NEWS – THURSDAY 30TH JULY 2020

NEWS ROUNDUP

TAX NEWS – THURSDAY 30TH JULY 2020

HMRC withdrawing more APNs than the number it issues

New figures reveal that HMRC withdrew more tax demands sent to those suspected of using unlawful avoidance schemes than were issued in 2019. Some people who received such Accelerated Payment Notices (APNs) have sold their homes or taken out loans, before demands were later withdrawn. Richard Morley of BDO remarked: “It’s all very well for those with the means to pay, as if the APN is later withdrawn and the individual is vindicated they will get their money back. But for those who can’t pay they have to raise the money or risk penalties later down the line if they refuse to pay straight away,” while a spokesman for HMRC defended APNs, saying they had “successfully changed the economics of avoidance” in recent years.

The Daily Telegraph

Wolfson in digital tax warning

Next boss Simon Wolfson has warned that a digital sales tax could hurt the high street by hitting the click-and-collect model. Lord Wolfson said of the mooted levy: “There is a potential for a massive own goal [from the Treasury],” adding: “It could severely reduce the number of people going to the high street if click and collect is taxed.”

The Daily Telegraph, Business, Page: 1

REGULATION NEWS – THURSDAY 30TH JULY 2020

FRC fines BDO for first time

BDO has been fined £200,000, reduced to £160,000 for early admission of errors, by the Financial Reporting Council for rule breaches in its work on international insurer AmTrust Europe’s accounts. Jamie Symington, Deputy Executive Counsel to the FRC, said: “The failings in this case related to an area of high audit risk, namely the consideration of an insurance company’s approach to its provision for claims. The Auditors relied on the opinions of independent expert actuaries without taking sufficient steps to gain an understanding of or to evaluate their work.” The FRC said the fine, which included a reprimand for BDO partner David Roberts, reflected that BDO and Mr Roberts have a good compliance history and disciplinary record with no prior sanctions. BDO is required to implement a training programme to improve how it obtains and evaluates independent actuarial audit evidence. The firm said it was “extremely disappointed” that its audit work did not meet the required standards, adding that the shortcomings had been addressed.

The Daily Telegraph, Business, Page: 7 Financial Times, Page: 10 The I, Page: 48 Daily Mail

CORPORATE NEWS – THURSDAY 30TH JULY 2020

Aston Martin errors see losses understated

Aston Martin understated the scale of last year’s losses, after its new owners identified discrepancies in payments to US dealers dating back to 2018. Pre-tax losses in 2019 were understated by £15.3m as a result, with the firm making a loss last year of £70.9m compared with an initial figure of £55.6m. Chief financial officer Kenneth Gregor blamed a “simple error or misunderstanding.”

The Guardian Financial Times, Page: 10 Evening Standard

Pre-pack hit Monsoon creditors

Unsecured creditors of Monsoon Accessorize are owed more than £132m after founder Peter Simon bought it back out of administration in a pre-pack rescue deal managed by FRP. The administrator’s proposals show that creditors include landlords, suppliers and local authorities, with the Times noting that potential returns to unsecured creditors remain unclear and depend on the realisation of assets by FRP and the claims agreed.

The Times, Page: 44

EMPLOYMENT NEWS – THURSDAY 30TH JULY 2020

Minister warns against extending furlough scheme

Steve Barclay, chief secretary to the Treasury, has cautioned against extending the government’s furlough scheme, commenting: “For people to be out of the labour market for too long period is not a good outcome.” The scheme has now cost the taxpayer £31.7bn, an increase from £29.8bn a week ago, according to new data. Meanwhile Caroline Abrahams, director of Age UK, remarked: “For the sake of employers as well as their staff, we call on the Government to implement a new furlough-style support scheme at the current 80% level for workers who are shielding or who are exceptional risk from the virus, if August 1 is too early for them to return safely to work.”

The Daily Telegraph

No rush for office returns

A survey of 94 of Britain’s biggest employers by the Chartered Governance Institute and governance recruitment specialist The Core Partnership shows half plan to keep all staff working remotely for the next few months, a fifth plan to bring staff back to the office only on a part-time basis and around a fifth plan to bring staff back full time. The Times notes that PwC is planning for about half of its 22,000-strong UK workforce to return to the office by the end of September.

The Times, Page: 9

Pandemic to deliver work shift?

Craig Vickery, head of ACCA Scotland, looks at what the coronavirus crisis will mean for firms, reflecting that while the physical world of work “looks likely to be very different”, the nature of work and the skills needed may also see a shift. He says the ACCA has “been at the forefront of upskilling and re-skilling our members to equip them to face the ever-changing world of financial services”.

The Scotsman, Page: 28

SMEs NEWS – THURSDAY 30TH JULY 2020

EU rules on business loans eased

More small firms will be able to secure government-backed loans under the coronavirus business interruption loan scheme after the European Commission (EC) agreed to relax competition rules which had prevented some accessing emergency support due to their debt and accumulated losses. The Treasury has agreed with the EC that businesses in this category with fewer than 50 employees and a turnover of less than £9m can now apply for the loans

The Times, Page: 47

PROPERTY NEWS – THURSDAY 30TH JULY 2020

Prime house price growth slowest in 11 years

House price growth in global prime residential markets slowed to the lowest rate in 11 years in June, with Knight Frank’s prime global cities index increasing 0.9% in the year to June, down from 2.3% in March. London was one of the poorest performers, with prime property prices down 5% in the 12 months to June and 3.7% in Q2.

City AM

ECONOMY NEWS – THURSDAY 30TH JULY 2020

BoE: Record dip in debt while home loans bounce back

The Bank of England (BoE) says the amount consumers owed on credit cards and loans fell by a record amount over the last 12 months. A slump in borrowing and spending since March has seen the amount households owe on credit cards and loans fall from £225.3bn in February to £207.1bn in June, marking a 3.6% drop on the amount outstanding in June 2019. The reduction in outstanding debt is the largest year-on-year fall since records began in 1994. Alistair McQueen at Aviva said households “have repaid five years of credit card debt in just five months”. Howard Archer, senior economic adviser at the EY Item Club, said: “Consumer confidence remains well below the levels seen in February which is likely to be encouraging many people to cut back on their borrowing if they can.” Meanwhile, BoE figures show mortgage approvals increased to 40,010 last month, a significant jump from the 9,300 recorded in May. The Bank’s monthly money and credit report said: “The mortgage market showed some signs of recovery in June but remained relatively weak in comparison to pre-COVID,” with figures showing that February saw 73,700 mortgage approvals.

The I, Page: 47 Daily Mail Financial Times, Page: 2 The Times, Page: 48 Daily Express, Page: 47 The Sun, Page: 47

Contact Paul Southward

Paul Southward