NEWS – THURSDAY 10TH SEPTEMBER 2020

NEWS ROUNDUP

TAX NEWS – THURSDAY 10TH SEPTEMBER 2020

A deterrent to corona-fraud would improve public finances

The Times’ Patrick Hosking says public tolerance of furlough fraud is likely to be zero and there will no doubt be plenty of whistleblowers willing to spill the beans on employers in the coming months. Mr Hosking talks to Sarah Wallace, a partner at Constantine Law, who believes this has the makings of a real headache for some companies if HMRC decides to get heavy. The successful prosecution of a high-profile employer would be the best way for HMRC to maximise revenues from companies that have wrongly claimed money, Hosking suggests.

The Times, Page: 39

Majority favour tax hikes for the wealthy

A report compiled by Tax Justice UK found that 74% of Brits want to see wealth taxed more with supporters of the move including 64% of Tory voters and 88% of Labour. Robert Palmer, executive director of Tax Justice UK, said: “Brits want fair tax rises to support better public services, tackle inequality and deal with the climate emergency.”

Daily Mirror, Page: 13

CORPORATE NEWS – THURSDAY 10TH SEPTEMBER 2020

New Look faces administration risk if restructuring blocked

New Look warns it will have to consider “less favourable alternatives” if unsecured creditors do not support its latest restructuring plan, potentially putting around 11,000 jobs at risk. Last month, the group launched a second major restructuring of its store estate in three years, asking landlords to agree new turnover-based leases at 402 stores to help it through the COVID crisis. A recapitalisation that would reduce senior debt from about £550m to £100m can only be delivered if the firm secures the support of its landlords for a CVA at a vote on September 15th. New Look has been criticised by the British Property Federation (BPF) over alleged inaccuracies in how it has presented the restructuring plan. “New Look and Deloitte have launched this CVA with reference in their communications that the BPF’s views are reflected in the proposal – this is not true,” chief executive Melanie Leech said.

The Daily Telegraph, Business, Page: 3 The Times, Page: 42 City AM

CRIME NEWS – THURSDAY 10TH SEPTEMBER 2020

Bank branch staff stopped £19m of fraud in first half of 2020

The Banking Protocol that enables bank branch staff to alert their local police force when they suspect a customer is being scammed has prevented victims from losing £116m from fraud and led to 744 arrests since it was introduced three years ago. Just in the first six months of 2020, £19.3m of fraud was prevented and more than 100 arrests were made through the scheme, according to figures from UK Finance. A range of scams that trick elderly and vulnerable customers into withdrawing cash from their branch were prevented, including courier scams, romance fraud and rogue traders. Katy Worobec, managing director of economic crime at UK Finance, said: “It is sickening that criminals are preying on elderly and vulnerable victims during this difficult time. Bank branch staff on the frontline are doing a heroic job in stopping these cruel scams and helping bring those responsible to justice.

BBC News Your Money

SMEs NEWS – THURSDAY 10TH SEPTEMBER 2020

Businesses forced to close to be eligible for grants

The Chief Secretary to the Treasury Stephen Barclay has announced a new scheme to help businesses survive closures due to coronavirus lockdowns. Large businesses in England which are forced to close as a result of a local lockdown will now be able to claim a £1,500 grant per property for every three weeks they are not able to open their doors. Smaller businesses will receive £1,000. The British Chambers of Commerce welcomed the payments but warned they would not be enough for many firms. Mike Cherry, the national chairman of the Federation of Small Businesses, described the intervention as “a much needed additional financial lifeline” while Annie Gascoyne, of the Confederation of British Industry, warned that more targeted support would be needed in the autumn.

Financial Times, Page: 2 The Times, Page: 4 Daily Mail The Guardian, Page: 6

State loans should be repaid only when businesses return to profit

A study by the centre-right think tank Onward has found that around 20% of British businesses are only making enough profit to cover their debt interest payments. High levels of corporate debt built up by companies during the COVID-19 pandemic has pushed 4.3% of firms into technical insolvency, the report estimates. Angus Groom, Onward fellow and report author, said: “The Government’s loans schemes have been highly effective at helping firms through the worst of the crisis, but they represent a double-edged sword in that they have weighed down firms with debt just as we need them to invest.” About £53bn has been loaned to SMEs and The City UK has estimated that £35bn may not be repaid. Researchers at Onward are calling on the Government to convert the debt into “income-contingent loans” that do not need to be repaid until companies become profitable.

The Times, Page: 40 The I, Page: 9

WEALTH MANAGEMENT NEWS – THURSDAY 10TH SEPTEMBER 2020

St James’s Place reopens frozen UK property funds

St James’s Place has become the first investment manager to reopen its £3.2bn property fund range, saying that its portfolio manager was confident the products were liquid enough to allow investors to trade in and out.

Financial Times

PENSIONS NEWS – THURSDAY 10TH SEPTEMBER 2020

£2tn ‘at risk from pension tricksters’

More than £2tn of pension cash is at risk of scams, according to a report from The Police Foundation think-tank, which calls for urgent action to better protect investors.

Financial Times

ECONOMY NEWS – THURSDAY 10TH SEPTEMBER 2020

Forecasters say no-deal Brexit now more likely

City analysts have said the probability of a no-deal Brexit has increased following the publication of the UK Government’s Internal Market Bill. Fitch now expects the UK and the EU to trade on WTO terms from January 1st and has taken 2% of forecast for next year. Mujtaba Rahman of the Eurasia Group consultancy now puts the likelihood of no-deal at 60%, up from his previous 40% prediction while Kallum Pickering, senior economist at Berenberg, commented: “It suggests the UK is trying to increase the pressure to get a deal more to its liking rather than going for a hard exit. Either way, the strategy does not raise the chance of a good outcome.”

The Daily Telegraph

OTHER NEWS – THURSDAY 10TH SEPTEMBER 2020

Government sets out plans for new approach to subsidy control

UK Business Secretary Alok Sharma yesterday confirmed that the UK would follow World Trade Organisation (WTO) rules on subsidies and other international commitments after the end of the transition period. In a press release, the BEIS said: “The WTO rules are an internationally recognised common standard covering financial assistance granted by governments and public authorities to companies. Unlike EU member states, most advanced economies do not have substantive rules regulating subsidies beyond those set by the WTO.” In a statement to MPs, Mr Sharma insisted the change would not mean a return to the 1970’s policy of picking winners or bailing out losers. Rather the UK needed “a modern system for supporting businesses to grow” and to “maintain the flexibility to support the UK’s strategic interests”. Sharma added that a detailed plan for a post-Brexit state aid regime would not be published until next year, prompting anger in Brussels.

GOV The Times Financial Times, Page: 3 The I, Page: 6

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Paul Southward