NEWS – THURSDAY 25TH FEBRUARY 2021

NEWS ROUNDUP

REMINDER TO FILE SELF-ASSESSMENT TAX RETURNS

For anyone who missed filing their 2019/2020 self-assessment tax return, a reminder that the extended filing deadline ends on 28th February 2021.  Filing after this date could lead to a £100 penalty.  A reminder also to pay any tax due by 1st April 2021 at the latest, to avoid a 5% late payment surcharge.

If you need help with your tax affairs – contact Paul Southward or your usual KSK contact.

TAX NEWS – THURSDAY 25TH FEBRUARY 2021

Sunak to use US example for corporate tax increase

Rishi Sunak is expected to announce a sharp rise in Britain’s corporation tax rate with officials suggesting the rate could rise to 25% or more over the course of the parliament. The Chancellor will point to US plans to hike the tax and the fact that the UK’s rate will remain competitive within the G7. Meanwhile, Labour leader Sir Kier Starmer indicated that his party would oppose any rise in corporation tax. Sir Kier, who stood on a 2019 manifesto to raise corporation tax to 26%, told MPs it was “not the time for tax rises for families and for businesses.” After a backlash, the position was softened with a Labour source saying last night that the party would back a steady minimal increase later in the parliament. The Mail reports that the Chancellor is expected to shelve plans to raise fuel duty and intends to extend the stamp duty holiday until the end of June. The Express leads with news that senior Tory figures and business groups are urging Mr Sunak not to increase the tax burden and focus instead on freeing businesses to spur a recovery.

Financial Times The Times, Page: 2 Daily Mail, Page: 1 Daily Express, Page: 1, 4-5 The Guardian, Page: 1, 2

New freelancers could miss out on Covid payout

The Government has considered extending the self-employed income support scheme to new freelancers, the Telegraph reports, but civil servants raised concerns over the number of freelancers yet to file their returns. Reportedly, some 1.5m people are yet to sort out their taxes, after HMRC said no one would face fines as long as they filed by the end of February. Andy Chamberlain of IPSE, a freelancer trade body, said: “It would be a major kick in the teeth for people who have taken advantage of lenient tax return rules to be penalised.”

The Daily Telegraph, Business, Page: 5

Barclay sets out free port rules

Stephen Barclay, the Chief Secretary to the Treasury, told MPs on Wednesday that free ports planned for the UK would not be allowed to provide tax breaks to those wanting to import luxury goods. Those bidding to host the ports must demonstrate that they will help regenerate the local area, Barclay added, while other officials warned that ministers had the power to “de-designate a tax site if there is lots of non-compliance”.

Express & Star

Surge in phone scams recorded

Reports of fraudsters calling taxpayers pretending to be from HMRC surged 200% between December and January – from 10,997 to 33,053 – the Revenue said. Scammers usually offer fraudulent rebates but they have also threatened legal action over unpaid tax or sent emails or texts offering fake government support or grants.

BBC News Daily Express, Page: 2

City lobby group calls for tech boost

TheCityUK has called for the launch of a tax simplification programme in Rishi Sunak’s Budget, which it says would “have a positive impact on inward investment and the overall attractiveness of the UK’s business environment”.

City AM

REGULATION NEWS – THURSDAY 25TH FEBRUARY 2021

BoE governor warns EU over derivatives clearing power grab

Attempts by Brussels to force banks to move all clearing of euro-denominated derivatives from London to the eurozone risks a “serious escalation” in tensions in its relations with the UK, Andrew Bailey warned yesterday. Brussels has granted EU banks temporary access to UK-based clearing houses but expects them to move their euro-denominated trades into the bloc by mid-2022 when equivalence lapses. The governor of the Bank of England told MPs the EU have their eye on forcing other overseas banks to shift their euro-denominated trades to the eurozone too in a resurgence of the EU’s location policy. “The issue of location policy is not a new one,” he said. “It would be very controversial in my view because legislating extraterritorially is controversial anyway, and obviously of dubious legality frankly.” Mr Bailey went on to say that an agreement with the EU on financial services was preferable, but “there ’s a point beyond which the deal is not worth having”.

Financial Times The Times The Daily Telegraph Daily Mail

High Court orders FCA to halt Danish tax fraud probe

The High Court has ruled that the FCA should stop disciplinary proceedings against a businessman accused of defrauding Danish authorities while judges decide a lawsuit brought by the country’s Tax Administration.

Financial Times

CORPORATE NEWS – THURSDAY 25TH FEBRUARY 2021

Asda’s new owners appoint another heavyweight director

The Issa brothers have appointed another senior director to their petrol station empire as they move to assuage concerns over corporate governance. Dame Alison Carnwath will join the board of EG Group as the head of the audit committee, Mohsin and Zuber Issa announced. The Mail notes that Deloitte resigned in October as auditor due to concerns over governance and internal controls.

Daily Mail, Page: 79

Ratesetter may need more financial support

Ratesetter faces “material uncertainty” over its status as a going concern, according to its latest accounts. EY said that the company “may not have sufficient capital to continue to meet its regulatory capital requirements” unless Metro Bank, which bought the peer-to-peer lender last year, injects more funds.

The Times, Page: 39

EMPLOYMENT NEWS – THURSDAY 25TH FEBRUARY 2021

The future promises a ‘hybrid’ approach of working

The Scotsman considers the future of work since the pandemic has altered practices so acutely. A report from specialist recruiter Robert Half found that about 90% of UK firms expect hybrid workforces to become a permanent part of working life. The report comes after PwC said in December that it was reviewing the layout and technology of all of its offices to ensure they were “best equipped for a hybrid working world”. KPMG later said it was “preparing for a future of hybrid working,” and this year will spend a further £44m to transform its offices and invest in new home working technology for staff.

The Scotsman

PENSIONS NEWS – THURSDAY 25TH FEBRUARY 2021

Cut to pension tax relief inevitable

The Express reports that Rishi Sunak could slash pension tax relief, citing Tim Stovold of Moore Kingston Smith who said a cut was inevitable as the benefit was too generous. However, the change may not necessarily come in this Budget as it doesn’t immediately collect large amounts of tax.

Daily Express

ECONOMY NEWS – THURSDAY 25TH FEBRUARY 2021

Lifting restrictions should see economic bounceback

The governor of the Bank of England told MPs on Wednesday that the economy was performing better than expected considering the Covid restrictions, citing the adaptability of the British people. Andrew Bailey said the Prime Minister’s reopening roadmap should result in the economy growing rapidly over the next six months, getting GDP back to its pre-Covid levels by early 2022. Ben Broadbent, Deputy Governor for Monetary Policy, added that experience from last summer suggested that when restrictions are lifted there should be a bounceback in spending.

The Daily Telegraph

ACCOUNTANY NEWS – THURSDAY 25TH FEBRUARY 2021

KPMG close to selling UK restructuring business

KPMG has entered into exclusive talks with private equity firm HIG Europe about the sale of its UK restructuring business, according to Sky News. Reports indicate that HIG has lined up John Connolly, the former chairman of Deloitte, to chair the business. If the deal goes ahead, it will represent the most valuable disposal to date by one of Britain’s big four auditors. The news comes a week after Deloitte confirmed that it was selling its restructuring arm to Teneo. Sky News notes that the Big Four have all submitted plans to the Financial Reporting Council demonstrating how they intend to ‘operationally separate’ their audit and consulting arms during the next four years.

Sky News City AM

Contact Paul Southward

Paul Southward