NEWS – WEDNESDAY 28TH OCTOBER 2020

NEWS ROUNDUP

TAX NEWS – WEDNESDAY 28TH OCTOBER 2020

Tax return filing deadline looms

Paul Southward reminds taxpayer’s that they now only have 96 days left to complete and file their self -assessment tax returns for the year ended 5th April 2020.  The fact that the 31st January falls on a Sunday next year may make this deadline even tighter for some.  Contact Paul if you need any assistance with your tax affairs.

INDUSTRY NEWS – WEDNESDAY 28TH OCTOBER 2020

Consultants paid £180m for work on Brexit

The Government is spending £180m on consultants to help minsters with Brexit, according to newly published contracts, raising questions about why departments have not done more to build up civil service expertise. Bain and McKinsey will be handed as much as £30m each to run “deep dive” reviews of policy, the Telegraph reports, while Deloitte, Accenture, KPMG and PwC will each be handed as much as £30m to help deliver the Government’s Brexit agenda. Nick Davies, an outsourcing expert at the independent Institute for Government, said: “The Government has had more than enough time to build up capacity and skills within the civil service to manage the transition. Ministers should not at this point be making such great use of hugely expensive consultants to deliver core government functions.”

The Daily Telegraph, Business, Page: 1 The Times, Page: 2

SMEs NEWS – WEDNESDAY 28TH OCTOBER 2020

2020 could set record for incorporation

Analysis of data from the past decade by recruitment and training business SHL suggests that this year could set a record for growth in company registrations. An additional 59,358 new companies were created in the UK between June and August compared with the same period last year, SHL said, with an extra 84,758 companies expected to be created this year in total compared with last year. SHL said its findings suggested there were “tens of thousands of new entrepreneurs”. But John Endacott, tax partner at PKF Francis Clark, said the increase could be down to job losses pushing people into solo self-employment. Elsewhere, Iain Wright, director of business and industrial strategy at the Institute of Chartered Accountants in England and Wales, said: “Every downturn in economic history is accompanied by a rise of entrepreneurship. This could be the start of new, innovative businesses.”

The Times, Page: 38

Nearly a fifth of self-employed claimed support despite no pain

In a survey of more than 6,000 people, the Resolution Foundation found 17% of applicants who applied for the self-employed income support scheme did so despite suffering no hit to their incomes during the pandemic. This means some 435,000 self-employed workers banked an extra £1.3bn from the taxpayer. Under the scheme, self-employed people with annual profits of less than £50,000 were offered a taxable grant worth up to 80% of average profits for a period of three months to October 31, capped at £7,500. The scheme has since been extended to April 2021. HMRC has urged self-employed workers who have been “overpaid”, who have claimed in error or were not eligible for the grant in the first place to pay the money back.

The Times, Page: 35

PENSIONS NEWS – WEDNESDAY 28TH OCTOBER 2020

Pension reforms could cost companies an extra £40bn

Figures from LCP indicate that new rules designed to protect company pension schemes could cost UK employers an extra £40bn over the next decade. The firm found that proposals in The Pension Regulator’s new defined benefit (DB) funding code would require the sponsoring companies that sit behind the UK’s largest DB pensions to put £100bn into these schemes over the next 10 years. This compares to a cost of between £60bn and £65bn under current rules. LCP partner Steve Webb comments: “If businesses are forced to move tens of billions of pounds away from productive investment in the economy and instead have to lock the money up in their pension fund, there is a risk that this damages the long-term health not just of the companies concerned but of the UK economy as a whole.” Meanwhile, Baroness Ros Altmann warned: “In the midst of a national economic crisis, forcing firms to increase pension funding sharply, instead of using their resources to boost their business, clearly increases the risk of employer failure.” Nearly two thirds of listed companies with DB schemes have issued profit warnings this year, according to EY.

The Daily Telegraph Pensions Age Professional Pensions

St James’s Place suffers drop in net inflows

St. James’s Place has reported record funds under management of £118.7bn at the end of the third quarter. However, the pace of net inflows slowed, falling to £1.44bn from £2.11bn. Andrew Croft, CEO of St. James’s Place, said that while uncertainty over major world events including the US election and Brexit talks is making investors jittery, it is also creating a greater need for professional financial advice.

The Times Financial Times, Page: 12 City AM

EMPLOYMENT NEWS – WEDNESDAY 28TH OCTOBER 2020

One in five furloughed young workers have lost their jobs

New research by the Resolution Foundation has revealed that one in five young workers who were furloughed have lost their jobs. The think tank revealed that of the workforce overall, 17% of those in work before the pandemic were still not back in full employment, including those no longer working, those still furloughed or whose pay or hours have been cut. Kathleen Henehan, Resolution Foundation analyst, said the unemployed struggle to find new work suggested that “even if the public health crisis recedes in a few months’ time, Britain’s jobs crisis will be with us for far longer”. The Foundation argued there was a case for expanding the Chancellor’s furlough scheme to more firms and urged Rishi Sunak to take a “proactive” approach to job creation.

The Daily Telegraph

CORPORATE NEWS – WEDNESDAY 28TH OCTOBER 2020

Revolution Bars to close six venues

Revolution Bars is to close six venues that could result in around 130 job losses. The chain, which is also seeking rent reductions at seven venues as part of its CVA, employs around 2500 people and has 73 venues. It is proposing to close two sites in London and venues in Birmingham, Sunderland, Bath and Solihull. The company said the Government’s 10pm curfew has cost Revolution Bars around a third of its revenue.

Evening Standard Daily Mirror, Page: 39 The Daily Telegraph, Business, Page: 3 Daily Express, Page: 46

Unilever to press ahead with unification

Unilever has yesterday to proceed with combining its UK and Dutch entities into a single London-based company despite the threat from Dutch politicians of an “exit tax” in the Netherlands that could cost the consumer goods group €11bn.

Financial Times, Page: 10 The Daily Telegraph, Business, Page: 4

ECONOMY NEWS – WEDNESDAY 28TH OCTOBER 2020

Retail sales hit by second wave

The CBI’s latest survey of retailers and wholesalers shows retail sales declined in October as the second wave of coronavirus saw a fall in the demand for clothes shops and department stores. The business group’s monthly gauge of retail sales fell to -23 in October, its lowest level since June, after hitting an 18-month high of +11 in September. CBI economist Ben Jones said: “With footfall still down by one third, many retailers face a difficult run-up to the all-important Christmas period. It is vital that local authorities use their discretion over the new tier 2 grant funding to target support in a way that helps keep town and city centres open for business.”

The Daily Telegraph

Europe’s direct lending market shrinks in first half of 2020

The number of direct lending deals completed in Europe fell by 29% in the first six months of 2020 as raising money on public debt markets became cheaper, according to figures from Deloitte. Separately, the ECB’s quarterly survey of banks shows lenders are reducing lending to European businesses and households as they prepare for a rise in bad loans due to the economic impact of the pandemic.

Financial Times, Page: 13 Financial Times, Page: 4

INTERNATIONAL NEWS – WEDNESDAY 28TH OCTOBER 2020

Rich residents map escape route from Argentina’s ‘money trap’

Wealthy Argentines are fleeing to Uruguay as the left-wing government hikes taxes on the rich while Uruguay’s new conservative administration offers tax breaks to newcomers.

Financial Times, Page: 6

Spain’s coalition unveils ambitious tax and spend plans

Spain’s left-wing coalition has announced plans to increase taxes on big business and the rich in order to raise €240bn for social spending.

Financial Times, Page: 4

OTHER NEWS – WEDNESDAY 28TH OCTOBER 2020

Katie Price faces court over bankruptcy

Former glamour model Katie Price, who was declared bankrupt in November last year, has apologised to a court for not dealing with her bankruptcy issues because of her mental health problems. Price appeared over Skype from the Maldives, where she is currently on holiday, for a hearing at a specialist insolvency and companies court in London.

The I, Page: 17 Daily Express, Page: 25

Contact Paul Southward