NEWS – WEDNESDAY 10TH JUNE 2020

NEWS ROUNDUP

TAX NEWS – WEDNESDAY 10TH JUNE 2020

Could a wealth tax help pay for Britain’s coronavirus spending?

Paul Falvey, a tax partner at BDO, looks at whether a wealth tax could help pay for Britain’s coronavirus spending woes. He says a wealth tax on property would run into complex problems as there are wide regional variations in the value of property and for many their home is the main or even sole asset. Property has also already been subject to stamp duty, council tax and inheritance tax. Overall, Falvey says introducing a wealth tax in a fair way would be overly complex and bring in only a small proportion of the UK’s tax take.

Daily Mail

CORPORATE NEWS – WEDNESDAY 10TH JUNE 2020

Everest bought back by private equity owner

Double glazing firm Everest has been sold back to its private equity owner Better Capital via a “pre-pack” administration. FRP Advisory handled the sale. Partner Alistair Massey commented: “This deal secures a significant number of jobs and personal livelihoods for many affiliated roles.” Around 1,000 jobs will be preserved but the company said 188 redundancies were being made across the business.

The Times, Page: 41 The Guardian Daily Mirror, Page: 35 Daily Mail, Page: 69 The Press and Journal, Page: 15

Business failures: raze like a phoenix

The FT’s Lex suggests business collapses triggered by the coronavirus pandemic should make money for specialist private equity groups, but opaque restructurings could result in scandals a year or two.

Financial Times, Page: 22

Gym heads for insolvency

Low-cost gym chain Xercise4Less is believed to be considering a company voluntary arrangement (CVA) after advisers from PwC failed to find a buyer.

The Times, Page: 42

SMEs NEWS – WEDNESDAY 10TH JUNE 2020

Bounce back loan borrowing at £24bn as CBILS approval rate hovers around 50%

The approval rate for coronavirus business interruption loans (CBILS) remains at just above 50%, as figures show British firms have borrowed nearly £35bn under the government’s three emergency coronavirus credit schemes. Total lending under the bounce back scheme was at £23.8bn by 7 June, up from £21.3bn a week earlier, with a total of £9.6bn lent under the CBILS scheme and £1.57bn as part of the CLBILS initiative. Giles Wilkes, senior fellow at the Institute for Government, told MPs on the Treasury committee he was worried much of the cash would not be repaid. “As time passes guarantees and subsidised lending from the state can start damaging the fabric of the economy if you simply keep alive companies that should not be kept alive or won’t be sustainable,” he said.

City AM Daily Mail, Page: 68

UK government eyes stakes in start-ups to keep them afloat

The Treasury could commit up to £1bn through the government’s Future Fund, which provides loans to start-ups threatened by coronavirus that convert into equity if not repaid.

Financial Times, Page: 3

EMPLOYMENT NEWS – WEDNESDAY 10TH JUNE 2020

State paying wages for 11.5m Britons

New figures from the Treasury reveal that nearly 9m UK workers have been furloughed as a result of the coronavirus pandemic. The data showed that firms have now claimed £19.6bn to cover furloughed employees’ wages. A further 2.6m self-employed workers have submitted claims for a total of £7.5bn. Today is the deadline for employers to place new staff on furlough. The scheme will be closed to new entrants from June 30th. Meanwhile, a fortnightly survey of companies by the Office for National Statistics (ONS) found employers expect to lay off fewer staff than before as sentiment improves.

The Daily Telegraph, Business, Page: 1 The Times, Page: 38 City AM

PROPERTY NEWS – WEDNESDAY 10TH JUNE 2020

House sales in England rebound

Research by property website Zoopla shows house sales in England have rebounded since the government allowed estate agents to reopen last month. Zoopla said demand had improved in June, with asking prices 6% higher than a year earlier. However, the company’s research director, Richard Donnell added: “We still believe that this spike in demand will be short-lived as the economic impacts of COVID start to feed through into market sentiment and levels of market activity in 2020 H2.”

The Times, Page: 2 Financial Times, Page: 2 Reuters The Guardian, Page: 35

ECONOMY NEWS – WEDNESDAY 10TH JUNE 2020

All shops can open on Monday but consumers remain cautious

Alok Sharma has confirmed that all non-essential shops will be allowed to reopen in England on Monday. The business secretary said retailers can open as long as they follow safety guidelines, or they could face enforcement notices. However, economists expect high streets are on course for a slow restart with an EY survey finding only 25% of shoppers felt comfortable visiting supermarkets and nearly two thirds expected to go shopping less frequently. Some 67% said they expect it will take months or years before they return to a restaurant while 80% said it could be months or years before they feel comfortable visiting a cinema and 73% felt the same way about returning to pubs and bars.

Financial Times BBC News The Times, Page: 40 The Daily Telegraph, Business, Page: 5 Daily Mirror, Page: 16 The Guardian Daily Mail

Economic bounce-back requires Brexit deal and vaccine

KPMG ’s latest outlook report warns that Britain’s economic recovery could be hampered by a hard Brexit or a failure to find a vaccine for COVID-19. The economy would shrink by 7.2% next year, before rebounding by 2.8% in 2021 provided a vaccine is available by next summer. If this is not the case growth would be limited to 0.9%, the firm said, adding that the unemployment rate could hit 8.6% this year, and 11% in 2021. Yael Selfin, chief economist at KPMG UK, said: “Considerable uncertainty remains around the timing of a vaccine, which will impact the timing and speed of the recovery, as well as the extent of any permanent damage to the economy.”

The Times, Page: 42

OTHER NEWS – WEDNESDAY 10TH JUNE 2020

Bar Refaeli’s mother is jailed for tax evasion

Supermodel Bar Refaeli has been ordered to do nine months of community service as part of a plea deal with Israeli prosecutors in a £2m tax evasion case. Her mother, however, who has been her daughter’s agent throughout her career, has been jailed for 16 months for her role in deceiving tax authorities.

The Times, Page: 33 The I, Page: 2

Contact Paul Southward

Paul Southward