NEWS WEDNESDAY 3RD FEBRUARY 2021

NEWS ROUNDUP

TAX NEWS WEDNESDAY 3RD FEBRUARY 2021

Sunak urged to rethink property tax

The Chancellor has been urged to scrap council tax and stamp duty and replace them with a single new property tax, with campaigners claiming the move would save households an average of £435 a year. The Fairer Share pressure group suggests the levy could involve a flat rate of 0.48% on the current value of a property. While it acknowledged this could hit households in London, with those in the capital paying more due to the “extreme” rises in house prices, it said people in the north and Midlands would see savings, with this helping the Government’s “levelling up” efforts. Kevin Hollinrake, chairman of the Property Research Group – which campaigns for reform of the property tax system – welcomed the proposal, saying: “The time is right to put fairness back at the heart of how we tax property. It would also boost transactions throughout the market, creating huge economic output at a time when we most need it.”

The Times, Page: 2 Daily Express, Page: 2

Banks fear tax raid as Chancellor balances the books

Analysts at UBS believe Rishi Sunak could launch a tax raid on banks as he looks to tackle the UK’s record deficit. With the Chancellor looking to balance the books after public finances took a hit from the coronavirus crisis, there is speculation he could look to readjust corporation tax. With a Conservative manifesto pledge preventing Mr Sunak from increasing income tax, national insurance and VAT, UBS analyst Jason Napier said there is concern that “as governments come to balance budgets” in the wake of the pandemic, the banking sector “could appear an attractive source of funds.” Mr Napier says banks’ administration of Bounce Bank Loans that are 100% guaranteed by taxpayers are an area of concern, saying that if lenders are considered to have been deficient in applying controls to funds advanced under cover of government guarantees, “we see the risk of increased taxation or levie s applied.”

The Daily Telegraph, Business, Page: 5

Chote: Tax increase needed to cover health and care costs

Sir Robert Chote, the former chairman of the Office for Budget Responsibility, says permanent tax increases equivalent to 1% or 2% of GDP could be needed to fund health and social care services. Such increases would equate to around £25-£50bn a year – or approximately 5p-10p on income tax. Sir Robert said it would be “a surprise” if Chancellor Rishi Sunak felt that he could permanently support inevitable increases in health and care spending on the back of borrowing and not roll out permanent tax increases.

The Independent

Chancellor told pensions should be a tax target

With the Chancellor believed to be considering raising taxes in his March 3 budget, Professor Judith Freedman, a tax expert at the University of Oxford, has suggested pensioners should be targeted. While Rishi Sunak is reportedly contemplating increases for capital gains and inheritance tax, Prof Freedman has said: “If you are looking at broadening the base, people in receipt of pensions should be within your purview because they are not paying national insurance on those pensions.” However, Mr Sunak is said to have agreed to maintain the triple-tax lock on pensions.

Daily Express

Late-filers offered enhanced TTP arrangement

With HMRC data showing that 1.8m people missed the January 31 deadline for submitting their self-assessment tax return, the Revenue is offering enhanced Time to Pay arrangements. Those wishing to set up a payment plan to spread their tax bill into 12 monthly instalments must still submit their tax return and pay any outstanding balance. They must also arrange the payment plan by March 3 or face a 5% late payment penalty.

Daily Mail, Page: 38 Daily Express, Page: 29

Landlords the losers if Sunak raises CGT

Tom Selby, senior analyst at AJ Bell, says landlords, those with holiday homes and pensioners could be the big losers if Rishi Sunak opts to raise capital gains tax in order to pay for the pandemic.

Daily Express

PROPERTY NEWS WEDNESDAY 3RD FEBRUARY 2021

House prices fall in January

Nationwide data shows UK house prices fell last month, with demand declining as the end of the stamp duty holiday nears. Figures from the building society show that the average price of a house was down 0.3% to £229,748 between December and January, while the annual growth rate eased to 6.4% from 7.3% – the first time it has slowed since June. Nationwide’s Robert Gardner has warned that housing activity could drop “sharply” as the tax break ends on March 31, saying: “The slowdown probably reflects a tapering of demand ahead of the end of the stamp duty holiday, which prompted many people considering a house move to bring forward their purchase.” Considering the climate for the property market, Howard Archer, chief economic advisor to the EY Item Club, said: “Support in the first quarter will likely come from buyers looking to take final advantage of the stamp duty threshold increase before it ends on March 31.”

The Times The Guardian Financial Times The Daily Telegraph City AM

CORPORATE NEWS WEDNESDAY 3RD FEBRUARY 2021

Tucan Travel goes into administration

Tour operator Tucan Travel has collapsed into administration after business was hit by the coronavirus pandemic. Administrators at Begbies Traynor will contact the 850 customers with bookings to inform them how they can get their money back.

The I, Page: 44

Asos’ colourful cast

With Asos having snapped up Arcadia brands including Topshop in a £295m deal, the Mail looks at the “cast of colourful City characters” who have backed the online retailer. These include Quentin Griffiths, with it noted that he has sued BDO over advice offered on how to avoid tax on the sale of shares in Asos.

Daily Mail, Page: 70

REPORTING NEWS WEDNESDAY 3RD FEBRUARY 2021

Time to clean up climate reporting standards

An FT editorial calls for companies to back up their rhetoric on climate reporting standards with accounts that make clear the potential impact on their earnings.

Financial Times, Page: 20

PENSIONS NEWS WEDNESDAY 3RD FEBRUARY 2021

The pandemic and pension pots

The Independent examines the consequences of the pandemic for people’s pensions. In the last three months of 2020, 360,000 savers accessed their pension early, an increase of 10% in the same period of 2019. Between them, they took out £2.4bn early, up from £2.2bn in the same three months the previous year. However, the amounts of money being accessed has been falling. The average amount withdrawn in the last quarter of 2020 was £6,600, down slightly from £6,800 the year before.

The Independent

INTERNATIONAL NEWS WEDNESDAY 3RD FEBRUARY 2021

Germany to beef up financial regulator in wake of Wirecard scandal

Reform of Germany’s financial regulator following the Wirecard scandal will see the creation of a financial task force that will be able to conduct forensic audits of companies suspected of fraud.

Financial Times

Washington mulls ‘billionaire tax’

Washington is considering a wealth tax on certain financial assets, with a proposed bill mooting a 1% state-wide tax on “extraordinary” intangible financial assets including cash, publicly traded options, futures contracts, and stocks and bonds — but not income. The first $1bn in value would be exempt from the tax that would apply to taxable worldwide wealth.

The Independent

ECONOMY NEWS WEDNESDAY 3RD FEBRUARY 2021

Brits add £50 to grocery bills

Analysis suggests that the average British family spent £50 more on groceries in January, with £1bn in extra spending on food and drink in supermarkets recorded in the four weeks to 24 January when compared with the same period in 2020. This was driven by the latest coronavirus lockdown which has seen restaurants and cafes – as well as schools – shut. It was also shown that the closure of pubs helped drive alcohol sales in supermarkets up by 29%, or £234m. The analysis also shows an increase in online grocery shopping, with online sales accounting for 14% of total grocery takings, up from just under 13% in December. Across all retailers, grocery sales rose by 12.2% year-on-year during the 12 weeks to January 24, up from the 11.4% reported the previous month.

The Guardian

OTHER NEWS WEDNESDAY 3RD FEBRUARY 2021

January transfer spend lowest since 2012

Premier League clubs spent £70m during the January transfer window, the lowest total in a winter window since 2012 and far below the £230m spent in January 2020. Tim Bridge of Deloitte believes the market faces a period of uncertainty amid the impact of the pandemic, saying now is “probably the toughest time ever to predict what the transfer market will look like in 12 or 18 months.”

The I, Page: 52

HMRC overpays staff

HMRC accidentally overpaid its own staff more than £1.25m last year, with 255 workers seeing more than £1,000 extra paid into their accounts. The tax office says it has recouped the overpayments.

Daily Star, Page: 22

Contact Paul Southward

Paul Southward