NEWS – MONDAY 8TH JUNE 2020

NEWS ROUNDUP

TAX NEWS – MONDAY 8TH JUNE 2020

Community ventures call for extension to tax relief

Campaigners are warning that if the government scraps the social investment tax relief (SITR) as planned at the end of April 2021 dozens of social enterprises will have to hand back millions of pounds of private money invested to support community projects and organisations. SITR was introduced in 2014 but take-up of the relief has been lower than expected. Campaigners want the relief to be extended for at least two years, until April 2023. Stephen Muers, the interim chief executive of Big Society Capital, said: “Now is not the time to be taking away a tax relief scheme that has been proven to attract significant investment into some of the most disadvantaged places and causes in the UK.”

The Guardian, Page: 31

US trade talks could be stymied by tax on tech firms

Former US trade negotiators are warning that an investigation into taxes aimed at technology firms could scupper hopes for a UK-US trade deal. US trade representative Robert Lighthizer is investigating whether tech taxes warrant retaliatory tariffs.

The Daily Telegraph, Business, Page: 4

Iceland chief: practical steps to ensure a green recovery

Among the proposals from Iceland boss Richard Walker for improving sustainability is that the tax system be used to reward good environmental outcomes and penalise bad behaviour.

Financial Times, Page: 21

CORPORATE NEWS – MONDAY 8TH JUNE 2020

Travel and hospitality firms join airlines in legal battle against quarantine

A legal bid by airlines to reverse quarantine measures due to be imposed on travellers to the UK on Monday has been joined by over 500 travel and hospitality businesses. A new group called Quash Quarantine will announce on Monday morning whether it is joining the action led by British Airways as an interested party or launching a separate legal bid. A survey of the group’s members found that 71% of business owners and chief executives expected to make 60% of their staff redundant if the quarantine policy is not scrapped.

The Daily Telegraph Financial Times The Daily Telegraph

Carluccio’s administration set to cost £1.2m

FRP Advisory has submitted a bill for £1.2 for its working winding down the Italian restaurant chain Carluccio’s, Companies House documents show. FRP managed to sell 31 of its 72 sites to the Boparan Restaurant Group for £3.4m. But staff owed almost £1.6m in unpaid wages have been forced to apply to the Insolvency Service while unsecured creditors will get nothing.

The Daily Telegraph, Business, Page: 2

REGULATION NEWS – MONDAY 8TH JUNE 2020

No. 10 pushing tough new takeover laws

Downing Street is in the process of strengthening legislation to prevent foreign takeovers that pose a risk to national security. The new regime could see directors jailed, disqualified or fined for ignoring new stringent conditions. Boris Johnson also wants partnerships with research institutions to be included in the new laws. The move comes amid increasing concern about the influence of China and deals struck between Huawei, Oxford Innovation Sciences and Imperial College London.

The Times

SMEs NEWS – MONDAY 8TH JUNE 2020

eBay offers lifeline amid shutdown pain

Small businesses trading on eBay have seen turnover rise by a third during the lockdown from a year earlier, figures show. Those selling internationally saw the value of sales rise by 2% between March and April with volumes increasing by 7%. Separate research from Aston University in Birmingham found evidence that companies have diverted exports worth £10bn away from the EU since the 2016 referendum. The smallest exporters had switched as much as 46% of their new export growth by value to non-EU markets.

The Times, Page: 41

FINANCE NEWS – MONDAY 8TH JUNE 2020

Treasury working on plan for alternative lenders to access lending programme

Treasury officials are working on a plan to allow some alternative lenders to offer state-backed loans to struggling small businesses. Mainstream banks would provide funding to challenger banks and specialist lenders through a special purpose vehicle which would be linked to the British Business Bank. An email sent by industry lobby group UK Finance said that officials “fully understand the need to move quickly on this for a scheme to be of use to the non-banks and small and medium enterprises that utilise their facilities”.

The Daily Telegraph

State should take on toxic coronavirus loans, says Lloyds chairman

Lloyds chairman Norman Blackwell is urging the government to set up a vehicle that will take on debts from some companies unable to repay their state-backed coronavirus loans. The Conservative peer said: “Some businesses will need to go into liquidation, but those which they think have a prospect [of surviving] the best thing is to take the loans off the banks, pay out their guarantee and put them in a vehicle which will over time try and recoup money from the companies. Private finance won’t take on refinancing the debt at the value the government has guaranteed it.”

The Daily Telegraph, Business, Page: 1

PERSONAL FINANCE NEWS – MONDAY 8TH JUNE 2020

Banks in talks over credit card holiday extension for borrowers

Banks are in discussions with the Financial Conduct Authority about extending coronavirus relief measures for customers struggling to repay credit cards and other unsecured debts until the end of September.

Financial Times

ECONOMY NEWS – MONDAY 8TH JUNE 2020

Johnson in drive to slash social distancing to one metre

The Business Secretary Alok Sharma has been sounding out his counterparts in Denmark and the Netherlands about the rationale behind their decision to implement social distancing under two meters. Countries such as Germany, Australia and the Netherlands are now operating at 1.5 metres while Denmark is using one metre. The World Health Organisation recommends a one metre minimum. The evidence gathering comes as Boris Johnson grows increasingly worried about the loss of millions of jobs if businesses cannot operate. Mr Sharma warned the PM last week that 3.5m jobs were at risk in the hospitality sector, triggering the push to accelerate the reopening of the economy. The cabinet are due to discuss a plan to reopen pubs and bars on 22 June. Responding to concerns the lockdown was being lifted to swiftly, Health Secretary Matt Hancock yesterday insisted there would be no trade-off between the economy and health and that the government will proceed on a strictly “safety first” basis.

The Daily Telegraph Financial Times Daily Mail, Page: 15 The Times, Page: 8 Daily Express, Page: 1, 4-5

Jump in manufacturing output offers hope

Output increased across Britain in May from its previous record low level as manufacturers benefited from an easing of lockdown measures, according to research by BDO. The firm’s Kaley Crossthwaite said: “While the jump in manufacturing output offers a glimmer of hope, early signs point to this being a long road to recovery. The UK is experiencing the deepest economic contraction in living memory, and possibly in its history. The latest readings suggest we have passed the rock bottom of this crisis.”

The Times, Page: 35 Daily Express, Page: 48 Daily Mirror, Page: 7 The I, Page: 9 Yorkshire Post, Page: 11

PROPERTY NEWS – MONDAY 8TH JUNE 2020

Housebuilder insolvencies threaten supply

According to data obtained by Price Bailey, 368 developers filed for insolvency last year compared with 207 in 2016, with the increase said to be threatening the supply of new homes.

Financial Times, Page: 11

OTHER NEWS – MONDAY 8TH JUNE 2020

Growth is route out of slump, leaving debt for another day

Writing in the Telegraph, Roger Bootle, the chairman of Capital Economics, says the UK can grow its way out of the debt problem brought on by the coronavirus pandemic, but fiscal discipline will still be necessary. “Policies on tax, energy, green issues, trade, planning, regulation and public investment need to be radically reshaped to maximise economic growth,” asserts Bootle, adding: “We cannot now afford any luxuries or fripperies – for example the triple lock on pensions, HS2 and overseas aid.” In the same paper, Jeremy Warner warns that much of the state-supplied debt will be transferred back from corporates to the public balance sheet alongside the ever-widening deficit. Inflation will not prove an adequate solution to reducing this debt, he warns. “The bottom line, sadly, is that there is no such thing as a free lunch; we’d be in serious trouble if interest rates ever started to rise again.”

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

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Paul Southward