NEWS – MONDAY 6TH JULY 2020

NEWS ROUNDUP

TAX NEWS – MONDAY 6TH JULY 2020

Dodds suggests support for wealth tax

Shadow chancellor Anneliese Dodds has suggested a wealth tax could help the country’s coronavirus recovery but, when pressed on what such a levy may involve, opted against offering detail over the proposal. In interviews on both the BBC’s Andrew Marr programme and Sky’s Sophy Ridge on Sunday, Ms Dodds said the burden of higher taxation ought to fall on those with the “broadest shoulders” but said debate over the policy would take place only if the pandemic delivers a severe recession. Ms Dodds, who had previously suggested ministers “need to look at” the idea of a wealth tax, said the proposed levy was a “complicated area” but offered: “It is my view that if we do need to see an increased tax take we shouldn’t see it coming from those low and middle-income people … Instead we should have a focus on the very best-off people.”

The Times, Page: 2 The Daily Telegraph, Page: 4 Daily Express

Should pandemic prompt tax rises?

Ben Chu in the Independent considers the economic impact of the coronavirus crisis, with public borrowing set to pass 10% of GDP this year and Office for National Statistics data showing public debt is roughly equivalent to the size of the total economy. He says that with the Prime Minister ruling out a return to austerity, the “spotlight has turned to taxation.” While the Conservative manifesto pledged no increase in VAT, national insurance or income tax, the Prime Minister recently refused to rule out upping taxation. Mr Chu argues that there is a case for temporary tax cuts in the current climate.

The Independent, Page: 8

Think-tank urges tax rethink

Conservative think-tank Onward has suggested tax reform should be considered as the UK looks to ensure that borrowing ramped up amid the coronavirus crisis is brought under control without harming growth. This could involve a thorough review of tax relief and pushing ahead with new digital taxes. The think-tank’s Bounce Back report also suggests taxpayer money should be used to take a stake in businesses that were given government loans to help navigate the pandemic but are unlikely to ever be able to repay them.

The Times, Page: 4

REGULATION NEWS – MONDAY 6TH JULY 2020

FRC to carry out Autonomy hearing

The Financial Reporting Council will this week conduct a two-day disciplinary hearing into Deloitte and Richard Knights and Nigel Mercer, members of the ICAEW, over the auditing of Autonomy before Hewlett-Packard bought the firm in 2011.

The Times, Page: 35

INDUSTRY NEWS – MONDAY 6TH JULY 2020

Counting whisky casks was all part of the audit

A letter to the FT expresses surprise at the chief executive of Grant Thornton saying that an audit was “not designed to look for fraud”.

Financial Times, Page: 20

INSOLVENCY NEWS – MONDAY 6TH JULY 2020

Retail insolvencies affect 56,000 jobs

A total of 2,630 stores and nearly 56,000 jobs have been affected by insolvencies in the retail sector so far this year, according to the Centre for Retail Research. This compares with 2,051 stores and 46,500 jobs affected during the whole of 2019. With a number of retailers falling into insolvency having been hit hard by the coronavirus lockdown, 24,000 jobs have been lost across the sector already in 2020. Joshua Bamfield, director at the Centre for Retail Research, said the end of the furlough scheme and the end of a moratorium on lease forfeits could see further cuts. “The second half of the year could be disastrous for high streets,” he warned.

The Daily Telegraph, Business, Page: 1

CORPORATE NEWS – MONDAY 6TH JULY 2020

Wirecard’s core business has been lossmaking for years, audit shows

A special audit conducted by KPMG suggests Wirecard’s core business in Europe and the Americas has been lossmaking for years, with profits in EY-audited financial reports existing largely on paper.

Financial Times, Page: 1

Manufacturing key to Yorkshire economy

A report from manufacturers’ organisation Make UK and BDO shows that the manufacturing sector accounts for 14% of Yorkshire’s economy. It also shows the region’s reliance on EU market for exports, prompting Make UK to stress the need for a deal with the EU that avoids trade barriers.

Yorkshire Post, Page: 12

Owner secured for golf club

Jobs have been saved at Leeds Golf Club after Begbies Traynor completed the sale of the business and assets to Leeds Golf Club 1896 Limited.

Yorkshire Post, Page: 12

SMEs NEWS – MONDAY 6TH JULY 2020

Small firms call for support

In a letter to Chancellor Rishi Sunak on behalf more than 120 UK SMEs, Blick Rothenberg has called for support including a reduction in VAT to at least 15% for a two-year period, a reduction in national insurance to 10%, and a reduction in business rates. Milan Pandya, a business advisory partner at Blick Rothenberg, said: “SMEs are crying out for government to create a medium-term stable environment”, arguing this would “generate clarity and confidence to allow strategic decisions to be made.”

The I, Page: 42

SMEs back trade talk plan

Industry leaders have welcomed plans for a summit to discuss how to improve small businesses’ ability to trade with the United States. International Trade Secretary Liz Truss has confirmed that the UK and US will hold a roundtable focused on small business. Emma Jones, founder of small business adviser network Enterprise Nation, has backed efforts to make it easier for SMEs to export, while Mike Cherry, national chairman of Federation of Small Businesses, said: “As we enter a new era for global trade, it’s critical that small firms are placed front and centre of negotiators’ minds.”

The Times, Page: 41

EMPLOYMENT NEWS – MONDAY 6TH JULY 2020

Government to provide 30k new traineeships

The Government is pledging to deliver 30,000 new traineeships to get young people into work, with a £111m programme to give English firms £1,000 for each work-experience place they offer and £21m going toward similar schemes in Scotland, Wales and Northern Ireland. A Treasury statement detailing plans to expand the traineeship programme warned that “young people’s employment prospects are expected to be disproportionately affected by the economic fallout of coronavirus”. The Treasury said that while three quarters of young people who complete a traineeship moved on to employment or further study within a year, three quarters of 18-24 year-olds who are not in education, employment or training for three months will remain out of work and education for a full 12 months.

BBC News The Independent

Teaching tech

James Titcomb in the Telegraph looks at technology and the education system, considering whether schools and colleges are producing enough graduates with the technical skills required to support the growing technology industry. A 2019 study by KPMG and Harvey Nash found that 67% of 3,600 chief information officers polled were struggling to find suitable people to hire, particularly in big data and analytics, cyber security and AI.

The Daily Telegraph, Business, Page: 5

PROPERTY NEWS – MONDAY 6TH JULY 2020

Stamp duty holiday looks to boost home sales

Chancellor Rishi Sunak is expected to this week announce a temporary stamp duty holiday that will set a threshold between £300,000 and £500,000. The move, which will seek to reignite the housing market in the wake of the COVID-19 crisis, comes with Halifax data showing property values slipped 0.2% in May, a third consecutive monthly decline. HMRC data shows that April saw just 38,060 transactions completed, which is less than half the number seen in April 2019.

The Times, Page: 1 Daily Mail, Page: 2

INTERNATIONAL NEWS – MONDAY 6TH JULY 2020

Germany empowers watchdog

German finance minister Olaf Scholz is to grant BaFin, the country’s financial watchdog, greater powers following the scandal at Wirecard, with it to be handed more authority over financial reports. The fallout of the issues at the fintech company may see auditors rotated to ensure independence.

The Daily Telegraph, Business, Page: 6

ECONOMY NEWS – MONDAY 6TH JULY 2020

Arts handed £1.5bn support

The Government has announced a £1.57bn support package to help culture, arts and heritage organisations navigate the disruption caused by the coronavirus crisis. The £1.15bn support pot for cultural organisations in England is made up of £880m in grants and £270m of repayable loans, with ministers saying the latter will be “issued on generous terms”. Northern Ireland is to see funding of £33m, with £97m going to Scotland and £59m to Wales. Arts Council chairman Sir Nicholas Serota was among those to welcome the announcement.

The Daily Telegraph, Page: 1 BBC News ITV News

OTHER NEWS – MONDAY 6TH JULY 2020

Lockdown drives a green recovery

Jillian Ambrose in the Guardian suggests “countless” businesses are poised to profit from a green economic boom after the coronavirus pandemic. Steven Jennings at PwC says the lockdown has triggered a shift for consumers and companies that is accelerating developments in sustainability, saying: “One of the unintended consequences of the coronavirus crisis is the opportunity for businesses to think about the future. If a company has to rebuild itself, it makes sense to reconfigure how it works to be more sustainable.” Ms Ambrose notes that PwC has set out five-pillar plan to “build back better”.

The Guardian, Page: 28

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Paul Southward