NEWS – TUESDAY 23RD FEBRUARY 2021

NEWS ROUNDUP

TAX NEWS – TUESDAY 23RD FEBRUARY 2021

Chancellor can raise funds without disrupting economy

The Times’ Philip Aldrick contends that Rishi Sunak can still raise taxes in his Budget but this does not mean he has to take money out of the economy, which most analysts agree is not the right thing to do at this point. Aldrick suggests offsetting a rise in corporation tax or a new online sales tax with investment inducements or a reduction in rates for high street retailers, arguing that such measures would support growth and do not constitute fiscal tightening. Additionally, prudence calls for the country’s debt to be acknowledged, and paying that down while rates are so low is not a bad idea.

The Times, Page: 35

File tax returns now to prevent penalties

HMRC is urging self-assessment taxpayers to submit their late tax returns by 28th February of face a £100 late filing penalty. While 10.7m taxpayers filed their return by 31 January, more than 1.5m taxpayers missed this deadline and are still to file their tax return. They are accruing interest on any unpaid tax liabilities but still have time to file and pay without incurring penalty charges. Those who owe tax have until midnight on 1st April to pay any outstanding tax or set up a payment plan to prevent a 5% late payment penalty.

Press Release Daily Express

London’s super-rich gain more than all of north of England

Campaign group Tax Justice UK says figures from HMRC show a group of 1,600 ultra-wealthy Londoners made £9bn from assets in 2019, more than the entire population of the north of England, which made £8bn. Tax Justice said that the figures underscored the need for the government to equalise capital gains and income tax rates.

The Times

Tax havens tycoons could lose their knighthoods

A Cabinet Office spokeswoman has denied claims reported by the Times that the honours committee has created a “Ratcliffe clause” allowing for knighthoods to be withdrawn if the recipient moves abroad to avoid taxation. The rule allegedly refers to Sir Jim Ratcliffe, the billionaire Ineos boss who moved to Monaco after receiving a knighthood for services to business.

The Times, Page: 4

ESG investment favours tax-avoiding tech companies

The rise in ESG-based investing is funnelling money into companies that pay much less tax and employ fewer people than their lower-rated peers, experts say, with ESG funds unconsciously “worsening inequality and monopolistic concentration”.

Financial Times

Online sales tax proposal leaves sector opinion split

Calculations by the FT indicate that leading UK high street retailers face potentially higher taxes if the Government imposes a charge on online sales to fund a reduction in business rates.

Financial Times, Page: 12

REPORTING NEWS – TUESDAY 23RD FEBRUARY 2021

Companies given six-month reprieve on gender pay gap reporting

The Equality and Human Rights Commission (EHRC) has given UK companies a six month grace period to report their gender pay gap. The EHRC confirmed it would not begin enforcement proceedings until 4th October. Kishwer Falkner, the EHRC chair, said the approach was designed to strike “the right balance between supporting businesses still impacted by the pandemic and making sure employers comply with the law”. Felicia Willow, the chief executive of the Fawcett Society, welcomed the news that companies would have to report their gender pay gaps for 2020-21. She said: “We recognise that the pandemic has affected many employers, but gender pay gap reporting is good for business. We therefore hope that there will be no further delays in enforcement after this year.”

The Guardian

UK companies face greater scrutiny on climate risks at upcoming AGMs

The Investment Association will start flagging companies in high-risk sectors which fail to report on climate-related risks. The IA’s Andrew Ninian states that clear reporting is vital to achieve a more sustainable future.

Financial Times

EMPLOYMENT NEWS – TUESDAY 23RD FEBRUARY 2021

Firms urged to consider “psychological safety” of staff

The Financial Conduct Authority has warned that workers in the financial services sector are suffering from “lockdown fatigue”, with high performers given huge workloads. Bosses are being urged to consider “psychological safety”, or ensuring that all employees feel confident about speaking out and challenging opinions. David Blunt, the FCA’s head of conduct specialists, said at an online conference: “During this third lockdown, there has been a greater impact on mental wellbeing, with many people struggling with job security, caring responsibilities, home schooling, bereavements and lockdown fatigue.” He added: “The impact of COVID-19 is creating a huge workload for those considered to be high performers, while the remote environment potentially makes it much more challenging for those who were previously considered low performers to change that perception.”

The Times, Page: 34 The I, Page: 42

Gig economy workers to capture 20% of financial services jobs

According to research from PwC, gig economy workers will soon make up between 15 and 20% of the workforce at financial services firms, with the change driven by cost pressure and the need to access digitally skilled talent. John Garvey, PwC global financial services leader at PwC US, said: “Leaders in the industry are looking seriously at their workforces to evaluate which roles need to be performed by permanent employees and which can be performed by gig-economy workers, contractors or even crowd-sourced on a case-by-case basis.” Garvey added that remote working has enabled firms to assess outside of a firm’s physical location, including outside the country.

City AM

Doubts staff will flood back to offices post-lockdown

With Boris Johnson outlining his plans to ease Britain out of the pandemic lockdown the Telegraph notes that people working from home will not be back in the office before June 21st. A KPMG survey reveals that a quarter of financial services staff would like to remain working from home full-time even after restrictions are lifted. KPMG is one of a swathe of firms redesigning its offices to prioritise meeting spaces and video technology over the banks of desks that traditionally dominated City offices, the paper adds, while PwC is investing in virtual reality headsets to make video meetings more enjoyable.

The Daily Telegraph, Business, Page: 3

REGULATION NEWS – TUESDAY 23RD FEBRUARY 2021

Changes to solvency rules could free up £9bn

A report written by KPMG and commissioned by the Association of British Insurers argues that loosening the EU’s Solvency II regulations post-Brexit and giving them more freedom over how they invest their assets could free up £95bn for City insurance firms to reinvest into the economy. KPMG said the formula that determines the cap on how much capital insurance firms must hold at any one time to stave off insolvency “is overly-sensitive to very low interest rates” and that it forces “insurers to hold billions of excess capital for no purpose”.

The Times, Page: 37 Financial Times, Page: 2 The Daily Telegraph, Business, Page: 2 City AM

SMEs NEWS – TUESDAY 23RD FEBRUARY 2021

Letter: SMEs deserve the tax relief, not private equity

Phillip Oppenheim says tax reliefs for investors should not be stripped away from entrepreneurs who take great risks. He suggests the tax treatment of carried interest for private equity should be targeted instead.

Financial Times, Page: 22

PROPERTY NEWS – TUESDAY 23RD FEBRUARY 2021

Stamp duty holiday saves movers £11,500

Research by Halifax shows the stamp duty holiday has saved the average house mover £11,566 in tax as well as boosting property prices by 15.5%. Movers in England and Wales spent an average £431,000 per property in the six months to December last year, a rise of nearly £58,000.

The Daily Telegraph, Business, Page: 1

ECONOMY NEWS – TUESDAY 23RD FEBRUARY 2021

Economists voice concern over rise in inflation

The Times reports on concerns among investors that as countries emerge from the pandemic lockdowns economies will overheat and inflation will run rampant, causing central banks to turn off the taps and tighten monetary policy. George Lagarias, chief economist at Mazars, said: “We know that market performance is still driven by exceptional monetary stimulus. Accommodation will most probably remain elevated for the year, but 2021 will challenge the iron resolve of central bankers, as inflation figures are expected to materially climb. While we believe that this inflation will probably be transitory, a result of supply chain pressures, stimulus and mere year-on-year consumer price comparison (against the horrid second quarter of 2020), we need to remain vigilant in case it overshoots or overextends its welcome.”

The Times, Page: 25

OTHER NEWS – TUESDAY 23RD FEBRUARY 2021

US Supreme Court allows prosecutor to obtain Trump tax records

The US supreme court has ordered Donald Trump to hand over his tax returns to Manhattan District Attorney Cyrus Vance Jr., who has been seeking Mr Trump’s tax records since 2019. The ruling could mean a grand jury investigation into alleged hush money payments and other transactions. The former President’s accounting firm, Mazars, said it would comply with the subpoena, but Mr Trump sued to block the records’ release. Mr Trump claims the DA’s efforts to obtain his tax returns is the “greatest political Witch Hunt in the history of our Country.”

Financial Times The Daily Telegraph, Page: 15 BBC News Metro

Contact Paul Southward

Paul Southward