NEWS – TUESDAY 5TH JANUARY 2021

NEWS ROUNDUP

TAX NEWS – TUESDAY 5TH JANUARY 2021

Lord’s report calls for better tax avoidance information

The House of Lords’ Economics Affairs Committee says people need to be better informed about tax avoidance schemes and says it is “troubled” that people on lower incomes are becoming caught up in loan schemes while those behind the schemes remain unpunished. The committee’s New powers for HMRC: fair and proportionate? report says that evidence it received in 2018 suggests that HMRC has “spent considerable time and resources focusing on individuals who participated in disguised remuneration schemes, while some of those who promoted such schemes have continued to be able to profit from their activities.” The report says taxpayers need “better information about schemes so that they can see through a promoter’s sales pitch and recognise when they are being sold an aggressive tax avoidance scheme.”

Yorkshire Post

EU firms question post-Brexit tax rules

A number of European retailers have stopped delivering to the UK due to new tax rules that came into force when Britain exited the EU on January 1, with new rules seeing VAT now being collected at the point of sale rather than at the point of importation. This means overseas retailers sending goods to the UK need to register for UK VAT and account for it to HMRC. A UK Government spokesperson said: “The new VAT model ensures goods from EU and non-EU countries are treated in the same way and that UK businesses are not disadvantaged by competition from VAT-free imports.”

BBC News Financial Times, Page: 2 Daily Mirror

OECD warns governments to rethink constraints on public spending

OECD chief economist Laurence Boone has urged governments to use fiscal policy – increased public spending and lower taxes – to help drive the post-pandemic economic recovery.

Financial Times, Page: 4

CORPORATE NEWS – TUESDAY 5TH JANUARY 2021

Business leaders call for greater support amid new lockdown

Business leaders have warned that the new coronavirus lockdown announced by Boris Johnson could put the future of many firms at risk. British Chambers of Commerce director general Adam Marshall, who described the latest restrictions as a “body blow to our business communities”, said firms will understand why the Prime Minister felt compelled to act to address a surge in infections, “but they will be baffled and disappointed by the fact that he did not announce additional support for affected businesses alongside these new restrictions.” Mike Cherry, national chairman of the Federation of Small Businesses, fears the lockdown will cause widespread business failures and job losses unless support is provided “on an equal scale to these unprecedented curbs on economic freedom”. TUC general secretary Frances O’Grady said that without more support, jobs will be lost and businesses will close, cal ling for targeted help for hard-hit industries. In a similar call, Roger Barker, director of policy at the Institute of Directors, said the Treasury must “bolster support for the worst affected sectors” and reinforce the discretionary grant scheme. CBI director general Tony Danker said businesses “will continue to step up in the national interest to support the NHS, employees and customers”, while noting a need to “acknowledge that the economic impact of these new restrictions is significant.”

The Times, Page: 34 Daily Mail

INSOLVENCY NEWS – TUESDAY 5TH JANUARY 2021

Landlords warn of CVA abuse

The British Property Federation, whose members include some of Britain’s biggest commercial property owners, has called on ministers to act over what it claims is abuse of the insolvency framework. The body has written to Corporate Responsibility Minister Lord Callanan, highlighting that retailers and hospitality groups are increasingly turning to CVAs and warning that this form of insolvency can disproportionately hurt landlords by triggering rent cuts and site closures. Melanie Leech, chief executive of the federation, told Lord Callanan that some wealthy individuals and private equity backers have “cynically” used the coronavirus crisis as an excuse to “shift on to property owners the cost of years of failings and under-investment”. With it shown that creditors less affected by the CVA often receive a greater share of the vote than the landlords, the federation wants ministers to ensure that the voting procedure is fairer. It argues that the votes of those set to be hardest hit must carry greater weight than those of unaffected creditors.

The Times, Page: 38

EMPLOYMENT NEWS – TUESDAY 5TH JANUARY 2021

Restaurant industry job losses jump by 163%

Almost 30,000 job losses were recorded across restaurants and casual dining firms in 2020, with the coronavirus crisis driving a 163% jump in job cuts as restrictions designed to fight the spread of the virus hit the sector. Figures compiled by the Centre for Retail Research show that 29,684 jobs were lost, far exceeding the 11,280 job losses reported across the sector in 2019. The report also shows that branch closures by hospitality firms hit 1,621 – a 75.8% jump on the 922 closures recorded in 2019.

The Independent The Guardian Daily Mirror

Pandemic speeds technological change

The Telegraph looks at the threat AI and robotics poses to jobs, with research suggesting that the coronavirus crisis has accelerated the pace of technological change. It notes that, pre-pandemic, the OECD suggested that across wealthier nations 9% of jobs were at high risk of automation and PwC estimated that a third of UK jobs were at risk. A report from McKinsey says 59m jobs – a quarter of the total – are now estimated to be at risk from automation, with almost half already at risk before the coronavirus outbreak.

The Daily Telegraph, Business, Page: 4

PROPERTY NEWS – TUESDAY 5TH JANUARY 2021

Mortgage lending hits 13-year high

Figures from the Bank of England show that mortgage approvals hit the highest level in 13 years in November, with 104,969 approved. This was up on the 98,338 recorded in October and marks the biggest total since August 2007. The surge has been attributed in part to the stamp duty holiday rolled out to boost the market after it was hit by the coronavirus outbreak and resulting restrictions, with the temporary relief on the levy driving activity and boosting prices. Figures from building society Nationwide show that house prices rose by 7.3% in December, marking the biggest annual increase in six years.

The Times, Page: 36 The Guardian City AM BBC News

ECONOMY NEWS – TUESDAY 5TH JANUARY 2021

£1.5bn repaid in November

Bank of England figures reveal households repaid just over £1.5bn of credit card debt, personal loans and car finance in November, with weaker consumer spending amid the second national lockdown believed to be a contributing factor. With net consumer lending dropping by £1.54bn, it marks a 6.7% decline on the amount recorded November 2019, with this the biggest drop since monthly records began in 1994. Since the start of the coronavirus pandemic in March, households have repaid £17.3bn of consumer credit. Bank of England analysis also shows that total household deposits increased by almost £5bn month-on-month to reach £17.6bn.

The Guardian City AM

Factories hold record stockpiles

Factories accumulated record supplies of materials last month as manufacturers boosted purchases of supplies at the fastest pace in over 25 years, the IHS Markit/CIPS manufacturing purchasing managers’ index reveals. The index rose to 57.5, up from 55.6 the previous month to its highest level since November 2017. Manufacturers built up their stocks at the fastest rate since March 2019 ahead of the end of the Brexit transition period, while new orders rose at the quickest pace since August. Howard Archer, chief economic adviser to the EY Item Club, notes that manufacturers saw a stronger performance amid nationwide restrictions in November than during the initial shutdown, saying “lessons have been learnt in keeping activity going from the previous lockdown”.

The Daily Telegraph The Times City AM

OTHER NEWS – TUESDAY 5TH JANUARY 2021

Accountant has £50k to count

Accountant Kat Glennie-Soares has won £50,000 on game show Beat The Chasers, defeating five quiz experts from ITV’s The Chase.

The Sun, Page: 33 Daily Star, Page: 27

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Paul Southward