SEISS tax warning

The Low Incomes Tax Reform Group has warned that self-employed workers who have turned to Government support initiatives during the coronavirus pandemic may not realise they could have to pay back a third of their grants in tax and national insurance by January 2022. HMRC figures show that more than 2.3m people have utilised the Self-Employed Income Support Scheme, to the tune of £6.8bn.

Daily Mail, Page: 43


Pay levels fall at record rate

Office for National Statistics (ONS) figures show that April saw pay levels fall at the fastest rate on record, with workers taking home an average of £503 per week in regular pay during the month, representing a drop of over £6 in real terms compared to the previous month. Nomura’s George Buckley stated: “Clearly this reflects the operation of the furlough scheme, with many of those on furlough reporting that they are taking home 80% of their pre-virus pay.” Meanwhile the total number of workers furloughed has seen the joint-smallest rise since the job retention scheme was introduced, increasing by 200,000 to 9.1m with nearly £21bn claimed under the scheme. JPMorgan economist Allan Monks said the scheme “is playing a key role in limiting the rise in unemployment,” while Berenberg economist Kallum Pickering noted a risk of “a massive wave of layoffs” when the programme is wound down. Meanwhile, separate ONS data have revealed the largest increase in benefit claims for a century, with a record 2.8m claims. Tony Wilson, director of the Institute for Employment Studies, remarked: “If the public health crisis is just starting to ease, the figures show that the unemployment crisis is only just beginning.” Meanwhile, Yael Selfin, chief economist at KPMG, said the true impact of the COVID-19 crisis on the labour market “is likely to only be revealed once the job retention scheme starts unwinding in the second half of the year”.

The Guardian, Page: 31 The Times, Page: 12 Financial Times, Page: 3 The Daily Telegraph The Daily Telegraph, Business, Page: 1 The Independent, Page: 11 Daily Mail, Page: 8


Poundstretcher considers closures

Poundstretcher could close more than 200 stores, with the discount retailer considering plans to shut half of its 450-strong estate as part of a restructuring plan designed to stem losses. KPMG will oversee a CVA, with the firm’s Will Wright saying the CVA “seeks to safeguard the future of the business, across a smaller, more sustainable estate”. With the retailer looking to cut rents by up to 40% at 84 stores, KPMG said the future of a further 253 will be decided “depending on the commercial merits of each store” after a six-week negotiation period with landlords.

Daily Mail, Page: 68 The Guardian, Page: 32 The Times, Page: 47 Daily Mirror, Page: 39

Boohoo eyes Oasis and Warehouse

Boohoo is set to buy Oasis and Warehouse, snapping up the retailers two months after their collapse into administration. Oasis and Warehouse’s online business and intellectual property assets were sold to Hilco Capital in April. The deal would see Oasis and Warehouse reunited with fashion labels Coast and Karen Millen, which Boohoo bought for £18m last year. All four were previously owned by Mosaic Fashions. The deal could reportedly be announced today when Boohoo posts its first-quarter results.

The Daily Telegraph Financial Times, Page: 12 City AM

Investors look to score football bargains

The Times says football clubs facing financial turbulence amid the COVID-19 crisis could become the target of investors, with investment funds weighing the possibility of buying into troubled clubs at discount prices. “Private equity is emerging as the main option for distressed leagues. Firms have realised that the crisis … presents opportunities,” suggest François Godard of Enders Analysis. Deloitte analysis suggests England’s top 20 clubs are likely to report a £1bn shortfall in revenues for the financial year ending this month, with top flight teams possibly seeing a permanent loss of £500m.

The Times, Page: 44

£3.2bn tax take from AIM firms

Looking at the Alternative Investment Market 25 years on from its launch, the Telegraph cites Grant Thornton research showing that AIM-listed firms contributed £33.5bn gross value added to UK GDP last year and made a tax contribution of £3.2bn to the Exchequer.

The Daily Telegraph, Business, Page: 8

NHS and private hospitals explore link to cut lists

The FT reports that private hospitals taken over by the Government amid the coronavirus crisis are in talks about extending the arrangement, noting that KPMG acted as independent assessor on the deal.

Financial Times, Page: 2


Think-tank suggests share plan to support SMEs

A report for the Social Market Foundation by MP Bim Afolami suggests that the Government should invest £15bn in SMEs in exchange for shares that would one day be sold to the public. The Unlocking Britain report proposes that the Recovery Fund would be floated on the London Stock Exchange. Mr Afolami, who is expected to raise the idea in Parliament today, says the £15bn could be borrowed and invested via the Government’s British Business Bank.

The Daily Telegraph, Business, Page: 8 The Times, Page: 43

SMEs expect big impact from COVID-19

Research from Barclaycard has found that close to 75% of SMEs think the coronavirus pandemic will have a significant impact on their business for the next three months, with 20% foreseeing a heavy impact a year on.

Daily Mail, Page: 43


Lenders let homeowners switch early

Analysis from mortgage broker L&C shows that lenders are allowing homeowners to move to a better mortgage rate before the end of their existing deal without issuing and penalties. While banks often let borrowers agree a new rate up to six months in advance, there is often a fee to transfer before the current deal concludes. However, Nationwide, Santander, Clydesdale, TSB and Halifax are all offering the chance to transfer in advance without exit fees. Santander is offering a fee-free switch four months before the existing deal expires, with Halifax allowing the jump to be made two months early. The remainder allow borrowers to switch three months before the existing deal comes to an end.

Daily Mail


Shadow chancellor urges emergency Budget in summer

Anneliese Dodds, the shadow chancellor, is urging an emergency summer Budget and stimulus package. She said: “We are increasingly worried that the slow and confused health response is now being followed by a slow and confused response to saving jobs.” Insisting that the “window is closing to protect existing jobs and encourage firms to invest in creating new ones,” Ms Dodds, who voiced concern over an OECD estimate that UK GDP could slip 11.5% this year, called for a “back to work Budget that has one focus – jobs, jobs, jobs.” Jesse Norman, financial secretary to the Treasury, said the Government would do “whatever is needed” to support the economy.

The Independent, Page: 12 Financial Times City AM

Scottish sales fall by a quarter

The latest sales monitor from the Scottish Retail Consortium and KPMG shows that total sales in Scotland were down 27.6% year-on-year in May. This marks an improvement on the 40% dip recorded in April. Total food sales increased by 3.6% on a year ago, while total non-food sales slipped 53.2%. Paul Martin, UK head of retail at KPMG, commented: “June could become a crucial month as the sector, and consumers, come to terms with a very different looking high street.”

The Scotsman, Page: 36

Contact Paul Southward