NEWS – TUESDAY 23RD MARCH 2021

NEWS ROUNDUP

TAX NEWS – TUESDAY 23RD MARCH 2021

Tax day to outline administration strategy

Today marks ‘tax day’, an event that will see the Treasury publish 30 consultation papers as part of its 10-year tax administration strategy. The documents will set out policy ideas for future changes in the tax system. The Daily Telegraph’s Harry Brennan says tax day could see news of new taxes for online retailers and an overhaul of the tax return system. He also notes that the documents will include plans to crack down on firms promoting questionable income tax avoidance schemes. Nimesh Shah of Blick Rothenberg says that while the Treasury “is clear that tax day will be focused on tax administration”, it could “sneak in” proposals for future tax rises. These, he adds, could include a review of capital gains and property taxes. Dominic Stuttaford of law firm Norton Rose Fulbright says freelancers should expect changes to their tax status and the removal of lower rates of National Insurance. Elsewhere, Philip Aldrick in the Times says tax day is “a great idea, if used ambitiously”, arguing that “pulling big consultations into a single event is an opportunity to set a strategic vision.” This, he adds, gives business “much-needed clarity about the direction of travel, without the Government having to fix a specific route.” Meanwhile, the FT says much of the focus of the Treasury documents will be on tax administration and cutting red tape.

The Daily Telegraph, Business, Page: 2 Financial Times, Page: 3 The Times, Page: 38 The Times, Page: 39 Daily Mail, Page: 71 The I, Page: 10

Tax hikes for an independent Scotland

A report from the TaxPayers’ Alliance says an independent Scotland would have the highest deficit in Europe if it were to quit the UK, suggesting the Scottish Government would need to raise taxes and cut public spending. The paper says an independent Scotland would need to raise the basic rate of income tax to 46%, calculating that overall the Scottish Parliament would need to increase taxes by at least 10% of GDP and raise VAT to 49% to balance the books.

Daily Express

The case for taxing the rich more

Rhymer Rigby in the FT considers the case for higher taxes for the wealthy, noting that the Wealth Tax Commission has proposed a one-off 5% tax on total assets over £500,000.

Financial Times

CORPORATE NEWS – TUESDAY 23RD MARCH 2021

Half of FTSE 100 link pay to ESG targets

A recent report from PwC shows that almost half of FTSE 100 companies are now linking their executive pay packages to at least one of their environmental, social or governance targets, with the analysis showing that the average executive at these firms stands to miss out on 15% of their bonus if the targets are not met .

Daily Mail, Page: 70

Arcadia fire sale starts

Administrator Deloitte has started a fire sale of Arcadia’s assets, with Hilco Global appointed to manage an online auction that will include IT, furniture, photographic equipment and fabric cutting and sewing machinery tools .

The Daily Telegraph, Business, Page: 1

SMEs NEWS – TUESDAY 23RD MARCH 2021

SMEs see £126bn pandemic hit

A report from the insurance provider Simply Business suggests the cost of the coronavirus pandemic to UK SMEs is set to exceed £126.6bn. The study, which involved a survey of 1,206 small business owners, revealed that on average, SMEs have lost £15,673 each in earnings due to the pandemic and subsequent lockdowns. Alan Thomas, CEO of Simply Business, said: “No business, big or small, has been able to escape the impact of the C OVID-19 pandemic – with 12 months of restrictions, lockdowns, and uncertainty always likely to take its toll.” He added that with 6m SMEs in the UK – accounting for over 99% of all businesses, 33% of employment and 21% of all turnover – “this £126.6bn hole in the books of small businesses is a huge blow to the economy.”

Daily Express

I suggest that this whopping £126bn! cost is just the tip of the iceberg some businesses will never recover and be lost for ever, unemployment is set to soar.  The real cost of government strategies should be subject to enquiry.

EMPLOYMENT NEWS – TUESDAY 23RD MARCH 2021

Jobs needed to drive recovery

Research from Centre for Cities and HSBC UK suggests that the UK economy will need to create 9.3m jobs over the next few years in order to get 1.3m people back into work. The report also says the UK will need to create high-value, export-led jobs across all regions if it is to address the productivity puzzle. HSBC UK chief executive Ian Stuart says this presents a shared challenge to government and business. On the need to level up UK regions, he says that while focus has been on government action, the challenge must be shared with the private sector, calling for support for job creators so as to maximise the post-pandemic recovery and rebalance the economy.

The I

Government reviewing whistleblowing rules

The Government is to review rules on whistleblowing to make sure that they are “fit for purpose”. This comes with research revealing that a record number of employees claim to have lost their jobs for speaking up. Figures show that more than 2,289 employment tribunal cases where a worker claims they were sacked for whistleblowing were made between April and December 2020, with this marking a record high for the number of Public Interest Disclosure cases over a nine-month period.

The Daily Telegraph

Fewer CEOs expect to cut office space

A poll of business leaders suggests that a move toward remote working may not spell the end of the office, with KPMG’s CEO Outlook Pulse Survey showing that 17% of CEOs expect to reduce office space in the next three years – far less than the 69% who said the same six months ago. The survey, conducted between late January and early March, also saw 45% of chief executives say they expected a return to “normal” next year, while 31% expect it to occur this year.

The Times, Page: 44 City AM

PROPERTY NEWS – TUESDAY 23RD MARCH 2021

First-time buyers in London need £132k deposit

The average deposit being put down by first-time buyers in London has increased by more than £20,000 since last year, according to new research from Halifax. The analysis shows that in the 12 months to February 2020, the average deposit put down by first-time buyers in the capital was £111,321 but in the 12 months to February 2021 it was £132,685. The average London house price in the 12 months to February hit £462,617, with the average deposit 24%. Across the UK, Halifax says first-timers need to find £11,677 more for a deposit than they would have done a year ago, with the average now £58,986 – 23% of the typical purchase price.

City AM

ECONOMY NEWS – TUESDAY 23RD MARCH 2021

Inflation expectation

David Milliken of Reuters says inflation is on course to rise “rapidly” this year and is set to go “well above” the Bank of England’s (BoE) 2% target. While consumer price inflation was just 0.7% in January and the Bank has forecast it reaching just below 2% this year, economists at Bank of America and Pantheon Macroeconomics say it could hit 2.5% by late 2021. Samuel Tombs, chief UK economist at Pantheon Macroeconomics, says a rebound in oil prices is likely to push all central banks’ headline inflation rate above targets this year. Mr Milliken notes that BoE governor Andrew Bailey has stated that the Bank will not tighten policy at the first sign of inflation, while chief economist Andy Haldane has likened the economy to a “coiled spring” and said inflation is a “tiger” that is beginning to stir.

Reuters

Economic scars from COVID-19 risk becoming permanent

The FT weighs the economic impact of the pandemic, with KPMG’s Yael Selfin saying the “poorest households have seen the sharpest fall in earnings”, forcing many to use any “safety net savings they had”.

Financial Times, Page: 3

Contact Paul Southward

Paul Southward