NEWS – THURSDAY 4TH FEBRUARY 2021

NEWS ROUNDUP

TAX NEWS – THURSDAY 4TH FEBRUARY 2021

Self-Assessment Tax Returns 2019/20

HMRC have reported that more than 10.7m people submitted their 2019–20 Self-Assessment (SA) tax return by the 31 January 2021 deadline.

The remaining 1.8m whose tax return is now late will not be charged a late filing penalty provided they submit their return online by 28 February. This easement is for late filing penalties only and does not affect any other tax obligations. A return received in February will be treated in the same way as a return filed in February in a ‘normal’ year where there is a ‘reasonable excuse’ – the penalty will not be charged but the return is treated as late for the purposes of enquiry windows, etc.

Taxpayers should pay any outstanding balance, or arrange a payment plan, before 3 March 2021 to avoid a 5% late payment penalty.

If you need help with your tax affairs or guidance on avoiding a penalty for submitting a late tax return, get in touch with Paul Southward or your usual KSK contact.

KSK BUSINESS UPDATE JAN/FEB 2021

We have published our latest guide to topical matters covering a range of topics from VAT, CGT Brexit and more. have a look here:

KSK_Business_Update

Stamp duty holiday sees £530m in lost taxes

HMRC figures show that the stamp duty holiday rolled out to stimulate the housing market amid the coronavirus crisis has seen the Government’s tax take slip by more than half a billion pounds. The figures show that overall stamp duty receipts fell 16% to £2.76bn in Q4, compared to £3.29bn in 2019. The £530m drop in receipts comes despite a 14% increase in the number of transactions. The analysis also shows that stamp duty receipts in Q4 were up 47% compared to the third quarter. Chancellor Rishi Sunak has been urged to extend the tax cut so as to further help the property sector while the impact of the coronavirus outbreak continues, with MPs debating the matter earlier this week after an online petition calling for the March 31 cut-off to be pushed back was signed by 140,000 people.

City AM The Independent

IFS director expects tax rises

Paul Johnson, director of the Institute for Fiscal Studies, believes taxes will have to rise, telling MPs on the Treasury Select Committee that the public are likely to demand increased spending on health, education and social care in the wake of the pandemic. Suggesting that “in three or four years” the economy will probably be smaller than it would have been without the pandemic, he commented: “It is pretty unlikely that taxes won’t rise as a fraction of national income.” However, Julian Jessop of the Institute for Economic Affairs expects a stronger economic rebound, saying that if public finances continue to beat Office for Budget Responsibility forecasts, “we’ve got a good chance of getting through this crisis without the need to raise taxes.”

Daily Mail, Page: 10 The Sun, Page: 2

CORPORATE NEWS – THURSDAY 4TH FEBRUARY 2021

Tax demand as Amazon’s sales surge

Demand for online retail driven by the coronavirus outbreak and lockdowns has seen Amazon’s UK sales rise 51% to a record $26.5bn (£19.4bn) last year, prompting calls for it to make a greater tax contribution. The firm has not detailed how much tax it paid in the UK last year but it has faced criticism after paying just £293m in tax in 2019 despite UK sales of $17.5bn. Paul Monaghan, chief executive of Fair Tax Mark, said it was unlikely the jump in UK sales would lead to any sizeable increase in UK tax paid because “a good proportion” of Amazon’s UK sales will be booked in Luxembourg, “where they engineered a near €1bn loss last year”. He said this is likely to lead to Amazon “racking up hundreds of millions of tax credits that will be used to offset future profits that might have otherwise generated tax contributions”. He added that Amazon’s tax contribution “continues to be miserly”.

The Guardian, Page: 28 The Times, Page: 33

Asda owners split off petrol stations

Asda’s new owners plan to sell its petrol station network and some of its distribution centres while taking on £3.5bn worth of debt, with Mohsin and Zuber Issa and TDR Capital set to offload the petrol stations to their own EG Group for £750m. Reporting the news, the Times and FT both note that Deloitte resigned as EG’s auditor in October, citing governance concerns.

The Times Financial Times, Page: 12 The Guardian

Law firms see profit despite pandemic

Analysis shows that around 90% of UK law firms have recorded profits since last March, with a poll by MHA suggesting that about half of firms reported either no or a minor impact on their fee income as a result of the pandemic as of the end of 2020.

The Times, Page: 53

EMPLOYMENT NEWS – THURSDAY 4TH FEBRUARY 2021

Two in three fear worse job market in 2021

Research by skills development firm City & Guilds Group suggests that 65% of people expect the job market to be worse in 2021 than it was in 2020. Analysis shows that while job postings were up 57% year-on-year at the start of March 2020, they had slipped 54% year-on-year by April 5. The survey, conducted alongside analytics software company Burning Glass Technologies, shows that one in 10 respondents are looking to change jobs because the coronavirus pandemic has fundamentally altered their current role. The poll saw 32% say they do not know where their current skillset might be useful, while 34% were concerned about starting over again. Just over 20% said they lacked knowledge of other sectors, while 19% expressed an overall lack of confidence.

Yahoo! Finance

Pandemic hits graduate job market

The Guardian looks at the impact of the coronavirus crisis on the graduate employment market, with the number of entry-level graduate positions falling nearly 11% in 2020 and recruitment levels down at more than half of the UK’s leading graduate employers. The paper notes that KPMG’s graduate programme has seen an increase in applications of around 50% for the 2021 intake compared with last year.

The Guardian, Page: 11

SMEs NEWS – THURSDAY 4TH FEBRUARY 2021

Loan liabilities a risk for SME owners

Analysis by Purbeck Insurance Services shows that owners of SMEs have more than £1.2bn of personal liabilities linked to emergency pandemic support loans, with 1,587 directors agreeing to such terms when taking on credit through the Coronavirus Business Interruption Loan Scheme. The report, which comes after a Freedom of Information request, shows that the average size of a business interruption loan backed by a personal guarantee is £766,000. With concern that personal assets are at risk, Nic Conner, head of research at business finance consultancy Rangewell, has suggested ministers should consider offering something similar to mortgage indemnity guarantees “but tweaked to protect business owners.”

The Times, Page: 36

PENSIONS NEWS – THURSDAY 4TH FEBRUARY 2021

Concern over pension income gap

Research by the Pensions Policy Institute (PPI) suggests women retiring in 2020 were due to receive just £11,760 a year on average in total pension income. By contrast, the figure was £16,330 on average for men – a pension income gap of 28%.

Daily Express

ECONOMY NEWS – THURSDAY 4TH FEBRUARY 2021

Services activity slips in January

Activity in the services sector fell in January, with pressures stemming from the latest coronavirus lockdown driving the steepest contraction since May. The IHS Markit/CIPS purchasing managers’ index (PMI) fell from 49.4 to 39.5 last month, with this stronger than the 38.8 economists had forecast but short of the 50 or higher reading which signifies growth. Tim Moore, economics director at IHS Markit, said that although service providers “experienced a steep downturn in business activity” in January, the speed of decline “remains much slower than last spring.” On the outlook for the coming months, IHS Markit said: “While the UK economy is on course to contract sharply during the first quarter of 2021, businesses remain confident that pent-up demand and an easing of pandemic restrictions will provide a springboard to recovery later this year.”

The Times City AM

Consumer confidence nears record low

Deloitte ’s Consumer Tracker shows that the final quarter of 2020 saw consumer confidence in Scotland fall by two percentage points to a near record low of -18%. Barring personal finances, all measures of confidence were down year-on-year.

The Scotsman

OTHER NEWS – THURSDAY 4TH FEBRUARY 2021

Obituary: Harry Pinsker

The Times carries an obituary to Harry Pinsker, who served as the Beatles’ accountant for most of the group’s career. In a 2017 interview with the journal of the Institute of Chartered Accountants, he revealed he had to remind the band that their fortune was earnings, not assets, “and they needed to set aside a lot of those earnings for tax.” His revelation of how much they were due to pay prompted George Harrison to write Taxman, a song hitting out at the tax rate.

The Times, Page: 49

Taxman strikes back

Martyn Arthur, who became a private tax adviser after working as an accountant and at the Inland Revenue, has been ordered to pay HMRC £63,000 and handed a suspended sentence after submitting inaccurate tax returns in order to avoid paying money that was due. It is noted that in 2009 Mr Arthur, who has claimed to know the tax system “inside out”, published a book, The Taxpayer Strikes Back, detailing how to beat HMRC.

The Times, Page: 3 Daily Mail

Contact Paul Southward

Paul Southward