NEWS – TUESDAY 3RD NOVEMBER 2020
NEWS – TUESDAY 3RD NOVEMBER 2020
TAX NEWS – TUESDAY 3RD NOVEMBER 2020
ICAS warns Scottish Government against ‘kneejerk’ tax hikes
The Institute of Chartered Accountants in Scotland (ICAS) has warned the Scottish Government against a “kneejerk” approach to increasing taxes to offset the economic hit from the coronavirus pandemic. The Scotsman says tax increases are a possibility due to the crisis, with Scotland’s economy declining by a fifth earlier in the year and the possibility that the tax take could slide on the back of increased unemployment. Increasing taxes, the paper’s Scott Macnab suggests, would be an alternative to spending cuts. In a submission to Holyrood’s finance committee on next year’s budget, ICAS said: “Taxation needs to both collect funds and support the economy or, at the very least, not create economic disincentives or distort behaviour”. ICAS has also suggested that Holyrood should establish a stand-alone “tax committee” to enhance scrutiny of any changes in levies.
Charity donations cut IHT bills
Figures show that the number of millionaires leaving charitable donations of more than £1m in their wills has climbed by 31%, increasing from 2,328 in 2016/17 to 3,043 in 2017/18. Experts have suggested that in some cases the large donations may have been made to take advantage of an inheritance tax break that sees the rate drop from 40% to 36% when more than 10% of an estate is left to charity.
EMPLOYMENT NEWS – TUESDAY 3RD NOVEMBER 2020
Chancellor confirms extra support for the self-employed
Chancellor Rishi Sunak has announced that self-employed workers will be able to claim state aid of up to 80% of their average earnings during England’s four-week lockdown. This is an increase on the 40% currently offered via the Self-Employed Income Support Scheme (SEISS). Critics have questioned the eligibility criteria, however, warning that as many as 2.9m freelancers, contractors and newly self-employed people will remain excluded. Derek Cribb, CEO of the Association of Independent Professionals and the Self-Employed, says it is “deeply troubling” that ministers have not fixed “devastating gaps” in SEISS. The Federation of Small Businesses has also warned that too many self-employed people are excluded, with chairman Mike Cherry saying: “Fundamentally, the business support landscape still remains too much of a mixed picture”.
BBC News City AM
Half of firms expect permanent move to flexible working
A Confederation of British Industry (CBI) / Ipsos Mori poll shows that almost half of UK firms expect staff to be on flexible working arrangements in the future. The survey saw 79% of respondents say staff worked entirely or almost entirely in offices in 2019, with just 29% thinking this will be the case in 2021 and 47% saying they expect staff to split their time evenly between home and the workplace going forward. CBI deputy director-general Josh Hardie said remote working has brought “huge benefits” and has not led to a collapse in productivity. He added that while the coronavirus outbreak has triggered a mass migration from workplaces, “talk of the death of the office is premature.”
CORPORATE NEWS – TUESDAY 3RD NOVEMBER 2020
Treasury extends emergency business loan scheme
The Treasury has announced that applications for the Bounce Back Loan Scheme (BBLS), Coronavirus Business Interruption Loan Scheme and Coronavirus Large Business Interruption Loan Scheme will now be open until the end of January. The extension, which carries support before the previous end point of November 30, also applies to the Future Fund, an initiative aimed at UK start-ups. It was also confirmed that small businesses that already received funds through the BBLS programme – which offers firms cheap loans worth up to £50,000 – will also be able to top up existing loans if required. The changes were confirmed after the Treasury convened an emergency meeting with Britain’s largest banks in order to review the terms of the Government-backed loan programme.
No-Deal Brexit unthinkable amid second wave, says CBI
Business leaders have warned of the risks of a No-Deal Brexit at a time when the UK is battling against the coronavirus crisis. Dame Carolyn Fairbairn, director-general of the Confederation of British Industry (CBI), said: “It would be unconscionable to unleash a no-deal Brexit on the countries of Europe – the UK and the European Union – as we are facing this vicious second wave.” Speaking at the CBI’s annual conference she added: “I’ve always felt and argued that a good deal was an economic necessity, I now think it’s a moral necessity as well.”
PERSONAL FINANCE NEWS – TUESDAY 3RD NOVEMBER 2020
FCA announces extension of loan holidays
With England entering a second coronavirus lockdown on Thursday, the Financial Conduct Authority (FCA) has told mortgage, loan and credit card providers to offer borrowers extended repayment holidays. Consumers who have not yet had a credit payment deferral for a mortgage can request one that lasts for up to six months, while those who have had a deferral will be able to apply for a second. Figures from industry body UK Finance show that 2.5m people have already taken a payment holiday on their mortgage since March. The FCA also said that for high-cost, short-term credit such as payday loans, consumers can apply for a payment deferral if they have not already done so.
PENSIONS NEWS – TUESDAY 3RD NOVEMBER 2020
Over 55s raid savings
New HMRC data has revealed the number of over-55s accessing their pension savings has increased in recent months. The report said that through July, August and September 2020, 347,000 individuals chose to withdraw from their pension. This marks a 6% increase on Q3 2019.
ECONOMY NEWS – TUESDAY 3RD NOVEMBER 2020
Lockdown to hit growth hopes
Experts at the National Institute of Economic and Social Research (NIESR) have warned that the second coronavirus lockdown could see GDP fall by 12% in November, a decline that would mark the second biggest monthly dip on record after the fall seen in April. NIESR says the economy is also likely to slip by 3.3% across Q4, the steepest quarterly fall since 1955 bar the record 19.8% decline seen in this year’s second quarter. Elsewhere, Goldman Sachs has cut its fourth-quarter forecast from an expansion of 3.6% to a contraction of 2.4%, while Credit Suisse cut its forecast from growth of 1.5% to a contraction of 5%. Oxford Economics foresees a 3% fall in Q4, with a 10% decline in November driving this. Meanwhile, Morgan Stanley said that the shape of the recovery had changed from an “asymmetric V” to a “wonky W”.
Borrowing could hit £500bn in 2020
Government borrowing could hit a record £500bn this year as the country looks to cover the cost of the coronavirus crisis. If the forecast put forward by Douglas McWilliams, deputy chairman of the Centre for Economics and Business Research, proves correct it would far exceed the £158bn deficit recorded during the financial crisis a decade ago and push the national debt further beyond the £2trn mark.
Contact Paul Southward