NEWS – MONDAY 1ST JUNE 2020
NEWS – MONDAY 1ST JUNE 2020
TAX NEWS – MONDAY 1ST JUNE 2020
Sites to collect VAT from foreign sellers
HMRC is planning to force online marketplaces to collect VAT on UK sales made by overseas retailers in an effort to stamp out fraud totalling an estimated £1.5bn a year.
CORPORATE NEWS – MONDAY 1ST JUNE 2020
Restaurant insolvencies set to surge
UHY Hacker Young has warned that the fallout of the COVID-19 pandemic is likely to deliver a wave of insolvencies across the casual dining sector later this year. It warned that restaurants will struggle in the face of “big upcoming bills”, warning that the cost of measures to ensure spaces are safe for customers – including upgrading payment systems to allow for contactless billing and ensuring social distancing – could mean a number of businesses are no longer financially viable. UHY partner Peter Kubik said: “The restaurant sector has been put under huge pressure by this crisis and the lockdown. The sector really needs the Government to formulate proposals that will help the sector bounce back as quickly as possible.” UHY Hacker Young analysis shows losses at the UK’s top 100 restaurant groups increased by 94% last year, to £151m from £78m in 2018.
The Daily Telegraph, Business, Page: 2 Daily Express, Page: 48 The I, Page: 40 The Scotsman, Page: 10 Yorkshire Post, Page: 6 City AM
Lookers to announce findings of fraud investigation
Car dealer group Lookers will this week announce findings of an internal investigation into potential fraud, having delayered reporting its results in March after discovering suspect transactions in one division of the company. The firm said the issue related to “misrepresented debtor balances in respect of bonus receivables” and “fraudulent expenses claims”, adding that it expects to take a £4m hit as a result. The investigation, conducted by Grant Thornton, is the latest in a string of challenges faced by Lookers, which in June 2019 confirmed it was under investigation by the Financial Conduct Authority over its sales practices. Later in the year a whistleblower made a number of mis-selling allegations, while CEO Andy Bruce and COO Nigel McMinn abruptly quit in October.
Risk of cyber-attacks as businesses reopen
A number of businesses could be at risk of cyber-attacks as companies across many sectors begin to reopen, a report from F-Secure and Blick Rothenberg warns. The study says hackers are expected to target firms with malware including fake continuity plans and shipping document scams, which can give hackers access to sensitive financial data.
The I, Page: 38
FINANCIAL SERVICES NEWS – MONDAY 1ST JUNE 2020
EY poll: Coronavirus will drive new ways of working
A poll conducted by EY suggests the coronavirus crisis will prompt changes across the financial services sector and accelerate the adoption of technology. A survey of more than 200 financial services firms saw two thirds say they think the workplace will fundamentally change after the pandemic, while 30% expect moderate change. Some 87% said that working from home during lockdown will prompt firms to adapt their technology faster than anticipated. The report also saw 99% of respondents say their employees are working “productively and effectively”. Simon Turner, a financial services partner at EY, said: “Financial services is unlikely to return to the ‘old normal’, and new ways of working – incorporating a far greater degree of technology and flexible working – seem inevitable.”
EMPLOYMENT NEWS – MONDAY 1ST JUNE 2020
Some bosses using furlough rate for redundancy payouts
Employment lawyers have warned that furloughed staff who are laid off could see redundancy payouts reduced due to a loophole, with some seeing examples of employers basing payoffs on a worker’s furloughed rate of pay. Under the Government’s Coronavirus Job Retention Scheme, staff unable to work are paid 80% of their wage and some bosses are calculating payouts for staff they are letting go of on this reduced rate. Kate Palmer, an employment lawyer at Peninsula, said: “We have not had clear government guidance on whether redundancy pay can be based on one’s furlough pay.” She added: “With the increase in redundancies being instigated at this time, no doubt this will be tested in tribunals over the coming months.” Jodie Hill, an employment lawyer at Thrive Law, suggests employers may think they have a legal case for paying people less, saying: “On strict interpretation of the law, employers should calculate redundancy pay based on the average of the previous 12 weeks wages.”
How virtual worlds can help real-life recruitment
PwC ’s Jeremy Dalton says increased interest in virtual reality within recruitment is “to be expected” amid the coronavirus pandemic “as people seek ways to connect more deeply while maintaining social distancing”.
INDUSTRY NEWS – MONDAY 1ST JUNE 2020
Big Four face pandemic pressures
Michael O’Dwyer in the Telegraph considers the climate for the Big Four, saying that while experience of remote working meant a “smooth transition” under the lockdown, “returning to some semblance of normality is vital.” Describing professional services firms as “one of the quiet juggernauts of the UK economy”, he highlights how Deloitte, EY, KPMG and PwC employ 75,000 people in the UK, generate £11.5bn in revenue and pay more than £1bn in tax – as well take on a number of graduates and school-leavers. With this in mind, he says a slump in business in the wake of the coronavirus pandemic will affect the taxpayer and jobseekers. Mr O’Dwyer says teams dealing with corporate mergers and transactions are quiet, while consultants are “feeling the strain” and finding new projects could prove a challenge. On opportunities that have arisen during the pandemic in regard to public contracts, PwC, KPMG and Deloitte have won work from the British Business Bank, while EY is reportedly working for the Department for Business, Energy and Industrial Strategy. ICAEW chief executive Michael Izza comments: “I’m not sure that the public sector is the salvation of people with spare capacity”. On other workflow, Mr O’Dwyer notes that divisions such as tax, compliance and audit have remained steady, but says a “steady stream of audits is not enough to keep the lights on”, citing Financial Reporting Council figures showing audit fees account for only a fifth of revenues across the sector’s four biggest players.
INTERNATIONAL NEWS – MONDAY 1ST JUNE 2020
EU budget chief seeks backing for business levy to fund recovery
EU budget commissioner Johannes Hahn has called for new taxes as part of a post-coronavirus recovery plan, including a levy on large companies that would bring in €10bn a year.
ECONOMY NEWS – MONDAY 1ST JUNE 2020
UK’s richest 20% spend £23bn less during lockdown
Analysis by the New Policy Institute suggests that the richest 20% of Britons will have reduced their spending by around £23bn after three months of the coronavirus-prompted lockdown. At the opposite end of the scale, those in the bottom fifth of income will have reduced their spending by just £3.5bn by the middle of June. Across all income groups, the study suggests £57bn will have gone unspent during the quarter where much of the economy has been shut down. Report co-author Dan Corry, chief executive of the New Philanthropy Capital think-tank, said: “While it is a matter of judgement exactly what to count, our estimate compiled using official statistics, suggests that the top fifth of households, numbering 5.5m, will have reduced their spending by some £23bn if the lockdown were to last for three months. Those in the second highest fifth of households will have reduced their spending by around £14bn over one quarter.”
The Guardian, Page: 29
Stimulus package set for July in bid to stave off recession
Chancellor Rishi Sunak is preparing to unveil an economic stimulus package in July, with investment in retraining schemes and infrastructure projects among plans being considered to mitigate against recession.
Contact Paul Southward