NEWS – TUESDAY 9TH JUNE 2020

NEWS ROUNDUP

TAX NEWS – TUESDAY 9TH JUNE 2020

HMRC update CJRS guidance

HMRC have updated their guidance covering the Coronavirus Job Retention Scheme (CJRS) to reflect certain changes that are taking effect from 1st July 2020. Links to the latest updates: –

guidance/reporting-payments-in-paye-real-time

guidance/check-which-employees

guidance/claim-for-wage-costs

guidance/claim-for-wages

guidance/work-out-80-of-your-employees-wages

guidance/check-if-you-could-be-covered

EMPLOYMENT NEWS – TUESDAY 9TH JUNE 2020

Big drop in UK vacancies stokes fears of mass unemployment

Vacancies across the UK have fallen to their lowest levels for more than three years as recruiters warn of a “tsunami of job losses” when furlough comes to an end. James Reed, chairman of recruitment group Reed, said predicted that unemployment could rise to 5m, or 15% of the workforce. A poll by Manpower reveals 57% of employers don’t expect to return to pre-COVID-19 hiring levels until this time next year. A net 12% more firms plan to axe staff than take on new workers between July and September, the worst outlook in the survey’s 28-year history. Meanwhile, speaking at the CogX 2020 technology conference, Andy Haldane, the Bank of England’s chief economist, said the huge numbers of people on furlough or facing unemployment because of the lockdown meant there was “a level of inactivity in the jobs market we haven’t seen, possibly ever.”

Financial Times The Times, Page: 36 Daily Mirror, Page: 42

CORPORATE NEWS – TUESDAY 9TH JUNE 2020

Venture chief: use cash to boost equality

Eric Collins, the co-founder and chief executive of London-based venture capital fund Impact X, is urging people to support more BAME-owned businesses and BAME professionals stating: “Capitalism is driven on money, so use your money to drive the results that you’d like.” Collins added: “Even if you’re going to a large organisation like KPMG, if your money is being spent with an individual who is an underrepresented young associate, that person who has a client can say they have billable [hours] and has an opportunity to get to partnership.”

The Guardian, Page: 31

SMEs NEWS – TUESDAY 9TH JUNE 2020

Small businesses urged to switch from expensive CBILS

Analysis by HW Fisher has found small businesses that have accessed the cash through the Coronavirus Business Interruption Loan Scheme (CBILS) are paying far higher charges than those that waited until the newer Bounce Back programme. In some cases firms are paying 6% interest compared with the 2.5% fixed-rate for the bounce back loans. Simon Michaels, of HW Fisher, said that businesses are able to switch their loans by speaking to their bank.

The Daily Telegraph, Business, Page: 2

PERSONAL FINANCE NEWS – TUESDAY 9TH JUNE 2020

British households facing mounting debt crisis

Bank of England figures show UK households repaid a record £7.4bn of debt on credit cards and personal loans in April while household bank deposits also rose £16.2bn, more than triple the usual monthly figure. However, research by the Resolution Foundation indicates only one in eight low-income households experienced budget gains during the crisis compared with two in five high-income families. The charity StepChange said that since the beginning of lockdown in late March, 4.2m people had borrowed to make ends meet with 2.7m people using payment holidays on mortgages and credit products.

Financial Times, Page: 2 The Guardian, Page: 31

PROPERTY NEWS – TUESDAY 9TH JUNE 2020

Wagamama owner considering CVA

The Restaurant Group is considering entering into a company voluntary arrangement (CVA), as it enters talks with its landlords over cutting rents and closing sites. The news comes after the company, which owns Wagamama, Frankie & Benny’s and Chiquito, said it is looking to permanently close up to 120 restaurants, putting 3,000 jobs at risk. Meanwhile, Casual Dining Group and Azzurri Group are among other casual dining groups that have appointed advisers to look at strategic options.

The Times, Page: 34, 35 Financial Times, Page: 10

REGULATION NEWS – TUESDAY 9TH JUNE 2020

FRC closes remaining Tesco probe

The Financial Reporting Council (FRC) has closed its investigation into accountants at Tesco in relation to the supermarket chain’s £250m overstatement of profit in 2014. The FRC had already closed its investigation into Tesco’s former CFO in 2016, and into its former auditors in 2017. The investigation into accountants working within Tesco had been paused pending the Serious Fraud Office’s trial of senior Tesco employees on charges relating to the overstatement. A re-trial by the SFO of Tesco executives collapsed in 2018. The FRC said that following the conclusion of SFO proceedings and consideration of material from the fraud agency, it has decided to end its investigation into the Tesco accountants.

Financial Times, Page: 10 The Times, Page: 39 The Times, Page: 35 The Independent, Page: 53 The Sun, Page: 43 Daily Mail, Page: 73 Daily Express, Page: 50 Yorkshire Post, Page: 1 The Scotsman, Page: 36 The I, Page: 40

DIY investors suffer losses in company cash raises

The Telegraph reports that a scandal is brewing as private investors suffer huge losses as companies issue new shares at heavily discounted prices to fund managers, diluting investors’ holdings and often sending share values down. The Financial Conduct Authority permitted companies to double the 10% limit on emergency new issues earlier this year to enable firms to raise cash quickly amid the pandemic. Richard Wilson of Interactive Investor said: “The fact that it’s legal is astonishing. It flies in the face of the integrity of the financial system.” Anand Sambasivan of Primarybid dismissed claims that involving private investors took too long saying his firm has successfully connected private investors with fund raising for Compass Group, and outsource IWG. “Timing is not the issue. For some of our fund raising we managed to get £25m in a matter of hours. The issue is what businesses are allocating to retail investors,” he said. “Markets are public or they’re not.”

The Daily Telegraph

ECONOMY NEWS – TUESDAY 9TH JUNE 2020

Global economy set to contract by 5.2% in 2020 – World Bank

A report from the World Bank says the world economy is expected to contract by 5.2% in 2020 – the worst recession in 80 years – but the number of countries suffering economic losses means the scale of the downturn is worse than any recession in 150 years, the Global Economic Prospects report said. While China will see GDP rise by just 1%, the US will see a 6.1% fall, the eurozone a 9.1% drop, Japan faces a 6.1% decline, Brazil will fall by 8%, Mexico will be down 7.5% and India will experience a 3.2% slump. The World Bank warned that considering the high risks to the global outlook, the fall in GDP could be revised down to minus 8%.

Financial Times, Page: 1 The Daily Telegraph, Business, Page: 4 The Guardian, Page: 4

May’s sales figures improve on April

British retailers reported a 5.9% fall in sales in May compared with a year earlier, data from KPMG and the British Retail Consortium show. Total spending was down 19.1% in April when almost all non-essential stores were closed due to coronavirus restrictions. Barclaycard said its broader measure of consumer spending, based on transactions on around half of Britain’s credit and debit cards, showed a 27.7% annual fall in May compared with a record 36.5% drop in April.

The Times Reuters Financial Times, Page: 2

Contact Paul Southward