NEWS – TUESDAY 5TH MAY 2020
NEWS – TUESDAY 5TH MAY 2020
TAX NEWS – TUESDAY 5TH MAY 2020
Pandemic may prompt higher taxes
Experts believe the Chancellor will have little choice but to increase taxes in the autumn Budget. The Daily Telegraph’s Harry Brennan says Rishi Sunak may have to U-turn on a manifesto pledge to not increase income tax, National Insurance and VAT in an bid to balance the books due to the spending rolled out to ease pressure brought about by the coronavirus pandemic. This comes with calculations suggesting Government spending will break the £1trn mark for the first time, with support measures and increased funding for health services taking public expenditure to more than half the national income. Tax experts have also suggested that HMRC may toughen up on tackling tax evasion and avoidance, having been granted stronger powers to pull in the £30bn a year in lost duties. George Bull of RSM points to the way the public backed social distancing rules, saying that “due to the severity of the situation”, ministers will be “betting on winning similar support, even for something as unpopular as raising taxes.”
EMPLOYMENT NEWS – TUESDAY 5TH MAY 2020
Government pays 23% of worker wages
Figures show that the Government is paying the wages for nearly a quarter of UK jobs via a support scheme rolled out during the coronavirus crisis. The job retention scheme, which funds 80% of workers’ wages up to £2,500 a month, has seen 6.3m claims, a figure representing 23% of the employed workforce. HMRC says about 800,000 employers have reported furloughing workers since the programme started. It has distributed £8bn, with the average payout at £1,269. With the scheme due to run through June, the total cost could exceed £30bn. Torsten Bell, chief executive of the Resolution Foundation, said: “The 6.3m jobs being furloughed shows in stark terms the scale of the economic shutdown that Britain is living through.”
TUC says return to work plan puts staff at risk…
The Trades Union Congress (TUC) says Government draft measures to get people back to work amid the coronavirus crisis will put staff health at risk and cannot be supported in their current form. In a letter to Business Secretary Alok Sharma, TUC general secretary Frances O’Grady criticises the non-binding guidelines for letting employers decide what is safe when it comes to distance between workers, cleaning practices and the use of personal protective equipment (PPE). The letter says: “At present, this guidance fails to provide clear direction to those employers who want to act responsibly and is an open goal to the worst of employers who want to return to business at usual – which will put their workforce at risk.” Meanwhile, Mike Clancy, head of the Prospect union, has written to health secretary Matt Hancock asking for clarification of the guidance, which he says had caused “considerable confusion.”
The Guardian Financial Times
… while businesses want legal clarity
Employers are putting increased pressure on the Government to detail what personal protective equipment employees will need to wear to return to work and also want to know if they will be liable if staff contract coronavirus at work. Adam Marshall, director general of the British Chambers of Commerce, said: “Understanding the legal implications is a key issue. Every employer wants to keep their employees safe.” A spokesman for the Institute of Directors said: “Guidance setting out how businesses can safely operate during the coronavirus pandemic is vital to give employers and staff confidence.”
SMEs NEWS – TUESDAY 5TH MAY 2020
Bounce Back Loan scheme sees 110k day one claims
Around 110,000 small businesses applied for a new emergency loan scheme in the hours after it launched yesterday. With banks reporting an average loan of about £30,000, the support is calculated to have hit £3.3bn on day one. Early figures show that Lloyds had received 17,000 Bounce Back Loan applications by midday; RBS had 22,000 by 2.30pm, and HSBC had 34,500 by 4pm. Barclays confirmed that, by mid-afternoon, it had made 6,000 approvals worth £200m.
Self-employed can check support scheme eligibility
HMRC has urged self-employed workers to check whether they are eligible for coronavirus financial support, having launched an online service that lets workers use their self-assessment tax reference number to identify if they can access the Government’s self-employment income support scheme. The initiative enables self-employed workers to claim a taxable grant worth 80% of their average trading profits up to a maximum of £7,500 over a quarter. Mike Cherry, national chairman of the Federation of Small Businesses, said: “For those eligible, this scheme will be a lifeline and will go a long way into relieving the stress they have endured over the last few months .”
Daily Mail, Page: 70 The Times, Page: 39
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CORPORATE NEWS – TUESDAY 5TH MAY 2020
Blackmore Bond prompts regulation questions
The Telegraph looks at Blackmore Bond, which, with a winding-up petition looming and pressure from other lenders building, last month called in administrators from Duff and Phelps. The paper says this leaves about 2,500 investors worried about their roughly £45m invested in the firm and reignites questions about regulation of the mini-bond market.
The Daily Telegraph, Business, Page: 4
Bristol Energy up for sale
Bristol City Council is understood to be looking to sell Bristol Energy, the energy supplier that it helped set up in 2011. While the company now has almost 100,000 customers, the council is reported to have appointed EY to look into a sale, which is only expected to recoup a fraction of the estimated £35m the council has invested in the firm.
The Times, Page: 42 The Daily Telegraph, Page: 7
ECONOMY NEWS – TUESDAY 5TH MAY 2020
Consumer confidence crashes to all-time low
A survey by YouGov and the Centre for Economic and Business Research (CEBR) shows that consumer sentiment has dropped to its lowest level since the monthly gauge of sentiment started in January 2012. The majority of people polled expect the economy to slide into recession in 2020 due to the coronavirus pandemic, with 28% expecting a more prolonged depression. The YouGov/CEBR index, which is based on a survey of 6,000 households in Britain, fell to 92.7 in April, down from 98.6 in March. A score below 100 means that there are more consumers who lack confidence than those who are confident. The poll also saw 89% of people say they expect unemployment to rise this year. Kay Neufeld, head of macroeconomics at the CEBR, said measures to contain the spread of coronavirus “have had a marked effect” on consumer confidence.
Reuters The Times
OTHER NEWS – TUESDAY 5TH MAY 2020
Final whistle for Premier League season?
The Telegraph’s Jason Burt looks at whether the Premier League season should be abandoned. Weighing the arguments for and against resuming matches during the COVID-19 pandemic, he argues that football is “an important industry and the Premier League’s impact is global for UK plc,” citing EY analysis showing that the 20 clubs paid £3.3bn in tax during 2016/17 and employed 12,000 people directly – as well as supporting almost 100,000 full-time jobs in other companies.
Contracts prompt scrutiny concern
The Guardian reports that some critics have voiced concern that the Government is using the coronavirus pandemic to transfer key public health duties from the NHS and other state bodies to the private sector without proper scrutiny. Noting that ministers have used special powers to bypass normal tendering, it highlights that Deloitte and KPMG are among those to have secured taxpayer funded commissions in recent weeks.
The Guardian, Page: 17
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