NEWS – WEDNESDAY 29TH JULY 2020
NEWS – WEDNESDAY 29TH JULY 2020
TAX NEWS – WEDNESDAY 29TH JULY 2020
Digital tax ‘would penalise innovative online retailers’
Sam Dumitriu, research director at The Entrepreneurs Network, writes in City AM on rumours that the Chancellor is considering a new online sales tax. He notes that “An online sales tax won’t just punish the Amazons of the world. Since the lockdown, thousands of small shops have used e-commerce to stay afloat and diversify their income when the Government shut down their ability to trade physically.” The article concludes that a new model for town centres seeing a hybrid of live and workspaces “certainly makes more sense than a new digital tax that would be an insult to the innovative online businesses that have got us all through lockdown.” Elsewhere, the Times reports on claims by the Taxpayers’ Alliance that a 2% levy on goods sold online could cost the average household an extra £56 per year. Finally, Tim Newark in the Express says the tax could pay for the abolition of business rates and help save the high street.
The Times, Page: 42 City AM Daily Express, Page: 12
Is a tax on the unearned value of our homes inevitable?
Writing in the Times’, James Kirkup, the director of the Social Market Foundation, says one day the Government will have to bite the bullet and raise taxes to pay for its pandemic borrowing. But will a Conservative government be brave enough to do the sensible thing and tax property wealth, he asks. Kirkup thinks Labour leader Sir Keir Starmer will win plaudits for proposing such a move. A rising star in the Tory party admits to Kirkup: “Taxing property wealth is the sensible thing to do and it’s probably inevitable. But it’ll probably be a Labour government that introduces it – we just won’t reverse it when we’re next in office.”
EMPLOYMENT NEWS – WEDNESDAY 29TH JULY 2020
NIESR says ending furlough a mistake
Garry Young, deputy director of economic research group the National Institute of Economic and Social Research (NIESR), says plans to wind down the Government’s furlough scheme seems to be a mistake, “motivated by an understandable desire to limit spending.” Mr Young went on: “Unemployment is going to rise to about 10% by the end of this year, before dropping back next year, and we think that an extension of the furlough scheme would have been a relatively inexpensive way to limit that rise in unemployment.” NIESR economists also urged the Government to conduct a “comprehensive tax review” to decide how to rein in borrowing.
THE FUTURE FOR OFFICE WORKERS NEWS – WEDNESDAY 29TH JULY 2020
Letter: Offices are important to our work/life balance
PwC Chairman Kevin Ellis says that the “virtual world is no substitute for human contact” and that the pandemic “has proved to me the importance of offices to the work/life balance equation.”
CORPORATE NEWS – WEDNESDAY 29TH JULY 2020
M&C Saatchi accounts for last year delayed
M&C Saatchi has cited “disruptions to working practices” resulting from the coronavirus pandemic as it delayed the publication of its 2019 accounts again. The firm, which is under investigation by the Financial Conduct Authority for a £12m accounting error, stated: “Given the uncertain global economic environment over the last few months… initial results are encouraging and more favourable than management’s expectations.” Shares were up 12.5% to 52.2p in morning trading, while Peel Hunt analyst Malcolm Morgan noted: “The market will be reassured on the tone of trading and financing but frustrated that the [full-year] 2019 audited figures will not be released until [August].”
The Daily Telegraph, Business, Page: 3 The Times, Page: 41
PENSIONS NEWS – WEDNESDAY 29TH JULY 2020
Pension freedom inquiry launches with probe into scams
The Work and Pensions Committee has launched an inquiry into the impact of pension freedoms and level of protection for pension savers. The three-stage “broad inquiry” will investigate how savers are protected as they move from saving for retirement to using their pension savings under freedom rules. Andy Agathangelou, founder of Transparency Task Force, said: ”The pension scams pandemic that is blighting so many pension savers in the UK, is a festering sore on the face of the pensions industry that desperately needs treating.”
WEALTH MANAGEMENT NEWS – WEDNESDAY 29TH JULY 2020
Net cash inflows up at St James’ Place
St James’ Place has reported a rise in net cash inflows of 2% to £4.5bn in the six months to the end of June. Pre-tax profit for the period was up from £57.3m to £221.9m, with the firm’s underlying cash result falling to £114.4m. Chief executive Andrew Croft remarked: “We began the year with renewed confidence and momentum in the business as we saw investor sentiment rise following the UK General Election in December 2019, but this gave way to a challenging external environment in the UK as COVID-19 related lockdown and associated social distancing measures impacted the way we and the Partnership conduct business.”
SMEs NEWS – WEDNESDAY 29TH JULY 2020
Total of £49bn lent to SMEs during pandemic
Newly released Treasury data shows that banks have now lent some £49.4bn through the three main loan schemes backed by the government. The bounce back loan scheme (BBLS) has seen £33.7bn distributed, while the coronavirus business interruption loan scheme (CBILS) has seen £12.7bn given to small and medium-sized firms. A further £3.1bn has been issued through the coronavirus large business interruption loan scheme (CLBILS) for larger businesses.
Financial Times, Page: 3 City AM
PROPERTY NEWS – WEDNESDAY 29TH JULY 2020
Foxtons hails recovery in UK property market
Foxtons has reported that lettings are almost back to pre-crisis levels and sales are well up on April and May. CEO Nic Budden says he is “cautiously optimistic” for the rest of the year.
Paul Southward comments that a recovery in the housing market should not be unexpected with the temporary short-term reduction for SDLT. This trend will probably continue throughout 2020, ending in a peak of activity towards the end of March 2021 as the SDLT rates revert back to the former rates. This cliff-edge change could see a drop of activity in the housing market from April 2021 which could last until late 2021.
ECONOMY NEWS – WEDNESDAY 29TH JULY 2020
Pandemic brings split in fortunes
Capital Economics is predicting a K-shaped economic recovery in Britain, with the company’s chief UK economist Paul Dales explaining: “The upward leg is the ‘haves’ who have kept their jobs and the downward leg represents the ‘have nots” who have lost theirs.” Dales continues: “I can’t quite think of any recession which has had such a big difference on people’s incomes. Some people are sitting there with piles of cash in the bank and others will be wondering how they are going to buy food. The aggregate picture disguises a massive difference.”
Boost to rural economy as demand grows
The market for farms and land in Scotland is showing very positive signs of recovery, according to Andy Ritchie, partner at Campbell Dallas, who said: “Rising demand for agricultural and land businesses will almost certainly result in the buyers investing in their buildings, plant, machinery, infrastructure and services. Scotland’s rural economy will benefit, and we will hopefully also see an increase in rural employment.”
The Scotsman, Page: 36 The Press and Journal, Page: 31
Retail sales show signs of recovery
The monthly distributive trades survey from the CBI shows that the balance of retail sales balance had rebounded from -37 in June to +4 in July – the highest reading since April 2019. However, real-time data suggest sales have already dropped back considerably, says Samuel Tombs at Pantheon Macroeconomics, “now that pent-up demand for durable goods has been satiated.”
The Times, Page: 38 The Daily Telegraph, Business, Page: 4 The I, Page: 44
OTHER NEWS – WEDNESDAY 29TH JULY 2020
Over 50,000 outlets sign up to Eat Out to Help Out Scheme
More than 53,000 outlets across the UK have so far signed up to the UK Government’s Eat Out to Help Out Scheme – and a new official Government online finder is available to help diners locate them. The logo means diners that eat-in will benefit from a 50% discount, up to a maximum of £10 per person, on food and non-alcoholic drinks, any Monday to Wednesday in August – and no voucher is required. Diners can take advantage of the offer as many times as they like during the month. Chancellor of the Exchequer Rishi Sunak said: “Our restaurants, cafes and bars play a vital role in our economy, employing more than a million people. They have been hit hard by coronavirus, so it’s vital we do everything we can to help them re cover.”
Contact Paul Southward