Slow recovery could see need for more tax hikes

If the economy does not make a swift recovery from the pandemic the Chancellor may have to raise taxes further to balance the books, according to Professor Sir Charlie Bean. The Office for Budget Responsibility expert told MPs that if the “scarring” from Covid is wider than expected then more consolidation would be required. However, if the UK returned to its pre-pandemic trajectory the tax hikes announced last week “would, in theory, no longer be necessary to restore sustainability.”

The Independent

The tax implications from buying and selling crypto-assets

David Britton, a tax partner at BDO, answers some of the key questions regarding crypto-assets in light of the recent trading activity in Bitcoin. He says there is a popular misconception that the profit or gains arising from crypto-assets transactions are tax-free. Individuals buying and selling Bitcoin could be subject to CGT while those considered to be trading cryptocurrencies may need to pay tax on the profits as trading income. Additionally, income tax and NIC will apply to crypto-assets received from an employer as a payment for services performed in the UK.

Daily Mail

IHT reclaims could be on the horizon

Sean McCann, Chartered Financial Planner at NFU Mutual, provides some tips on how to counter the Chancellor’s freeze to the nil-rate band and the residence nil-rate band – a move that will bring more people into the inheritance tax net over the next five years. Mr McCann also points out that with house prices predicted to increase by 5.7% this year before falling back 1.7% next year, there could be a wave of families reclaiming overpaid inheritance tax on property.

Daily Express


Greensill files for administration

Greensill Capital has collapsed into insolvency after admitting it could not meet a $140m repayment demand from its Swiss bank backer. The supply-chain finance specialist was thrown into crisis last week after its main insurer refused to renew a $4.6bn contract and Credit Suisse froze $10bn of funds linked to the firm. A lawyer for the company said yesterday that Greensill had about $5bn of exposure to metals magnate Sanjeev Gupta’s GFG Alliance, which had started to default on its obligations. GFG said its operations were continuing as normal. Its UK business, Liberty Steel, employs about 5,000 workers at plants including Rotherham and Hartlepool. Worldwide, GFG employs 35,000 people. GFG’s situation could now see Apollo Global Management buy parts of the business with the US private equity group offering $59.5m for Greensill’s intellectual property and IT systems. A spokesperson for Greensill’s administrators, Grant Thornton, said: “The joint administrators are in continued discussion with an interested party in relation to the purchase of certain Greensill Capital assets.”

The Daily Telegraph Financial Times The Times, Page: 35 The Guardian, Page: 28 Daily Mail, Page: 77

Shoe Zone shuffles Foot for Boot

Terry Boot has been named as Shoe Zone’s new FD. Mr Boot, who will take on the role from Peter Foot, will take the position after four years working with The Company of Master Jewellers, following roles at Brantano and Jones Bootmaker. It came as the retailer said it is unlikely to pay a dividend out to shareholders until 2025 as it swung to a loss following the impact of store closures during the pandemic.

Evening Standard


Treasurers unlikely to risk balance sheet with bitcoin

The Mail talks to accountants about how likely investment by corporates into bitcoin will be. “When I did my treasury exams, the thing we were told as number one objective is to guarantee security and liquidity of the balance sheet,” said Graham Robinson, a partner in international tax and treasury at PwC and adviser to the UK’s Association for Corporate Treasurers. “That is the fundamental problem with bitcoin, if those are the objectives for treasurers, then breaking them could get them in trouble.” In the US, the Financial Accounting Standards Board does not have guidance specific to the accounting for cryptocurrencies but companies do treat them as “intangible assets” and account for them accordingly. Former FASB chairman Robert Hertz said he hopes the regulator will soon review its treatment if more mainstream companies get into bitcoin.

Daily Mail


Lifetime allowance freeze could impact Britons in their 40s and 50s

Tom Selby, senior analyst at AJ Bell, comments on the Chancellor’s decision to freeze the lifetime allowance for five years until 2026. Selby says the move was billed as an attack on pensioners but it could affect savers of all ages. He explains: “People in their 20s and 30s might understandably have never considered the lifetime limit, but decent-sized contributions coupled with strong investment returns could pull young people into its orbit. Those in the later stages of their savings journey – and even people who have already started taking a retirement income – may also be at risk and need to factor in the lower lifetime allowance into their planning.”

Daily Express


Over 1m small firms at risk of collapse due to cyber attacks

Research commissioned by Vodafone has found that the equivalent of 1.3m small businesses would go bust if they were targeted by hackers, leading to calls for the Government to put more money into cyber defences. The report urged the Government to expand a dedicated business cybersecurity within the National Cyber Security Centre and introduce a 5% VAT cut on cybersecurity products for small companies.

City A.M.


One in eight recent UK graduates hit by unemployment

ONS data show 12% of recent graduates were unemployed in the third quarter of 2020. This compares with an unemployment rate of 4.6% for the wider graduate workforce and 5.1% for the working age population overall.

Financial Times


Hospitality firms ‘optimistic’ about bounce back in trading

Leisure and hospitality firms are feeling optimistic about the future, a survey by Haysmacintyre has found. Hotel businesses had the most positive outlook, with 83% saying they were confident about future prospects; 53% of restaurants said the same but 59% of pubs were uncertain or lacking in confidence for their prospects looking forward. Overall, 69% believe that trading levels will return to normal either by the end of this year or the first half of 2022. Gareth Ogden, partner in the hospitality team at Haysmacintyre, said: “The hospitality industry has undeniably been hard hit by the COVID-19 crisis. However, despite the challenges, this Survey reveals that many in the sector remain positive.”

City AM

Pandemic effects ‘not as severe as other recessions’ – BoE

Bank of England governor Andrew Bailey has predicted that the coronavirus pandemic’s economic effect will not be as severe as those seen under previous recessions. Stating that government spending had been a “a necessary and sensible response,” he noted: “It means that the economic impact of COVID will be spread over time – how long we don’t know because it is too early to predict. But that cost has to be managed, and it will be easier to do that with a higher trend rate of growth, boosted by stronger investment.” The Bank’s outlook was cautious, Bailey added, noting that a planned further £150bn of quantitative easing was expected to be completed by around the end of 2021.

The Times The Daily Telegraph Financial Times City AM

UK retail sales return to growth despite lockdown

Retail sales in the UK grew 1% last month compared with the same period last year, according to KPMG and the BRC, a sharp reverse of a 1.3% year-on-year contraction in January. But Paul Martin, UK head of retail at KPMG, said Rishi Sunak’s budget last week offered only short-term help for retailers. “Conditions will continue to be incredibly challenging as they face subdued demand, thinner margins and rising logistics costs, alongside the accelerated structural changes to the sector,” Martin said.

Financial Times The Times, Page: 38 Daily Mail


HMRC investigates elite English rugby clubs

HMRC is to probe England’s elite rugby clubs to see how payments to players and agents are accounted for. The move follows a similar investigation into football, which resulted in players and agents being forced to hand over millions in unpaid taxes.

The I, Page: 5

Contact Paul Southward

Paul Southward