NEWS – TUESDAY 27TH APRIL 2021

NEWS ROUNDUP

TAX NEWS – TUESDAY 27TH APRIL 2021

White House says capital gains tax rise will hit only richest 0.3%

Following heavy criticism of new tax plans coming out of the White House, a Biden administration official has said only the richest 0.3% of Americans would have to pay the new levy on capital gains. The Mail reports that wealth advisers in the US are seeing a flood of inquiries as clients rush to sell assets, shift gains into retirement accounts or tax-deferred opportunity zone funds.

Financial Times, Page: 6 Daily Mail

Brussels targets tax rules in EU recovery plans

The European Commission is using the Covid recovery fund to leverage certain rule changes from nation states, with Ireland among those facing demands to clamp down on sweetheart corporate tax deals.

Financial Times, Page: 4

SMEs NEWS – TUESDAY 27TH APRIL 2021

SMEs looking to spend £97,000 on business growth

New research from Aldermore Bank indicates signs of recovery for small and medium-sized enterprises (SMEs), as they reveal plans to invest in their businesses in the next year, coinciding with the easing of lockdown restrictions. SMEs plan to spend an average of £97,000 to grow their business in 2021 and help kickstart their recovery from the COVID-19 pandemic. Over the next 12 months, one in four (25%) SMEs will invest in their online presence, with one in five (21%) advancing their digital marketing. A further one in four (21%) will spend on new equipment and 20% will invest in their staff through training. “It’s encouraging to see that SMEs are investing in their recovery from the COVID-19 pandemic”, said Tim Boag, group managing director, business finance at Aldermore. “Recent data reveals a vastly improved near term outlook for businesses, with the easing of restrictions. Confidence from SMEs is growing, and this is reflected in plans to invest in the growth of their businesses in order to recover effectively from the pandemic”.

Business Money The Scotsman

FINANCE NEWS – TUESDAY 27TH APRIL 2021

Ethnic minorities excluded from VC funding

Research by angel network Cornerstone Partners shows that entrepreneurs from black and ethnic minority backgrounds are being excluded from venture capital funding. Just 1% of founders who receive seed funding identify as black, according to the study. Only 3% of VC-funded founders identified as black and only 2.9% were Asian. The report also says that three quarters of founders come from advantaged socio-economic backgrounds and hardly any founders come from families living on welfare entitlements. Cornerstone Partners has made a number of recommendations, including the establishment of schemes that support angel groups and accelerators which invest in businesses led by minority founders. It also called for the introduction of early career development.

The Times

PROPERTY NEWS – TUESDAY 27TH APRIL 2021

One in six homes sell for more than asking price

Figures from NAEA Propertymark show one in six homes sold in March went for more than the asking price – a seven year high – with just a third selling for below the original price. Mark Hayward, chief policy adviser at Propertymark, said: “The imbalance of supply and demand means it’s an extremely strong sellers’ market; properties are selling quickly and for over the asking price, and this is something we expect will continue in the coming months.” Homeowners reconsidering their lifestyle and the stamp duty holiday are seen as the main drivers of the increased demand.

The Daily Telegraph

PENSIONS NEWS – TUESDAY 27TH APRIL 2021

Retired workers’ income set to fall dramatically

A new report from LCP warns that it will take too long to save into defined contribution (DC) pensions to keep retirement savings steady and offset the loss of defined benefit (DB) income. The report, titled ‘The ski slope of doom – is this the most worrying chart in pensions?’, claims that the incomes of newly retired workers are set to fall at a much more dramatic rate in the coming decades than had previously been thought. The report found that for those working in the private sector, the decline of traditional “final salary” type pensions is more rapid than expected and that the rise of new-style workplace pensions will take longer to make a real impact than previously assumed.

Daily Express FT Adviser IPE Money Marketing Professional Pensions

PERSONAL FINANCE NEWS – TUESDAY 27TH APRIL 2021

Advice firm encourages inheritance discussions

Research from the Institute for Fiscal Studies shows that inheritances are likely to be larger compared with lifetime incomes for younger generations than was the case for their predecessors. For those born in the 1980s, average inheritances compared to lifetime income are projected to be almost twice as large as those born in the 1960s.

Daily Express

ECONOMY NEWS – TUESDAY 27TH APRIL 2021

UK growth forecasts boosted by vaccines rollout and extended state support

Analysis by Consensus Economics puts UK growth at 5.4% this year, up from 4.2% predicted in February. Others believe this remains pessimistic, however, with Oxford Economics going as high as 7.2%. The EY ITEM Club has predicted growth of 6.8% while Goldman Sachs goes as high as 7.8%. A bounce-back is not unexpected considering the UK suffered a 9.8% slump in 2020 – the worst performance among the G7 group of major advanced nations but forecasters are upgrading predictions following the “innovative and flexible” response of UK businesses and consumers to the pandemic.

Financial Times, Page: 2 Sky News The Times, Page: 34

Investors may have to wait until 2025 for dividend recovery

According to Link Group’s Dividend Monitor, British companies paid out £12.7bn in dividends in the first quarter of 2021, down 27% on the same period last year. Reduced payouts from oil giants Shell and BP were responsible for most of the drop. Link said dividends were down 42% over the last 12 months and its “best-case” forecast for this year was a rise of just 5.6% on last year’s total. Ian Stokes of Link Group said there were signs of recovery but “2025 still looks like the most realistic moment for dividends to match their 2019 high point.”

The Daily Telegraph The Times

REGULATION NEWS – TUESDAY 27TH APRIL 2021

City bosses want payback after being left on Brexit sidelines

The Telegraph’s Lucy Barton looks ahead to what’s in store for the City post-Brexit as organisations including the Investment Association submit ideas to the Treasury for reform. The lobby group told ministers to consider a fully exempt tax regime for UK funds to keep them competitive with EU rivals. One banking executive who is in regular talks with ministers told the paper: “There will definitely be changes. Banking is completely exposed to politics and political changes – that’s always a huge risk – but I’ve never seen such commitment to change.” But although Rishi Sunak has told the City to brace itself for a “Big Bang 2.0” post-Brexit, TheCityUK’s CEO Miles Celic argues the sector is not chasing a “deregulatory agenda”. He says: “Competitiveness is about much more than regulation – it’s got to look at issues such as access to talent and a stable, predictable, simplified tax regime.” Finally, Barnabas Reynolds at Shearman and Sterling believes big changes are on the way, but it could take three to five years for the rule book to look significantly different.

The Daily Telegraph, Business, Page: 2

OTHER NEWS – TUESDAY 27TH APRIL 2021

Johnson hopeful restrictions will lift on 21st June

Boris Johnson has said Britain had built “some pretty robust fortifications” against another wave of Covid and there is now a “very good chance” of completely ending coronavirus restrictions in England on June 21st, as planned. The prime minister said lockdown had helped get the number of cases down considerably but that did not mean Covid was over.

The Times

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Paul Southward