NEWS – TUESDAY 6TH OCTOBER 2020

NEWS ROUNDUP

TAX INVESTIGATIONS NEWS – TUESDAY 6TH OCTOBER 2020

Britain hits Airbnb UK with extra £1.8 million tax bill after probe

British authorities hit Airbnb UK with an extra tax bill of 1.8 million pounds last year, the home rental company’s accounts showed on Tuesday, following an investigation into the firm.

Reuters: uk.reuters.com

British Airbnb Hosts face probe after company is forced to share letting details with UK tax authorities:

The Airbnb UK accounts for the year ended 31 December 2019 included a statement that the company will share data with HMRC about the earnings of hosts in the UK for the years 2017/18 and 2018/19.  Paul Southward comments that anyone who rents out UK properties through the Airbnb platform should review their letting activity for the last few years.  If they have declared the income and paid tax on their rental activity, then they should be fine.  If income has not been declared to the tax authorities, they should consider whether or not a declaration should be made even if they believe there is no tax liability.  Read Paul’s guide here: Airbnb-Tax-enquiries

TAX NEWS – TUESDAY 6TH OCTOBER 2020

Sunak warns of hard choices ahead

The Chancellor yesterday told the Conservative Party conference that the Government has a “sacred responsibility” to balance the books for future generations warning that there were “hard choices” ahead. Rishi Sunak indicated that not all Conservative party manifesto promises will be easy to meet considering the expenditure on the coronavirus crisis arguing that flexibility will be required. Mr Sunak said that the “mismatch” between public spending and tax revenues “can’t go on forever”, adding that balancing the books was “economically and morally” the right thing to do. The Telegraph reports on fears that the Government has political cover for a wealth tax to plug the budget shortfall after an Ipsos Mori poll found 41% of the public support the move over other revenue-raising measures. Elsewhere in the paper, Matthew Lynn says Sunak has the perfect opportunity now to “ rip up the entire tax system and start again from scratch”.

Financial Times, Page: 3 The Times, Page: 6 BBC News The Daily Telegraph, Page: 5 The Daily Telegraph, Business, Page: 1, 2 The Guardian, Page: 10 The Sun, Page: 4 Daily Express, Page: 1, 4-5, 14 Daily Mail, Page: 15

Capitalism, not socialism, will hoist us out of the mire

Kate Andrews says in a piece for the Telegraph that it is capitalism, not socialism that will heave us out of this crisis and that Britain is lucky to have leaders who believe in the power of markets and enterprise. But the conditions need to be created whereby enterprise can start to flourish again, continues Andrews. And this does not mean a digital services tax on businesses that have adapted to the crisis by moving online. Employers should not face a financial burden for hiring new employees and workers should get to keep more of their own income, Andrews adds, as she urges the Government to put its free-market beliefs into action.

The Daily Telegraph, Page: 16

TV presenter to take HMRC to court in tax bill row

TV presenter Eamonn Holmes is reportedly fighting a £250,000 bill by taking HMRC to court, with his case based on whether he is treated as a freelancer by ITV. A spokesman for the star stated that he “has always considered himself a self-employed freelancer and has never knowingly avoided paying taxes,” while HMRC had earlier stated that it needed to make sure employees pay “employment taxes” even if they are working through their own companies.

Daily Mirror Daily Express

Watch seller will be dented by VAT changes

Watches of Switzerland could miss out on £58m of sales next year if a proposed change to duty-free shopping and VAT refunds goes ahead. The Government said recently that from the start of next year only cigarettes and alcohol would be exempt from taxes at UK airports, while everything else – including expensive watches – would be liable. As for VAT, overseas visitors will be able to get a refund in British shops, although what they buy has to be shipped to their home address.

The Times, Page: 43

HMRC urges universities to warn new students of tax scams danger

Students starting university this year are being warned by HMRC that they could be targeted by a fresh wave of tax scams. HMRC has written to universities, through Universities UK, asking them to help ensure their students know how to spot a scam.

The Times, Page: 13 Press Release

FINANCE NEWS – TUESDAY 6TH OCTOBER 2020

New framework to help businesses deal with Covid loans

The Treasury is in talks with the banking trade body, UK Finance, to develop guidelines for the treatment of borrowers using the state-backed bounce back loan scheme should they fall into difficulty. The Government and the finance industry are working on a code that will establish a standardised process that borrowers could expect, including offers of forbearance to help struggling businesses to stay afloat. However, industry sources say banks will resist applying the framework to other emergency state lending programmes. Kevin Hollinrake, a Conservative MP and co-chairman of the all-party parliamentary group on fair business banking, welcomed the talks, saying that he hoped for a “standardised code of practice to make sure that businesses are fairly treated and given time to restructure their finances should they run into cash flow difficulties”.

The Times, Page: 34

CORPORATE NEWS – TUESDAY 6TH OCTOBER 2020

Duncan Smith hits out at firms following remote working guidance

The Mail considers how large City firms including PwC, HSBC and Goldman Sachs and have stalled plans to shift workers back to the office after Boris Johnson urged Britons to work from home again amid fears of a second wave of coronavirus. The paper cites former Conservative leader Sir Iain Duncan Smith, who says: “Smaller businesses cannot be up and running unless the big companies get their staff back to the office. It’s deeply unpatriotic of them to stay away from their offices, causing chaos for those businesses which rely on them and their staff. It will lead to massive job losses.”

Daily Mail, Page: 8

PROPERTY NEWS – TUESDAY 6TH OCTOBER 2020

Market fears dampen house sales

Concerns about job security and worries about house prices are putting one in five people off buying a home, according to a survey by PwC. However, 10% of respondents said they are more likely to buy, partly due to the stamp duty holiday. Jamie Durham, an economist at PwC, said: “The pandemic is making many people consider their next move very carefully.” The firm predicts that if COVID-19 remains contained, house prices could grow by 1% in 2021. A second national lockdown could, however, see prices fall by 7%.

Daily Mirror, Page: 11

ECONOMY NEWS – TUESDAY 6TH OCTOBER 2020

Services sector figures released by IHS Markit

The IHS Markit/CIPS Purchasing Managers’ Index (PMI) for the services sector fell to 56.1 last month from August’s score of 58.8. However, although the pace of the recovery has slowed, the reading was better than an initial “flash” estimate of 55.1. Any figure above 50 indicates expansion. IHS Markit chief economist Chris Williamson commented: “The UK service sector showed encouraging resilience in September, with business activity continuing to grow solidly despite the government’s Eat Out to Help Out scheme being withdrawn.” He went on: “Unsurprisingly, spending in the restaurant sector slumped after spiking higher in August, and many other consumer services activities showed a similar slide back into contraction as renewed lockdown measures were introduced, causing the overall rate of expansion to moderate.” Meanwhile the final composite PMI reading for the eurozone was reduced to 50.4 last month, against 51.9 in August.

The Daily Telegraph The Times, Page: 36 City AM

Increase in ‘zombie firms’ weighs on economy

Russell Lynch, writing in the Telegraph, discusses so-called ‘zombie firms’ and their effect on the economy. He quotes Bank of America Merrill Lynch which says the “build-up of zombie companies can make it more difficult for economies to escape vigorously from recessions, and can potentially hinder longer-term trend rates of growth.” Insolvency veteran Nick Hood, meanwhile, stated: “I think there will be a surge of insolvencies next year because I think all those gloves will be off and all those companies will start to go bust. There are a number of sectors that are going to be irreversibly changed by the pandemic, not just hospitality.”

The Daily Telegraph

OTHER NEWS – TUESDAY 6TH OCTOBER 2020

Johnson vows to make UK the Saudi Arabia of wind energy

Boris Johnson will suggest in his address to the virtual Tory conference today that the coronavirus crisis should be used as a catalyst to invest in green energy and wind power. The PM will promise to power every home in the UK with offshore wind energy within a decade. Mr Johnson will say: “We will invest £160m in ports and factories across the country to manufacture the next generation of turbines. And we will not only build fixed arrays in the sea, we will build windmills that float on the sea — enough to deliver 1 gigawatt of energy by 2030, 15 times as much as the rest of the world put together.”  More huff, puff and bluster from the old duffer?

The Times, Page: 1 Financial Times, Page: 1 The Daily Telegraph, Page: 1 The Guardian

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Paul Southward