunities brought about by Brexit.

The Times, Page: 4

Wealth tax warning over mooted property levy

With Treasury officials having reportedly modelled a plan to scrap council tax and stamp duty and replace them with a proportional property tax based on a percentage of a home’s value, the Chancellor has been urged not to push ahead with such a measure, with some analysts concerned it equates to a wealth tax. Iain McCluskey of PwC said the challenge of such a levy lies in the fact that it “is not a tax on liquid assets, like money you are actually receiving, but rather on illiquid assets – where you have to pay whether you have got the money or not.” A Mail editorial argues that an annual charge on a property’s value “would be, in all but name, a wealth tax”. However, charity Fairer Share has backed such a levy and suggests policymakers should create a proportional property tax with a rate representing 0.48% on the current value of a property.

Daily Mail, Page: 12, 18 Daily Express, Page: 2

Think-tank: Tax rethink could help level-up the UK

Think-tank Onward has urged Chancellor Rishi Sunak to cut taxes that disproportionally hit the UK’s poorest regions, saying doing so would help advance the Government’s levelling up agenda. Onward analysis highlights how the tax system could be targeted to reduce inequalities, suggesting that while corporation cuts would “overwhelmingly benefit London”, raising investment allowances would benefit the north, the Midlands and Wales. Onward director Will Tanner has warned that “ministers are trying to overturn decades of regional economic divergence with one hand tied behind their back” by overlooking tax policy. He said decisions such as whether to raise council tax or to cut corporation tax “are not regionally neutral decisions”, arguing that the Treasury has “probably not done enough to understand the regional consequences of its tax policies.”

The Daily Telegraph, Business, Page: 1 The Times, Page: 2 The Independent, Page: 13 The I, Page: 4 The Sun, Page: 2

Commons to debate stamp duty

The House of Commons has confirmed that there will be a debate about stamp duty after more than 100,000 people signed a petition for the stamp duty holiday to be extended for six months beyond the March 31 deadline. The Express notes that MP Kevin Hollinrake is backing calls for property taxes to change, saying they are “unfair, complicated and block aspiration.” Despite calls for the tax break to be extended, some experts have called for more permanent action, with Nick Sanderson, CEO of Audley Group, saying the stamp duty holiday is “by no means a long term cure” for issues the housing market. Tom Clougherty, head of tax at the Centre for Policy Studies, has called for the stamp duty cuts rolled out amid the pandemic to be made permanent, arguing “there’s a case for going further” and saying the levy is “a remarkably destructive tax at the best of times”.

Daily Express The Daily Telegraph, Business, Page: 2

HMRC urged to extend tax return deadline

With the January 31 deadline for self-assessment tax returns on the horizon, HMRC has been urged to extend the cut-off due to concern that coronavirus-related pressures will see a spike in late filing. Kevin Sefton, CEO of tax app untied, said that while a million people miss the January tax deadline most years, “it looks like there’s going to be an even higher number this year because of COVID-19 and related knock-on effects.” He added: “Whilst a delay isn’t the sort of thing that HMRC will agree to readily, we are calling for an extension to the filing deadline and the payment deadline this year as a one off.”

Daily Express

Sun says Sunak should cut taxes

A Sun editorial says that while the Chancellor is expected to raise taxes to help foot the state’s coronavirus bill, tax cuts are the way to go, arguing that highly taxed economies grow more slowly. It says that post-pandemic, the economy will need “rocket boosters … not the dead weight double-whammy of tax rises and massive public spending.”

The Sun, Page: 10

BUSINESS RATES NEWS – MONDAY 18TH JANUARY 2021

Timpson calls for ‘common sense’ on rates

Sir John Timpson, chairman of Timpson, says that unless policymakers get their “thinking straight on business rates”, retailers will continue to close, saying: “I pray the Treasury will see common sense.” Sir John believes Rishi Sunak’s rates holiday and furlough scheme “was a shrewd investment” when many shops were shut, arguing that by keeping strong firms solvent, the Chancellor has secured a substantial future source of tax revenues. However, he says a lack of news on any extension to the business rates holiday before the March budget has left retailers “on our knees”, arguing that confirming a concession now could help retailers plan ahead and avoid closures. Sir John adds that there are two “even more fundamental business rate problems”, a lack of a level playing field between bricks-and-mortar and online retailers; and a continual increase in rates when rental values have been falling.

The Daily Telegraph

EMPLOYMENT NEWS – MONDAY 18TH JANUARY 2021

Concerns raised over workplace safety

Unions have expressed concern that employees are being forced to go into workplaces that are not compliant with coronavirus-related safety guidelines during lockdown. Analysis shows that the Health and Safety Executive (HSE) received 2,945 complaints about safety issues between January 6 and January 14. Pointing to a Government pledge to get tougher on those flouting lockdown rules, TUC general secretary Frances O’Grady said: “If the Government is upping enforcement, ministers should start with employers who break COVID safety rules.” She added a call for greater resources for HSE, saying this would help “stop rogue employers getting away with putting staff at risk.” HSE said inspectors “continue to be out and about, putting employers on the spot and checking that they are complying with health and safety law”.

BBC News

The pandemic tests a new generation of graduate trainees

The FT considers the pressures graduates face amid the pandemic, with Deloitte‘s Global Millennial Survey showing that 46% of Generation Z have reported anxiety or stress about their job or career prospects.

Financial Times, Page: 18

PROPERTY NEWS – MONDAY 18TH JANUARY 2021

Buyers take on higher rates to avoid stamp duty

Home buyers are turning to less-common forms of borrowing to ensure their property purchases complete before the stamp duty holiday comes to an end on March 31, with the Telegraph’s Adam Williams warning that some buyers are taking on “sky-high interest rates”. He says that while bridging finance differs from a normal mortgage because it can be arranged in a matter of days, the higher cost of borrowing means it is rarely recommended for house purchases. However, the tax savings offered by the stamp duty cut mean bridging finance has become an option for some. Mr Williams says that while rates appear low, the figures of between 0.7% and 1.25% are monthly rates so the annual cost is between 8.7% and 16.1%.

The Daily Telegraph

CORPORATE NEWS – MONDAY 18TH JANUARY 2021

Arcadia bid deadline nears

Today marks the deadline for bids from those interested in acquiring Arcadia in a sale being overseen by administrators from Deloitte that could see the retail empire snapped up for more than £200m. Next, which is bidding for the group in partnership with US hedge fund Davidson Kempner, is said to be the frontrunner, with Frasers Group, JD Sports, Boohoo and Juicy Couture owner Authentic Brands thought be among other bidders. Brands under the Arcadia umbrella include Topshop, Topman, Dorothy Perkins, Wallis, Miss Selfridge and Burton. Evans has already been hived off and sold to Australian retailer City Chic Collective for £23m.

The Guardian, Page: 27 Daily Mail, Page: 71

REPORTING NEWS – MONDAY 18TH JANUARY 2021

ESG accounting needs to cut through the greenwash

Karthik Ramanna of Oxford’s Blavatnik School of Government calls for better accounting in regard to firms’ ESG claims, arguing that prudence, dual reporting and matching are “virtually unheard of” in ESG accounting standards.

Financial Times, Page: 23

INTERNATIONAL NEWS – MONDAY 18TH JANUARY 2021

EU rules promise to reshape opaque world of sustainable investment

The FT looks at the EU’s sustainable finance disclosure regulations, noting a PwC estimate that ESG funds could increase their share of European assets from 15% to 57% by 2025.

Financial Times, Page: 8

ECONOMY NEWS – MONDAY 18TH JANUARY 2021

Bank chair: Britain’s recovery may exceed expectations

William Vereker, chairman the UK arm of Spanish banking group Santander, believes the UK’s economic recovery this year could be stronger than most experts predict, saying: “I can see sterling strengthening and the economy growing faster than forecast”. Mr Vereker feels the Brexit deal and the coronavirus vaccination programme could deliver a “big uptick” in consumer spending and business investment. He said that despite there being “so many negative predictions … there is another possibility – things might be okay.” Mr Vereker said he can see a “quick bounce-back”, with “significant” pent-up consumer demand and savings set to flow into the economy later this year. He added that the Brexit deal is “going to remove a big element of uncertainty” and encourage business investment, while “on a relative basis, the UK looks good in terms of the opportunity to invest, employ and develop businesses”.

Daily Mail

OTHER NEWS – MONDAY 18TH JANUARY 2021

Treasury, FCA and HMRC spend £3m coronavirus-proofing offices

A Freedom of Information request shows that around £3.1m has been spent making Treasury, Financial Conduct Authority (FCA) and HMRC offices COVID-19 secure for staff. HMRC has spent £2.9m on coronavirus safety measures since March, while the FCA spent £211,218 between March and October and the Treasury paid out around £17,300. HMRC said that measures have enabled its 90 offices across the UK to remain open to staff.

Daily Express, Page: 45 Aberdeen Evening Express

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Paul Southward