NEWS – WEDNESDAY 26TH AUGUST 2020

NEWS ROUNDUP

TAX NEWS – WEDNESDAY 26TH AUGUST 2020

HMRC probes 250 wealthy taxpayers for evasion

According to freedom of information requests submitted by law firm Pinsent Masons, 250 taxpayers as well as 23 of the 2,100 largest businesses in the UK were referred to the taxman’s evasion teams in the year to March 2020. Andrew Sackey, partner at the firm, said: “HMRC clearly now has the behaviours of a number of the UK’s biggest businesses in its sights. If a case is referred to the tax evasion referral teams then detailed investigations are almost certain to follow. For large corporates that do find themselves in the tax tribunals for alleged evasion, the reputational risks are substantial.” Looking forward, Mr Sackey said furlough fraud was going to be of “particular interest” to HMRC over the coming months and years and urged businesses that discover that they have received furlough monies that they weren’t entitled to urgently consider taking specialist advice.

FT Adviser

If you have any concerns about your business or personal tax affairs or have received an enquiry from the taxman, contact Paul Southward for specialist advice.  You can read Paul’s article on penalties for incorrect tax returns here: –

HMRC_Penalties

Royal tax affairs could be leaked after US move

The Daily Express features a report on the Duke of Sussex’s tax affairs, noting that should his earnings be subject to the US’ IRS instead of the UK’s HMRC, his tax returns may be released. Daily Mirror royal editor Russell Myers noted that if Prince Harry made any corporate deals that could be frowned upon, these would become public knowledge should his tax returns be published. He noted: “You spoke about the tax arrangements, well that is very interesting, because if they spend 183 days of the year in the US then all of their tax affairs will need to be going through the IRS in the States and that poses a particular problem for the Royal Family as well, because their tax affairs are very, very closely guarded.”

Daily Express

Torsten Bell: brace for 1990s-style tax rises rather than spending cuts

Writing in the Times, Torsten Bell, the director of the Resolution Foundation think tank, says we won’t be able to judge how to react to the economic crisis caused by the pandemic by looking at our immediate past – it won’t be a rerun of the financial crisis. Bell predicts that, “with spending cuts difficult technically and politically, and the pandemic likely to leave the UK with a lasting deficit, the years ahead are much more likely to include a rerun of the tax rises of the 1990’s than the spending austerity of the 2010’s.”

The Times, Page: 37

EMPLOYMENT NEWS – WEDNESDAY 26TH AUGUST 2020

JPMorgan and Linklaters make remote working policies permanent

JP Morgan has told staff in London and on Wall Street that they will be continuing to work remotely on a part-time basis. London-based Daniel Pinto, head of JP Morgan’s investment banking arm, told CNBC that staff will in future cycle between office-based shifts and home working. The move comes as Magic Circle law firm Linklaters also tells staff they are allowed to permanently split their time between home and the office after the COVID-19 crisis. Linklaters has told employees worldwide that they will be allowed to spend between 20% and 50% of their time working remotely once all COVID-19 restrictions have been lifted. The policies are likely to spur more City firms to follow suit, cementing fears for the prosperity of central London and Canary Wharf. The news follows plans from Aviva Investors to make flexible working permanent while PwC said that most of its 22,000 UK employees will never return to the office full-time.

Financial Times The Daily Telegraph The Times, Page: 35 CNBC City AM Daily Mail, Page: 62

London workers optimistic about future prospects

A survey by job board CV Library has found that 40% of Londoners expect to be awarded a pay rise in the next year, with some 22% expecting a promotion. Lee Biggins, founder and CEO of CV-Library remarked: “It’s understandable that professionals in London are looking to regain some of their lost income in the coming months, particularly if they’ve been placed on furlough. However, the government’s Job Retention Scheme will come to an end in October and a second wave of the virus could make the job market even more competitive in 2021.” He went on: “The data clearly shows that professionals in London are hopeful about the future of the job market. While we are seeing an increase in the number of job opportunities available in the capital, job seekers may find that there is more competition for top roles.”

City AM

CORPORATE NEWS – WEDNESDAY 26TH AUGUST 2020

Finablr accounts delayed as problems mount

Finablr, which earlier this year admitted it had discovered $1bn (£760m) of previously undisclosed debt, has announced that it will miss the deadline for filing its annual accounts. It stated: “The company is currently unable to adhere to this deadline and will provide an update on the anticipated publication date when it is able to do so.” This comes after Finablr’s former chief executive, Promoth Manghat, was accused of being part of a group of executives and employees who forged documents and siphoned off funds from firms.

The Daily Telegraph The Times, Page: 40

Wirecard: the frantic final months of a fraudulent operation

A report on the saga surrounding Wirecard notes that auditor “EY, for years, had been content with balance confirmations issued in the name of the trustee, a company named Citadelle.” The report comes as Wirecard’s administrator cancels the contracts of its chief executive and two other senior managers while slashing 730 staff at the collapsed German payment company’s headquarters in Bavaria.

Financial Times, Page: 21 Financial Times, Page: 11

Quintessentially turns to US investor for loan amid pandemic

The concierge company run by Conservative party co-chairman Ben Elliot has been forced to borrow money from a US shareholder. Quintessentially said the agreement with WFS had been struck to “ensure its financial stability” but its new auditor, BDO, is yet to sign off on the group’s overdue accounts.

Financial Times, Page: 12 The Times, Page: 29 The Daily Telegraph, Business, Page: 3

PENSIONS NEWS – WEDNESDAY 26TH AUGUST 2020

More than £30m lost to pension fraud since 2017

Men in their 50s have been identified as the most likely victims of fraudsters who target people’s long-term pension savings. More than £30m has been lost since 2017 to pension fraud, according to Action Fraud, as unauthorised “advisers” tout unrealistic investments. In response to the figures, the Financial Conduct Authority and the Pensions Regulator have launched a campaign against scammers fronted by the football commentator Clive Tyldesley, who will use a raft of football analogies to raise awareness among savers about how to avoid scams.

BBC News The Guardian City AM Evening Standard Daily Mail

British workers have ‘no idea’ how their pensions work

A survey for Hargreaves Lansdown has revealed less than a third of workers in the UK are aware of where their pension savings are invested. Just a fifth of women in the UK are aware that their pension savings are invested in the stock market, the research showed. Maike Currie, investment director at Fidelity International, says that financial inequality at retirement is one of the “greatest challenges facing women today.”

Daily Mail

SMEs NEWS – WEDNESDAY 26TH AUGUST 2020

Chancellor urged to extend dining-out scheme

The Federation of Small Businesses is calling for Rishi Sunak’s Eat Out to Help Out initiative to be extended for another month to help out small hospitality businesses. More than 64m meals have been served under the Chancellor’s scheme at an estimated cost to the Treasury of around £320m. Mike Cherry, FSB chairman, called the deal “a success”, adding: “We now need to see it extended to continue the critical support that it is providing for small firms as we enter a period of economic make or break.”

Daily Express, Page: 10 The Independent, Page: 17

ECONOMY NEWS – WEDNESDAY 26TH AUGUST 2020

Retail employment falls at sharpest rate in more than a decade

Retail employment fell at the fastest rate in more than a decade in the year to August as high street firms cut jobs amid the coronavirus pandemic. The Confederation of British Industry’s monthly distributive trades survey also showed an even sharper decline is anticipated in the 12 months to September. The decline was broad across sectors, with only grocers, furniture and carpets, non-store and “other” goods sales achieving growth. The balance of employers saying they would reduce their headcount was -20 in May before weakening to -45 in August and -52 for the three months to November. “The furlough scheme has proved effective at insulating workers and businesses in some of the worst-hit sectors during the pandemic, but these findings reinforce fears that many job losses have been delayed rather that avoided”, said CBI lead economist Alpesh Paleja. “As a result, further support may well be needed for the retail sector if demand continues to disappoint. Extending business rates relief will go a long way towards alleviating pressure on retailers’ cash flow”.

Financial Times The Daily Telegraph, Business, Page: 1 The Guardian Evening Standard City AM Daily Mail, Page: 14

Contact Paul Southward