NEWS – THURSDAY 21ST MAY 2020
NEWS – THURSDAY 21ST MAY 2020
TAX NEWS – THURSDAY 21ST MAY 2020
PwC sued by Matalan founder in tax dispute
PwC is being sued by John Hargreaves, founder of discount retailer Matalan, claiming the firm’s advice on how to avoid paying taxes when he relocated to Monaco constituted negligence. Mr Hargreaves said PwC had advised him that he was allowed to continue to work at Matalan’s UK offices and to “sleep at [his] UK house for two or three nights a week” even after his move, after paying tens of millions to HMRC following an investigation which began in 2004. PwC issued a statement saying: “We believe this claim will ultimately fail and are seeking to strike out aspects of the claim.”
William Hill foresees up to £150m windfall after HMRC decision
William Hill has announced a possible tax windfall of as much as £150m after the betting industry was overcharged VAT on FOBT machines in betting shops. This follows an announcement from HMRC that it would not appeal a tribunal ruling on the matter. The firm stated: “Whilst William Hill currently expects the net cash recovery to be material, its precise quantum remains uncertain. Nevertheless, the board has considered a number of scenarios which suggest a potential net cash recovery of between £125m and £150m.”
The Times, Page: 34 The Daily Telegraph, Business, Page: 7 Daily Express, Page: 49
There has never been a better time to make Big Tech pay its way
Marietje Schaake asserts in the FT that big tech companies should be first in line for tax hikes when governments turn to raising cash to pay for the coronavirus crisis.
CORPORATE NEWS – THURSDAY 21ST MAY 2020
Don’t increase debt, Bailey tells companies, raise equity instead
Bank of England governor Andrew Bailey has told large companies that they must take responsibility for the debt they accrued prior to the coronavirus crisis. Mr Bailey told MPs on the Treasury select committee yesterday that overleveraged businesses unable to access cheap government-guaranteed debt should look to raise finance on equity markets instead of adding to their debts. “They were over-indebted before coronavirus came around and I’m afraid they will have to take responsibility for sorting that out,” he said.
PENSIONS NEWS – THURSDAY 21ST MAY 2020
Pension providers cleared of responsibility in mis-selling claims
A landmark High Court ruling has seen Sipp provider Carey Pensions win its case against a former client who claimed he was mis-sold a pension in 2012. The Telegraph reports that the ruling “has consequences for investors who put money into unregulated schemes via Sipps prior to July 2014,” noting that “Courts have now sided with pension firms that they cannot be held accountable for poor quality investments chosen by savers.” Christine Hallett, of Carey Pensions, commented: “It has given a much better understanding of the legal relationship between an introducer and the Sipp provider which will provide valuable guidance for savers.”
Government figures reveal under half of retirees receiving full state pension
Figures published by the Department for Work and Pensions reveal that just 44% of people reaching the state pension age since the introduction of the new state pension four years ago receive the full rate, with reforms disproportionately affecting those who were “contracted out” during their working lives, according to the Telegraph. Stephen Lowe, of retirement income specialist firm Just Group, is quoted as saying that many older households depend on the state pension and benefits, remarking: “Together they make up around £4 in every £5 of income for the poorest pensioner households and around half of income for the average pensioner household.”
REPORTING NEWS – THURSDAY 21ST MAY 2020
Means of valuing the outcome of litigation contentious
The Times runs through some of the attacks by short-seller Muddy Waters on litigation funder Burford Capital. One of the key complaints from Muddy Waters is Burford’s practice of recognising revenue from unfinished cases, so-called fair value accounting. But lawyers have defended Burford’s use of the method. Nicola Foulston, chief executive of Rosenblatt, says the problem lies with international financial reporting standards which do not allow properly for this type of product.
SMEs NEWS – THURSDAY 21ST MAY 2020
Six new lenders accredited to British Business Bank CBILS
The British Business Bank has announced that it has approved six new lenders for accreditation under the Coronavirus Business Interruption Loan Scheme (CBILS): Bibby Financial Services, iwoca, Scania Financial Services, Triodos Bank UK, Ulster Community Investment Trust (UCIT), and Woodsford TradeBridge. Following their approval, each lender will be putting in place the operations required to start lending under the scheme and will confirm shortly the dates from which they will be ready to start receiving CBILS applications from smaller businesses across the UK.
Coronavirus Statutory Sick Pay Scheme to launch next week
A new online service will launch on May 26th for SME employers to recover Statutory Sick Pay (SSP) payments they have made to employees due to the coronavirus, the Government has announced. Employers are eligible if they have a PAYE payroll scheme that was created and started before 28th February 2020 and they had fewer than 250 employees before the same date.
SMEs suffer worsening mental health amid COVID-19 pressures
The latest weekly ACCA UK and The Corporate Finance Network (The CFN) SME Health Tracker finds that 89% of accountants say their SME clients have reported feeling more stressed than usual amid the COVID-19 pandemic, with 78% stating a worsened mental health condition, 56% unable to cope and 11% sharing the fact they’ve had suicidal thoughts.
PROPERTY NEWS – THURSDAY 21ST MAY 2020
Court win for supermarkets over cash machine tax
The Supreme Court yesterday ruled against the government’s Valuation Office Agency and said supermarkets did not have to pay business rates on cash machines. Colliers International has estimated that retailers are due refunds of up to £500m.
ECONOMY NEWS – THURSDAY 21ST MAY 2020
Bonds with negative yield sold by UK government for first time
Policymakers are coming under increasing pressure to take new action to boost the economy, as the UK sells bonds with a negative yield for the first time. The sale reflects rising expectations that the Bank of England will increase its £200bn bond purchase programme next month. Meanwhile, BoE governor Andrew Bailey told MPs that the possibility of negative rates was being kept under review. Such a move could be used to persuade companies to spend rather than pay to hold money in banks.
ONS reveals price fluctuations as inflation rate falls
Figures from the Office for National Statistics (ONS) show that the UK’s inflation rate fell last month to its lowest since August 2016, while the prices of games and toys was up, which the ONS attributed to people spending more time at home. Jonathan Athow, deputy national statistician for economic statistics at the ONS, commented: “While the coronavirus limited the availability of some goods and services, its effect on prices was more muted.” Meanwhile, average petrol prices dropped by 10.4p a litre between March and April, while clothes retailers launched more discount sales than usual.
INDUSTRY NEWS – THURSDAY 21ST MAY 2020
FRC chair to step down
Simon Dingemans, chairman of the Financial Reporting Council, is to step down at the end of the month. Mr Dingemans is expected to return to a more full-time role in the private sector. BEIS will now take forward the appointment of a new FRC Chair. The FRC said Dingemans’ other roles had proved incompatible with his job at the regulator, which takes up three days a week. Michael Izza, chief executive of the ICAEW, said Mr Dingemans’ departure was a “setback”, adding: “We would hope the FRC will be able to appoint someone of equal stature in the near future.” Elsewhere, Scott Knight, head of audit at BDO, fears the move will hurt the pace of audit reform: “The train has left the station and he has got off at a crucial point.”
REGULATION NEWS – THURSDAY 21ST MAY 2020
Insolvency law shake-up to protect UK companies during pandemic
Legislation introduced in the House of Commons yesterday temporarily bans landlords from making legal claims for rent owed by businesses hit by COVID-19. The move, described by Colin Haig, president of restructuring trade body R3, as the biggest shake-up of insolvency laws for two decades, is designed to head off a rash of coronavirus-induced bankruptcies. The Corporate Insolvency and Governance Bill also includes a relaxation of “wrongful trading” provisions that hold bosses personally liable if a firm continues to operate when insolvent and introduces “light-touch” administration to allow companies hit by the pandemic more time to get back on their feet.
OTHER NEWS – THURSDAY 21ST MAY 2020
Treasury set to curb property investments by councils
The FT reports that councils could be banned from borrowing money through the Public Works Loan Board to invest in commercial property – which has become more common as councils seek to make up for funding cuts.
Contact Paul Southward