NEWS – WEDNESDAY 14TH APRIL 2021
NEWS – WEDNESDAY 14TH APRIL 2021
TAX NEWS – WEDNESDAY 14TH APRIL 2021
UC claimants hit by tax raid
HM Revenue & Customs has cut payments to hundreds of thousands of Universal Credit (UC) claimants during lockdown because they were mistakenly overpaid tax credits as long as 17 years ago. As many as half a million struggling families have been affected. HMRC data shows such deductions have been occurring “at a rate of 47,000 cases per week” since January 18. Figures also reveal that between April and November last year it cut £63m from claimants’ payments. UC architect Sir Iain Duncan Smith said using the benefits system to claw back tax in this way is “a major mistake” that is “causing profound difficulties.”
Wales – Labour vows ‘no income tax rise in Covid recovery’
Mark Drakeford has promised not to increase income tax while the economy is recovering from the impact of coronavirus if his party is re-elected into government at the Senedd election. The Welsh Labour leader pledged to create a “stronger, greener, fairer Wales” if in power after the 6 May vote.
Denmark charges 3 Americans and 3 Britons in tax fraud scandal
Three British citizens and three US nationals have been charged by Danish authorities with defrauding Denmark of $175m as part of a European investigation into dividend tax fraud. The cum-ex trading scheme is also being investigated by authorities in Germany, Belgium and Britain.
Financial Times, Page: 10 Daily Mail
CORPORATE NEWS – WEDNESDAY 14TH APRIL 2021
Babcock in writedowns warning
Defence contractor Babcock has warned of writedowns totalling some £1.7bn, more than double analysts’ estimates, following a review of historic contracts and future income. In a trading update, the firm noted that the “vast majority” of impairments are one-off in nature and non-cash affecting, with group underlying operating profit expected to be reduced by around £30m annually. Babcock’s annual results are likely to be delayed because of the volume of work needed on the writedowns and write-offs and because the company effectively has two auditors as Deloitte prepares to take over from PwC.
Peacocks bidders had no chance, critics say
The Times reviews the move by Philip Day’s right-hand man to rescue Peacocks, with the backing of Day himself. The “phoenixing” of Day’s various retail interests in new vehicles fronted by Steve Simpson, his long-term lieutenant, has led to criticism. The Peacocks move infuriated rivals who have accused FRP Advisory, the administrators to Day’s assets, of “merely going through the motions, wishing to create the appearance of a fair and equal bidding process, when in fact they have a settled intention to compete with one particular party — an insider”. FRP insists it ran a full and fair process and rejects allegations that it had frustrated other bidders, such as Frasers Group’s attempts.
PENSIONS NEWS – WEDNESDAY 14TH APRIL 2021
Working from home can turbocharge women’s pensions
Former pensions minister Ros Altmann has welcomed the move to flexible working, adding that it will “alleviate” some of the pension discrepancies between men and women. She says: “The more women can combine their caring duties with their careers, the better. It is certainly a good thing if workplaces make it easier for women to continue working full-time hours while balancing their other responsibilities.” But, she adds: “Lots of women are still unable to commit to full-time hours even when flexible working is an option.”
Daily Mail This is Money
SMEs NEWS – WEDNESDAY 14TH APRIL 2021
HMRC gives update on SEISS payments
HMRC has issued an update on SEISS grants, stating that the service to claim the fourth grant will be available from late April 2021. HMRC said: “If you are eligible based on your tax returns, HMRC will contact you in mid-April to give you a date that you can make your claim from. It will be given to you either by email, letter or within the online service.” HMRC added that self-employed claimants will need to confirm they meet all the eligibility criteria when making their claim – which has to be made on or before June 1, 2021.
ECONOMY NEWS – WEDNESDAY 14TH APRIL 2021
Positive Covid data pressures Johnson to reopen faster
New official figures show 23% of recorded coronavirus deaths are now people whose primary cause of death was not COVID-19. Additionally, daily death figures by “date of death” reveal that Britain has had no more than 28 deaths a day since the beginning of April while Oxford University has calculated that the number of people in hospital with an active Covid infection is likely to be around half the current published daily figure. Covid deaths now make up just 4.9% of deaths registered in England and Wales, compared with 45% in mid-January, according to the ONS. MPs are now calling on Boris Johnson to take a less cautious approach to lifting restrictions to reduce the other harms caused by lockdown. Prof Carl Heneghan, the director of the Centre for Evidence Based Medicine at Oxford University, commented: “The issue is as we go about our daily lives there will be a slight increase in cases, but the key is not to panic. I think this over-cautiousness c an be overcome by using a data-driven approach.”
February export figures released
The Office for National Statistics has released figures showing that UK trade with the EU recovered in February, with exports increasing by £3.7bn, or 46.6%, after a £5.7bn decline a month earlier. AJ Bell financial analyst Danni Hewson commented: “There is small comfort to be had in February’s trade figures. Exports to the EU, which dropped so dramatically off a cliff in January, have bungeed back up, though they are still £2bn down on pre-Brexit levels. Notably imports from the EU were less resilient and remain more than £5bn down.”
INTERNATIONAL NEWS – WEDNESDAY 14TH APRIL 2021
SEC says warrants issued by blank-check companies may be liabilities
The Securities and Exchange Commission has issued guidance indicating that the warrants issued to early investors in SPAC deals should not be classified as an equity, but rather “a liability measured at fair value, with changes in fair value each period reported in earnings.” In a statement late Monday, SEC officials said: “The evaluation of the accounting for contracts in an entity’s own equity, such as warrants issued by a SPAC, requires careful consideration of the specific facts and circumstances for each entity and each contract.” Forbes reports that uncertainty over how the SEC will treat warrants has stopped all new SPAC offerings as accounting firms will not sign-off on any financial statements or company audits until they receive clarity from the government.
US should require crypto-trading to be reported to help close tax gap
Internal Revenue Service Commissioner Charles Rettig estimates that the US now has a $1trn tax gap – up from the last official estimate of a $441bn annual average from 2011 to 2013. Rettig reckoned trading in cryptocurrencies was escaping taxation, as was rising foreign-sourced income and abuses of business income passed through as personal income. Among his recommendations Rettig suggested new legislation requiring transactions in cryptocurrencies such as Bitcoin be reported.
OTHER NEWS – WEDNESDAY 14TH APRIL 2021
Katie Price owes £3.2m to creditors
Former glamour model Katie Price reportedly owes more than £3.2m to her creditors after accountants submitted a report raising concerns about her financial conduct. Price allegedly owes the cash from her company Jordan Trading Ltd, despite being declared bankrupt in 2019 and vowing to pay back £12,000 a month through an individual voluntary arrangement. The reality star was once worth more than £45m.
Daily Mail The Sun Daily Mirror
Bank of England’s chief economist to run Royal Society of Arts
Andy Haldane is leaving the Bank of England after a 30-year career to join the Royal Society for Arts, Manufactures and Commerce (RSA) as chief executive in September. The Bank of England’s chief economist has been among the most optimistic forecasters throughout the pandemic. “Haldane’s departure means the Bank of England is losing its major – and maybe only – current hawk,” said James Smith, economist at ING. “In theory, at the margin this tilts the committee towards a more favourable view on negative interest rates if more stimulus were needed, though we still think this is unlikely.”
Contact Paul Southward