NEWS – THURSDAY 5TH NOVEMBER 2020
NEWS – THURSDAY 5TH NOVEMBER 2020
TAX NEWS – THURSDAY 5TH NOVEMBER 2020
Airports face £300m hit from tax shake-up
A new poll suggests Government plans to end tax-free shopping after the Brexit transition period will cost airports £300m every year. A survey of the 20 biggest members of the Airport Operators Association shows that scrapping duty-free shopping will see them each lose an average of £15m annually. Heathrow has filed a pre-action notice in a legal challenge to halt the tax change, with tax refund specialist Global Blue supporting the airline.
Praise for taxation mediation
Writing in the Scotsman, Graham Boyack of Scottish Mediation offers details of a Chartered Institute of Taxation webinar led by Azets’ Veronica Donnelly. He says he was “both surprised and pleased” to discover that not only does HMRC have a mediation scheme, but that it has this year adapted it to make it more accessible. He notes that the service enables taxpayers to apply for Alternative Dispute Resolution, adding that this can be considered where: communications have broken down; the facts are disputed; the dispute is a result of a misunderstanding; and where clarity is required over information HMRC has rejected or requires.
The Scotsman, Page: 30
SMEs NEWS – THURSDAY 5TH NOVEMBER 2020
Government urged to help small retailers
Blick Rothenberg has claimed that small retailers should receive 75% of last year’s takings to help them through the festive period, mirroring an approach taken in Germany. The firm’s Mark Hart said the latest lockdown measures are going to “hit small retailers hard just when they were just starting to get their businesses back in shape”. He added that by guaranteeing three-quarters of last year’s income, ministers would give firms the resources to pay rent, salaries and other outgoings. Without support, he added, “many of them will not be around to trade at all in the new year”.
EMPLOYMENT NEWS – THURSDAY 5TH NOVEMBER 2020
Job vacancies decline in October
A report by KPMG and the Recruitment and Employment Confederation shows that employers are cutting back on permanent hiring amid increasing economic uncertainty surrounding the coronavirus crisis. Demand for permanent employees fell in October, having risen in September. The KPMG-REC index for permanent placements last month fell from 56 to 48.8 on an index where a reading below 50 indicates that vacancy numbers are shrinking. The index for temporary hires saw an increase, however, climbing from 56 to 56.5 in October. The survey was conducted in the two weeks before the Government announced a nationwide lockdown in England. Lames Stewart at KPMG warned that the lockdown “puts the UK jobs market in a precarious position,” adding: “While the furlough scheme extension may give a brief respite, it will fuel economic uncertainty and further dampen prospects for jobseekers, hitting hiring activity hard . ”
The Times, Page: 42 The Daily Telegraph, Business, Page: 5
PROPERTY NEWS – THURSDAY 5TH NOVEMBER 2020
London climbs property investment rankings
London has climbed from fourth to second in a league table of European cities with the most attractive property investment and development prospects. The survey, by PwC and the Urban Land Institute, saw London rank behind Berlin as the top city in which to invest. Investors polled said London was boosted by good liquidity and Brexit-related pricing discounts relative to continental markets. Gareth Lewis, real estate director at PwC, said: “It’s clear that, at this time of significant uncertainty, investors continue to see Europe’s core cities as safer bets and there remains cautious optimism.”
CORPORATE NEWS – THURSDAY 5TH NOVEMBER 2020
LionRock steps into Clarks
A £100m rescue deal will see the family that founded Clarks lose control of the shoe retailer for the first time in its 195-year history. Hong Kong-based private equity firm LionRock Capital is set to become Clarks majority shareholder in a deal that will see the chain go ahead with a CVA. The firm said the CVA, which is being handled by Deloitte, should allow it to keep all 320 stores open and pay no rent on 60 sites, with the remaining branches expected to pay rent based on turnover.
Businesses urged to plan for the unexpected
Johnston Carmichael has advised firms that ongoing uncertainty makes cash flow management and access to sufficient funding a priority, adding that scenario planning is crucial to help “prepare for the unexpected”. The firm’s finance director Alan Hamilton comments: “Business resilience planning has never been more important”.
The Press and Journal, Page: 29
CRIME NEWS – THURSDAY 5TH NOVEMBER 2020
HMRC makes arrests over support-scheme fraud
HMRC has announced that three people have been arrested on suspicion of fraud in connection with the Government’s Eat Out to Help Out discount scheme. Meanwhile a further three arrests were made over fraud related to Bounce Back loans worth £145,000. Kath Doyle, deputy director of HMRC’s fraud investigation service, commented: “This is taxpayers’ money, and any claim that proves to be fraudulent limits our ability to support people and deprives public services of essential funding.”
The Daily Telegraph The Guardian, Page: 34 Daily Mirror, Page: 19
ECONOMY NEWS – THURSDAY 5TH NOVEMBER 2020
Services sector recovery slows in October
The IHS Markit/Cips services purchasing managers’ index (PMI) was down to 51.4 last month, from 56.1 in September. The measure of the services sector, which accounts for three quarters of economic activity, shows a slowdown in its recovery and marks the slowest monthly growth since June. Tim Moore, IHS’s economics director, said the service sector was “close to stalling” even before the latest lockdown announcement, adding that the economy “seems on course for a double-dip recession this winter and a far more challenging path to recovery in 2021”. Pantheon Macroeconomics economist Samuel Tombs said the data suggests the recovery “essentially ground to a halt in October”, adding the impact will be seen in lower GDP growth. The EY Item Club forecasts that there could be a GDP contraction of 5%-8% in Q4, with chief economic adviser Howard Archer saying there seems “little doubt” that the national lockdown will cause the economy to contract, “and, very possibly, by an appreciable amount.”
BoE set to launch further QE
The Bank of England is expected to launch a fresh round of quantitative easing (QE). The measure, set to be announced today, comes with Britain facing a double-dip recession, with Samuel Tombs, chief UK economist at Pantheon Macroeconomics, warning: “Hopes of a V-shaped recovery are dead and buried.” Experts predict that, having already cut interest rates to a record low of 0.1%, the Bank’s Monetary Policy Committee will opt against a move toward negative rates, instead choosing to roll out further QE worth £100bn. This would add to the £300bn of emergency cash created through QE since the outbreak of COVID-19. While analysts say the Bank is unlikely to move toward negative rates at this point, PwC economist Hannah Audino said policymakers “continue to flirt with the idea” of taking them below zero.
Daily Mail, Page: 81
OTHER NEWS – THURSDAY 5TH NOVEMBER 2020
Focus on law firms
The Times’ Best Law Firms supplement says Macfarlanes has invested heavily in its tax team over the past five years, more than doubling in size to become one of the largest tax advisory practices at a UK law firm. It adds that Macfarlanes now competes with large accountancy firms. Elsewhere, it is noted that Addleshaw Goddard has advised Deloitte on administrations, while the firm’s Paul Fleming has acted as conflict counsel for PwC.
Contact Paul Southward