NEWS – WEDNESDAY 28TH APRIL 2021

NEWS ROUNDUP

TAX NEWS – WEDNESDAY 28TH APRIL 2021

Family businesses lobby group calls for £150bn of tax cuts

The International Business Network has called for the abolition of corporation tax and cuts to income tax and VAT to drive a post-pandemic recovery. The group, which represents family businesses, urges the Government to make £150bn of tax cuts, £70bn of which should be permanent while quantitative easing should be abandoned and perpetual “Covid recovery bonds” issued in its place to finance the recovery. “The UK is at an economic crossroads between prosperity and long-term relative decline. It is vital it chooses the right path,” John Longworth, chairman of the network, said. “This package sets out a clear agenda to allow family owned and run businesses . . . the cover they need to drive us out of this economic Armageddon.”

The Times, Page: 35

Republicans call Biden’s tax plans “economic sabotage”

The US president is expected to use his first speech to a joint session of Congress on Wednesday to outline his proposals for increases in capital gains tax, corporation tax and income tax. The tax raid on America’s wealthy is supposed to fund multi-trillion dollar spending programmes, but Republicans have called the plans “economic sabotage” while business figures said it threatened to “kill the golden goose that is America.” Chris Christie, the former Republican presidential candidate, said it showed Mr Biden was a “far-left president”. He said: “It is nothing more than income redistribution. It’s socialism.” Those earning more than $1m will see CGT rates almost double and when local and state capital tax rates are combined with the new federal level investors will pay up to 58% in some localities, such as New York City. Meanwhile, Mr Biden also plans to give the IRS an extra $80bn to crack down on wealthy individuals and powerful corporations who try to evade his proposed new tax hikes. UK analysts are watching the Chancellor closely to detect signs that he may follow suit with his own CGT rate increase later this year.

The Daily Telegraph, Page: 13 Daily Mail Daily Express The Guardian, Page: 27

PAC issues stinging report on tax and UK’s net-zero vision

A report from the Public Accounts Committee has said that the Treasury and HMRC have no “clear vision” of how taxes could help the UK meet its legal target of net-zero emissions by 2050. Committee chair Meg Hillier said the Government needed to release a clearer plan ahead of Cop26: “The economic revolution required to abandon fossil fuels and reach net zero must be the greatest coordinated ask of governments around the globe in history,” she said. “But the UK Government has been blithely issuing ever more ambitious climate targets for years now, with no sign of a roadmap to reach any of them. The departments in charge seem stuck in a bygone era, with little sign of the innovative thinking needed to achieve all this.”

The Independent Daily Express, Page: 4

French and German finance ministers back US global tax plan

France and Germany have backed the US Government’s idea of a global minimum corporate tax rate of 21% to be negotiated at the OECD. Germany’s finance minister Olaf Scholz said that personally, he had nothing against the US proposal. France’s Bruno Le Maire said: “If that is the result of negotiations, we would also be agreed.” Austrian Finance Minister Gernot Bluemel said the U.S. proposal was constructive. “This tax fairness must also apply above all between digital and analogue business models,” he said.

Financial Times, Page: 6 The I, Page: 25 Daily Mail

Danish tax authority loses High Court ‘cum-ex’ case

A judge has ruled that the Danish state could not enforce its own tax laws in an English court, collapsing an attempt to pursue more than 100 financial institutions for £1.5bn in tax payments.

Financial Times, Page: 11

FINANCE NEWS – WEDNESDAY 28TH APRIL 2021

Investment in UK tech set for record year

Venture capital investment into technology start-ups in the UK and Ireland is on track to set a record in 2021, according to data business PitchBook. Technology companies in the UK and Ireland raised £5.3bn in the first quarter of 2021, placing the sector on track to surpass last year’s funding record of £13.4bn. “In this post-Brexit era, UK-based companies have generally been able to attract capital and conduct business as usual,” PitchBook wrote in its new European Venture Report. “In the long run, prominent UK-based start-ups could play a key role in retaining talent and attracting new overseas investment,” the report added.

The Daily Telegraph

SMEs NEWS – WEDNESDAY 28TH APRIL 2021

KPMG Venture Pulse survey released

The latest KPMG Venture Pulse survey reveals that venture capital investment in Scottish businesses cooled in the opening months of the year, with the combined value of deals falling to £64.3m, from £97.6m previously. Amy Burnett, senior manager with KPMG private enterprise in Scotland, commented: “The figures for Q1 are relatively subdued and disappointing, but it’s clear investors still have an appetite for Scottish scale-ups. To some extent, we bucked the global trend towards the end of 2020, with significant deal volume and value, and we’re now seeing that steady off and balance itself out.” Bina Mehta, chair of KPMG UK and head of the firm’s ‘emerging giants’ practice, added: “The fact that the amount of VC investment coming into the UK from overseas increased in this post-Brexit environment is encouraging, as was the continued strength of corporate VC investment”;

The Scotsman BBC News

BBRS has cost £23m so far with no cases addressed

The Business Banking Resolution Service finally went live in February after a series of delays, the Times reports, but since its inception in 2019 the body has cost more than £23m without having compensated a single business. The BBRS was set up to give small and mid-sized businesses an independent view on banking disputes. Craig Beaumont, chief of external affairs at the Federation of Small Businesses, said: “Small businesses seeking redress will be looking at these big sums and expecting big results.”

The Times, Page: 35

CORPORATE NEWS – WEDNESDAY 28TH APRIL 2021

PKF supports Bloom & Wild’s first acquisition

Bloom & Wild has acquired Netherlands-based competitor Bloomon for an undisclosed sum – its first acquisition which quadruples the size of the online flower and gifting platform’s European footprint. PKF advised Bloom & Wild on the deal. Sophia Meadows, finance director at Bloom & Wild, said: “PKF were an invaluable support throughout the entire process. They were flexible with ever moving timelines, totally understood our business and what mattered to us and we relied on their technical expertise heavily to guide us through the process.”

Insider Media

PERSONAL FINANCE NEWS – WEDNESDAY 28TH APRIL 2021

Muted interest in advice during pandemic

Research from Netwealth suggests the pandemic has made people more engaged with their personal finances, although just one in seven Britons have increased their reliance on financial advice. A February survey of 2,000 adults aged 35-plus found two in five (41%) said they were more engaged with their personal finances throughout the pandemic than in previous years. But the research also found only 15% said they relied more on a financial adviser or wealth manager during the pandemic compared with previous years.

FT Adviser

ECONOMY NEWS – WEDNESDAY 28TH APRIL 2021

New Investment Council will advise on post-Brexit reform

The Department of International Trade has announced the creation of a new Investment Council to help advise ministers on how to make the most of Britain’s post-Brexit freedoms. The body, which is made up of private sector businesspeople, will meet at least twice a year to provide strategic advice on how to make regulatory changes to improve the attractiveness of the UK for foreign investors. International Trade Secretary Liz Truss said: “Alongside the Office for Investment, this Investment Council led by Minister Grimstone is a major leap towards ensuring foreign investors are heard and fostering a business environment that is fair and drives innovation and economic growth across the UK.”

Daily Express

UK manufacturers’ profitability drops to decade low

Figure from the ONS show UK manufacturers’ profitability fell sharply for a second consecutive year in 2020, dropping to 8.8%, the lowest since 2010.

Financial Times

REPORTING NEWS – WEDNESDAY 28TH APRIL 2021

Opinion: Investors should consider doing a little goodwill hunting

The Telegraph’s Ben Wright considers the treatment of goodwill and warns that a high proportion of listed companies entered the pandemic with the value of the goodwill on their balance sheet exceeding their retained earnings. “The worry is that the pandemic will have profoundly altered some of the assumptions about the future upon which companies were valuing their goodwill.” Adam Leaver, a professor of accounting and society at the University of Sheffield, says: “The big question is how difficult it’s going to be for some companies to sustain the cash flow expectations that underpin the assumptions on which that goodwill is valued in this new world.” He adds: “For acquisitive companies with levered balance sheets, [it] could get very messy if all of a sudden, observers begin to question the cash flow expectations that underlie their goodwill valuations.”

The Daily Telegraph, Business, Page: 4

Contact Paul Southward

Paul Southward