NEWS – TUESDAY 16TH FEBRUARY 2021

NEWS ROUNDUP

TAX NEWS – TUESDAY 16TH FEBRUARY 2021

IFS: Sunak should avoid tax rises

The Institute for Fiscal Studies (IFS) believes the Chancellor should look to avoid any tax rises in his March 3 budget, although it has warned that “sizeable net tax rises” may be needed at some point to help cover the Government’s coronavirus-related spending. IFS director Paul Johnson said: “A reckoning in the form of big future tax rises is highly likely, but not as yet inevitable.” The think-tank is calling on Rishi Sunak to “secure the UK’s economic recovery” and “set out plans for how to help the economy recover and adjust to a new normal”, suggesting “well targeted” extensions to current emergency coronavirus support measures should be rolled out. Separately, Mark Littlewood, director general at the Institute of Economic Affairs, has said the UK “has reached its taxable limit,” adding that over the medium term “public finances are going to need to be repaired by expenditure reductions not tax rises”. Meanwhile, the FT says that while the Chancellor may be considering tax rises to cover pandemic-related spending, many Tory MPs oppose tax rises in the short to medium term.

The Times, Page: 36 City AM Financial Times, Page: 3 The Sun, Page: 2

Stride calls for one-off wealth tax

Mel Stride, chair of the Treasury Committee, has suggested that a one-off wealth tax could help boost public finances and balance the books following vast coronavirus-related spending. He suggested that a one-off levy may be preferable to raising taxes across the board or an annual wealth tax. Mr Stride noted that several European countries have tried to introduce annual wealth taxes only to withdraw the idea, saying “it is highly complicated and very difficult”. Mr Stride’s remarks follow a report from the Wealth Tax Commission which last year suggested that a one-off wealth tax could raise up to £260bn if levied at 5% of assets worth in excess of £500,000. City AM notes that Chancellor Rishi Sunak, who is set to outline tax and spending plans in his March budget, has reportedly said that a one-off wealth tax would go against Conservative Party values.

The Independent City AM

Reduced checks on sellers raises tax evasion risk

With a Freedom of Information request showing that HMRC sent just 80 individual data requests to online retail platforms about sellers using their service between April and December last year, down from 2,684 in the 2019/20 tax year, UHY Hacker Young’s Sean Glancy has warned that a failure to investigate overseas online sellers “risks allowing them to use tax evasion to undercut UK retailers with relative impunity.”

The Daily Telegraph, Business, Page: 3

EMPLOYMENT NEWS – TUESDAY 16TH FEBRUARY 2021

Men hit harder by pandemic job losses

While analysis from economists at Citi shows that female employment dropped by up to three percentage points more than male employment across major economies amid the initial wave of the pandemic, Office for National Statistics figures suggest the UK bucked the trend, with men accounting for three-quarters of the fall in employment. It has also been shown that the UK has not seen unemployment surge as much as the US or eurozone amid the crisis, with the jobless rate at 5% in November compared to 4% before the pandemic. Insight into the data suggests the UK’s unemployment rate was prevented from spiking by the furlough scheme. In regard to the gender divide, the varying types of work undertaken by men and by women is said to be factor, with men more likely to work for themselves and women far more likely to work for the public sector. Vicky Pryce at the Centre for Economics and Business Research notes that women are more likely to have suffered cuts to their pay or hours, while childcare issues may have had an impact on the hours they can work.

The Daily Telegraph, Business, Page: 5

CORPORATE NEWS – TUESDAY 16TH FEBRUARY 2021

Pharmacies at risk

The Mail looks at the climate for the UK’s independent pharmacies, noting EY analysis suggesting that three-quarters of the often family-owned businesses are either closing or under threat of closure.

Daily Mail, Page: 40

Rolls-Royce names new finance chief

Panos Kakoullis, a former global head of Deloitte‘s audit and assurance practice, has been appointed chief financial officer at Rolls-Royce.

The Daily Telegraph, Business, Page: 7 Daily Mail, Page: 75 The I, Page: 44 City AM Evening Standard

PROPERTY NEWS – TUESDAY 16TH FEBRUARY 2021

100k buyers could miss out on stamp duty deadline

One in five home buyers who agreed a deal last July when the stamp duty holiday was announced have not completed their purchase yet – and Rightmove has estimated that around 100,000 buyers will fail to complete by the March 31 cut-off for the relief. The analysis suggests that of those buyers who agreed a purchase last July, one in five remain stuck in the “logjam” more than six months later. Meanwhile, Rightmove says the average asking price has increased by 0.5%, or £1,522, this month. Property inquiries in the first week of February were up 18% on the same period last year, and agreed sales were up 7%. This marks a decline on a post lockdown peak seen last year, where agreed sales jumped 60% year-on-year in August.

The Times Daily Express Daily Mail City AM

Hamptons research reveals new generation of BTL investors

Research by estate agents Hamptons International shows that the stamp duty holiday has led to a “new generation” of first-time investors, with figures showing that 50% of landlords purchased with a mortgage in the last six months of 2020, representing the highest share since the firm’s records began 12 years ago.
The Daily Telegraph, Business, Page: 4

ECONOMY NEWS – TUESDAY 16TH FEBRUARY 2021

Vaccine optimism pushes up the pound

The pound has hit its highest level in almost three years amid increasing optimism about the UK’s coronavirus vaccine rollout. Sterling rose above $1.39 for the first time since April 2018 – reaching a high of $1.3918. Sterling was also up against the euro, reaching €1.1463 – a level not seen since April 2020. With the pound boosted by optimism that the UK economy could be one of the fastest to recover from the coronavirus pandemic, some forecasters say it could hit $1.45 this year. This would mark the highest point since before 2016’s Brexit vote. Despite the gains and optimism, Societe Generale strategist Kit Juckes warned that as the UK’s economy is global, it will only see a full recovery once the rest of the world is vaccinated.

Daily Mail

Tech investment could boost the economy by £232bn

Analysis from Virgin Media Business and the Centre for Economics and Business Research (CEBR) think-tank suggests investment in digital technology could boost the economy by £232bn by 2040. The report sets out three factors that would be needed to deliver the biggest economic growth: a prolonged investment in connectivity; higher spending on collaboration technologies; and better enterprise resource planning systems. These, it says, will enhance productivity and output across the private and public sectors. It adds that in the medium term, making the sufficient investments could add £74bn to the economy by the middle of the decade.

Daily Mail

OTHER NEWS – TUESDAY 16TH FEBRUARY 2021

Green growth

The Guardian looks at the green economy, with Chris Doran of the University of Salford saying the green agenda “will form the bedrock for regeneration from COVID-19” and “drive innovation, growth and employment”. Local Government Association analysis suggests that 700,000 new jobs in low-carbon sectors could be created by 2030 – and over a million by 2050. Siobhan Gardiner, climate change and environment lead at Deloitte Ventures, comments: “Over the past decade, the public’s awareness of climate change has soared.”

The Guardian, Page: 10

Contact Paul Southward

Paul Southward