Chancellor told tax increases now would be ‘self-sabotage’

The Centre for Policy Studies has suggested that Rishi Sunak should follow the lead of Australia and New Zealand and ease the tax burden on business during the coronavirus crisis. The think-tank has urged the Chancellor to refrain from increasing corporation, capital gains or dividend taxes, saying that while tax increases will be needed down the line to cover the cost of the pandemic, upping levies during a recession would amount to an act of “self-sabotage”. Australia, it is noted, is raising income tax thresholds, while New Zealand has introduced breaks for businesses, allowing firms to carry forward losses incurred in 2020/21 to offset their corporation tax bills the year after.

The Daily Telegraph


Boohoo given something to cry about in auditor hunt

The Telegraph says that fashion firm Boohoo has yet to secure a new auditor following PwC’s decision to step down having reportedly cited reputational concerns. Sources claim that while EY has yet to rule out the move, Deloitte, KPMG, BDO and Grant Thornton have all decided not to bid for the contract, with the Telegraph noting that KPMG cannot apply for the role for at least a year, with consulting work for Boohoo meaning there is a potential conflict of interest. The paper highlights that the Department for Business, Energy and Industrial Strategy has legal powers to appoint an auditor to public companies that cannot find one on the open market. Meanwhile, several papers report that Boohoo’s share price dipped by almost a fifth yesterday, with news of PwC’s decision to resign hitting the retailer’s value. Elsewhere, Kate Burgess in the FT looks at PwC’s decision, saying it is rational to weigh the risks of working with a business whose culture is facing increasing scrutiny.

The Daily Telegraph The Times, Page: 37 Financial Times The Independent Daily Mail, Page: 69 I, Page: 42 Daily Express, Page: 47 Daily Mirror, Page: 44 The Sun, Page: 43 The Scotsman, Page: 44 Yorkshire Post, Page: 3 The Press and Journal, Page: 37 City AM Evening Standard Financial Times, Page: 14

Lockdown threatens pubs

Ben Chapman in the Independent looks at the impact localised coronavirus restrictions will have on pubs, saying revenues across the industry are predicted to be down 50% in the next six months, while analysis suggest more than a quarter of the UK’s 39,700 pubs may not survive the pandemic. Russell Nathan, head of hospitality at HW Fisher, warns that a Tier 2 lockdown is going to be “catastrophic” for pubs and restaurants.

The Independent, Page: 48

Buyer set to land Flybe

Airline Flybe says Cyrus Capital has bought its “brand, intellectual property, stock and equipment” for an undisclosed sum, with it suggested that the carrier, which collapsed in March, could be back in the air in 2021. EY’s Simon Edel, joint administrator of Flybe, said: “The restart of this iconic brand will provide a potentially significant boost to aviation jobs, regional connectivity and local economies.”

The Times, Page: 37

CVA on the menu for café chain

Café chain Bakers + Baristas has urged suppliers and landlords to approve a deal that would reduce costs amid “ongoing uncertainty” surrounding coronavirus. It has hired BDO to put forward a CVA.

The Daily Telegraph, Business, Page: 3

Three UK water companies hang on to tax haven subsidiaries

Water companies Southern Water, South East Water and Welsh Water still have subsidiaries in the Cayman Islands three years after Ofwat advised firms against having financial holdings in tax havens.

Financial Times, Page: 14


Government urged to adopt ‘pension bonus’ plan

Pension industry figures have said that low earners denied free pension cash given to better paid colleagues should be compensated with a bonus from HMRC. A tax flaw means an estimated 1.5m poorly paid staff lose Government payments into their pensions, depending on the type of scheme operated by their employer. The Treasury put forward four potential fixes over the summer, and asked for feedback and other suggestions in a consultation which has just closed. A solution where HMRC would use information it already holds on lower earners to pay money into their retirement funds is favoured in responses made public by pension groups. The other options involve either clawing back money from low earners who do get the cash at present or two methods forcing employers to change how they administer pensions.

Daily Mail


Lawyers warn over insolvency rules

Lawyers are warning company bosses of a potential litigation storm after the temporary relaxation on insolvency laws rolled out amid the coronavirus crisis came to an end. James Whitaker, a commercial litigation partner at Mayer Brown, says that before the pandemic there were a “marked increase” in investigations and prosecutions against individual directors who fall foul of the rules, facing accusations of bribery, fraud, and breaking insolvency and competition laws. This, he suggests, “reflects the general trend over recent years of greater individual accountability for corporate decisions and actions”.

Evening Standard


Property prices hit record high

The average price of a home in Britain hit a new record high of £323,530 in October, according to figures from Rightmove. Asking prices were 1.1% higher than in September, and 5.5% higher than a year ago. Rightmove predicts that the annual rate of price growth could peak at around 7% before the end of this year. However, the property portal said there were signs that activity levels may be easing off. In September the number of sales agreed was up by 70% year-on-year, but that figure has fallen to 58% in October.

The Times I The Guardian Daily Mail


Government urged to cut tax-free Isa allowances to support young people

The Social Market Foundation (SMF) think-tank has urged the Government to cut tax-free Isa allowances for older people and use the money to help out young people on low incomes. “HMRC data show that Isa investors aged 65 and over hold an average of £49,161 in tax-free accounts, compared with £5,629 for people under 25,” the SMF said.

The Daily Telegraph, Business, Page: 4


City finance vacancies down over 50% on last year

Job vacancies in the City’s finance sector have fallen by 54% year-on-year, according to data from Morgan McKinley, underlining the year’s tough third quarter compared to the same period in 2019. Researchers found firms were advertising 3,810 roles in the three months to the end of September, up from 2,490 in June. The London Employment Monitor report suggests the loss of work opportunities has been the result of a perfect storm of pandemic-prompted uncertainty, its impact on banking profits and also Brexit concerns.

City AM Evening Standard


King: Economy will need further support

Former Bank of England (BoE) governor Mervyn King has warned ministers the economy will need additional support in the coming months, with the coronavirus crisis continuing to pose a threat. He suggested that the furlough scheme may need to be extended due to the impact of local lockdowns, saying: “The more stringent the restrictions, the more generous the support needs to be.” Noting that a number of European countries have opted to extend their equivalent of the furlough scheme into 2021, Mr King added: “I think that we are going to end up doing something very similar”. Speaking during a podcast with former Chancellor Alistair Darling, Mr King said the national debt placed no “immediate constraint” on what the Treasury can spend in response to the pandemic. He also warned the BoE against rushing to adopt negative interest rates, saying they would be unlikely to have a “significant impact” on the economy.

The Guardian, Page: 29

Contact Paul Southward