NEWS – MONDAY 8TH MARCH 2021
NEWS – MONDAY 8TH MARCH 2021
TAX NEWS – MONDAY 8TH MARCH 2021
Rishi Sunak’s tax on middle classes
Figures from the Office for Budget Responsibility show that the Treasury earned £14.9bn from capital gains and inheritance tax in 2019-20. But with the Chancellor freezing the inheritance tax threshold and capital gains tax allowance, by 2026 it will make £21bn a year – a rise of 41%. The Mail cites Sam Collins, policy adviser at the Institute of Economic Affairs think-tank, who said that instead of increasing the tax burden on businesses and individuals, the Chancellor should focus on growth and simplifying the tax code, adding: “The Chancellor argues that investment is key to our economic recovery, but capital gains tax has the reverse effect. At high levels, it discourages investment, deters entrepreneurship and encourages tax avoidance. Inheritance tax is known as Britain’s most hated tax for a reason. It is not only immoral as a form of double taxation but is a bureaucratic nightmare for families.”
Daily Mail, Page: 6
Labour U-turn on personal allowance freeze
Labour will vote against the income tax personal allowance freeze, the shadow foreign secretary said on Sunday. The move comes just days after the shadow chancellor claimed the party would not “stand in the way”. Lisa Nandy said: “We are going to vote against it this week. We feel that now is absolutely the wrong time to be targeting low and middle-income-earning families for tax hikes and squeezing their incomes.” Nandy denied the party had made a U-turn on the issue, insisting Labour had already stated it wanted such tax hikes to be deferred.
The Times, Page: 4 The Daily Telegraph, Page: 2 Daily Mirror, Page: 6 The I, Page: 24
Rishi Sunak takes an axe to Thatcher’s low-tax ideology
Martin Wolf says in the FT that Rishi Sunak’s tax policies represent a shift away from Conservative orthodoxy; may not encourage business investment, and serve to illustrate that bold reform is desperately needed.
EMPLOYMENT NEWS – MONDAY 8TH MARCH 2021
Public sector pay anger illustrates appetite for giveaways
Writing in the Telegraph, Kate Andrews says the Conservative party has fostered the belief that public sector workers can continue to demand substantial pay rises despite the dire state of public finances – having discovered the “magic money tree” during the pandemic in the form of Bank of England financing. With Boris Johnson unable to find a spending project he’s willing to sacrifice in the name of fiscal responsibility and virtually vetoing public spending cuts, a hike in corporation tax was the most obvious target, says Andrews. Along with freezing personal income tax allowances, the Budget has brought “into question the party’s core philosophy that a low-tax, less intrusive state actually creates a better set of conditions for both the private and public sector to thrive.”
FRAUD NEWS – MONDAY 8TH MARCH 2021
Financial scams have become hidden ‘epidemic’
Victims of financial scams are losing £4,000 on average to criminals impersonating institutions, experts have warned. Financial scams are an “epidemic within the pandemic”, a former investigator has said, as the number of victims falling for fraudsters impersonating the likes of HMRC, the NHS and Royal Mail doubled last year. Criminals were swift to seize on the coronavirus pandemic, targeting members of the public with fake emails, texts and phone calls. Figures from UK Finance revealed that the number of impersonation scams, where fraudsters contact potential victims pretending to be a trusted authority, doubled in 2020 to 39,360 cases. A total of £150.3m was raided from bank accounts, meaning the average victim lost nearly £4,000. Fraud is the most likely crime that the British public will become a victim of, according to Helena Wood, a former investigator with the National Crime Agency, now at the Royal United Services Institute .
PENSIONS NEWS – MONDAY 8TH MARCH 2021
Women facing ‘£100,000 pension pay gap’ with men
A study by Scottish Widows indicates the average woman in her twenties today will retire with £100,000 less in her pension than her male peers. The firm’s research pointed to women’s lower average earnings, higher probability of working part-time and heavier childcare burden as the reasons for the gap. According to the research, over the first 15 years of their careers, women on average save about £2,200 a year, compared to £3,300 for men. The difference only widens over a lifetime as wage increases lead to “significant inequalities in retirement income”. Jackie Leiper, managing director of pensions at Scottish Widows, said: “We know that young women have been some of the hardest hit by the short-term financial impact of the pandemic and this has only exacerbated the challenge of reaching pensions parity.” A Department for Work and Pensions spokesman commented: “Our groundbreaking pension reforms, including automatic enrolment, have helped millions more women save into a pension, many for the first time. Pension participation among eligible women working in the private sector has risen from 40% in 2012, to 86% in 2019.”
CORPORATE NEWS – MONDAY 8TH MARCH 2021
Richard Caring ready to back Bill’s
Restaurant tycoon Richard Caring has said he is willing to offer financial support to Bill’s Restaurants after it emerged the chain breached its banking agreements during the pandemic. BDO, the restaurant group’s auditor, warned that the effect of coronavirus on trading and future funding indicated that there was material uncertainty “that may cast significant doubt on the company’s ability to continue as a going concern”. The restaurant’s parent company Bill’s Stores has since secured a waiver on covenants with its bank, HSBC.
Rivals target Sanjeev Gupta’s assets
Sanjeev Gupta’s rivals are reportedly preparing to pick off the steel tycoon’s assets as his GFG Alliance comes under increasing scrutiny due to its massive debt. Greensill Capital has lent Gupta billions but was last week thrown into turmoil after Credit Suisse suspended its $10bn supply chain fund. Grant Thornton has declined to comment on reports it has been primed to oversee the administration of Greensill.
SMEs NEWS – MONDAY 8TH MARCH 2021
Calls for clarity on “super-deduction”
Smaller companies need clarity on how they will be able to access the Chancellor’s “super-deduction” tax break, the Times reports. The relief is intended to spur investment by providing 25p off company tax bills for every £1 of qualifying spending on plant and machinery. But investment incurred under “a hire purchase or similar contract” will have to meet “additional conditions” in order to qualify and over one in five SMEs use this kind of finance. Craig Beaumont, of the Federation of Small Businesses, said: “Not much thought has yet gone into access for smaller firms, who have a hugely important role to play in post-pandemic investment in smaller equipment that would improve Britain’s productivity.”
ECONOMY NEWS – MONDAY 8TH MARCH 2021
Service industry confidence at 12-month high
Britain’s service sector has seen a spike in business confidence with BDO’s Services Optimism Index hitting 94.13 in February, up from 86.6 in January. The confidence boost has come from the ongoing vaccine roll-out and Budget pledges form the Chancellor. Kaley Crossthwaite, a partner at BDO, said: “With business lifelines extended in the shape of the prolonged furlough scheme, and an extra dose of support provided to hospitality via extensions in business rates relief and the VAT cut to 5%, there is reason to believe this optimism can be sustained as we gradually emerge from the depths of lockdown.” Separate research by the Centre for Economics and Business Research and YouGov found consumer confidence rose last month with the positive sentiment expected to “further aid the recovery over the coming months.”
Contact Paul Southward