NEWS – MONDAY 18TH MAY 2020

NEWS ROUNDUP

TAX NEWS – MONDAY 18TH MAY 2020

Scotland could bar tax haven firms from bail-outs

The Scottish Government has signalled its support for a proposal that would bar companies registered in tax havens from receiving taxpayer-funded coronavirus support. Scottish Green Party co-leader Patrick Harvie will this week propose an amendment to emergency coronavirus legislation. Scottish Labour will back the proposal, with leader Richard Leonard saying the Scottish Government can “state clearly that the days of the state bankrolling tax-dodging companies at the expense of the domestic economy are over.” Commenting on the issue, a Scottish Government spokeswoman said it is “committed to taking the toughest possible approach to tackling tax avoidance,” adding that it “strongly” sympathises with the aims of the amendments and is giving it “detailed consideration”. The Welsh Government has already declared none of its £500m Economic Resilience Fund will be granted to businesses registered in tax havens.

The Scotsman, Page: 7

Majority of UK public supports windfall taxes

A YouGov poll shows that 53% of people support a windfall tax on companies that have thrived during the coronavirus pandemic, while 61% back a wealth tax for those with assets exceeding £750,000.

Financial Times

Think-tank: Tax people for park perk

The Social Market Foundation has recommended copying a system used in some US cities whereby local authorities can tax people living near parks in order to fund their maintenance.

The Times, Page: 2

CORPORATE NEWS – MONDAY 18TH MAY 2020

Loan scheme revision may deliver dividend ban

Sky News reports that ministers are considering plans that could see companies receiving state-backed loans under the Coronavirus Large Business Interruption Loan Scheme (CLBILS) banned from paying dividends or buying back shares. Reform of the initiative that offers loans of up to £200m may also see firms urged to demonstrate restraint in regard to executive pay and bonuses. The restrictions on dividends and share buybacks would reportedly only apply to loans above £50m – the initiative’s previous ceiling. It is suggested that any change to CLBILS may be outlined alongside broader criteria for the COVID Corporate Financing Facility, which allows companies to issue short-term debt that is then bought by the Bank of England. Sky News understands that the British Business Bank, which administers the lending schemes rolled out by the Treasury since the COVID-19 outbreak, has been briefed on the potential changes. The most recent data on CLBILS uptake shows 59 companies have been lent a combined £359m.

Sky News The Daily Telegraph

Hospitality help call

Fraser Campbell of Campbell Dallas says there is “an urgent need” for the Government to develop sustained financial support for the hospitality and tourism sector. He says a strategic survival plan will need to be “bold and far-reaching”, while the Government could consider interventions including further rates holidays and grants.

The Scotsman, Page: 35

EMPLOYMENT NEWS – MONDAY 18TH MAY 2020

Mothers short changed by self-employed support

Campaigners have warned that self-employed women who have taken maternity leave in the past four years are being financially penalised by the Government’s support package for sole traders. With self-employed people unable to work or losing income due to the coronavirus crisis able to apply for a taxable grant of up to 80% of trading profit, up to £2,500 per month, for three months, campaigners claim mothers are being short-changed because of the way the grant is calculated. While profits are averaged over three years by HMRC, periods of maternity leave are not exempt, while maternity pay is not classed as income. This means some women are seeing a gap in the amount of support being offered.

Daily Express, Page: 10

Firms reduce entry-level intake

Analysis by the Institute of Student Employers says school leavers and graduates hoping to enter the labour market this year will struggle to find employment as firms reduce entry-level jobs by a quarter due to the coronavirus crisis. The report says entry-level roles have been reduced by 23% this year, while 15% of employers expect to scale back recruitment further in 2021. The Guardian notes that a number of employers have cancelled or delayed recruitment schemes and internships, with PwC and BDO among large companies to make changes to their recruitment plans.

The Guardian, Page: 27

SMEs NEWS – MONDAY 18TH MAY 2020

Small firms call for delay to immigration rule rethink

Small business have written to Home Secretary Priti Patel, calling for a delay to new immigration rules they warn will be “impossible” to implement as the impact of the coronavirus crisis remains uncertain. As of January 1 working visa applications will be decided on a points-based system recognising education level, English language skills and occupation. In a joint letter to Ms Patel, a number of small firms say having to comply with expensive new requirements when taking on staff from EU – including having to pay an Immigration Skills Charge of up to £1,000 a year for each employee – could be “disastrous” for SMEs. Warning that the new system would have imposed a “huge challenge” on small businesses even without the pandemic, signatories say the challenges brought about by COVID-19 “makes it impossible” to prepare for the new immigration system.

The Independent

Support packages ‘leave small firms behind’

SMEs have warned that the Government’s financial rescue packages have “left behind” millions of small firms, arguing that the Government furlough scheme and business loan guarantees are not sufficient to stop around half a million small firms failing due to the coronavirus crisis. Milan Pandya of Blick Rothenberg notes that “a sizeable portion of SMEs do not qualify for some or all of the Government measures, particularly start-up businesses.” He adds: “The other key issue is that those furloughed must stop working. For sole director/shareholder businesses this means that the company effectively needs to stop operations.”

The I, Page: 13

PROPERTY NEWS – MONDAY 18TH MAY 2020

Office building hits record high

Deloitte ’s latest crane survey shows that construction of new office buildings in central London reached a record high in the period before the coronavirus crisis forced swathes of office staff to work from home. The report found that 45 developments broke ground in the six months to the end of March, the highest volume of new starts on record and 42% up on a year earlier. Considering the impact of the COVID-19 pandemic, Mike Cracknell, director at Deloitte Real Estate, said: “The crane survey suggests many of the new offices expected to complete this year will be postponed until next year,” adding a belief that any permanent halt to construction that is already under way “is highly unlikely.” The Deloitte report suggests a number of firms are expected to delay or cancel relocation plans on the back of the coronavirus outbreak, meaning landlords will find it harder to find tenants.

The Times, Page: 38

INDUSTRY NEWS – MONDAY 18TH MAY 2020

It is a struggle securing a job in the UK – should I return home?

A letter to the FT suggests accountancy may be a career worth pursuing, suggesting there will be inevitable defaults and restructuring amid the coronavirus crisis “and nothing goes without accountants”.

Financial Times, Page: 16

INSOLVENCY NEWS – MONDAY 18TH MAY 2020

Flood of bankruptcies must not slow recovery

The FT reflects on efforts to keep businesses afloat amid the COVID-19 pandemic, saying collapses are inevitable and policymakers must ensure that the system is not overwhelmed by corporate failures.

Financial Times, Page: 20

ECONOMY NEWS – MONDAY 18TH MAY 2020

OBR chief expects slow recovery

Office for Budget Responsibility (OBR) director Robert Chote says Britain is unlikely to see a swift economic recovery in the wake of the coronavirus crisis. He says the UK should “expect a slower recovery than the v-shaped” rebound that some analysts have predicted, suggesting that the economy may face “permanent scarring” as a result of the pandemic. “I think you’re likely not going to see the economy bouncing back to where we expected it otherwise to be by the end of the year…but instead a rather slower recovery,” he said. He told the BBC’s Andrew Marr Show: “The fact debt goes up doesn’t necessarily mean you have to have the sort of austerity that followed the financial crisis … Much more important to that is whether you have scarring of the economy – if the economy is permanently smaller you get permanently less tax revenue.” Mr Chote added that a “post financial crisis-style, extended period of austerity is not a done deal,” while noting that tax rises could be an option for the Chancellor.

The Daily Telegraph, Page: 2 Daily Mirror, Page: 7 City AM Reuters

OTHER NEWS – MONDAY 18TH MAY 2020

Tax request proves ideal nest

Financial compliance officer Anne Steele had to explain an unusual issue to her accountant after a bird nested in her post-box and used an HMRC letter asking for her annual returns for bedding. “I explained to my accountant that a blue tit had done it. He thought it was hilarious,” she told the Sun.

The Sun, Page: 26

Contact Paul Southward