NEWS – MONDAY 4TH MAY 2020

NEWS ROUNDUP

TAX NEWS – MONDAY 4TH MAY 2020

Climate activists plan to withhold taxes

The Times reports that Extinction Rebellion is proposing a “money rebellion” by refusing to repay loans and withholding taxes. It is suggested that the environmental activist group could carry out a tax strike where 10,000 people would commit to withholding £100 of income tax to “present a dilemma to HMRC about whether to pursue 10,000 claims for £100”.

The Times, Page: 14

Scotland’s private schools spared business rate change

The Scottish Government has postponed plans to remove the charitable status of the country’s private schools, as the sector struggles to cope with the financial effects of the COVID-19 pandemic. The move, which would remove the charitable relief of independent schools’ business rates, was initially set to be implemented from September 1, 2020, however the proposals are now being pushed back to April 2021.

The Herald

7 in 10 would pay more tax to boost NHS pay

A poll by Redfield & Wilton Strategies saw 78% of respondents say NHS staff should get a pay rise because of their efforts against coronavirus, with 71% saying they would be willing to pay more tax to cover the cost.

City AM

CORPORATE NEWS – MONDAY 4TH MAY 2020

Business confidence at all-time low

A Deloitte survey of finance chiefs shows that business confidence has sunk to an all-time low due to the coronavirus pandemic. The poll of more than 100 finance chiefs at some of the UK’s largest firms, including FTSE 350 companies, shows that nine in ten believe their business faces a high or very high level of uncertainty. The quarterly poll, which was conducted after the lockdown was rolled out, saw just 16% of respondents say they are more optimistic about their company prospects than they were three months ago. On average, the CFOs expect revenues at their businesses to be 22% lower than they had estimated before the COVID-19 outbreak, while 98% expect businesses to reduce their capital spending during 2020. On the economic outlook, 53% foresee a downturn lasting until the end of 2020. On cost cutting, 76% said it is a strong priority, with 59% saying their firm had furloughed staff and 52% saying output had been reduced. Some 30% have sought to – or will seek to – utilise the Bank of England’s COVID-19 corporate financing facility. Ian Stewart, chief economist at Deloitte, said: “CFOs expect the lockdown to ease in May and June and demand in their own sectors to start recovering later this year. But there is no expectation of a quick snap back in activity, with most CFOs assuming revenues will not return to pre-crisis levels for at least a year”.

The Daily Telegraph, Business, Page: 1 The Times, Page: 29 The Guardian, Page: 33 The I, Page: 40 Daily Mail, Page: 68 The Scotsman, Page: 34

Q1 profit warnings exceed 2018 total

Analysis by EY shows that more than one in five public quoted companies issued a profit warning in Q1, marking a 5% increase on the 287 issued in all of 2018. While the coronavirus crisis has played a part, with 77% of warnings citing the pandemic, EY said that a number of firms were already “struggling”, with warnings up 43% year-on-year in January.

The Daily Telegraph, Business, Page: 1

Restaurants at risk

The auditor of Richard Caring’s Caprice Holdings has cast doubt over the future of the entrepreneur’s restaurants. BDO said that while an extension to its credit facility has been verbally agreed, material uncertainty related to the coronavirus crisis means Mr Caring may have to foot the bill for any shortfall in funding. BDO added that the closure of the restaurants for longer than six months without additional finance could cast “significant doubt” on the group’s ability to continue. Caprice Holdings is trying to extend its £72m credit facility, which is due for repayment on March 31 2021.

The Daily Telegraph, Business, Page: 1

Brewery growth goes flat

Brewery growth has fallen flat for the second year in a row, with the number of producers in the UK falling by one in the last year to a total of 2,273, according to UHY Hacker Young. The firm’s James Simmonds said: “To help the sector bounce back, the Government should consider expanding the Small Brewer Relief to include more breweries”, adding that an increase in business rate relief “would be welcome.” UHY Hacker Young predicts the craft beer market may be reaching “saturation point” among its existing core market.

Daily Star, Page: 19 Daily Mirror, Page: 7 Daily Express, Page: 46

Empty stores: Repurpose them

The FT considers options for redeveloping or repurposing empty retail sites, noting that KPMG warns over the “patchwork ownership of high streets” and how it can hinder schemes.

Financial Times, Page: 22

What is the value of Burford’s claim against YPF?

The FT looks at Burford Capital’s late-arriving audited 2019 results, highlighting that EY had to explain a challenging list of “key audit matters”.

Financial Times, FT Fm, Page: 12

INDUSTRY NEWS – MONDAY 4TH MAY 2020

Consultants under fire over speed of contracts

With the Government acting quickly to draft in the Big Four to help tackle the coronavirus crisis, Tabby Kinder looks at concerns over transparency and how taxpayer money was being spent.

Financial Times, Page: 11

Audit reform must not be kicked into the long grass

GO Investment Partners’ Eric Tracey says COVID-19 must not delay audit reform, suggesting measures “that would change attitudes and behaviours of directors and auditors” could be implemented, boosting audit quality.

Financial Times, Page: 20

EMPLOYMENT NEWS – MONDAY 4TH MAY 2020

Firms given back to work guidance

Businesses have been given draft guidance on how to make workplaces safer. The guidance, prepared by EY, says only staff who cannot work from home should be asked go in; desk sharing should be stopped or reduced; one-way systems should be used to reduce contact; hand sanitisers and screens should be provided for staff; meeting rooms should only be used if necessary; and workplaces should be cleaned more frequently. Meanwhile, Transport Secretary Grant Shapps says firms could be asked to stagger employees’ working hours when the coronavirus lockdown eases in a bid to prevent crowded commutes. Cabinet Office minister Michael Gove also touched on the subject in the daily Downing Street briefing, saying consultations are under way with employers, trade unions and public health experts to ensure that people return to work in the “safest possible” environments.

The Times, Page: 4 BBC News

SMEs NEWS – MONDAY 4TH MAY 2020

Further grants for small businesses

The Government has announced a further £617m in grants for small companies that work in shared spaces. The Business, Energy and Industrial Strategy department said the fund is aimed at small businesses with ongoing fixed property-related costs who are not eligible for business rates relief. Businesses must have fewer than 50 employees and be able to demonstrate that they have suffered a significant drop of income because of the coronavirus lockdown. The maximum grant available is £25,000.

The Times, Page: 37 City AM

Treasury adds bounceback loans to arsenal

With small businesses now able to apply for bounceback loans of up to £50,000, Federation of Small Businesses chair Mike Cherry said the facility “offers real hope” amid the coronavirus crisis.

Financial Times, Page: 2

ECONOMY NEWS – MONDAY 4TH MAY 2020

BCC calls for public spending increase

The British Chambers of Commerce (BCC) has urged the Government to sustain high levels of public spending to help the private sector recover from the coronavirus crisis. BCC president Baroness Ruby McGregor-Smith has written to the Prime Minister, saying now is “a time to be bold”, insisting that “an expansionary fiscal policy, including a commitment to transformative infrastructure investment, will be needed…to pay down the national debt in the longer-term”. The BCC has outlined a three-phase plan to ease the coronavirus lockdown, calling the phases restart, rebuild and renew. The first two involve a “a phased reopening of the economy” that would include a staggered opening of different parts of the private sector. Free market think-tank the Institute of Economic Affairs questioned the BCC’s proposals, with economics fellow Julian Jessop saying the call for expansionary fisca l policy was “reckless, not bold” and “would risk another fiscal crisis”

City AM

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