NEWS THURSDAY 29TH OCTOBER 2020

NEWS ROUNDUP

TAX NEWS THURSDAY 29TH OCTOBER 2020

Capital Gains Tax warning for property owners

Paul Southward reminds you of the new rules for reporting capital gains on the disposal of residential property.  From April this year the time limit for reporting and paying the capital gains tax is 30 days from the date of disposal.  Failure can lead to penalties and interest charges.  If you need assistance contact Paul, meanwhile here is an explanation of the new rules: New-reporting-for-CGT-UK-Res-Prop.pdf

Further IR35 reform delay unlikely

Steven Fraser of Anderson, Anderson & Brown says that while ministers delayed the launch of the Off- Payroll Tax reform by a year amid the coronavirus crisis, the firm feels “nothing short of a significant second national lockdown will stop the changes to IR35 going ahead next April.”

The Scotsman, Page: 32

INSOLVENCY NEWS THURSDAY 29TH OCTOBER 2020

557k firms in significant distress

The latest Red Flag Alert report from Begbies Traynor suggests that a record number of businesses are on the brink of collapse, with more than half a million firms in significant financial distress. There was a 6% increase in significantly distressed businesses between Q2 and Q3, taking the total to 557,000. The jump marks the biggest quarterly increase since 2017 and pushes the total to the highest figure since the report was first published in 2014. Begbies Traynor says ten out of the twenty-two sectors it analysed have experienced double-digit percentage increases in financial distress this year. The firm’s Julie Palmer said a “combination of grim economic data and very poor trading conditions” is taking a toll and “is expected to feed through to next year’s first quarter, particularly when the Government ends its corporate life-support measures.” Meanwhile, a report from EY and TheCityUK suggests a quarter of a million companies are at risk of collapsing under £35bn of unsustainable debt.

The Times, Page: 40 Financial Times, Page: 3 Daily Mail, Page: 78 The Sun, Page: 47 The Press and Journal, Page: 29 Yorkshire Post, Business, Page: 1

ONS report reveals insolvency risk

The Office for National Statistics (ONS) has released the results of its latest Business Impact of Coronavirus Survey, finding that two-thirds of all UK firms currently trading have a “low to severe risk of insolvency.” The ONS analysis shows that 64% of businesses are at risk of insolvency, with 43% running on less than six months’ cash reserves. The report also notes that 14% of UK businesses have paused trading under local lockdown restrictions. Meanwhile, with almost 10% of the UK workforce still on partial or full furlough at the beginning of the month, the Trades Union Congress (TUC) has warned of a “tsunami” of job losses when the furlough scheme ends on October 31.

City AM

PROPERTY NEWS THURSDAY 29TH OCTOBER 2020

Property sector calls for stamp duty holiday extension

The property sector is urging Rishi Sunak to extend the stamp duty holiday by six months, with industry bodies writing to the Chancellor to warn that the sector does not have the capacity to process the enormous volume of sales in the pipeline before the tax holiday expires on March 31. Signatories, who come from bodies representing estate agents, conveyancers, surveyors and mortgage brokers, told Mr Sunak: “We are concerned that consumers continue to offer on properties expecting to benefit from the stamp duty rate reduction but in reality they may be too late.” They argue that a six-month extension would allow deals to complete and “avoid a disorderly and distressing period” for buyers and sellers – and prevent transactions “falling off a cliff edge”. This comes with analysis from data agency TwentyCi suggesting that 325,000 buyers could miss out on the tax break if the deadline is not extended.

The Daily Telegraph, Business, Page: 3 The Sun, Page: 3

Stamp duty holiday boosts property pipeline

Analysis from Zoopla shows that there are 140,000 more homes currently progressing through the system than at this time last year, with a rush to get deals over the line before the stamp duty holiday comes to an end in March 2021. The property platform says more than 400,000 property sales worth £112bn were working their way through the pipelines in October. The report says that sales agreed were up 40% to 60% between July and October compared to the same period last year, with a peak increase of 62% recorded in August. Zoopla’s price index shows that annual house price growth is running at 3%, up from 1.1% in October 2019.

Daily Mail City AM

CORPORATE NEWS THURSDAY 29TH OCTOBER 2020

M&C Saatchi profits hit

Profits at advertising group M&C Saatchi have fallen nearly 60%, with pre-tax profits hitting £2m for the six months to June. Revenues fell 30% to £149m amid “extremely challenging economic conditions” from coronavirus. The firm’s shares remain suspended after it missed a September deadline to file its annual results to December 2019. M&C Saatchi was last year caught up in an accounting scandal, having overstated profits by £11.6m despite auditor KPMG signing off the accounts.

The Daily Telegraph

EG Group downgraded

Moody’s has cut its rating on EG Group from B2 to B3, with the credit agency criticising the petrol forecourt operator for failing to improve its financial reporting and management processes following a two-year acquisition spree. Moody’s highlighted concerns around internal controls and the make-up of EG Group’s board. A spokesman for EG Group said it “strongly disagrees with Moody’s decision”. It is noted that Deloitte recently quit as EG’s auditor because of concerns over its governance and internal controls, with KPMG taking over as auditor.

The Daily Telegraph, Business, Page: 1 The Times, Page: 42 Financial Times

Southend settles tax bill

Southend United have settled tax debts worth £493,931, with a winding-up petition against the football club dismissed in the High Court.

BBC News The Guardian, Page: 42

PENSIONS NEWS THURSDAY 29TH OCTOBER 2020

Pensions dashboard scheme to come online in 2023

The Money and Pensions Service has announced that the Pensions Dashboards Programme will not be ready until 2023. Pensions minister Guy Opperman said the new timetable for the dashboards was “sensible” and would allow for extensive testing. In response, Kate Smith, head of pensions at Aegon, commented: “Although this is disappointing, we believe the delay is worthwhile using the extra time to get things right. Critical mass is needed from day one, to allow people to find the majority of their pensions.” However, Royal London’s Helen Morrissey commented: “After already progressing at a snail’s pace for some time, it is hugely disappointing to see this project further delayed.”

The I

SMEs NEWS THURSDAY 29TH OCTOBER 2020

APPG calls for BBLS replacement

The All-Party Parliamentary Group (APPG) for Fair Business Banking has called for the Government to replace the Bounce Back Loan Scheme (BBLS), with leader Kevin Hollinrake saying the group of cross-party MPs want a new scheme to be “rolled out really quickly”. While the BBLS is set to come to an end next month, Mr Hollinrake said it should be immediately replaced by “a new iteration of the scheme” that would run into the middle of 2021. Research by the APPG suggests that up to 250,000 small businesses could struggle to access the loans as they do not bank with accredited lenders. Mike Cherry, national chair of the Federation of Small Businesses, said: “With a month to go until the BBLS is set to close, it’s vital that all small firms who need access to finance can do so in a speedy fashion so as to ensure that jobs and businesses can be safeguarded for the future.”

City AM

FINANCIAL SERVICES NEWS THURSDAY 29TH OCTOBER 2020

EY: Scotland appeals as a financial services destination

An EY report on Scotland’s finance sector suggests the country will top the rankings of key European finance hubs for life satisfaction in 2021. The report said Scotland had “consistently” improved its life satisfaction score in relation to European peers, including the UK as a whole, the Netherlands, Ireland, Germany, France and Luxembourg. Scotland has risen from fourth in 2011 to second in 2016, and will be top in 2021, said EY. Sue Dawe, head of financial services at EY in Scotland, said the nation had an “extremely strong case to compete” as a finance hub.

The Scotsman, Page: 45

Banks could follow rivals on fees

With it suggested that some banks may look to introduce charges for current accounts, experts believe that rivals will be quick to follow suit once charges for basic banking services are in place. Simon Westcott, a financial services expert at PwC, predicts that “the industry would seek to move quite quickly together” if one bank starts charging.

The Daily Telegraph, Business, Page: 1

ECONOMY NEWS THURSDAY 29TH OCTOBER 2020

Economists call for extended support measures

Economists have urged Chancellor Rishi Sunak to extend the furlough scheme and increase support for businesses amid concern increasing rates of coronavirus infections could result in a nationwide lockdown that could trigger a double dip recession. Capital Economics and Oxford Economics say Government support must be upgraded if lockdown measures are extended, warning of the risk of a higher rate of business closures and an economic slump. Oxford Economics economist Martin Beck urged ministers to announce a “bigger and bolder” rescue package that would protect the economy under tougher lockdown rules. Lord Skidelsky, emeritus professor of political economy at Warwick University, called for protection measures to be extended but warned that “even with generous support there are going to be many redundancies as the economy slows down”, while Lord Jim O’Neill, a former City economist and Treasury minister, said that if minsters pledge to replace the income of firms unable to trade under lockdowns, “they stand a chance of making it through the winter.”

The Guardian

CBI chief: Deal delay leaves economy in ‘suspended animation’

Outgoing CBI boss Dame Carolyn Fairbairn says the economy has been left in “suspended animation” by the failure to secure a trade deal with the EU despite the end of the transition period edging closer. She said: “The economy has gone into suspended animation while we resolve this seismic issue. I hope we can have a resolution so we can move on.” Dame Carolyn also rejected the suggestion that the UK would prosper under a no-deal scenario, saying an agreement with the bloc would be “enormously better” than none. She told the Guardian: “The thing that’s painful is that it has taken so long to get to a resolution. I think we will get a deal. The remaining issues look soluble.”

The Independent The Guardian

OTHER NEWS THURSDAY 29TH OCTOBER 2020

Amazon’s Xmas shoppers set to spend £400 each

With Amazon customers expected to spend £400 each on the website in the run up to Christmas, Laura Onita in the Telegraph notes that Deloitte last year found that UK consumers planned to spend £250 online in the run up to Christmas.

The Daily Telegraph, Business, Page: 3

Contact Paul Southward