NEWS – MONDAY 26TH April 2021

NEWS ROUNDUP

TAX NEWS – MONDAY 26TH April 2021

Tax authorities could seek clarification from PM over flat refurb

Boris Johnson may have to clarify with HMRC where the £58,000 used to refurbish his Downing Street flat came from and whether it should have been declared, the i reports. The Prime Minister would be “treated like any other taxpayer” to determine whether he derived any benefit in kind from any loans or donations for the refurbishment. It was reported last week that Tory donor Lord Brownlow was to chair a charitable trust, set up by Mr Johnson for “preserving Downing Street’s heritage”, and donated £58,000 into it to pay for the revamp. Downing Street says Mr Johnson has now covered all of the costs for the work, but it is unclear whether this was after a loan or donation had been made by Tory party donors. Fiona Fernie, a tax disputes and resolution partner at Blick Rothenberg, said: “HMRC will always look for clarification if there is a chance that money wouldn’t have been received by someone unless it was because of the position they were in. HMRC would not want to be seen not to seek clarification from the Prime Minister when it would from anyone else.”

The i , Page: 6

Investment trade body seeks abolition of taxes on UK funds

Proposals to make the City more competitive post-Brexit include a call from the Investment Association for the Government to apply a zero rate of value added tax to all UK funds.

Financial Times, Page: 2

UK public support green taxes to achieve net zero, survey finds  

With surveys suggesting increased public support for green taxes, campaigners argue ministers have a mandate for wholesale tax reform fit for a sustainable future rather than a fossil fuel economy.

Financial Times, Page: 3

CORPORATE NEWS – MONDAY 26TH April 2021

LCF administration costs hit £25m

Analysis shows fees and expenses charged or incurred by insolvency practitioners and lawyers working on recovering assets for bondholders exposed to the London Capital & Finance scandal have contributed to total costs approaching £25m. LCF failed after the Financial Conduct Authority said that it was misleadingly promoting high-risk bonds. Smith & Williamson , which is leading the administration of LCF as well as linked insolvencies of borrowers including London Oil & Gas and Prime Resorts, defended its costs after some bondholders criticised the fees as “exorbitant”. Finbarr O’Connell, partner at Smith & Williamson, said: “Our extensive investigation work … has led to us issuing legal proceedings against a number of parties with a view to recovering substantial funds. This robust action can’t be undertaken without incurring costs and fees.” FRP Advisory and CMB Partners, along with lawyers from Mishcon de Reya, have also worked on the insolvencies.

The Times, Page: 41

FINANCIAL SERVICES NEWS – MONDAY 26TH April 2021

EU will come round on financial services deal

It is in the EU’s own interests to agree a post-Brexit deal on financial services, says PwC’s global head of financial services John Garvey, who predicts that although an agreement may not transpire in the short term, the Europeans will eventually realise they need access to the London market. An aversion to shouldering the risk is also hampering the EU’s efforts to set up a new financial centre, Garvey adds, as none of their governments, particularly Germany, is comfortable with taking on the responsibility.

The Daily Telegraph, Business, Page: 3

SMEs NEWS – MONDAY 26TH April 2021

Small firms need a year to recover from pandemic

A survey of 500 SMEs by Nucleus Commercial Finance finds that small firms believe it will take an average of a year for their business to make up for lost revenue caused by the coronavirus crisis. The study indicated medium-sized businesses are most confident about their recovery while younger business owners are more optimistic about making up lost revenue. Chirag Shah, chief executive of Nucleus Commercial Finance, said: “While the trepidations of the pandemic and subsequent restrictions will have lasting effects for many British businesses, it’s encouraging to see such optimism among SMEs about their projected finances as they return to business as usual.”

The I, Page: 40

Nearly 4,000 businesses repay furlough grants

Research by UHY Hacker Young indicates that some 3,777 businesses have voluntarily repaid over £760m in furlough grants to HMRC. The firm says it is likely that many of these businesses claimed furlough money in the early stages of the pandemic as a precaution in case they ran into financial difficulties.

The I, Page: 42

ECONOMY NEWS – MONDAY 26TH April 2021

Data points to rapid recovery

Tracking data from Apple and Citymapper indicates that movement in cities has almost reached the post-Covid highs of last September, raising hopes of a strong comeback for the UK economy. Figures from Google suggest footfall in retail and restaurant hubs are down 30% compared to the 60% fall seen in February while data from Opentable show restaurant bookings last week were almost 40% down on normal levels. Meanwhile, data from Barclays suggests total spending was 15% above pre-Covid levels in the first week of the latest phase of reopening. Sanjay Raja, UK economist at Deutsche Bank, says he expects a 5% jump in GDP in a “roaring” second quarter compared to the previous three months. Fabrice Montagné, Barclays UK economist, adds that although the consumer-related fast data is heartening, it is labour market improvements that will in time prove much more critical to the sustainability of the recovery.

The Daily Telegraph

UK economy is on course for its best year of growth since WW2

Economists at EY Item Club predict GDP growth of 5% to 6.8% for 2021 – the highest rate since the Second World War. The economy is expected to regain its pre-pandemic size by the second quarter of 2022, they add, due to Britain proving “more resilient than seemed possible”. The final three months of this year should also see peak unemployment fall from 7% to 5.8%, EY said. Separately, the Deloitte Consumer Tracker shows every measure of confidence – from the state of the economy to general wellbeing and personal debt levels – improved over the first quarter. “The UK is primed for a sharp snap back in consumer activity,” said Ian Stewart, chief economist at Deloitte. “High levels of saving, the successful vaccination rollout and the easing of the lockdown set the stage for a surge in spending over the coming months.”

The Times, Page: 36 The Guardian, Page: 2 Daily Mail

Contact Paul Southward

Paul Southward