NEWS – WEDNESDAY 10TH FEBRUARY 2021

NEWS ROUNDUP

TAX NEWS – WEDNESDAY 10TH FEBRUARY 2021

IoD: Tax rises ‘will be disaster for entrepreneurs’

The Chancellor has been warned off increasing taxes on entrepreneurs with Jonathan Geldart, director-general of the Institute of Directors, saying they need to be put “at the heart of the recovery” instead of being burdened with higher taxes. Mr Geldart said: “Tax hikes risk choking off the economic recovery before it has even got started. It is paramount the existing package of grants, loans and reliefs is extended. A cliff-edge in support would be disastrous for business.” The IoD’s proposals for Rishi Sunak’s budget include a temporary cut in employers’ national insurance contributions, targeted business rates relief for the hardest-hit companies and extending the present measures such as furlough “as long as restrictions continue”. Investment reliefs should be enhanced and Brexit adjustment vouchers issued to help businesses with the disruptions and costs of trading with the EU. Commenting on the Government’s current agenda, Matt Kilcoyne, deputy director of the Adam Smith Institute, said: “The Government has shuttered the shops, the Chancellor is threatening to put up taxes on firms that survive this bleak winter, the Business Secretary is lining up to make directors liable and prosecutable for actions that they knew nothing about. It is economically unsound.”

The Times, Page: 40 The Daily Telegraph, Business, Page: 5

Ocado chief slams plans for online sales tax

Tim Steiner, the co-founder and chief executive of Ocado, has described plans for a sales tax on online retailers as “inappropriate”. His remarks come after it emerged that the Treasury is considering a new online sales tax as part of a business rates review as well as a windfall tax on firms that have seen profits surge due to COVID-19. Mr Steiner said: “We already have sales tax in the UK, it’s called VAT. It’s applied equally to whoever sells the product based on the products. I don’t think it’s appropriate for anyone to put a sales tax on a retailer because they operate from a different type of premises or they’re a more efficient operator.”

The Daily Telegraph, Business, Page: 5 The Independent Daily Mirror, Page: 39 Daily Express, Page: 51

Chancellor could target IHT to raise funds

In a piece considering the possible tax changes Rishi Sunak could make to pay for the pandemic spending, Finn Houlihan, the Managing Director at ATC Tax, told the Express he believes that inheritance tax could be targeted, suggesting the rate could be raised from 40% to 80%. His comments echo the views of other experts, but Paul Johnson, director of the Institute for Fiscal Studies (IFS) suggested earlier this month that pensions tax, council tax, inheritance tax and capital gains tax should all be reformed before extra levies are imposed.

Daily Express

REPORTING NEWS – WEDNESDAY 10TH FEBRUARY 2021

Government told to urgently reinstate gender pay gap reporting

Work undertaken over decades to close the gender pay gap in the UK could be undone if the Government fails to commit to gender pay gap reporting, campaigners have warned. Britain’s flagship gender pay gap reporting service has been placed “under review” for the second time since its inception in 2017, the Guardian reports. Gender pay gap enforcement was suspended on 24 March 2020 due to the pressures on business from the pandemic and the women and equalities select committee recently called for gender pay gap reporting to be urgently reinstated or the Government would risk further entrenching existing gender inequality in the economy. Ann Francke, chief executive of the Chartered Management Institute said: “If the government doesn’t act, things quickly disappear back down the rabbit hole. The excuse is likely to be that businesses are badly hit right now but actually, it is employees, especially women and minorities, who have been badly hit.”

The Guardian

CORPORATE NEWS – WEDNESDAY 10TH FEBRUARY 2021

Brexit red tape drives JD Sport to open warehouse in EU

The executive chairman of JD Sport has said the company will set up a new warehouse in Europe, employing about 1,000 people, because the costs of exporting to the EU have soared due to Brexit red tape. Peter Cowgill also warned that an overhaul of business rates and rents are needed for UK high streets to recover.

The Daily Telegraph, Business, Page: 3 BBC News Daily Mail, Page: 23 Daily Mirror

Dune issues CVA proposal

Footwear and accessories firm Dune has launched a Company Voluntary Arrangement (CVA) proposal which includes a number of shops moving to a turnover-based rent model. Will Wright and Chris Pole from KPMG‘s restructuring practice are the proposed nominees of the CVA.

Evening Standard

WEALTH MANAGEMENT NEWS – WEDNESDAY 10TH FEBRUARY 2021

Nucleus to be acquired by James Hay

Investment platform business Nucleus is to be acquired by James Hay for £144.62m, with a financial planning and retirement adviser platform with AUA of £45bn to be formed from the merger. James Hay CEO Richard Rowney remarked: “We admire much about Nucleus and the skills within its team and look forward to working with them to better serve the growing needs of advisers. By joining forces, we can combine Nucleus’ reputation for great digital user-experience and James Hay’s pension specialism, creating greater strength and a platform with the scale to invest and deliver real value for advisers and their clients.”

City AM

PENSIONS NEWS – WEDNESDAY 10TH FEBRUARY 2021

UK Government liabilities surge £1.3trn in three years

According to figures from the ONS, the UK Government’s pension liabilities have risen 22% in three years, raising questions about the profitability of public pension schemes. The data showed that the Government’s liabilities had grown by 22% between 2015 and 2018 to reach £6.4trn. State pension liabilities amounted to £4.8tn, or 224% of gross domestic product. Former pensions minister and LCP partner Sir Steve Webb said not too much had changed with regard to private sector DB and DC schemes. The total figure has grown roughly in line with growth in the economy.

FT Adviser Interactive Investor

ECONOMY NEWS – WEDNESDAY 10TH FEBRUARY 2021

Sharp fall in global migration threatens economic recovery

The global collapse in skilled migration resulting from pandemic-driven border controls will hamper the economic recovery, particularly in countries whose growth was fuelled by high levels of net immigration.

Financial Times

INDUSTRY NEWS – WEDNESDAY 10TH FEBRUARY 2021

Auditors, not directors should be liable for accounts

Among possible reforms to the audit sector is a new liability for directors who could be fined or banned if their companies publish inaccurate information in their accounts. In a letter to the Telegraph, retired director David Hutchinson says, “the pressure should be put on auditors who fail to carry out their duties competently”. He explains: “I and other board members relied on an experienced, qualified finance director to accurately state the financial position, with an annual audit to provide a check. As a chartered engineer, I had neither the expertise nor qualifications to identify anything other than blatant accounting errors.”

The Daily Telegraph, Page; 19

OTHER NEWS – WEDNESDAY 10TH FEBRUARY 2021

KPMG chairman: ‘Stop moaning’ about Covid workplace regime

The chairman of KPMG UK has apologised after telling staff on a conference call to “stop moaning” about the impact of the coronavirus. Later in the call he apologised and in a follow-up email, said: “I know that words matter and I regret the ones I chose to use today. I think lockdown is proving difficult for all of us. I am very sorry for what I said and the way that I said it.” Staff had been voicing their concerns about potential pay cuts as well as a performance system that ranks individuals within a team.

The Daily Telegraph, Business, Page: 3 Financial Times, Page: 1 BBC News

Arcadia administrators earning £1,200 an hour

The Mirror reports on documents detailing how accountants handling collapse of Sir Philip Green’s Arcadia are earning up to £1,200 an hour. Deloitte was appointed as administrators for more than two dozen Arcadia-linked businesses at the end of November and is thought to be in line for £25m in fees once the fashion retailer is would down. A spokesperson for Deloitte said: “This is one of the largest and most complex retail administrations in UK history, which spans eight brands and 27 separate companies.” Separately, two legal firms say they have already gathered almost 200 potential claimants who they say may not have been properly consulted before losing their jobs at Arcadia.

Daily Mirror Daily Express, Page: 12 The Guardian, Page: 32

Washington State wealth tax would see billionaires flee

A new 1% tax on wealth of more than $1bn proposed by legislators in Washington State could see Amazon founder Jeff Bezos levied around $2bn a year. Other billionaires in the state include Microsoft co-founder Bill Gates and Microsoft CEO Steve Ballmer. But Jared Walczak, the vice president of state projects for state tax policy at the Tax Foundation, said the tax would simply drive the billionaires out, depriving the state of other revenue as well.

The Independent

Eli Lilly CFO steps down after ‘inappropriate’ communications

Josh Smiley, the CFO of Elli Lily, has stepped down amid allegations he had “consensual though inappropriate personal communications” with some employees.

Financial Times

Contact Paul Southward

Paul Southward