NEWS – THURSDAY 14TH JANUARY 2021

NEWS ROUNDUP

TAX NEWS – THURSDAY 14TH JANUARY 2021

Stamp duty holiday extension could add 100k property sales

Research suggests that extending the stamp duty holiday until the end of 2021 would unlock 100,000 extra home sales and could help prevent a slump in the property market. The report from estate agent Hamptons International suggests that extending the tax break for nine months beyond the current cut-off would boost transactions by around 10% this year, accounting for 100,000 extra sales and driving the total to 1.2m. The stamp duty holiday is set to end on March 31 but Chancellor Rishi Sunak is facing calls to push back the deadline so more buyers can benefit, with a petition calling for a six-month extension drawing almost 77,000 signatures so far. Daniel Pryor of the Adam Smith Institute has expressed concern that ending the stamp duty holiday “will seriously threaten Britain’s economic recovery”, while Samuel Tombs, of Pantheon Macroeconomics, said the housing market “will fall into a deep slumber”; when the tax break is removed. Tom Clougherty, head of tax at the Centre for Policy Studies think-tank, believes stamp duty “reduces sales, messes up the housing market, and hurts the economy”, saying the Chancellor should make current stamp duty rules permanent “at a minimum” but feels “there would be significant economic benefits to further cuts – or even abolishing this dreadful tax once and for all.” Elsewhere, a Telegraph editorial calls on Mr Sunak to make the stamp duty holiday permanent, saying it has “been a remarkable showcase of the power of tax cuts to stimulate economic activity.” It adds that the Chancellor’s plan to end the stamp duty holiday in March is “ill-considered”. Meanwhile, Allister Heath in the same paper also calls for the stamp duty holiday to become permanent, describing the levy as “one of the most destructive and irrational taxes in Britain.”

The Daily Telegraph, Business, Page: 1 The Daily Telegraph The Daily Telegraph, Page: 16

Paul Southward is not convinced that these suggestions would prove beneficial to the economy in the long term.

Self-employed must declare SEISS grants in tax returns

Self-employed taxpayers have been told they must declare COVID-19 grants in future tax returns, with money handed out under the Self-Employment Income Support Scheme subject to income tax and self-employed national insurance. The warning comes with a poll from GoSimpleTax seeing 46% of sole traders say they did not believe this information needed to be included. Under current HMRC rules, any government support received during the pandemic must be included in 2020/21 tax returns. Mike Parkes, technical director at GoSimpleTax, said it is “essential to understand the implications and tax liabilities that come with these emergency measures.” He added: “While it’s next year’s tax bill that will be dominated by coronavirus, it will pay to get ahead of the curve.”

Daily Express

Quarter of self-employed to delay paying tax

A report from consumer group Which? shows that one-in-four self-employed workers plan to delay their tax bill amid financial struggles stemming from the coronavirus crisis. The report shows that 25% of the 4,000 people surveyed are hoping to delay the payment due on January 31, while one in five have already deferred July 2020’s tax payment. One in six taxpayers said they either did not know how they planned to settle their tax bill or had not thought about it yet.

The Independent, Page: 46

Tax cheats in the spotlight

Andrew Penman in the Mirror suggests that tax dodgers are not “treated with the contempt they deserve”, saying “cheats usually get away with little publicity” before going on to list cases that have drawn scant press attention. He notes that tax offences are the most common reason for someone being banned from being a director, highlighting Insolvency Service figures for the last financial year showing that of 1,346 director disqualifications, 711 cases were for “unfair treatment of the Crown”. He notes that HMRC has prosecuted 4,123 people since 2016 and last year raised an extra £5bn by tackling non-compliance.

Daily Mirror, Page: 22

Citizens Assembly calls for greater devolution of tax

A report from the Citizens’ Assembly has detailed the powers it feels should be transferred from Westminster to the Scottish Parliament, with the assembly saying more tax powers should be devolved and “used innovatively” to end poverty. The Assembly consisted of a group of 100 Scots broadly representing the people of Scotland in terms of demography, geography and political views.

The Scotsman

INDUSTRY NEWS – THURSDAY 14TH JANUARY 2021

IIA calls for audit reform

John Wood, CEO of the Chartered Institute of Internal Auditors, says recent changes to rules surrounding audit in Singapore have highlighted why action on audit reform in the UK is necessary, suggesting reform is needed to protect the UK’s reputation for strong corporate governance. Singapore has ruled that all primary-listed issuers must appoint an auditor registered with its Accounting and Corporate Regulatory Authority to conduct their statutory audits. Mr Wood says he would like to see similar changes in the UK. He also said the institute “urges consistency in implementing recent proposals from the Financial Reporting Council to split up the Big Four’s audit practices.” He added: “Given the risk firms could interpret the proposed principles differently, the Chartered IIA is calling for greater consistency in applying them at an operational level, something we believe is fundamental to their effectiveness and to ensure a level playing field”.

City AM

EMPLOYMENT NEWS – THURSDAY 14TH JANUARY 2021

400k high street roles at risk

A shift toward online shopping and remote working amid the coronavirus crisis could see more than 400,000 high street jobs lost, analysis by KPMG suggests, with towns in the London commuter belt said to be most at risk. The study forecasts that offices will largely become “collaboration hubs”, with this likely to reduce the flow of commuters into towns and cities by between 10% and 27% compared to pre-pandemic levels. This will hit retailers and restaurants in town centres, with many of these dependent on commuters for sales. KPMG says high streets could lose between 20% to 40% of their shops, cafes and other businesses, with this affecting up to 5% of the local workforce. Chris Hearld, head of regions at KPMG, said: “As we leave the pandemic behind, towns and cities across the UK will need help and space to rethink the purpose of their centres,” while Yael Selfin, chief economist at KPMG, commented: ” High streets will need to be reimagined as cultural and recreational hubs to act as magnets for businesses and jobs able to transform less prosperous areas.”

The Guardian, Page: 33 Daily Mail, Page: 78 The Independent, Page: 42

Seven in ten furlough requests from working mums rejected

A TUC survey of more than 50,000 working mothers found that 71% of those who asked to be furloughed following school closures were turned down. The study found that two in five working parents were unaware they have been entitled to request furlough since March, with the job retention scheme allowing employers to furlough parents unable to work due to school or nursery closures. The poll shows that 78% of working parents have not been offered furlough by their employer, while 25% of mums are using annual leave to manage their childcare, 18% have been forced to reduce their working hours and 7% are taking unpaid leave.

Daily Mirror

Staff mental health hit by pandemic

Research by Purbeck Insurance Services shows that 66% of female employees at SMEs and 62% of male staff feel their mental health has suffered as a result of the pandemic. This comes after an Aviva poll found 58% of employees had neglected their physical well-being due to work pressures since the coronavirus outbreak, with 55% failing to look after their mental well-being. The Telegraph notes that a growing number of large employers now give employees access to wellness apps such as Unmind, with KPMG among those making the app available to staff.

The Daily Telegraph, Business, Page: 4

CORPORATE NEWS – THURSDAY 14TH JANUARY 2021

Debenhams shuts London flagship

Debenhams has confirmed that its flagship Oxford Street store in London is to close permanently, as are branches in Portsmouth, Staines, Harrogate, Weymouth and Worcester. The closures will mean the loss of 320 jobs. Administrator FRP Advisory said it is continuing to talk with potential suitors over the sale of all or parts of the business. Geoff Rowley at FRP Advisory, said the latest coronavirus lockdown “has had an effect on our plans for the wind-down of the business.”

Daily Mail, Page: 78 The I, Page: 43 Financial Times, Page: 10 The Daily Telegraph Daily Mirror, Page: 11 Daily Star, Page: 9 The Guardian

Europe’s football giants see €1bn loss

Analysis from KPMG shows that twenty of Europe’s biggest football clubs lost more than €1bn in revenue over the past year, with pressure brought about by the coronavirus crisis also knocking almost 10% off players’ average values. A 20-team sample of European sides calculated an aggregate loss of revenue of €1bn. Of the sampled teams only two had an increase in revenue over last season.

The Guardian, Page: 43

PROPERTY NEWS – THURSDAY 14TH JANUARY 2021

FCA extends repossessions ban

The Financial Conduct Authority (FCA) is extending its ban on house repossessions until April, saying it is taking the worsening pandemic and the Government’s tighter coronavirus-related restrictions into account. Under previous guidance, banks were told not to enforce repossessions before January 31 except in exceptional circumstances. The FCA has now said people who fall behind with mortgage payments will be given a grace period until April 1. Amid the pandemic, many customers have been protected by payment holidays, with mortgage borrowers and those on short-term credit agreements still able to apply for a pause on payments until March 31.

The Daily Telegraph, Business, Page: 1

ECONOMY NEWS – THURSDAY 14TH JANUARY 2021

Report reveals change in expenses

Analysis by uSwitch shows that, for the average household, rent and council tax have risen more than any other household expenditure in the past fifty years. The study, which looked at the proportion of typical household income spent on costs such as bills, rent and food, found that people typically spend 15.47% of their salaries on rent, compared to just 10% in 1970. It was also found that utilities are costing people 5% more now than they did in the 1970s, with the average Briton spending £1,279 a year on fuelling their home in 2019. The study highlights changes over the past 50 years which have influenced household income, such as the introduction of the national minimum wage and the increase in women taking up paid work. It also notes that student loans and credit card fees are a financial outgoing that did not exist in the 1970s, with these now making up almost 6% of household spending.

The Scotsman

OTHER NEWS – THURSDAY 14TH JANUARY 2021

Phone wipe call

The Mail looks at sales of recycled phones amid research from cyber security firm Kaspersky showing that many previously used phones are sold with private information still on them. The National Cyber Security Centre has urged consumers to ensure data is properly wiped from devices so as to ensure it does not fall into the hands of criminals. Analysis from EY-Parthenon, a consultancy firm that is part of EY, estimates that 30% of all smartphones are re-sold, totalling 8.1m phones a year.

Daily Mail, Page: 28

Contact Paul Southward

Paul Southward