NEWS – MONDAY 7TH SEPTEMBER 2020

NEWS ROUNDUP

TAX NEWS – MONDAY 7TH SEPTEMBER 2020

Study reveals towns with highest rate of tax avoidance

A new study by UHY Hacker Young shows high net-worth individuals are increasingly likely to admit tax avoidance to escape harsh penalties, with research showing towns in the stockbroker belt of the home counties have the biggest concentration of people admitting tax avoidance. Windsor tops the list, with 23 disclosures to HMRC of unpaid tax per 100,000 population last year, compared to the UK average of seven. St Albans followed, with 20 disclosures per 100,000 population with Guildford and Tunbridge Wells coming next. Sean Glancy, of UHY Hacker Young, said: “The stockbroker belt is littered with tax avoidance hotspots. The home counties are home to many high net-worth individuals and well-paid city commuters. These are the groups most likely to have the highest income tax bills – leading to greater incentives to find ways to reduce payments.”

The Guardian, Page: 19 Daily Express, Page: 45 Daily Mirror, Page: 26 The Times, Page: 6 The Daily Telegraph, Page: 12 Daily Star, Page: 24

Bootle: Hiking taxes would prove deeply damaging

Roger Bootle issues a warning against tax rises in the Telegraph, stating that higher taxes would “blunt incentives” and damage economic performance. He says foreign aid is one area of spending that deserves to be trimmed. This should be done in combination with confidence-bolstering measures for the post-Brexit economy. Higher personal and corporate taxes would work against this and “risk an exodus of both talented people and successful businesses.” As for government debt, fears over a rise in interest rates could be ameliorated by the use of perpetual bonds – putting off refinancing state debt for decades or more. Elsewhere, the Mirror cites Doug McWilliams, of the Centre for Economics and Business Research, who agrees with Bootle’s position on debt, saying that running it down over 50 years “seems sensible.”

The Daily Telegraph, Business, Page: 2 Daily Mirror, Page: 4

Tory MPs revolt over tax hike plans

Conservative MP David Davis is leading a charge against a rise in taxes, arguing that Treasury plans for increases to be spread over the next four years “won’t work and it is not Conservative.” Davis told the Daily Express: “We are already at the highest tax burden for 30 years. High taxes suppress economic activity, investment and employment. The smarter approach is to borrow cheaply as we look to spread the cost of the crisis, as in wartime, over 50 years or thereabouts and grow the economy as quickly as possible.”

Daily Express, Page: 4

Comment: Divide over taxes marks beginning of longer economic war

Writing in the Times, Mark Littlewood, director-general of the Institute of Economic Affairs, talks about the new divide emerging in how the dire state of public finances is to be tackled, with Treasury hawks advocating tax rises while the doves support spending for growth. Littlewood gives several reasons why the doves may be right, but adds that, before too long they “will need also to become spending hawks.”

The Times, Page: 35

SMEs NEWS – MONDAY 7TH SEPTEMBER 2020

Give small businesses vouchers to ease EU transition, FSB says

The Federation of Small Businesses is calling on the government to provide “transition vouchers” to help to prepare for the end of the Brexit transition period. National chairman Mike Cherry said: “The transition period will soon be at an end, but the small firms that make up 99% of our business community still have no clear sense of what they’ll be transitioning to.” He continued: “Transition vouchers mark a sensible way forward: set sums that can be spent on expertise, tech and training that will ease the small business community’s move to a new relationship with the EU. If the government wants firms to take preparatory action over the next few months, it needs to help them to do so.”

The Times, Page: 34 The Daily Telegraph, Business, Page: 6 The I, Page: 7 The Scotsman, Page: 13

Nearly a fifth of small businesses would not survive second lockdown

A survey by insurance group Simply Business reveals that 17% of small businesses believe they would not survive a new lockdown while a total of 62% said they were less confident about their firm’s long-term outlook. Only 5% of respondents think they would cope better. Elsewhere, the Times reports that Alok Sharma, the business secretary, is considering the introduction of cash grants for businesses hit by local lockdowns.

Daily Mail, Page: 74 Daily Express, Page: 45 The Times, Page: 10

CORPORATE NEWS – MONDAY 7TH SEPTEMBER 2020

James Moore: When will firms get serious about climate change?

The Independent’s James Moore is sceptical about whether UK companies are serious about tackling climate change, citing a report from KPMG which found although 82% of business leaders said it was a “top priority”, only 8% reported having a fully-fledged plan for how to tackle the risks in place. Some 89% claimed they were “in early stage discussions” and 3% said they had developed no plans at all. Moore does give some credit to institutional investors, whose efforts he says have meant corporates are at least talking about the issue. The Press and Journal also picks up on the survey and cites KPMG UK’s head of ESG, Sue Bonney, who said: “Talk now on any post-pandemic recovery almost always includes climate change at its heart. But our survey suggests that, while many businesses are taking ESG seriously, there is a long way to go before we can truly say that everyone is placing it at the centre of their future strategic growth plans.”

The Independent, Page: 40 The Press and Journal, Page: 28

PENSIONS NEWS – MONDAY 7TH SEPTEMBER 2020

UK universities and staff face huge jump in pension contributions

Proposals from the Universities Superannuation Scheme to plug an estimated £18bn deficit could see a massive increase in contributions paid by university employers and around 200,000 scheme members.

Financial Times

ECONOMY NEWS – MONDAY 7TH SEPTEMBER 2020

Chancellor must act to avoid permanent loss of skills

Almost two thirds of manufacturers told industry group MakeUK that the job retention scheme (JRS) should be extended for key sectors to protect vital parts of the economy. “The protection of key skills should be a strategic national priority as this will be the first building block in getting the economy up and running,” said Stephen Phipson, MakeUK’s chief executive. “The starting point for this should be an extension of the JRS to those sectors which are not just our most important but who have been hit hardest. Failure to do so will leave us out of step with our major competitors and risk a loss of key skills when we can least afford to do so.” Meanwhile, a survey from BDO published today shows 60% of mid-sized businesses do not plan to bring back all of their staff when the Treasury stops supporting the wages of those still off work, raising the prospect of a full-blown unemployment crisis in the autumn.

The Daily Telegraph, Business, Page: 1 The Guardian, Page: 27 Daily Express, Page: 6 The I, Page: 6 Yorkshire Post, Page: 11

Johnson given a week to save aviation

The bosses of the UK’s 20 biggest airports have warned Boris Johnson that he risks “irreparable damage” to the economy unless he moves to replace quarantine with COVID-19 testing in the next week. In a letter to the Prime Minister and the Chancellor, the signatories give Mr Johnson seven days to make the change as part of a series of measures to prevent the loss of up to 110,000 aviation and allied industry jobs. Separately, at least 24 Conservatives are pressuring Rishi Sunak to suspend air passenger duty until the end of summer next year.

The Daily Telegraph, Page: 1, 2 Daily Mail, Page: 11

Contact Paul Southward