NEWS – TUESDAY 26TH JANUARY 2021

NEWS ROUNDUP

TAX NEWS – TUESDAY 26TH JANUARY 2021

HMRC scraps late filing penalty for those who file online by 28 February

Taxpayers will not receive a penalty for their late online tax return if they file by 28 February, HMRC’s Chief Executive Jim Harra has announced. More than 8.9m customers have already filed their tax return. HMRC is encouraging anyone who has not yet filed their tax return to do so by 31 January, if possible. Anyone who cannot file their return by the 31 January deadline will not receive a late filing penalty if they file online by 28 February. The move comes after accountancy and tax professional bodies argued that advisers and taxpayers would struggle to meet the deadline this year because of the impact of COVID-19. Dawn Register of BDO comments: “This additional time will provide taxpayers and advisers with crucial latitude, which is needed in these unprecedented times. Previously, taxpayers would have needed to rely on adhering to HMRC’s definition of a ‘reasonable excuse’, which is open to interpretation.” George Bull of RSM welcomed the extension but warned that “people may be lulled into a false sense of security, thinking no penalty means no tax demand”. Nimesh Shah of Blick Rothenberg added: “The sting in the tail is that the 31 January deadline is important for all other purposes, including making your tax payment. Taxpayers will be left with a surprise in relation to interest and surcharges for late payment of tax if they wrongly believe the extension also applies to paying their tax.”

The Daily Telegraph, Business, Page: 3 Financial Times, Page: 1 The Times, Page: 2 The Daily Telegraph, Page: 7 The I, Page: 15 Daily Mail, Page; 25

Paul Southward comments “there has been speculation for some time that HMRC would or should suspend late filing penalties for self-assessment tax returns, and it comes as no surprise that an official statement would be delayed until the last week before the filing deadline.  The taxman would prefer if people filed on time.  There are good reasons why you should file on time if you can, any tax liabilities that are due by 31st January 2021, still need to be calculated and payment made on time if you want to avoid interest and the possibility of surcharges.  If you need help with your tax affairs, contact KSK.”

IFS calls for tax hikes on self-employed

The Institute for Fiscal Studies has called for higher taxes on self-employed workers and business owners. A report from the think tank points out that an employee in a £40,000 job generates £3,300 more than a self-employed worker doing the same role – and £4,300 more than someone working through their own company. IFS researchers said a “particularly attractive” option for reform was combining higher rates of self-employed national insurance contributions and capital gains with more generous allowances to encourage investment. Helen Miller, the IFS’s deputy director, said: “The Government has struggled to get support to some of the self-employed during this crisis. But that doesn’t mean we should permanently keep across-the-board preferential tax rates for business owner-managers.”

The Daily Telegraph, Business, Page: 4

MEPs want EU to tighten tax haven rules

MEPs have voted in favour of a resolution calling on Brussels to change its tax haven blacklist system, arguing that the list, which was set up in 2017, failed to “live up to its full potential, [with] jurisdictions currently on the list covering less than 2% of worldwide tax revenue losses”. The EU Parliament said that the criterion for judging if a country’s tax system as fair or not needs to be widened to include more practices and not only preferential tax rates, citing as an example the fact that the Cayman Islands has just been removed from the blacklist, while running a 0% tax rate policy. Following the vote, the Chair of the Subcommittee on Tax Matters, Paul Tang said: “In refusing to properly address tax avoidance, national governments are failing their citizens to the tune of over €140bn. Especially in the current context, this is unacceptable.” However, he added that the bloc needed to practice some self-reflection, pointing out that EU countries are responsible for 36% of tax havens.

Daily Express

CORPORATE NEWS – TUESDAY 26TH JANUARY 2021

Boohoo agrees Debenhams deal

Boohoo has confirmed that it will acquire the online operations of Debenhams, in a deal worth £55m. However, it will not take on any of the firm’s remaining 118 High Street stores or its workforce, meaning 12,000 jobs at the department store chain are now at risk. John Lyttle, the Boohoo chief executive, said the company was still “working through the numbers” on how many jobs might be saved but that there were “no definitive numbers at this point”. The administrators of Debenhams UK, FRP Advisory, said they had undertaken a “thorough and robust process” to achieve “the best outcome for Debenhams’ stakeholders”.

The Times, Page: 33 The Daily Telegraph The Guardian

Asos in talks to acquire Arcadia brands

Asos has confirmed it is in exclusive talks to buy the Topshop, Topman, Miss Selfridge and HIIT brands from Sir Philip Green’s Arcadia empire. Asos is discussing a deal with administrators Deloitte but stressed there can be no certainty of a transaction and shareholders will be updated as appropriate.

The Times The Daily Telegraph The Guardian The I, Page: 43

REGULATION NEWS – TUESDAY 26TH JANUARY 2021

Senior figures call for crackdown on scams

MPs and adviser bosses have claimed that fraudsters who trick people out of their hand-earned savings should be met with a tough enforcement regime. Calling for a more robust approach to tackling pensions fraud, Stephen Timms, chairman of the work and pensions select committee, said: “It is becoming clear that the enforcement response, if you do report a scam, is not very convincing. We really have to gear up effectively to deal with [investment scams]. We are no way ready for it and there is a lot the Government needs to do.” His comments were echoed by those of Paul Feeney, chief executive of Quilter and chairman of the Financial Conduct Authority’s practitioner panel, who said: “If the industry and the regulators see websites, for example, where the company is clearly operating outside of its authorisation, and there is potential harm – [the regulators] should bring the darn things down. Shoot first and ask questions la ter.”

FT Adviser

INDUSTRY NEWS – TUESDAY 26TH JANUARY 2021

Accountants see IT investment pay off in pandemic

The FT concludes its three-part series which looks at digital transformation in various sectors, noting that the crisis has vindicated heavy spending on digital products at UK professional service firms.

Financial Times

SMEs NEWS – TUESDAY 26TH JANUARY 2021

Crunch time for small firms

Research by Santander reveals that small businesses do not expect business to recover to pre-pandemic levels until next summer. The bank also found that one in twelve firms do not expect to survive the pandemic at all. Susan Davies, head of business banking at Santander, said that 2021 would be a “crunch year for many”.

The Times, Page: 42

MPs demand UK Covid support for 3m excluded self-employed

A cross-party group of over 260 MPs is urging the Treasury to implement a plan to help those ineligible for pandemic-related support, many of whom are suffering extreme hardship.

Financial Times, Page: 2

PENSIONS NEWS – TUESDAY 26TH JANUARY 2021

Call for ‘living pension’ to boost contribution levels

A report from the Resolution Foundation has called for a living pension standard to encourage employers to raise contribution rates and help workers enjoy a decent standard of living in retirement. Calculations from the think tank showed that on average savers would need to save £3,000 a year to meet the living pension target. For a full-time living wage earner, that is £1,500 a year more than current minimum auto-enrolment requirements and equivalent to an additional 8% contribution rate.

FT Adviser

ECONOMY NEWS – TUESDAY 26TH JANUARY 2021

UK worst hit in G7 by pandemic

The UK economy shrank more than that of any other G7 country last year in what the Bank of England says will be Britain’s biggest slump in more than 300 years. The UK’s dependence on consumer spending, which was so hard hit by the pandemic, is one of the main reasons. Leading into the pandemic, the UK was suffering from weak business investment, poor productivity and low wage growth going due to years of uncertainty over Brexit.

Wall Street Journal

SPORT NEWS – TUESDAY 26TH JANUARY 2021

Barcelona remain world’s richest football club

Deloitte ‘s latest Football Money League once again lists Barcelona as the world’s richest football club despite their revenue falling by €125m to €715.1m in 2019-20. Real Madrid were just behind while Bayern Munich climbed to third ahead of Manchester United, the highest placed English team in the annual rich list. Liverpool, Manchester City, Chelsea and Tottenham Hotspur are also in the top 10. Arsenal remain 11th and Everton are 17th. The collective revenue of the world’s richest football clubs dropped by €1.1bn year on year to €8.2bn and Deloitte beliefs they are on course to miss out on €2bn in revenue by the end of this season. Tim Bridge of Deloitte’s Sports Business Group told the PA news agency: “We usually release our money league and talk about the growth in revenue but of course football is not immune to the COVID-19 pandemic. The revenue that’s been missed out on is driven by the lack of fans in the stadium, the lack of interaction on a matchday – fans spending in the club shop and buying food and drink – and there is an element that relates to revenue that broadcasters have either clawed back (or deferred) to next year.”

The Daily Telegraph, Sport, Page: 8 Financial Times, Page: 9 The Mirror The Sun, Page: 49

OTHER NEWS – TUESDAY 26TH JANUARY 2021

PwC digital marketing manager killed while jogging

A senior digital marketing manager at PwC was struck by a car and killed while out jogging earlier this month. Jack Ryan was hit at Battersea Bridge by an individual driving a Range Rover on 13 January. Medics tried to save Jack, but the 29-year-old was pronounced dead at the scene.

City A.M.

Contact Paul Southward

Paul Southward