NEWS – WEDNESDAY 30TH SEPTEMBER 2020

NEWS ROUNDUP

TAX NEWS – WEDNESDAY 30TH SEPTEMBER 2020

2m homeowners take on emergency debt to cover stamp duty bills

Research from Cornerstone Tax suggests that almost 2m people have had to take out short-term loans or emergency credit to cover the cost of unexpected stamp duty payments. The study also found that close to 2.7m homeowners believe they have overpaid stamp duty due to errors made by the professionals employed to advise them. David Hannah, principle consultant and founder of Cornerstone Tax, said: “These statistics are shocking, if not wholly surprising, when you consider how many amendments have been made to stamp duty in the past few decades.” Noting that the law around the levy is “incredibly complex”, he adds that many advisers “simply aren’t familiar with the intricacies of the law’s evaluation criteria, which has led to many consumers being misadvised unintentionally.” The Cornerstone Tax poll suggests that around half of homeowners believe an independent office should be set up to audit stamp duty transactions so as to ensure people only pay what they owe.

The Independent, Page: 50

EMPLOYMENT NEWS – WEDNESDAY 30TH SEPTEMBER 2020

A REMINDER TO EMPLOYERS WITH PAYE SETTLEMENT AGREEMENTS (PSA)

If you have PSA agreement for the 2019/20 tax year, you are reminded of the upcoming due dates for payment of tax and Class 1B NICs.

The payments must clear HMRC’s bank account by 22nd October 2020 to avoid interest charges and/or late payment penalties.

The deadline for paying by post is 19th October 2020.

HMRC Staff cuts and delays due to the Covid-19 crisis has meant that payslips may not be issued in time; employers are advised not to wait for a payslip from HMRC before making a payment.

PSAs allow employers to make one annual payment to cover all the tax and national insurance due on minor, irregular or impracticable expenses or benefits provided to employees such as small gifts and staff entertaining.

In is understood that some employers with a PSA in place may not have received a payslip from HMRC confirming the amount owed under their PSA arrangement for the 2019/20 tax year.

Employers in that situation are advised to pay the tax and national insurance based on the amount that they calculated and submitted for their PSA to HMRC rather than waiting for the payslip

Employers should ensure they quote their PSA reference number, which is shown on their PSA confirmation letter when making their PSA payment; not their PAYE Accounts Office reference.

This is because payments received with the PAYE Accounts Office reference are allocated to their normal PAYE account and they will continue to receive reminders for the PSA payment even though they have paid.

Employers that do not have their PSA reference number should contact the PSA team on 0300 322 7077.

PROPERTY NEWS – WEDNESDAY 30TH SEPTEMBER 2020

Mortgage approvals hit 13-year high

UK monthly mortgage approvals hit a near 13-year high in August, supported by the release of pent-up demand as consumers resumed spending and the Government’s stamp duty holiday. Home loan approvals for August reached 84,700, the highest rate of approvals since October 2007, according to the new data from the Bank of England. So far this year, 418,000 mortgages have been approved, below the 524,000 approved in the same period last year. Howard Archer, chief economic advisor to the EY ITEM Club, commented: “August’s further rise in mortgage approvals provides ongoing hard evidence of the marked short-term pick-up in housing market activity since the easing of restrictions that started in mid-May, which released pent-up demand.” He added that the “buoyancy has been reinforced” by the Chancellor raising the stamp duty threshold until the end of March 2021.

The Daily Telegraph Financial Times City AM

Retail rent arrears set to exceed £2bn

Industry body Revo says retail rent arrears are set to exceed £2bn, with landlords expecting to receive less than half of due payments for Q3. Revo says around £1.5bn of rent payments went unpaid during the first half of the year, with retail and hospitality firms holding off payments or agreeing delays due to a ban on business evictions until the end of the year, a measure rolled out to help firms hit by the coronavirus crisis. Robert Hayton, head of property tax at Altus Group, warned that landlords are being hit by a “lack of tax parity with tenants”, saying it is unfair and warning that their tax burden is “increasing exponentially through insolvencies as more properties become vacant.”

Daily Mail

Charity boss leads review into property valuations

Peter Pereira Gray, chief executive of the investment division of the Wellcome Trust, will oversee an independent review of property valuations commissioned by the Royal Institution of Chartered Surveyors. He will assemble a panel that is expected to include lawyers and auditors. The Times notes that the ICAEW has voiced concern about the treatment of property valuations in accounts, saying: “We sometimes find there is very little evidence to support valuations.”

The Times, Page: 47

INSOLVENCY NEWS – WEDNESDAY 30TH SEPTEMBER 2020

IoD calls for extension of trading rule exemption

The Institute of Directors (IoD) has warned that the reactivation of wrongful trading rules – which were suspended to give directors breathing space amid the coronavirus crisis – could see a number of company collapses. The rules mean directors must cease trading if their business is facing insolvency and the exemption ends today, with the institute calling for it to be extended until the end of the year. IoD director of policy, Roger Barker, said the exemption coming to an end “risks opening the door to a wave of avoidable insolvencies.”

The Daily Telegraph, Business, Page: 4

CORPORATE NEWS – WEDNESDAY 30TH SEPTEMBER 2020

Airbnb pays £1.8m extra tax

Airbnb has paid an additional £1.8m in tax following an investigation into its UK tax arrangements by HMRC. The extra tax bill comes on top of a £1.1m tax bill it paid on profits of £5.6m reported by Airbnb UK in 2019. The firm said in its recently filed accounts that it had received a revised assessment from HMRC which resulted in additional tax payable of £1.8m. Airbnb has also said it is co-operating with HMRC to share data on the money made by Airbnb hosts.

The Guardian, Page: 29

Retail fuels forecourt revenue

The Telegraph’s Rachel Millard looks at how petrol stations have branched out, expanding to offer a range of retail options, citing KPMG analysis suggesting food and retail make up 35% of forecourts’ revenue. Paul Martin, KPMG’s head of retail, muses on the impact a shift to electric cars could have, saying that if forecourts offer charging facilities “that should mean higher dwell times”.

The Daily Telegraph, Page: 5

SMEs NEWS – WEDNESDAY 30TH SEPTEMBER 2020

Poll reveals climate for SMEs

Research from Aldermore Bank shows that the average small firm believes it would only survive for four months if the UK was to enter another period of lockdown. The poll shows that if the economy were to continue in its current state, 26% of small firms could survive indefinitely, a 36% increase on April’s survey. The average SME says it has seen a 30% loss in monthly business income, this compares to 34% in April. It was also found that 18% of smaller firms have seen their business income decrease by more than 70%. The report also shows that 69% of SMEs have taken steps to increase income amid the pandemic, with 20% increasing the amount they communicate with customers and clients, 19% moving more of their business online and 10% diversifying into a new market. While many have sought to boost income, 67% have cut costs to help cover losses, making an average saving of 25% on business expenditure.

Daily Mirror, Page: 35

PENSIONS NEWS – WEDNESDAY 30TH SEPTEMBER 2020

Government rules out pension tax relief review

The Government has ruled out a review into the impact of pension tax relief within the next year, despite recommendations from the Public Accounts Committee. Rather than a review the Treasury said it would continue to engage with stakeholders and gather evidence but added it does “not think it is the right time now for a formal evaluation”.

Daily Express

ECONOMY NEWS – WEDNESDAY 30TH SEPTEMBER 2020

Britons borrowed more and saved less in August

Bank of England figures show £21.3bn was borrowed on cards and loans in August, up from £20.9bn in July, and less was being saved. While the amount borrowed by consumers on credit cards, overdrafts and loans increased again last month, households also paid back more, meaning the net amount borrowed fell to £0.3bn. The Office for National Statistics data suggest an increasing number of Britons are finding themselves in financial difficulty and more people are having to use savings to cover their living costs or are turning to debt.

Daily Mail

Contact Paul Southward

Paul Southward