NEWS – MONDAY 22ND MARCH 2021

NEWS ROUNDUP

TAX NEWS – MONDAY 22ND MARCH 2021

Sunak to delay online sales tax decision

Rishi Sunak will not make a decision on introducing an online sales tax until later in the year, with the Chancellor holding back on the proposed move in the hope that global reform of taxation for tech firms can be agreed. While the Treasury is mulling a levy that could level the playing field between online retailers and high street stores, the OECD is looking to develop a global approach to digital services taxation. It is said that US President Joe Biden “has shown some movement” on the possibility of a worldwide stance on the issue. Meanwhile, the outcome of a Government review of business rates is also set to be delayed until the autumn.

Daily Mail, Page: 63 Financial Times, Page: 2

CORPORATE NEWS – MONDAY 22ND MARCH 2021

Spotlight on Greensill

Alex Brummer in the Mail looks at the collapse of Greensill, saying that the Bank of England and the Financial Conduct Authority appear not to have heeded warnings over the firm’s practices. He also highlights that Grant Thornton, which is running the Greensill insolvency, is also audit adviser to several enterprises run by Greensill client Sanjeev Gupta and notes that Greensill Capital, the group’s main operating company in the UK, was audited by Saffery Champness. Elsewhere, City AM says that while Greensill appointed administrators last week, warning of “severe financial distress”, its issues “have been mounting for some time”. Meanwhile, the latest revelation shows that former Prime Minister David Cameron, a Greensill adviser, sent text messages to the Chancellor in a bid to secure emergency funding for the finance firm.

Daily Mail, Page: 63 City AM

LSE misses out on tech boom

A report from BDO shows that less than 4% of Britain’s fastest growing technology companies have floated on the London Stock Exchange in the last two decades, with only 43 of the 1,200 fastest growing technology businesses going on to do so. BDO’s Tony Spillett says: “If you believe that listing fast-growing tech companies on the stock market is an important part of helping to deliver economic growth, then the UK is missing out.” He adds that UK investors are currently only able to access many tech businesses indirectly through private equity funds. It is noted that a review of Britain’s stock market listing regime carried out by Lord Hill has called for an overhaul that would include the launch of dual class share listings allowing tech founders to retain control even if they only hold a minority stake.

The Daily Telegraph, Business, Page: 1

Odey Asset Management loses pay plan tax case

Hedge fund Odey Asset Management has lost a tax tribunal case over a partnership pay policy, with HMRC raising concern over the incentive plan and saying it was owed income tax.

Financial Times, Special Report, Page: 4

Customers face £90m Football Index losses

Customers of Football Index, which billed itself as the “football stock market”, are facing losses of almost £90m in the wake of its collapse. Legal firm Leigh Day is investigating a potential claim on behalf of punters, with Begbies Traynor expected to be appointed to handle the administration.

The Times, Page: 35

Travel companies seek return to pre-Covid growth

The FT reflects on the travel sector, citing Deloitte’s head of hospitality and leisure, Andreas Scriven, who says the sharing economy has become “a huge trend” in travel.

Financial Times, Page: 11

PROFESSIONAL SERVICES NEWS – MONDAY 22ND MARCH 2021

Professional firms face junior staff loss to burnout

With fears that heavier workloads and solitary working amid the pandemic could drive an exodus of junior staff from professional services, the Big Four are offering a range of support measures.

Financial Times, Page: 8

Britain’s businesses grapple with post-Brexit visas

The FT considers the post-Brexit climate for regulated professions, with Deloitte’s Amanda Tickel saying the UK sought a continued mutual recognition system for professional qualifications but the EU refused.

Financial Times, Page: 18

EMPLOYMENT NEWS – MONDAY 22ND MARCH 2021

Pandemic set to deliver rethink on work patterns

Nicholas Bloom, professor of economics at Stanford University, says a large number of workers will not fully return to the office once lockdown restrictions are eased, with research pointing to a “widespread appetite for a new paradigm.” He says the shift toward working from home amid the pandemic is likely to see new patterns where work is split between the office and remote working, with several large firms already announcing plans for a 3-2 system where staff spend three days in the office and two working from home. Prof Bloom says a recent poll of 5,000 UK employees found that three days in the office was the preferred pattern, with staff saying the perk was worth about 6% of wages. He also points to research he undertook in 2010 which found home-based employees were 13% more efficient. Prof Bloom warns of the implications for inequality in a shift to remote working, saying only half of all employees can work from home, with these typically university-educated people in management, professionals or business services.

The Guardian

Skills concern over IT uptake

A report from the Learning and Work Institute (LWI) suggests that a digital skills crisis could be on the horizon, with analysis revealing a fall in the number of young people taking IT courses as employer demand for expertise increases. The study says just 48% of UK employers believe new entrants to the workforce have the necessary digital skillset. Data shows that the number of people taking IT subjects at GCSE has fallen by 40% since 2015, with the proportion taking related A Levels, further education courses and apprenticeships also declining. The LWI also warns of a gender gap in digital skills, with women accounting for just 22% of GCSE entrants in IT subjects, 17% of A Level entrants, 23% of apprenticeship starts and 16% of undergraduate starts. While the number of people opting for IT-focused courses has fallen, research shows that 60% of businesses believe their reliance on advanced digital skills is set to increase over the next five years.

The Guardian

How companies can ensure women get the top jobs, too

The FT looks at how women can reach the top positions in leading companies, saying initiatives such as the Breakthrough Leadership Programme at PwC can help female talent move ahead.

Financial Times, Business Education, Page: 11

PROPERTY NEWS – MONDAY 22ND MARCH 2021

British housing is expensive and its supply must increase

Research from Schroders shows that the ratio of average house prices to earnings was 8:4 in Q4, the highest level since the 1880s bar the year before the financial crisis.

Financial Times

INTERNATIONAL NEWS – MONDAY 22ND MARCH 2021

Hong Kong promises investors its prized tax haven status is secure

Matthew Cheung, Hong Kong’s chief secretary for administration, says the territory’s status as a “tax haven” is safe despite political upheaval and economic turmoil, telling business “very low tax … is assured”.

Financial Times, Page: 4

ECONOMY NEWS – MONDAY 22ND MARCH 2021

Lockdown costs economy £520m a day

Centre for Economics and Business Research (CEBR) analysis suggests that each day of lockdown is costing the economy more than £500m, with output down £521m a day compared to its pre-pandemic level. The report says a quarter of businesses remain closed and 6m workers are on furlough, while the Government is borrowing almost £1bn a day to pay for support measures including tax breaks for struggling firms. The total bill for dealing with the pandemic is expected to hit £407bn, while state borrowing is set to hit £355bn in 2020/21 and another £235bn in 2021/22 to cover the cost of higher spending and lower taxes.

Daily Mail

Wake up call for a strategy re-think for the government.

Spending could drive demand on recovery path

Roger Bootle, chairman of Capital Economics, looks at the UK’s path toward economic recovery after the pandemic, saying the Government’s borrowing requirement will be about 18% of GDP in 2021, while plans for future tax rises set out in the Budget will tighten fiscal policy by 1.5% of GDP. Mr Bootle notes that the Office for Budget Responsibility has suggested COVID-19 will have a “scarring” effect on the UK economy, delivering a permanent reduction in GDP of 3% relative to what it would have been without the pandemic. He also suggests that the UK could see growth in aggregate demand “spurred by private spending rather than government largesse”.

The Daily Telegraph

Contact Paul Southward

Paul Southward