NEWS – WEDNESDAY 12TH AUGUST 2020

NEWS ROUNDUP

TAX NEWS – WEDNESDAY 12TH AUGUST 2020

HMRC miscalculates coronavirus grants for self-employed

HMRC has admitted that over 16,000 grants given to the self-employed to help them through the coronavirus crisis were either too high or should not have been paid out at all. Integrated Dispute Resolutions, a legal services firm which highlighted the error, called on HMRC to be transparent about how much the errors have cost. A spokesman for HMRC said: “The Self Employment Income Support Scheme has been delivered at unprecedented pace and has protected the livelihoods of 2.7m self-employed people in the UK. The vast majority of grants were paid correctly but in a very small number of cases not all the information held on a tax return was taken into account when calculating eligibility and grants.”

Daily Mirror, Page: 5

Amazon shamed by eBay’s stance on tax

eBay has announced that it will not pass the UK Digital Services Tax to sellers in the form of fee increases, piling pressure on Amazon which was roundly condemned for saying that it will not absorb the extra costs of the digital services levy. The tax, introduced in April, levies a 2% charge on revenues generated in the UK. It is estimated that the tax will cost eBay at least £20m this year.

The Times, Page: 37

EMPLOYMENT NEWS – WEDNESDAY 12TH AUGUST 2020

Soaring unemployment – “the lull before the storm”

Almost three-quarters of a million jobs have been lost from company payrolls since the start of the coronavirus pandemic in March, official figures show. Young people aged 18 to 24 were among the worst affected by job cuts along with workers over the age of 65,according to the Office for National Statistics, which also recorded a record high number of zero-hours contracts. Pay levels were down with wages including bonuses falling 1.2% and regular pay down 0.2%, the first negative reading since records began in 2001. Ruth Gregory, a senior UK economist at Capital Economics, commented: “Further rises in unemployment in the coming months are all but inevitable as the furlough scheme unwinds. This is just the lull before the storm.” Following the release of the figures, Boris Johnson said the UK has a “long, long way to go” until it sees a return to “economic vitality and health”. Mike Cherry, national chairman of the Federation of Small Businesses, suggested the furlough scheme will need to be reviewed “and the option of a meaningful extension to furloughing should be kept open.”

The Times, Page: 8 The Daily Telegraph, Business, Page: 5 Financial Times, Page: 3 The Daily Telegraph, Page: 1 The Guardian, Page: 31 Daily Mail, Page: 14 Daily Express, Page: 6

Two-in-five businesses expect to cut jobs

A survey by the ICAEW of 800 senior finance executives at UK companies found 40% expect to cut jobs in the next six months as a result of the coronavirus slowdown. One third had already cut jobs, with two-thirds of these saying the reason was due to a drop in demand and 59% said it was to increase efficiencies. Some 54% said their organisation had furloughed staff. Just over a quarter (28%) of respondents said their organisations were hiring, while 27% said their firms had a recruitment freeze. The measures taken by the Government to protect jobs were approved by 76% of respondents. Iain Wright, ICAEW director for business and industrial strategy, commented: “Our members give government credit for preserving jobs so far, but they believe that a hard landing for the economy is only months away, and that employment will be badly hit. Some of this will be because market demand is weaker, but the crisis is also driving companies to become more efficient. This may improve productivity, but it will cost jobs.”

City AM

CORPORATE NEWS – WEDNESDAY 12TH AUGUST 2020

Mike Ashley’s Frasers Group to delay results

Mike Ashley’s Frasers Group, formerly Sports Direct, is to delay the release of its annual results, stating it needs more time to complete its accounts. Frasers was due to release its full-year figures on Thursday 13 August, but will now publish them on 20 August, as disclosures relating to new accounting rules were “completed and reviewed”. In a statement released to the City, Frasers said the delay was not linked to any “significant matters” beyond completion of “normal audit procedures”. The company added: “Due to the undoubted scrutiny of our accounts, management and our auditors RSM will take this extra week to robustly review the final accounts and ensure that all necessary disclosures have been completed.” Last year Sports Direct’s results were delayed multiple times, resulting in the resignation of auditor Grant Thornton.

The Guardian

Debenhams to cut another 2,500 jobs

Debenhams is planning to cut a further 2,500 jobs as it restructures management roles at stores and distribution centres. The retailer, which currently employs 14,500 people, announced 4,000 job losses in May. The cuts will be mainly across its UK stores and distribution centre, but it said no new shops were slated to shut. The shopworkers union Usdaw said the latest cuts were “devastating news for staff” who were informed via a conference call and without consultation. In response, a spokesperson for the joint administrators at advisory firm FRP said consultation was “rarely possible in insolvency where the options available are limited and the administrators must consider their own duty to creditors.”

Financial Times, Page: 10 The Daily Telegraph The Guardian, Page: 31 The Independent, Page; 44

INSOLVENCY NEWS – WEDNESDAY 12TH AUGUST 2020

Scots business failures expected to spike by Q4

Research by the restructuring trade body R3 reveals that 93.7% of insolvency and restructuring professionals expect corporate insolvency numbers to rise in Scotland over the next year. Some 56% predict the increase will occur between October and December. R3 Scotland chair Tim Cooper highlighted the help provided by government support measures, but warned: “It’s clear from the survey results that it’s a question of when, not if, corporate insolvency numbers increase.”

The Scotsman, Page: 36

WEALTH MANAGEMENT NEWS – WEDNESDAY 12TH AUGUST 2020

Quilter reserves another £17m for pensions scandal

Quilter has increased its provision for mis-selling costs relating to the steelworkers pension scandal from £12m to £29m after finding the problem was more widespread than it had thought. Members of the British Steel pension scheme were targeted by financial advisers from a number of firms, including Quilter’s Lighthouse subsidiary. The mis-selling took place before Quilter bought the firm in June 2019 and saw steelworkers pressured into signing away valuable defined-benefit rights. CEO Paul Feeney said that the failings were “predominantly down to two individuals”, both of whom had left Lighthouse.

The Times, Page: 36

SMEs NEWS – WEDNESDAY 12TH AUGUST 2020

Government coronavirus business loans total nears £52bn

Data released by the Treasury on Tuesday revealed that, as of August 9th, the Government has lent £51.7bn to businesses via its emergency coronavirus loans funding schemes. Lending under the bounce back loan scheme accounted for £34.96bn, with a total of 1,404,726 applicants and 1,157,296 approvals; under the coronavirus businesses interruption loan scheme (CBILS), lending hit £13.41bn, with 121,669 applications and 59,520 approvals; and the coronavirus large business interruption loan scheme (CLBILS) made up £3.4bn of lending, with 497 loans approved out of a total of 896 applications.

Daily Mail, Page: 69 City AM

ECONOMY NEWS – WEDNESDAY 12TH AUGUST 2020

UK slumps into recession with massive Q2 slump

The Office for National Statistics is expected to confirm today that UK GDP plunged by 21% between April and June, following a 2.2% fall in the first quarter of the year. However, all eyes will be on the figures for June which analysts hope will indicate an 8% rebound in activity. Philip Shaw, chief economist at Investec Bank, added that July’s figures next month “should contribute strongly to a material rebound in the third quarter,” however, the “test will come in the autumn when there are no further ‘lockdown releases’ to boost the economy, some restrictions (perhaps just local) are imposed and programmes such as the furlough scheme are wound up.”

Sky News Yorkshire Post, Page: 1

Sunak weighs delaying autumn Budget on second Covid wave

Rishi Sunak is reportedly considering scrapping his autumn Budget if Britain is hit by a big second wave of coronavirus, signalling anxiety at the heart of government over a possible second COVID-19 spike.

Financial Times, Page: 1

INTERNATIONAL NEWS – WEDNESDAY 12TH AUGUST 2020

Chinese US listings: cease and delist

The FT’s Lex says delisting Chinese companies from US exchanges for not adhering to domestic accounting standards is impractical and could harm investors.

Financial Times, Page: 22

OTHER NEWS – WEDNESDAY 12TH AUGUST 2020

Accountant’s family ride in her memory

The Mail reports on the passing last year of Jessica Welsby, who died of Sudden Arrhythmic Death Syndrome (SADS) while taking part in an international exchange programme in Australia. Family and friends are taking part in a 230 mile bike ride to raise money for SADS UK; from St Helens to Edinburgh, where she gained her qualification of Chartered Accountant at Chiene and Tait.

Daily Mail Daily Mirror Daily Star

Contact Paul Southward