NEWS – TUESDAY 8TH SEPTEMBER 2020

NEWS ROUNDUP

TAX NEWS – TUESDAY 8TH SEPTEMBER 2020

Higginson tells Chancellor to hit avoiders with windfall tax

Companies that shift profits offshore to minimise their corporation tax bills should be hit with a windfall tax to help pay for the COVID-19 crisis, Andrew Higginson, the chairman of Morrisons has said. Instead of raising taxes for workers and companies that pay their taxes, multinationals using complex structures to funnel profits overseas should be targeted instead, Mr Higginson wrote in a note for clients of the stockbroker Shore Capital, where he acts as a senior adviser. “The easy cry is to raise taxes on those that already pay. The better choice is to target those who don’t. Windfall taxes should be the Government’s weapon of choice,” Mr Higginson added.

The Times, Page: 36

CGT rise could stifle investment

Treasury proposals to increase the rate of capital gains tax “could stifle entrepreneurialism and slow down investment simply to generate short-term tax revenues,” Richard Churchill, a partner at Blick Rothenberg, has claimed. Mr Churchill said: “Serial entrepreneurs may well conclude the incentives are no longer sufficient to warrant risking their own funds and simply sit on their hands during the next few years which would be a further blow to the economy during a period which will undoubtedly be difficult for UK plc.”

The I, Page: 43

EFL clubs told to settle tax debts

The Mail reports that English Football League clubs are facing a funding crisis as HMRC demands taxes due after their four-month COVID-9 payment holiday are paid in one lump sum. The clubs lost a combined £50m through missing gate receipts after lockdown and a further loss of £200m is expected if significant crowds are kept away this season.

Daily Mail, Page: 75

PENSIONS NEWS – TUESDAY 8TH SEPTEMBER 2020

Employers urged to assist savers looking to transfer out of DB schemes

A report from Royal London and Lane Clark & Peacock is calling for employers to provide greater assistance to those workers who want to transfer their defined benefit pension plan into a scheme that they can manage themselves. The report warns that unless such advice is made available, there is a danger that savers could end up dealing with rogue advisers who go on to strip them of their pension. The report found only 29 out of 750 IFAs surveyed (4%) have been appointed by a scheme. LCP partner Steve Webb comments: “Pension schemes have an important role to play in ensuring that members are fully informed about their options and can access high quality advice.” Research by Royal London and LCP also reveals nearly half of advisers are unsure whether they will still be giving defined benefit transfer advice in a year’s time. New rules including a ban on most contingent charging will come into force from the start of next month.

FT Adviser Money Marketing International Adviser Financial Planning Today IPE Corporate Adviser

Providers should have power to stop risky transfers

A study of 13 pension providers by the People’s Pension and policing think tank the Police Foundation shows over 900 people with combined savings of £54m were potentially targeted by fraudsters in 2019. Phil Brown, director of policy at the People’s Pension, said: “Currently, pension providers can flag a potential scam to a customer, but we can only stand by and watch if the individual chooses to proceed with a risky transfer that could result in them losing all their savings. We’re calling on the Government to provide pension providers and regulators with the powers to stop risky transfers; and ensure victims of fraud aren’t hit with having to pay tax penalties on their lost savings.”

Daily Express, Page: 23 Daily Mirror, Page: 21 Yorkshire Post, Page: 9

EMPLOYMENT NEWS – TUESDAY 8TH SEPTEMBER 2020

HMRC boss says £3.5bn of furlough cash could be suspect

Jim Harra, the top civil servant at HMRC, told MPs yesterday that its working assumption is that between 5% and 10% of furlough claims may have been paid out in error or because of fraud. The Government has so far paid out £35.4bn in furlough cash, meaning somewhere between £1.75bn and £3.5bn could have been wrongly paid out. Mr Harra said HMRC would not be seeking to root out employers who have made legitimate mistakes, but will instead be focusing on tackling abuse and fraud. HMRC expects businesses to check their claims and repay any excess amount, Mr Harra added.

The Daily Telegraph, Page: 1 Daily Mail, Page: 1, 2 The Times, Page: 36 The I, Page: 11 The Guardian, Page: 29 The Sun, Page: 13 The Scotsman, Page: 10

CORPORATE NEWS – TUESDAY 8TH SEPTEMBER 2020

Business will struggle to repay Covid debt, BCC warns

A survey of service sector and manufacturing businesses by the British Chambers of Commerce and TSB has found that more than one in four companies may need to scale down their operations to repay debt accrued during the COVID-19 pandemic. Businesses will need to be given flexible repayment options if an “unsustainable debt crisis” is to be avoided, the BCC said. A quarter said they would have to change their investment plans because of their debts and more than one in ten feared that they may be forced out of business. The groups’ director general Adam Marshall commented: “If not addressed, large debt burdens could stifle the recovery, threatening jobs and constraining business activity and investment.”

The Times, Page: 38

PROPERTY NEWS – TUESDAY 8TH SEPTEMBER 2020

Halifax figures show record UK house prices

Halifax has reported that pent-up demand and the stamp duty holiday have seen UK house prices reach a record high in August, with managing director Russell Galley stating: “A surge in market activity has driven up house prices through the post-lockdown summer period.” The price of the average UK house now stands at £245,747, with Andrew Burrell of Capital Economics noting: “Pent-up demand will soon be expended. A weak economy, cautious lenders and the end of the stamp duty cut will weigh on prices.”

The Daily Telegraph, Business, Page: 1 The Guardian City AM

ECONOMY NEWS – TUESDAY 8TH SEPTEMBER 2020

UK consumer spending exceeds last year’s level for first time since lockdown

Data from Barclaycard indicates that consumer spending grew 0.2% in August, compared with the same month last year, up from a 2.6% contraction in July and the first expansion since February. Separately, the British Retail Consortium and KPMG retail sales monitor reported retail sales rising at an annual rate of 3.9% in August. Paul Martin, UK head of retail at KPMG, said: “We continue to experience mixed fortunes and not all retailers are where they should be at this point in the year. Fashion sales did start to rebound somewhat although this was mainly driven by children’s back-to-school purchases. Likewise, the focus on home-related products, including furniture and computing equipment, continued – no doubt aided by many consumers remaining mostly at home.”

Financial Times, Page: 3 The Times, Page: 38 The I, Page: 43 Yorkshire Post, Page: 1

Sterling drops as Brexit tensions escalate

Sterling dropped about 0.5% against the USD in early European trading yesterday ahead of another round of Brexit trade talks between the UK and EU. The prospects for a deal were dealt another blow overnight after news that the UK Government is preparing to override previous agreements with the EU.

CNBC

OTHER NEWS – TUESDAY 8TH SEPTEMBER 2020

Forget philanthropy and tax, tax, tax

Paul Vallely explains at length in a piece for the Guardian why philanthropy does little to resolve wealth inequality. Rather, it serves elite causes, enables billionaires to dictate policy and instead of making the world a better place, undermines democracy. Vallely goes on to point out that tax relief adds the money of ordinary citizens to the causes chosen by rich individuals, but attempts to reform the tax relief continue to hit brick walls. Vallely cites Rutger Bregman, who, when asked at Davos in 2019 how the world could prevent a social backlash rising from the growth of inequality, replied: “The answer is very simple. Just stop talking about philanthropy. And start talking about taxes – Taxes, taxes, taxes. All the rest is bullshit, in my opinion.”

The Guardian, Journal, Page: 5-7

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Paul Southward