NEWS – THURSDAY 6TH AUGUST 2020

NEWS ROUNDUP

TAX NEWS – THURSDAY 6TH AUGUST 2020

Digital Services Tax leads to hike in Amazon seller fees

Seller fees on Amazon will be increased next month after the tech giant decided it will no longer absorb the UK’s digital services tax. The firm stated: “While the legislation was being passed, and as we continued our discussions with the Government to encourage them to take an approach that would not impact our selling partners, we absorbed this increase. Now that the legislation has passed, we want to inform you that we will be increasing… fees by 2% in the UK to reflect this additional cost.” Mike Cherry, national chairman of the Federation of Small Businesses, remarked: “The tax is aimed at the profits of multinationals with large revenues. Passing the tax on to their small business customers will hurt them at the worst possible time.”

The Times, Page: 1, 2 The Daily Telegraph, Business, Page: 1 Daily Mail, Page: 78

EMPLOYMENT NEWS – THURSDAY 6TH AUGUST 2020

BCC issues warning as furlough scheme comes to a close

A spending plan announced by the Treasury to protect British jobs has failed to stop firms from laying off staff as furlough support ends, with British Chambers of Commerce (BCC) co-executive director Claire Walker noting that: “Expected usage of schemes announced in the Summer Statement is relatively low, indicating they do not provide the right kind of support for many businesses at this critical time and a rethink is needed.” She went on: “With confidence and demand not returning at the scale firms need, the Government must take radical steps to slash the tax burden around employment to help companies pay valued staff.” The BCC is also calling for a significant boost to the Employment Allowance, as well as an increase in the threshold for employers’ National Insurance contributions.

City AM

Supply of temporary workers at 20-year high

The latest jobs report from KPMG and the Recruitment and Employment Confederation shows demand for permanent and temporary jobs fell again in July as businesses adjusted their staffing requirements. The KPMG/REC index for permanent and temporary placements rose from 34.3 to 44.7 and from 33.5 to 45.1, respectively. The report said: “The supply of temporary workers rose at the fastest rate in two decades of data collection, while the upturn in permanent labour supply was the second sharpest on record.” James Stewart, vice-chairman at KPMG, said: “It’s encouraging to see the downturn in recruitment easing. However, we are still a long way from being out of the woods.”

The Times, Page: 36 Financial Times, Page: 2 Yorkshire Post, Business, Page: 1

REGULATION NEWS – THURSDAY 6TH AUGUST 2020

IASB proposals fail to satisfy UK post-Brexit legal test

The Local Authority Pension Fund Forum (LAPFF) has warned that proposals from the International Accounting Standards Board (IASB) to amend International Accounting Standard 1, Presentation of Financial Statements, could fail to satisfy the UK’s endorsement criteria following the country’s departure from European Union institutions on 31 December. LAPFF chair Doug McMurdo told IPE: “The IFRS system doesn’t stand up to legislative scrutiny. The model has been engineered to avoid dealing with going concern, capital and profits.” It is noted that when powers held by EU institutions to endorse accounting standards are repatriated back to the UK a new endorsement board hosted by the Financial Reporting Council will then exercise those powers. The LAPFF adds that as the IAS 1 going concern assessment “confuses management intent with the de facto position of the company” this creates a situation where auditors could avoid liability for fraud leaving shareholders with inadequate redress.

IPE

SMEs NEWS – THURSDAY 6TH AUGUST 2020

Johnson hopes planning shake-up will trigger construction boom

Small builders are set to benefit from a cut in planning regulations in England with ministers looking at exempting small sites from taxes paid to fund local infrastructure and affordable housing. Robert Jenrick, the housing secretary, said: “These once-in-a-generation reforms will lay the foundations for a brighter future […] We will cut red tape, but not standards, placing a higher regard on quality, design and the environment than before. Planning decisions will be simple and transparent, with local democracy at the heart of the process.”

Financial Times, Page: 2 The Times, Page: 1, 2 The Guardian, Page: 10

Fast-growing smaller UK companies face £15bn funding shortfall

New research from the ScaleUp Institute, Innovate Finance, and Deloitte estimates that fast-growing SMEs in the UK face a £15bn funding deficit this year.

Financial Times, Page: 1

PROPERTY NEWS – THURSDAY 6TH AUGUST 2020

Dunkerton: Rates decision puts high street at crossroads

Superdry CEO Julian Dunkerton warns in a piece for the Telegraph that if business rates return at the same levels next year it will bring carnage to the high street and lead to a future of “decay and depression” that will prove “impossible to reverse”. However, if the Government makes the right decision on rates and tax for online retail giants the current crisis could prove a catalyst for a new wave of retail entrepreneurs.

The Daily Telegraph

CORPORATE NEWS – THURSDAY 6TH AUGUST 2020

M&Co to axe 380 jobs

M&Co is to close 47 stores and axe 380 jobs as part of a major restructuring the high street chain said will secure the company’s long-term future. The firm, which hired Deloitte as administrators in April, said it will continue to operate with 218 stores and 2,200 employees after completing the restructuring.

The I, Page: 44 Daily Express, Page: 45

ECONOMY NEWS – THURSDAY 6TH AUGUST 2020

Employment down as private sector sees resurgence

The IHS Markit/Cips composite purchasing managers’ index (PMI) has found that the private sector rebounded at its fastest rate in five years last month. Tim Moore, economics director at data firm IHS Markit, noted that “Higher levels of service sector output were almost exclusively linked to the reopening of the UK economy after lockdown measures and the subsequent return to work of employees and clients.” Meanwhile one-third of purchasing managers who responded to IHS Markit’s survey reported a drop in employment. Duncan Brock, group director at the Chartered Institute of Procurement & Supply, noted that “The threat of further pandemic lockdown threatens to derail continuing progress,” warning: “Business will have to continue to absorb any additional costs coming their way or face the prospect of having to close their doors permanently.”

The Daily Telegraph The Times, Page: 36 Daily Express, Page: 45

INTERNATIONAL NEWS – THURSDAY 6TH AUGUST 2020

Greenlight’s Einhorn says Wirecard fraud was ‘hiding in plain sight’

The well-regarded short seller David Einhorn has criticised auditors, regulators and sell-side analysts for failing to detect signs that now-bankrupt German fintech Wirecard was a fraud “hiding in plain sight”.

Financial Times, Page: 8 Financial Times

OTHER NEWS – THURSDAY 6TH AUGUST 2020

Working families affected by Coronavirus given an extra boost

Working parents or carers, who are eligible for Tax-Free Childcare or 30 Hours Free Childcare but have temporarily fallen below the minimum income requirement as a result of the pandemic, will continue to receive financial support until 31 October, the Government has announced. Families will receive a £2 government top-up for every £8 they pay into their child’s account, up to the value of £2,000 per child, or £4,000 per disabled child in financial support. The money can be used towards the cost of qualifying childcare for a child up to the age of 11 or 17 for a disabled child. HMRC’s Deputy Chief Executive and Second Permanent Secretary, Angela MacDonald, said: “We want to make sure families will not be adversely affected by any abrupt change in circumstances, which is why we have extended available support through Tax-Free Childcare to give families that extra boost.”

Press Release

Wells Fargo to dramatically cut consultancy spend after internal backlash

Wells Fargo is to slash the “extraordinary” $1bn-$1.5bn paid annually to consultants including McKinsey, PwC and Oliver Wyman following an internal backlash.

Financial Times, Page: 8

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