NEWS – TUESDAY 15TH DECEMBER 2020

NEWS ROUNDUP

TAX NEWS – TUESDAY 15TH DECEMBER 2020

Letter: Tax land, not wealth

In a letter to the Times, former MP Michael Meadowcroft says a wealth tax is “fraught with problems of logistics and political fairness.” He argues that while the “filthy rich” may make the headlines, “there are not enough of them to produce a significant income.” Suggesting that while the wealthy “invariably manage to put their assets beyond the reach of the taxman”, land is an asset that cannot be hidden, adding that taxing it annually on the basis of its maximum development value is “entirely defendable and lucrative for public funds”.

The Times, Page: 32

Bank of Mum and Dad risks landing children with tax bill

Legal experts are warning that growing reliance on the Bank of Mum and Dad is leaving their children in danger of landing with a hefty tax bill. Cash gifts could leave the recipients with a large bill because of inheritance tax, which is payable for up to seven years after the money changes hands. Law firm Lindsays has seen a rise in the number of cases it is dealing with where people risk being stung with an unexpected inheritance tax bill because they and their parents were unaware of the implications of what they thought was a gift.

Daily Mail

EMPLOYMENT NEWS – TUESDAY 15TH DECEMBER 2020

London to lead on jobs growth amid lopsided recovery

Analysis by EY suggests that London and the South East are the only regions in England expected to see jobs growth by 2023. The capital is expected to add almost 80,000 jobs by 2023, with the South East adding 28,000 jobs over the period. Employment is set to fall in all other regions, led by Yorkshire and the Humber, which is predicted to lose 49,000 jobs. Rohan Malik, EY’s government and infrastructure partner, said: “The economy faces a lopsided recovery which risks setting back the UK’s levelling up agenda unless concerted action is taken.” The firm’s chief economist Mark Gregory said manufacturing “will be key to the levelling up agenda”, noting that an estimated 86% of manufacturing activity is located in towns or smaller cities outside the South East.

The Times, Page: 47 The Daily Telegraph, Business, Page: 5

Peer says UK is ‘sleepwalking into unemployment crisis’

Lord Forsyth, chair of the House of Lords economic affairs committee, has warned that the UK is “sleepwalking into an unemployment crisis”, arguing that efforts to support the labour market amid the coronavirus crisis are falling short. This comes as the committee releases its Time for a New Deal report which calls on the Government to invest in job creation and move away from wage subsidies. Lord Forsyth, who said the report seeks to “save the prospects of a generation of young people”, says that the coronavirus vaccine does not mean the economy will no longer need support. “Sectors with jobs that historically lead labour market recoveries – hospitality, retail and leisure – have been flattened”, he noted. Adding that these sectors are “likely to be in a worse state” when wage support ends, he warned that unemployment will spike.

Daily Mail City AM

SMEs NEWS – TUESDAY 15TH DECEMBER 2020

Businesses sitting on half of coronavirus loans

As much as £21bn of taxpayer-backed coronavirus loan cash is sitting unused in firms’ bank accounts, bankers have revealed, with senior executives telling MPs that around half of the £42bn handed out under the Government’s Bounce Back Loan scheme for small companies is being held onto. Paul Thwaite, commercial banking chief at NatWest, told the Treasury Select Committee: “I think that demonstrates … that some customers have exercised caution, drawn down on the lending and kept it for future spending.” Amanda Murphy, HSBC’s head of commercial banking, said that for many SMEs, “these loans provided a very important lifeline, enabled them to pay their bills… and prevented them from going into financial difficulty.” Suggesting that further support will be needed when loan applications close in January, Starling Bank CEO Anne Boden said: “The pandemic doesn’t end when these schemes finish.”

The Daily Telegraph, Business, Page: 1

INDUSTRY NEWS – TUESDAY 15TH DECEMBER 2020

What Brexit means for the capital’s financial heart

Looking at the post-Brexit landscape for professional services, the FT notes that where the Big Four’s services are contracted directly to EU clients, they are working to secure market access.

Financial Times, Page: 11

How to become a finance officer with impact

An FT feature on the role of CFOs notes a PwC report from 2019 showing that top-performing finance chiefs spend 75% of their time on data analysis.

Financial Times, Corporate Change and Technology, Page: 4

REPORTING NEWS – TUESDAY 15TH DECEMBER 2020

Sustainability takes centre stage in shift to digital

The FT considers the need for CFOs to understand ESG issues, noting that the Financial Reporting Council has urged companies to provide investors with more information on climate risks.

Financial Times, Corporate Change and Technology, Page: 1

CORPORATE NEWS – TUESDAY 15TH DECEMBER 2020

Petropavlovsk former chief attacks probe into past deals

Pavel Maslovski, co-founder of gold miner Petropavlovsk, says a KPMG-led investigation into governance during his tenure as CEO is a “smokescreen” to deflect attention from shareholder UGC.

Financial Times, Page: 12

PROPERTY NEWS – TUESDAY 15TH DECEMBER 2020

Asking prices dip in December

Figures from Rightmove show that asking prices for UK homes have fallen for the second month in a row, slipping by an average of £2,080 since last month. In December the average asking price was £319,945, down 0.6% on November. This follows a 0.5% dip recorded between October and November. The decline has been attributed in part to sellers dropping prices as they seek to entice buyers looking to take advantage of the stamp duty holiday before it ends on March 31. Scotland and Wales have seen the biggest dip in asking prices since last month. In Scotland the average asking price is £162,116, down 2.1% on last month, while in Wales it’s £210,943, a drop of 1.9%. The analysis shows that homes at the top end of the market have seen asking prices decline 1.4% since November, while first-time buyer homes are down 0.1%. Year-on-year, the average asking price is up 6.6% on December 2019.

The Daily Telegraph, Business, Page: 5 The Sun

INTERNATIONAL NEWS – TUESDAY 15TH DECEMBER 2020

German audit watchdog chief suspended

Ralf Bose has been suspended from his role as head of German audit watchdog Apas after admitting to trading shares in Wirecard weeks before its collapse in June and while conducting a probe into its auditor. Mr Bose told a parliamentary committee that he bought Wirecard stock at the end of April before selling at a loss on May 20. During that period, Apas had upgraded its preliminary review of EY’s audits for Wirecard to a fully-fledged inquiry.

The Daily Telegraph, Business, Page: 5 Financial Times, Page: 4 The I, Page: 44

South Korean firms must revamp their audits

South Korea’s listed companies are under growing pressure to overhaul their external audit system in time for shareholder meeting season, with a new set of corporate regulations restricting the combined voting power of ownership families in the appointment of auditors.

The I, Page: 45

France seizes Ghosn’s assets

French tax authorities have seized €13m of property and other assets from Carlos Ghosn, with the fugitive former Renault-Nissan chief suspected of having evaded French taxes by claiming that he was domiciled in Amsterdam from 2012 until his 2018 arrest in Japan on charges of tax fraud.

The Times, Page: 37

ECONOMY NEWS – TUESDAY 15TH DECEMBER 2020

Lenders urge caution over negative rates

Finance bosses have urged the Bank of England (BoE) to move with caution as it considers taking interest rates negative for the first time, with Amanda Murphy, head of commercial banking at HSBC, telling the Commons Treasury Select Committee that the Bank “does have to carefully consider whether negative interest rates have the desired outcomes”. Pointing to countries that have made the move, she added that they “haven’t seen inflation rise and the growth hasn’t come back as strongly as one might have hoped.”

Daily Mail, Page: 74

Industrialist warns Brexit will be like a ‘slow puncture’

Juergen Maier, the former CEO of electronics firm Siemens, has warned that Brexit will hit the British economy like a “slow puncture”, with disruption to business to last well into 2021 even if a trade deal is agreed. He believes it is “going to be a pretty tough for the first six months”, adding that “those who think a deal is going to miraculously resolve the situation” are wrong. Mr Maier said the impact on the economy will be like “a slow puncture” and there will be “a slow burn” as firms gradually move bits of their production or parts of their research and development abroad. He has urged ministers to offer an “adjustment period” to allow businesses to get accustomed to new customs and standards red tape that Brexit will bring.

The Guardian

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Paul Southward