NEWS – WEDNESDAY 5TH AUGUST 2020
NEWS – WEDNESDAY 5TH AUGUST 2020
TAX NEWS – WEDNESDAY 5TH AUGUST 2020
Valuable properties could face higher business rates
Chancellor Rishi Sunak is considering increasing business rates for the “most valuable properties”, having called for industry opinion on whether high end shops, offices and other large premises should pay a new, higher business rate. Feedback has also been requested on proposals to create different rates for different types of businesses. As part of a review of the levy, the Treasury has issued a call for evidence which warns that failing to raise enough revenue from business rates could put pressure on “other parts of the tax system”. March saw the Chancellor announce a one-year £10bn business rates holiday for the retail, hospitality and leisure sectors in a bid to ease pressure brought about by the coronavirus crisis, a move which means revenue from the levy is down by about 40%. Considering the possibility of higher rates for more valuable buildings, Jerry Schurder at consultancy Gerald Eve said: “It beggars belie f, considering the primary complaint about business rates is that the tax is just too high.” The call for evidence will also look at whether an online sales tax could provide a “sustainable and meaningful revenue source” for the Government.
Betting firms accused of tax dodges
A report from the Social Market Foundation think-tank says offshore gambling companies should be required to have a base in Britain to stop the Treasury losing millions of pounds in tax. It found that more than half of the remote gambling services used by UK customers are provided by firms based in Gibraltar, a tax haven. The think-tank has submitted proposals to the Government which suggest firms with offices in Britain and a UK-incorporated entity would be easier to regulate. It also suggests firms that set up a UK base could be given tax breaks.
Daily Mail, Page: 14
CGT rethink could hit investors and entrepreneurs
Finance experts have voiced concern over the possible reform of capital gains tax, with Chancellor Rishi Sunak having asked the Office for Tax Simplification to review CGT and allowances, exemptions and reliefs linked to the levy. Financial planning business Jarrovian Wealth believes the current reliefs encourage investors and small firms to set up new ventures. With it suggested that CGT rates could be brought in line with income tax, Jarrovian Wealth’s Adam Young warns: “This would be a huge further blow for investors and entrepreneurs coming hot on the heels of Entrepreneurs’ Relief being slashed from £10m to £1m.”
Daily Mirror, Page: 33
INDUSTRY NEWS – WEDNESDAY 5TH AUGUST 2020
Standard Life chief picked as chairman of audit watchdog
Keith Skeoch is set to be named interim Financial Reporting Council chairman and will help lead the regulator as it oversees a breakup of PwC, Deloitte, KPMG and EY.
CORPORATE NEWS – WEDNESDAY 5TH AUGUST 2020
Pizza Express to close 67 restaurants
Pizza Express has announced plans to shut 67 – or 15% – of its 449 UK restaurants, with up to 1,100 jobs at risk. The decision comes as the chain looks to broker a CVA with its unsecured creditors.
The Guardian, Page: 31 Financial Times, Page: 10 The I, Page: 43 Daily Express, Page: 8
UK sues fraudulent GE for $1bn in back taxes
HMRC has accused US industrial firm General Electric of fraud and is demanding $1bn in back taxes, with the High Court ruling that HMRC can pursue its case.
Brand rank rethink
PwC ’s Future Brand Index 2020 shows a shift in the perception of large companies, reordering the top 100 companies by perception strength rather than financial clout. It evaluates brands on criteria such as their “innovation” and “passion”.
SMEs NEWS – WEDNESDAY 5TH AUGUST 2020
Microbusiness poll reveals coronavirus impact
Microbusiness bosses fear they can only continue trading for nine weeks due to the impact of the COVID-19 pandemic, a new poll shows. Three quarters of the 1,000 microbusiness owners polled are unsure how they will continue to keep their business afloat, with a lack of customers, cashflow issues and uncertain consumer confidence the most common areas of concern. The poll saw 46% of respondents say they have considered permanently closing their doors amid the crisis, while more than a third of owners have not paid themselves in a bid to cut costs and a further 28% have reduced their wage. The analysis also found that four in 10 microbusiness owners have utilised the Government’s coronavirus support initiatives, with more than a quarter using the furlough scheme and one in five applying for a Government loan. Just under a third have used personal savings to keep their enterprise afloat with a quarter using money from their current account.
Small firms secure £34m in bounce back loans
Around £50.7bn has now been lent to firms as part of the various government-backed coronavirus loan schemes, with the bounce back loans scheme distributing £34bn to small businesses. Separately, the government has given £534m to start-ups as part of its Future Fund initiative.
Daily Express, Page: 8 Daily Mirror City AM
EMPLOYMENT NEWS – WEDNESDAY 5TH AUGUST 2020
£34bn claimed via furlough scheme
HMRC figures show that around £34bn has been claimed through the Government’s furlough scheme to support jobs amid the coronavirus crisis. The scheme, which is set to end in October, is currently supporting 9.6m people and being utilised by 1.2m employers. As of August 1, companies have had to pay National Insurance and pension contributions for staff under the initiative’s umbrella, while next month will see employers have to pay 10% of furloughed employees’ salaries – with this rising to 20% in October.
Daily Mirror City AM
Job loss fears for those in rural regions
A study by Grant Thornton shows that those living in rural areas are more at risk of losing their jobs due to the coronavirus. The report, for the County Councils Network, suggests almost 6m people in England’s counties – more than half the workforce in the county areas – are working in “at risk” jobs. It also shows that 46% of furloughed workers reside in county areas.
Expense advice for home-workers
The Independent offers financial guidance for those working from home. It notes that they can claim expenses for their homeworking time, with UHY tax director Ian Dickinson saying: “It is an established practice that where there is a home working arrangement in place, an employer can pay a weekly amount to its employees tax-free without scrutiny or challenge.”
The Independent, Page: 52
ECONOMY NEWS – WEDNESDAY 5TH AUGUST 2020
Recovery may be ‘two-steps-forward, one-step-back’
The Independent’s Hamish McRae looks at how real-time data gives an insight into the economy, saying that the most current figures show activity is “coming up steadily”. Calling real-time data “the great revolution in economic statistics”, he says previous measures centred on factors such as GDP, retail sales and unemployment are “backwards-looking and frequently revised”. Assessing the latest round of data, which he says shows the economy has recovered to around 95% of its pre-coronavirus level, Mr McRae says seated diner numbers have risen to 80% of the level seen a year ago, while hotel occupancy is running at 50% in the regions and 20% in London. He notes that public transport use is “climbing steadily”, while property searches are higher than normal for the time of year but data on travel is “still very weak”. On what the next batches of data will tell us about the economic recovery, Mr McRae says the coming months may be a “two-steps-forward, one-step-back affair.”
The Independent The I, Page: 11
Loan pressure could see ‘economic second wave’
Natalie Ceeney, chairwoman of Innovate Finance, has warned that businesses must be given time to repay coronavirus loans so as to avoid an economic second wave. She cites a City UK and EY report suggesting that of the £43bn lent to businesses – plus the £30bn of tax deferrals – £35bn is likely to be outstanding and unpayable at the end of the loan period, with half of this held by SMEs.
OTHER NEWS – WEDNESDAY 5TH AUGUST 2020
City under pressure to curb illicit cash
Rachel Millard in the Telegraph looks at efforts to curb Russian influence and money laundering in London, with campaigners pointing to the role played by “enablers” such as lawyers, accountants, estate agents and PR professionals. A Transparency International report in 2019 found evidence of 86 banks, 81 law firms and 62 accountancy firms that had, unwittingly or otherwise, helped move suspicious or corrupt wealth from around the world into properties, jets, yachts, other assets and shell companies.
Contact Paul Southward