NEWS – TUESDAY 16TH JUNE 2020

NEWS ROUNDUP

TAX NEWS – TUESDAY 16TH JUNE 2020

Extension to social investment tax relief sought

Over 30 chief executives from firms including the Big Issue Invest, Big Society Capital and Impact Investing Institute have written to Financial Secretary to the Treasury Jesse Norman seeking an extension to the use of the social investment tax relief, which is currently due to end in 2021. The letter urges the Government to “encourage investment into businesses and organisations working in some of our toughest markets and communities,” and called for an extension to the relief until 2023. It stated: “We also cannot afford to take away a tool for social enterprises and communities to raise investment following the impact of COVID-19.”

The Daily Telegraph

Temporary VAT cut considered by Treasury

Rishi Sunak is considering a temporary VAT reduction in a bid to increase consumer demand and confidence. The Chancellor is reportedly concerned that a combination of low consumer confidence and social distancing rules will dampen the effect of shop re-openings this week.

City AM

Opinion: Tax troubles make UBI unworkable

Tim Worstall, a senior fellow of the Adam Smith Institute, looks at calls for a universal basic income (UBI), considering what the system might mean for tax rates as “the idea is that we tax everyone to pay for all that basic income”. Writing in the Times, he cites a report from the Fraser of Allender Institute, IPPR Scotland and Manchester Metropolitan University which shows that for the basic income to be 60% of median income, the top rate of tax would have to be 85% and the base rate 58%. This, he argues, “simply wouldn’t work.” “By pushing tax rates so high to raise the necessary revenue we would be gaining less, not more, tax to pay out in UBI”, Mr Worstall adds.

The Times, Page: 22

CORPORATE NEWS – TUESDAY 16TH JUNE 2020

AIM marks 25th anniversary

With London’s Alternative Investment Market (AIM) marking its 25th anniversary this week, research published by Grant Thornton shows that AIM companies contributed £33.5bn GVA to UK GDP in 2019 and directly supported more than 430,000 jobs. Philip Secrett, head of public company advisory at Grant Thornton, comments: “AIM’s long-term economic role has been highlighted during the pandemic, and the market will have a critical role to play in supporting economic recovery and future growth.”

The Scotsman, Page: 37 Yorkshire Post, Business, Page: 3

Dixons Carphone delays results

Currys and PC World owner Dixons Carphone has delayed the release of its latest financial results, with results covering the full year ending May 2 to be published on July 15, rather than the previously planned date of June 25. The firm said the move follows Financial Conduct Authority guidance on corporate reporting timetables in light of the coronavirus crisis and will allow auditors Deloitte sufficient time to prepare and review the results, “given the practical challenges of remote working and restricted access to stores.”

The Scotsman, Page: 36

Oak Furnitureland snapped up

Hedge fund Davidson Kempner Capital Management has bought retailer Oak Furnitureland through a pre-pack administration. Deloitte handled the insolvency process.

The Times, Page: 39

Travelex scraps sale as lenders reject potential buyers

Travelex has pulled the sale of its business, saying none of the non-binding offers it received were acceptable to bondholders and its lenders. PwC is advising Travelex on the process.

Financial Times

SMEs NEWS – TUESDAY 16TH JUNE 2020

Small firms concerned over recovery

A poll commissioned by Visa shows that more than half of small business owners fear their firm may not recover from the COVID-19 crisis and lockdown. While 56% said they may not be able to bounce back and a third foresee a sustained reduction in customer numbers, 39% have adapted their business models to continue trading. The poll, of 2,000 consumers and 500 small business owners, found that while consumers have been utilising online services in the lockdown, 31% of enterprises with fewer than 50 staff still do not sell goods or services online.

The Times, Page: 34 City AM

PROPERTY NEWS – TUESDAY 16TH JUNE 2020

Buyer boost

Figures from estate agent Knight Frank show that buyers have jumped back into the property market after activity resumed following the coronavirus shutdown. The firm had its best ever week outside London, with offers accepted outside of the capital the highest on record and more than 50% above the five-year average. Knight Frank notes that the average discount to the asking price for sales outside London is 1.2% since the market reopened, compared with 5.5% in London. Meanwhile, Rightmove figures show that the average asking price for newly-listed properties in early June was 1.9% – or £6,266 – higher than the £337,884 recorded in March. Elsewhere, analysis shows that 40,000 sales have been agreed since the market reopened a month ago, marking a 36% dip on the same period last year.

Daily Mail

EMPLOYMENT NEWS – TUESDAY 16TH JUNE 2020

400k capital jobs at risk

GLA Economics, the Mayor of London’s official forecaster, has warned that the coronavirus crisis could see more than 400,000 jobs lost in the capital this year. The forecast predicts a 7% decline in the workforce as the number of jobs falls from 6.07m in 2019 to 5.65m. HMRC figures show that 1.07m jobs have been furloughed in London, the most for any region of the UK.

The Daily Telegraph, Business, Page: 4

ECONOMY NEWS – TUESDAY 16TH JUNE 2020

Shoppers hit the high street as stores reopen

The easing of lockdown measures across England which enabled many stores to open after three months saw a surge of consumers descend upon high streets, retail parks and shopping centres. Analysis by Springboard shows that as of 5pm on Monday, footfall was 38.8% higher than a week ago. All shops in England are now allowed to open, but with strict safety measures, with stores having to ensure social distancing rules are adhered to and plastic screens are in place at tills. HMV owner Doug Putman told the BBC’s Today programme that he expected a rush in the first week of trading but warned that retailers will come under pressure if shoppers do not return in the same numbers as before the lockdown, saying that if operating costs remain the same but sales dip 20% “it makes a lot of companies unviable.” The British Retail Consortium has warned that reopening stores is unlikely to deliver an immediate boost for the sector and is urgi ng ministers to help stimulate demand with a short-term cut in VAT or a temporary income tax reduction. Meanwhile, Lisa Hooker of PwC says stores are unlikely to roll out big price cuts this week, but added: “If June trading does not make a big enough dent in stocks, we predict a rush of promotions and sales later in the summer.”

BBC News The Times, Page: 8 The Independent, Page: 7 Daily Mail, Page: 6

OTHER NEWS – TUESDAY 16TH JUNE 2020

Coronavirus tax refund scam warning

Scam emails and texts purporting to be from HMRC are on the rise, with recipients encouraged to click on links saying that they are due a tax refund due to coronavirus. Police have advised people to be wary of the messages, while HMRC has reiterated that it will never send emails or text messages in regard to rebates or refunds.

The Scotsman

Contact Paul Southward