NEWS – TUESDAY 17TH NOVEMBER 2020
NEWS – TUESDAY 17TH NOVEMBER 2020
TAX NEWS – TUESDAY 17TH NOVEMBER 2020
HMRC warns firms over shifting profit
HMRC has issued warning letters to multinational companies, saying those shifting profits to other jurisdictions to cut their British tax bill must review their operations and change incorrect practices. The letters, which mark the return of a clampdown that had been paused because of the coronavirus pandemic, say that investigations often find that “profits do not reflect the value created in the UK”, with tax investigators seeing “indications of careless or deliberate behaviour requiring penalties to be considered”. Firms have been given 90 days to review their operations and submit any relevant information to HMRC. The Revenue estimates that 2,000 large businesses with operations in the UK may owe a total of £34.8bn in taxes for 2019/20 financial year, up from £29.9bn in 2018/19.
Chancellor told scrapping tax-free shopping will hit the arts
The Chancellor has been urged to rethink plans to scrap tax-free shopping, with cultural leaders warning that the arts will be hit as tourists opt to bypass the UK. With the Treasury planning to end duty-free spending for visitors in 2021, music venue and theatre bosses have written to Rishi Sunak warning him that foreign travellers will choose to visit other countries over Britain without tax-free spending, hitting revenues and jobs. A letter from signatories including the chief executives of The Old Vic, Royal Opera House, Shakespeare’s Globe and The Royal Albert Hall says introducing a 20% tax for price-sensitive visitors will “drive them, and the billions they spend in the UK, away to Paris or other rivals.” They add that the UK will become “the only European destination to deter, rather than incentivise, visitors through our tax regime.”
CORPORATE NEWS – TUESDAY 17TH NOVEMBER 2020
Clubs to score escape from winding-up orders
Ministers are set to announce that football clubs struggling due to the impact of the coronavirus outbreak will escape winding up orders during the remainder of the pandemic. Culture Secretary Oliver Dowden is reportedly planning to say that while PAYE tax codes will remain in place, HMRC will suspend any potential court action against clubs. The English Football League has been lobbying for a tax holiday. Figures released in October showed that EFL clubs owed £77.6m in unpaid taxes excluding VAT, with the total now believed to be around £90m.
Firms turn focus to societal issues
The Times’ Tom Ball looks at how a number of companies and brands are taking a stance on societal issues, with it suggested that consumers are increasingly demanding they do so. A study by consultancy Edelman shows that 64% of people chose or avoided a brand based on its position on social issues, up from 51% in 2017. Mr Ball notes that investors are also taking an interest in the matter, with BDO research showing that almost two thirds of British private equity firms consider environmental, social and governance principles in their investments.
Pandemic hits hotel
Aberdeen’s Ardoe House Hotel has gone into liquidation with the loss of 68 jobs. Ken Pattullo of Begbies Traynor, which is working with the directors of the hotel, said the coronavirus pandemic forced the closure of the hotel, bringing “devastating consequences”.
The Scotsman, Page: 12 The Press and Journal, Page: 7
Capita replaces finance chief
Capita finance chief Patrick Butcher has announced his resignation, with Gordon Boyd to become interim chief financial officer and executive director.
EMPLOYMENT NEWS – TUESDAY 17TH NOVEMBER 2020
Pandemic pushes 1m freelancers into debt
A report from freelancer trade body IPSE shows that more than a fifth of Britain’s 4.5m self-employed workers have taken on credit card debt to make ends meet amid the coronavirus crisis. The analysis shows that one in seven has become overdrawn and more than a quarter have emptied their savings. Almost a fifth of self-employed workers polled said they will need to borrow to pay tax bills come the end of the business year. The IPSE report shows that a third of sole traders have accessed the self-employed support scheme rolled out by the Chancellor, while a fifth of company directors have used the furlough scheme. However, a number of freelancers have been excluded from state aid schemes, including PAYE contractors, the newly self-employed and those who pay themselves in dividends. Figures show that the number of self-employed workers has fallen from around 5m before the COVID-19 outbreak to around 4.5m today.
Free ports to offer tax breaks
The Treasury has announced that firms in regions granted free port status will see perks including relief from national insurance contributions for up to three years for employees earning a salary of up to £25,000. This amounts to a tax break of £2,240 per worker for firms within the new hubs. The announcement came as the Treasury opened applications for towns and cities to apply to become one of the seven special economic zones. The plan will see the creation of hubs where goods can enter the UK with zero tariffs.
PROPERTY NEWS – TUESDAY 17TH NOVEMBER 2020
Asking prices down with duty holiday end in sight
Rightmove has revealed that with people looking to get sales in place before the stamp duty holiday comes to an end in March 2021, the average asking price in October was £1,505 less than in September, falling 0.5% to £322,025. Analysis shows that through October, demand and activity was strongest in price bands where buyers will make the biggest savings thanks to the stamp duty holiday, with the number of sales in the £400,000 to £500,000 price band up 106% year-on-year. Meanwhile, the property portal estimates that 650,000 homes in the UK are currently in the process of being sold, a 67% increase on the total recorded a year ago.
The Guardian The Daily Telegraph, Business, Page: 3
ECONOMY NEWS – TUESDAY 17TH NOVEMBER 2020
ECB: European debt not unsustainable
European Central Bank chief economist Philip Lane insists that although European governments are running up record deficits in a bid to support their economies amid the coronavirus crisis, the surge in public spending will not make debt levels unsustainable. Mr Lane said that while there will be more public debt, “in the context of very low interest rates, in the context of the macroeconomic environment, the assessment should be that this is something that is sustainable”.
Lockdown curbs less costly second time round
Current restrictions are seemingly having a less severe impact on the economy than the UK’s initial coronavirus lockdown, with high-frequency economic indicators largely unchanged since before the latest restrictions were imposed.
OTHER NEWS – TUESDAY 17TH NOVEMBER 2020
Tax status could put the brakes on Hamilton knighthood
The Times reports that Formula One driver Lewis Hamilton will be considered for a knighthood in the new year honour’s list but notes that his tax status will be vetted before a final decision is made. Mr Hamilton, who this weekend equalled the record for world drivers’ championships with his seventh success, lives in Monaco, which is a tax haven. Despite being based in Monaco, Mr Hamilton is still among the top 5,000 taxpayers in the UK.
Contact Paul Southward