NEWS – WEDNESDAY 1ST APRIL 2020
NEWS – WEDNESDAY 1ST APRIL 2020
CORONAVIRUS LATEST SUPPORT AND LINKS
Covid-19: Job Retention Scheme – FAQ
Here is a useful note of frequently asked questions about the emergency Job Retention Scheme.
Link to new guidance on the coronavirus Job Retention Scheme
HM Treasury (HMT) has published new guidance on the coronavirus Job Retention Scheme.
The new guidance confirms that the government will cover employer NIC and pension contributions for furloughed workers on top of 80% of salary, and that those furloughed can volunteer for the NHS without risking their pay.
Guidance on avoiding scams and phishing emails
HMRC have updated their guidance on examples of HMRC-related phishing emails and bogus contact to include details about a coronavirus (COVID-19) SMS scam that tells customers they have been fined £250 for leaving the house.
TAX NEWS – WEDNESDAY 1ST APRIL 2020
Returning NHS workers warned over tax avoidance schemes
Former doctors and nurses returning to the health service to help the NHS amidst the coronavirus crisis have been warned to avoid tax-saving schemes designed to disguise their earnings. HMRC has warned that complex tax arrangements that see staff working via umbrella companies and taking home up to 85% of their pay resemble other disguised remuneration schemes that have seen workers hit by substantial tax bills under the Revenue’s loan charge policy. Dawn Register of BDO comments: “In the taxman’s view they do not work and anyone who enters into them can expect to be subject to investigations and financial penalties.” HMRC has advised staff offered such a scheme to use its online tax calculator to check the level of income tax and National Insurance they should be paying.
CORPORATE NEWS – WEDNESDAY 1ST APRIL 2020
Laura Ashley places 1,700 staff on furlough
The administrators of Laura Ashley have made 268 staff redundant and placed 1,669 on furlough, with redundancies across head office and back office functions. All 147 Laura Ashley stores closed last week, with 70 shut following a review of their long-term viability and the rest closed due to COVID-19. Rob Lewis and Zelf Hussain of PwC anticipate reopening all stores for a period of time, either because they form part of the sale of the business or to sell through existing stock. The administrators continue to operate the retailer’s online business, with employees working from home where possible.
The Daily Telegraph, Business, Page: 3 City AM
SMEs NEWS – WEDNESDAY 1ST APRIL 2020
CBI calls for support for medium-sized businesses
The Confederation of British Industry (CBI) has called for support to be given to “stranded middle” businesses who are not eligible for the Government’s coronavirus relief package. While companies with revenue of less than £45m can turn to the £330bn business interruption loan scheme and large investment grade companies can access the Bank of England’s Covid Corporate Financing Facility bond-buying programme, the CBI warns that a number of firms cannot access either initiative. CBI chief economist Rain Newton-Smith says there are “a lot of distressed businesses that are very big employers around the UK,” adding that a number of medium-sized businesses are going unsupported. “We feel it’s an issue that needs to be addressed at speed and at scale”, she added.
SMEs pushed toward more expensive loans
The Federation of Small Businesses has warned that some lenders are pushing SMEs seeking to get interest-free loans offered as part of the Chancellor’s COVID-19 support package toward more expensive alternatives that carry large interest rates and other charges. Federation chairman Mike Cherry said: “While the big banks have ruled out the use of personal guarantees where smaller interruption loans are concerned – a very welcome development – there is, at this point, nothing to stop them pushing those inquiring about these loans towards conventional products where personal guarantees are needed, and high interest rates are applied.”
The Daily Telegraph, Business, Page: 1
Banks pushed to waive personal guarantees for SME coronavirus loans
Ministers are pushing for an agreement with the banking sector that would mean small companies need not provide personal guarantees to access interest-free loans designed to ease coronavirus-related pressures.
EMPLOYMENT NEWS – WEDNESDAY 1ST APRIL 2020
Think-tank: National living wage hike justified
The Learning and Work Institute think-tank says an increase in the minimum wage is right, despite the pressure the coronavirus crisis is putting on employers. As of today the national living wage for those 25 and over increases by 51p to £8.72 an hour. The Resolution Foundation and the Institute for Fiscal Studies have suggested that the increase should be delayed due to the financial stress brought about by the pandemic, with many economists warning an recession is on the cards. However, Joe Dromey of the Learning and Work Institute says that the increase is “the right thing to do”, despite it being “a difficult and uncertain time for employers.” He says: “Employers will have long planned for this pay rise,” adding: “Reversing the increase would deny a pay rise to hundreds of thousands of low paid workers”, including many “who are on the front line in the national effort to tackle the virus .”
PROPERTY NEWS – WEDNESDAY 1ST APRIL 2020
London office investment plunges 74%
The amount spent by property investors on office buildings in London fell by 74% in March amid the ongoing coronavirus crisis. Just £534m of City and West End office purchases were agreed as travel restrictions made viewings and the signing of deals difficult, according to a study from property agent Avison Young. Around £2.4bn of purchases were agreed in Q1, a 13% decline, according to the research.
PENSIONS NEWS – WEDNESDAY 1ST APRIL 2020
TPR warns of scams during COVID-19 crisis
The Pensions Regulator has warned that pensions savers could be exploited by scams amid the coronavirus crisis, In updated guidance, it said: “Pension trustees should give greater attention to the heightened risk of members being targeted by scammers and unscrupulous financial advisers.” The regulator last week issued guidance to trustees saying that all transfer activity could be halted for three months, with former pensions minister Baroness Ros Altmann among experts who had called for a pause over concern that valuations of pension pots would be inaccurate due to market turbulence caused by the COVID-19 outbreak.
ECONOMY NEWS – WEDNESDAY 1ST APRIL 2020
Treasury trebles spending plans
The Treasury has trebled its Budget plans to raise cash from markets in April as it looks to support the economy through the coronavirus pandemic. The Debt Management Office says it will seek to raise £45bn in April – a record cash issuance of UK government bonds. The figure compares with an anticipated £16bn set out at the time of the Budget in March. Former Bank of England deputy governor and member of the Office for Budget Responsibility Sir Charles Bean has suggested Government borrowing could hit the same level as during the financial crisis, saying: “Together with the costs of the measures, the budget deficit could easily top £200bn this year according to the Institute for Fiscal Studies. That is nearly 10% of GDP, the same level reached in the Great Recession.”
Social distancing measures to hit GDP
Analysis by PwC suggests that, while half of workers can carry out their job from home, social distancing measures designed to slow the spread of coronavirus will contribute to a fall in GDP this year. PwC’s report suggests that at least 11% of the economy will be directly affected by the social distancing measures, which include the closure of pubs, restaurants and a swathe of shops. Jing Teow, senior economist at PwC, said that many businesses will have introduced remote working and “with the right technology more could follow suit, mitigating some of the loss to output and business activity”, but noted that this is “less feasible for sectors that require a physical presence.” For these entities, she added, “making full use of government support such as the job retention scheme will be critical.” While PwC previously forecast economic growth of +1%, this has been revised to between -3% and -7% since the outb reak.
OTHER NEWS – WEDNESDAY 1ST APRIL 2020
Contactless limit raised to £45
Measures to help tackle coronavirus have seen an increase in the maximum spend for contactless payments fast-tracked. As of today, the limit increases from £30 to £45, although UK Finance says the process of updating software in sale terminals may mean the new limit will not be active across all stores immediately. On the use of contactless payments, KPMG’s Linda Ellett comments: “There are those who aren’t perhaps as adaptive to these new technologies and need to be front of mind.”
Daily Mirror, Page: 2
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