NEWS – WEDNESDAY 6TH JANUARY 2021

NEWS ROUNDUP

TAX NEWS – WEDNESDAY 6TH JANUARY 2021

Sunak urged to reform tax system before bringing in wealth levy

The Institute for Fiscal Studies (IFS) has urged the chancellor to reform the UK’s tax system before pushing ahead with a levy on wealth. The IFS said Rishi Sunak should focus on sorting out “badly designed” charges such as pensions tax, council tax, inheritance tax and capital gains tax before introducing a new levy. It comes after the Wealth Tax Commission suggested a tax on people with assets of more than £500,000, or £1m for a couple, including their family home and pension. Paul Johnson, director of the IFS, commented: “We have a series of taxes on wealth or things close to wealth – tax on pensions, council tax, inheritance tax, capital gains tax. The first priority should be to sort these out. They are all badly designed and could be made more efficient and more equitable and raise more money, though not vast amounts more.”

Daily Mail, Page: 70

Taxpayers spend 19m hours filling in returns

Britons spend an average of two and a half hours filling in tax return forms, according to a survey by Which? with some struggling for up to five hours. This means that collectively taxpayers will spend 19m hours filling in their returns this year. The survey found that, with the January 31 online tax return deadline fast approaching, just three out of 4,000 people quizzed were able to answer seven questions about tax rules correctly. Which? money editor Jenny Ross said: “Our findings show how time-consuming and laborious tax returns can be, and there are clear gaps in the nation’s knowledge of the tax system.” Meanwhile, HMRC is being urged to extend the deadline or waive automatic fines for people who file an annual return. Tim Woodgates, associate at accountancy firm Moore, says an extension of at least a month would help the elderly and vulnerable who may be shielding, as many prefer to drop off receipts, bank statements and other documents at their accountants, rather than scan and email them.

The I, Page: 2 Daily Mirror, Page: 14

Paul Southward says “don’t waste your life away filling in boring tax forms, let KSK do it for you; contact us today”.  tax@ksk.co.uk

HMRC scam text warning

Warnings have been issued over a number of scam text messages which purport to come from HMRC as Britain’s third lockdown comes into effect. A spokesperson for HMRC stated: “If someone calls, emails or texts claiming to be from HMRC, saying that you can claim financial help, are due a tax refund or owe tax, or asks for bank details, it might be a scam. Check GOV.UK for our scams checklist, find out how to report tax scams here on GOVUK and get information on how to recognise genuine HMRC contact.”

Daily Express

EU urged to push UK harder on tackling tax avoidance and money laundering

The European Commission is being urged by Green MEPs to force the UK to take a harder line on money laundering and tax avoidance or lose access to the single market for financial services.

Financial Times, Page: 6

SMEs NEWS – WEDNESDAY 6TH JANUARY 2021

Sunak announces new £4.6bn support package for UK business

Grants of between £4,000 and £9,000 will be offered to small and medium business forced to close due to the lockdown. The aid, which is tied into the business rates typically paid by each business, is part of a £4.6bn Treasury scheme targeting retail, hospitality and leisure companies, some £594m of which will go to local authorities to offer discretionary support to affected companies which are not covered. Chancellor Rishi Sunak said the cash injection “will help businesses to get through the months ahead – and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen.” However, Chris Maloney, a partner at Menzies, says business will need additional funding to compensate them for lost turnover. “Without this, it is likely that some businesses will choose to cut their losses now and be forced to take difficult staffing decisions in the weeks ahead.”

The Daily Telegraph The Times, Page: 10 Financial Times The Guardian, Page: 34 Evening Standard The Independent

CORPORATE NEWS – WEDNESDAY 6TH JANUARY 2021

Paperchase declares notice of intention

Stationery chain Paperchase is believed to be close to entering administration, with PwC reportedly preparing to handle the process. A spokesman for the retailer said of the effects of the coronavirus pandemic: “Paperchase is not immune despite our strong online trading. Out of lockdown we’ve traded well, but as the country faces further restrictions for some months to come, we have to find a sustainable future for Paperchase. We are working hard to find that solution and this notice of intention is a necessary part of this work.” The latest accounts for the company show that its losses widened from £6.3m to £10.3m for the year to February 2019, with turnover down 5% to £125m.

The Daily Telegraph, Business, Page: 1 Financial Times, Page: 10 The Times, Page: 31 City AM Daily Mirror Daily Express, Page: 47

AIM market helped by increase in IPOs in 2020

London’s AIM market rallied 21% last year, closing at 1,157.04 by the end of 2020. Scott Knight, head of audit at BDO remarked: “The increase in IPOs in the second half of the year points to a pent-up demand for high quality growth companies that can create value in an economic environment that looks very different to a year ago.” He went on: “As we enter 2021, we are likely to see a shift away from balance sheet repair towards fundraising for growth capital, particularly in those sectors such as tech and pharma which will emerge stronger from the crisis.”

City AM

Insolvency North South divide continues

New statistics show insolvency rates in the North East, Yorkshire and the Humber and the North West are the worst in England and Wales. The results are for 2019 and show 453 people insolvent in Scarborough, a rate of 50.8 per 10,000. The lowest was in Westminster with 8.2 per 10,000. The insolvency trade body R3 says the statistics are a stark reminder of the continuing North South divide.

The Northern Echo

M&S closes in on Jaeger acquisition

Marks & Spencer is reportedly close to sealing a deal to buy British fashion brand Jaeger, which fell into administration last November. FRP Advisory is handling the administration.

The Daily Telegraph, Business, Page: 1

PENSIONS NEWS – WEDNESDAY 6TH JANUARY 2021

Pensions dashboard faces further delay

The long-awaited pensions dashboard will be delayed until at least 2023 because of slow progress in Westminster and the pensions industry. The tool, which will allow people to see all of their retirement pots in one place with the aim of encouraging saving, was due to be launched in 2019. However, it will not go into action for another three years, owing to the longer time than anticipated needed to construct the IT systems, complete the necessary legislation and get all pension providers signed up.

The Times

Pension funds need a radical rethink

Robin Harding says the security offered by old defined benefit pension plans “is no longer achievable.” He adds: “We must strive to offer defined contribution pensions of similar quality instead.”

Financial Times

ECONOMY NEWS – WEDNESDAY 6TH JANUARY 2021

Third lockdown could drive deficit to £450bn

Britain’s third national lockdown will put borrowing on course to hit £450bn this year, smashing the £394bn predicted by the Office for Budget Responsibility only six weeks ago. Howard Archer, chief economic adviser at the EY Item Club, said a £450bn deficit was a “rising and genuine possibility”. He added: “I suspect the deficit could still be up around £100bn in five years’ time.” Elsewhere, JP Morgan UK economist Allan Monks predicts a 2.5% slide in growth for the first three months of the year.

The Daily Telegraph The Sun, Page: 43

Contact Paul Southward

Paul Southward