NEWS – THURSDAY 10TH DECEMBER 2020

NEWS ROUNDUP

TAX NEWS – THURSDAY 10TH DECEMBER 2020

HMRC chided for threatening families left penniless by the pandemic

The Times details alleged enforcement tactics employed by HMRC to recover taxes from struggling families during the pandemic. Letters have been sent accusing people of “deliberately” choosing not to pay taxes and warning that officials “can take money directly from your bank or business society accounts”. The enforcement methods, which include the use of eight private debt collection companies, have been condemned for causing “distress” and “emotional trauma”. In the 2019/20 financial year, HMRC gave 1.1m cases to private debt collectors – more than double the number five years earlier. HMRC spent £25.4m on debt collection services in 2019, according to figures compiled by UHY Hacker Young. Over the past decade it paid at least £179m to debt collectors. Rushanara Ali, a Labour MP on the Treasury select committee, called for a review of public services’ use of debt collection agencies and aggressive practices. “We all recognise the need to recover taxes but in the middle of the pandemic there needs to be greater sensitivity so that it doesn’t become counter-productive,” she said – a position the Times agrees with in an editorial piece.

The Times, Page: 4, 5

Treasury initiates VAT review of sharing economy

The Treasury has launched a review into VAT and the sharing economy in a move that could lead to higher costs for people who use services such as Uber and Airbnb. The consultation comes amid concern that more services will move online, costing the Treasury as much as £20bn in lost revenue. Physical services charge 20% VAT, but most operators for Uber, Airbnb and TaskRabbit, an online freelance labour marketplace, pay nothing because the individual providers fall below the VAT threshold of £85,000 of turnover. The Treasury said that it also was concerned about “ensuring fair competition and a level playing field for all businesses”. Chris Sanger, global tax leader at EY, said: “The tax system normally seeks not to draw a distinction between different types of business model. Now it provides an incentive in favour of the sharing economy and self-employed, and that creates a risk for the exchequer.”

The Times, Page: 39 Financial Times, Page: 1 The Daily Telegraph, Business, Page: 1 Daily Mail, Page: 24 The Guardian, Page: 34

Ban on tenant evictions just delays the pain

The Times’ James Hurley comments on the Government’s decision to extend a ban on evicting commercial tenants until March 31 to help businesses to survive the COVID-19 pandemic. Although the move was welcomed by tenants and the British Property Federation approved of the commitment that there would be no further extensions, experts say the move has simply delayed some difficult decisions. Analysis by UHY Hacker Young indicates there are at least 3,300 insolvencies “stored up” for when the moratorium ends. Peter Kubik, partner at the firm, said thousands of companies only being kept alive because HMRC, landlords and other creditors are prevented from winding them up. “At some point that will have to come to an end.”

The Times, Page: 42

PPE contracts worth nearly £500m awarded to companies listed in tax havens

Analysis for the Labour party claims that ministers have awarded PPE contracts worth £470m to seven companies linked to tax havens. Shadow cabinet office minister Rachel Reeves said: “Despite evidence from the National Audit Office that taxpayer money was used to pay well over the odds for PPE […] we are seeing no real moves to increase clarity or trust.”

Daily Mail, Page: 15

SMEs NEWS – THURSDAY 10TH DECEMBER 2020

CBI touts digital voucher scheme to boost productivity

The Confederation of British Industry is in talks with the Government about a “productivity voucher” scheme that would provide small firms a 20% discount to adopt technology that experts believe can help solve the productivity puzzle. “It’s an idea that the Government is very open to, and we’re talking to them and really working through some of the detail,” said Rain Newton-Smith, CBI chief economist. “There’s an opportunity for the Government to play a catalytic role like they did with Eat Out to Help Out in giving everyone the confidence and the means to invest in digital technologies.”

The Daily Telegraph, Business, Page: 4

PROPERTY NEWS – THURSDAY 10TH DECEMBER 2020

A million homeowners could become mortgage prisoners

Money Saving Expert Martin Lewis warned MPs on the Treasury Select Committee yesterday that over 1m home owners could soon be trapped in mortgages they cannot afford. “We’ve got 250,000 mortgage prisoners now, but I dread to think how many we will have in a year-and-a half. It wouldn’t surprise me if it was four or five times that number,” he said.

Daily Mail, Page: 26

CORPORATE NEWS – THURSDAY 10TH DECEMBER 2020

E-cigarettes company out of puff

Smith & Williamson have been appointed by Kind Consumer, which made the nicotine-inhaling device branded as Voke after the company fell into administration. Kind Consumer has now agreed to a sale of assets for £1.6m to OBG Consumer Scientific, a subsidiary of Pharmaserve, a privately owned group and supplier. Shareholders are unlikely to see any of their cash returned.

The Times, Page: 44

REPORTING NEWS – THURSDAY 10TH DECEMBER 2020

Letter: Why sustainability is key to financial reporting

Judy Kuszewski comments on the future of sustainability reporting and agrees with the position that the rigour and consistency of disclosure will increase as public policy on sustainability issues tightens.

Financial Times, Page: 22

ECONOMY NEWS – THURSDAY 10TH DECEMBER 2020

Tier 3 would be a killer blow for London

Kate Nicholls, chief executive of UK Hospitality, has warned that placing London into Tier 3 restrictions before Christmas will result in 150,000 job losses in the industry. Nicholls said closing the sector would deliver a “killer blow” to hundreds of businesses already struggling to survive. “We know that around 800,000 people work in the hospitality sector in London. Even without Tier 3, we think the workforce will shrink by around 25% compared to pre-pandemic levels. But if the Government puts us into Tier 3, we believe the number will drop to 60% or even lower. That would mean a loss of up to 150,000 more jobs.” The warning comes as Westminster MP Nickie Aiken told residents to keep following rules or risk a tougher lockdown next week.

The Daily Telegraph Daily Mail

INTERNATIONAL NEWS – THURSDAY 10TH DECEMBER 2020

Hunter Biden under federal investigation for tax case

Joe Biden’s son Hunter Biden is under investigation by the top federal prosecutor in Delaware for his taxes. CNN reported on Wednesday that the investigation is “examining multiple financial issues, including whether Hunter Biden and associates violated tax and money laundering laws in business dealings in foreign countries, principally China.”

CNBC The Daily Telegraph The I, Page: 4

OTHER NEWS – THURSDAY 10TH DECEMBER 2020

Roman Catholic Church links arms with Council for Inclusive Capitalism

The Vatican has announced a new partnership with capitalism with Pope Francis teaming up with the Council for Inclusive Capitalism, a group founded by Lynn Forester de Rothschild which counts more than 100 of the world’s largest investors and companies as participants. Rothschild said in an interview that the body is focused on measurable actions for “true system change,” connected to the U.N. Sustainable Development Goals. The Pope has been highly critical of capitalism in the past, once describing it as “the dung of the devil.” Rothschild said capitalism today shouldn’t see workers at Fortune 500 companies on the public dole. “God didn’t create the corporation. The corporation is an invention by society to give limited liability to shareholders. But why should society give that if the shareholders mistreat workers, or poison customers or degrade the planet?” Rothschild asked. She continued: “We’re not going to just turn on a switch and make greed go away. But one thing that’s nice about being connected to the Vatican is a Christian principle of redemption and forgiveness.” Former Bank of England governor Mark Carney said in a statement that the council was fundamentally about the “basic social contract” and ensuring “fairness across generations.”

Politico New York Times CNBC

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Paul Southward