NEWS – TUESDAY 23RD JUNE 2020
NEWS – TUESDAY 23RD JUNE 2020
TAX NEWS – TUESDAY 23RD JUNE 2020
Creativity and boldness required to lift UK up again – Javid
In a piece for the Telegraph, former Chancellor Sajid Javid outlines some of the measures the government could take to rejuvenate the economy. Mr Javid has written a report with the Centre for Policy Studies called After the Virus which sets out more than 60 recommendations, covering everything from taxation to monetary policy. Jobs, growth and business support should be the top priority, he says, recommending a significant cut to Employer’s National Insurance, and a temporary VAT cut, which would help encourage spending and hiking investment in infrastructure. The report also urges the Chancellor to ensure the deficit falls year on year, and aims to balance the current budget within three years of GDP returning to pre-crisis levels.
The Daily Telegraph, Page: 18 The Times, Page: 2 The Independent, Page: 47
HSBC faces £1.3bn lawsuit over film scheme
Investors have filed a £1.3bn lawsuit against HSBC relating to a Disney film financing scheme that HMRC deemed to be a tax avoidance vehicle. The Mail reports that former football managers Sir Alex Ferguson and Sven-Goran Eriksson are among the hundreds of investors bringing the case.
Financial Times Daily Mail, Page: 65
CORPORATE NEWS – TUESDAY 23RD JUNE 2020
Missing Wirecard money ‘does not exist’
German payments firm Wirecard has said that €1.9bn (£1.7bn) believed to be missing from its accounts may not exist, after auditor EY refused to sign off the firm’s accounts until the money was located. Felix Hufeld, head of Germany’s top financial regulator Bafin, commented: “It’s a complete disaster we’re looking at… It starts with looking at complete failure of a senior management, despite many, many hints to discover the facts. It goes on to the scores of auditors who couldn’t dig up the truth and it goes on with a whole range of private and public entities including my own who have not been effective enough to prevent something like that happening.” Munich police have now said they were launching a criminal investigation into the group.
EMPLOYMENT NEWS – TUESDAY 23RD JUNE 2020
Business leaders call for cut to cost of employing workers
The Institute of Directors (IoD) and the Federation of Small Businesses (FSB) have both called on the Chancellor to use next month’s economic statement to prime the economy for recovery. The IoD called for measures including an increase in the employment allowance and in the threshold for employers’ national insurance contributions. The FSB also urges Rishi Sunak to cut employers’ national insurance contributions, and also to provide help with apprenticeship costs and offer a full rebate for sick pay costs faced by companies that lose staff hours as a result of track-and-trace. The Guardian’s Richard Partington notes suggestions from George Osborne and the FSB on forgiving bounce back loans given to small businesses, or allowing them to pay them back only when they return to profit.
The Times, Page: 36 The Guardian, Page: 9 The Sun, Page: 43
PENSIONS NEWS – TUESDAY 23RD JUNE 2020
TPR urged to nudge savers back into pensions
The Work and Pensions committee has urged the Pensions Regulator (TPR) to consider helping workers who have opted out of their workplace pension during the coronavirus crisis to re-enrol sooner than the current three-year timeframe under auto-enrolment rules.
FINANCIAL SERVICES NEWS – TUESDAY 23RD JUNE 2020
BDB calls for post-Brexit equivalence priority as banks told to prepare for worst
The Association of German Banks (BDB) has urged the EU to prioritise equivalence rules in post-Brexit negotiations with the UK, arguing that these rules are essential for achieving market and financial stability on both sides. In a position paper, the BDB said: “Clarity regarding future market access arrangements should be provided at the earliest possible date,” adding that a comprehensive free trade agreement should be established, alongside strengthening “the EU internal market and market infrastructure”. A spokesperson for British trade body UK Finance said: “The Association of German Banks is right to call for full and reciprocal financial services access to be established as early as possible in the EU-UK trade deal… These arrangements do not need to be contained solely within a free trade agreement and can build on the longstanding regulatory relationships and supervisory cooperation that already exist.”
City AM Reuters Daily Express
REGULATION NEWS – TUESDAY 23RD JUNE 2020
New FCA chief appointed
Nikhil Rathi, chief executive of the London Stock Exchange, has been appointed head of the Financial Conduct Authority by Chancellor Rishi Sunak. Mr Rathi will replace Chris Woolard, who has run the regulator on a temporary basis since Andrew Bailey left to become Bank of England governor in March. FCA chair Charles Randell commented: “Nikhil has been closely involved in guiding the FCA’s development… and brings both private sector management skills and experience of domestic and international regulatory policy making.” Mr Sunak added: “Nikhil is the outstanding candidate for the position of chief executive of the Financial Conduct Authority, and I am delighted that he has agreed to take up the role.”
Foreign takeovers to be scrutinised in light of public health emergencies
The Department of Business, Energy and Industrial Strategy has revealed that ministers are to be handed powers to scrutinise foreign takeovers of UK firms to ensure that the UK’s ability to deal with future public health emergencies is not compromised. Business Secretary Alok Sharma commented: “These powers will send an important signal to those seeking to take advantage of those struggling as a result of the pandemic that the UK government is prepared to act where necessary to protect our national security.”
ECONOMY NEWS – TUESDAY 23RD JUNE 2020
Bank of England to reverse QE before rates are raised – Bailey
The Bank of England must begin reversing quantitative easing before interest rates can be raised from record lows, according to governor Andrew Bailey. He wrote in an article for Bloomberg: “When the time comes to withdraw monetary stimulus, in my opinion it may be better to consider adjusting the level of reserves first without waiting to raise interest rates on a sustained basis.” The policy of predecessor Mark Carney was that the Bank should raise rates before trying to sell bonds back to the market, while Mr Bailey said he does not want high Bank of England purchases of government bonds to become a long-term arrangement. In separate comments to Sky News, Mr Bailey said the Bank’s early intervention in the coronavirus crisis save the government from potential financial collapse.
Scots economy warning from CBI
The CBI in Scotland has set out measures including tax breaks, investment in “shovel-ready” projects and scrappage schemes to stimulate activity, as it warned that urgent action was needed to address soaring levels of unemployment. CBI Scotland director Tracy Black remarked: “This unprecedented crisis demands an unprecedented response to get the economy back on track. The Scottish economy was already struggling before COVID-19 hit, and now every single bit of growth matters for people’s jobs and livelihoods.” It is also suggested that business rates relief be extended to mid-sized businesses to help them proceed with innovation projects.
OTHER NEWS – TUESDAY 23RD JUNE 2020
Ancelotti faces tax charge
Everton manager Carlo Ancelotti has been charged by prosecutors in Spain over alleged tax irregularities related to his time at Real Madrid in 2014 and 2015. He stands accused of dodging £900,000 in taxes.
The Daily Telegraph, Sport, Page: 5 The Sun, Page: 50 Daily Mail, Page: 79
Contact Paul Southward