NEWS – WEDNESDAY 24TH FEBRUARY 2021

NEWS ROUNDUP

TAX NEWS – WEDNESDAY 24TH FEBRUARY 2021

Business urged to prepare for increased tax enforcement

Research carried out by EY shows business leaders expect greater tax enforcement from governments over the next three years as countries look to rebalance their books following the pandemic. Europe was seen as the region representing the highest tax risk to businesses in the coming three years, with the Americas and Asia-Pacific close behind. Workers stranded overseas, the treatment of financial losses linked to the pandemic, the claiming of tax refunds and even the receipt of stimulus measures were seen as the top pandemic-related tax risks. Kate Barton, EY’s global vice chair of tax, said COVID-19 had “greatly amplified the tax risk profile” of organisations. “As governments look to balance budget deficits, tax authorities are resuming suspended tax audits and litigation. Meanwhile, the digital transformation of the global economy – and the increasing volume of data and compliance requirements from tax administrations – means that organisations will inevitably face more risk for tough audits,” she said. “Without a change in approach today, organisations face a real risk of financial penalties and reputational damage tomorrow.”

City AM

Revera case illustrate need for reform of care home sector

Canadian care home operator Revera, which owns 56 care homes in the UK, has been accused of using aggressive tax avoidance to route profits from its homes through the tax havens of Jersey, Guernsey and Luxembourg. A report by the Centre for International Corporate Tax Accountability and Research says that profit-shifting such as that allegedly undertaken by Revera “indicates that investor-owned UK care companies have consciously chosen to extract profits rather than increase spending on higher staffing levels and better-quality care”. Christina McAnea, general secretary of the trade union Unison, said: “The scale of tax avoidance across the UK care home sector is deeply concerning. Urgent reform is needed.”

The Times, Page: 41

VAT Deferral New Payment Scheme – online service opens

Over half a million businesses who deferred VAT payments last year can now join the new online VAT Deferral New Payment Scheme to pay it in smaller monthly instalments, HMRC has announced. In order to take advantage of the new payment scheme businesses will need to have deferred VAT payments between March and June 2020, under the VAT Payment Deferral Scheme. They will now be given the option to pay their deferred VAT in equal consecutive monthly instalments from March 2021. Businesses will need to opt-in to the VAT Deferral New Payment Scheme. They can do this via the online service that opens on 23 February and closes on 21 June 2021.

Press Release

PROPERTY NEWS – WEDNESDAY 24TH FEBRUARY 2021

Stamp duty holiday to be extended to end of June

The Chancellor will use his March Budget to extend the stamp duty holiday until the end of June, according to the Times. In July last year the Chancellor raised the threshold for paying stamp duty from £125,000 to £500,000, providing people with up to £15,000 in savings. Experts warned ending the policy on March 31 would slow sales and send prices down by over 8%. However, Paul Johnson, the head of the Institute for Fiscal Studies, warned that by extending the stamp duty holiday the Government was increasing the likelihood of it becoming permanent. Extending the holiday is expected to cost the Treasury about £1bn. Additionally, the business rates holiday for the retail, hospitality and leisure sectors will also be extended at a cost of just under £1bn a month, along with the VAT cut for hospitality and tourism at an estimated cost of £200m a month.

The Times, Page: 1

EMPLOYMENT NEWS – WEDNESDAY 24TH FEBRUARY 2021

New wave of £7,500 grants for self-employed planned

Rishi Sunak is preparing to offer self-employed workers grants of up to £7,500 in next week’s Budget, the Telegraph reports. People who meet the criteria can claim 80% of average monthly profits up to a maximum of £2,500 a month. However, the scheme will probably end at the end of April reflecting the fact that many self-run businesses will have to remain shut until then. Andy Chamberlain, director of policy at the Association of Independent Professionals and the Self-Employed, welcomed the proposals but cautioned against pulling support from self-employed workers too soon. “Throughout the coming months, where there are still restrictions on the economy and businesses, Government must ensure there is proportionate support for this country’s freelancers and self-employed,” Mr Chamberlain said.

The Daily Telegraph

Extension to furlough scheme urged as unemployment hits 5.1%

Chancellor Rishi Sunak has been urged by the CBI to extend furlough and other support programmes amid fears that the unemployment rate could grow. CBI figures show that it has already reached 5.1%. Matthew Percival, director of People and Skills at the CBI commented: “With tough decisions on jobs being taken daily, employers need the Budget to provide further business support until the economy is fully reopen,” while Julian Jessop, economist at the Institute of Economic Affairs said of the furlough scheme: “It would make sense for the Chancellor to extend this scheme in next week’s Budget, but only for as long as substantial COVID restrictions remain in place.”

Evening Standard Financial Times, Page: 2

CORPORATE NEWS – WEDNESDAY 24TH FEBRUARY 2021

Women representation on FTSE boards climbs by 50%

The Hampton-Alexander Review has found that women representation on FTSE 350 boards has risen from 21.9% to 34.9% since 2015. “In total, 220 of the FTSE 350 companies now meet the Hampton-Alexander target of having at least 33% of their board positions held by women – with the figure having quadrupled from just 53 in 2015,” a statement from the Department of Business, Energy and Industrial Strategy read. The final report from the review also noted that there are now no longer any all-male FTSE 350 boards. The figures also show that women occupy 29.4% of broader senior roles, up from 24.5% in 2017. Hampton-Alexander Review chief executive Denise Wilson said: “The lack of women in the boardroom is where it all started a decade ago, and it’s the area where we have seen the greatest progress. “But now, we need to achieve the same – if not more – gains for women in leadership. The supply of capable, experienced women is full- to-over-flowing. It is now for business to fully-utilise a talent pool of educated, experienced women, to their own benefit and that of the UK economy.”

BBC News City AM

ECONOMY NEWS – WEDNESDAY 24TH FEBRUARY 2021

Sunak urged to support manufacturing in Budget

Crowe is calling on Chancellor Rishi Sunak to support the manufacturing sector in his March Budget. Johnathan Dudley, partner and head of manufacturing at Oldbury-based firm, said: “The Government has secured billions in COVID-19 corporate debt, most of which is at least a medium-term risk to the Exchequer. To reduce and manage this risk, it is important for manufacturers to be productive and competitive and for the original equipment manufacturer supply chains to be secure for the former to survive and the latter to have the incentive to stay around. This requires investment and simple tax relief alone will not justify it.”

Express & Star

CBI survey shows fall in retail, wholesale and motor trades employment

The CBI’s distributive trades survey has revealed that employment levels in the retail, wholesale and motor trades declined at a record pace in the year to February. CBI principal economist Ben Jones commented: “With lockdown measures still in place, trading conditions remain extremely difficult for retailers. Record growth in internet shopping suggests that retailers’ investments in on-line platforms and click-and-collect services maybe paying off, but the re-opening of the sector can’t come soon enough to protect jobs and breathe life back into the sector.”

City AM

INTERNATIONAL NEWS – WEDNESDAY 24TH FEBRUARY 2021

PwC head to trial over whistleblower firing

PwC US will go to trial on Monday as it defends its audits of two tech companies – Cavium and Harmonic – and that it rightly fired a whistleblower. Mauro Botta, former senior manager at the firm, has accused PwC of firing him because he submitted complaints to the Securities and Exchange Commission and other regulators, saying the firm had too cosy a relationship with its clients. PwC denies this, arguing Botta “fabricated an internal control and falsified audit documentation,” and then lied about doing so during an internal investigation.

City AM

Contact Paul Southward

Paul Southward