NEWS – WEDNESDAY 6TH MAY 2020
NEWS – WEDNESDAY 6TH MAY 2020
TAX NEWS – WEDNESDAY 6TH MAY 2020
Self-Employed Income Support Scheme
The government has handed responsibility for the new Self-Employment Income Support Scheme over to HM Revenue & Customs (HMRC). KSK can help with your claim, so do contact us if you have queries, but agents are not allowed to make claims on behalf of claimants. Taxpayers will have to set up their own self-assessment taxpayer account with HMRC. There is a link through which you can check your eligibility and register to make a claim, and this can be found here: –
BUSINESS UPDATE NEWS – WEDNESDAY 6TH MAY 2020
KSK Latest Business Update publication now available
EMPLOYMENT NEWS – WEDNESDAY 6TH MAY 2020
Government considers trimming furlough rate
The Chancellor has started to plan a phased withdrawal of the furloughing scheme, with one option being considered reducing the 80% wage subsidy to 60%. Another approach would be to allow some furloughed staff to work, but with a smaller taxpayer subsidy. Rishi Sunak said that without changes, the Government would spend as much on furloughing as it does on the NHS, remarking: “Clearly that is not a sustainable situation.” Some 800,000 employers have applied for the coronavirus job retention scheme, according to HMRC.
The Daily Telegraph, Page: 1 The Sun, Page: 2 Evening Standard
SMEs NEWS – WEDNESDAY 6TH MAY 2020
Small firms could miss out on bounce-back loans
Concern had been raised that a lack of uptake for the Government’s Bounce Back Loan Scheme by lenders may mean small firms hit by the coronavirus crisis are at risk of missing out on support. So far, just eight banking groups been authorised to handle applications for the scheme, and most are restricting loans to their own business customers. This raises the possibility that small businesses in need of finance will face delays unless they bank with the larger lenders. Suren Thiru, head of economics at the British Chambers of Commerce, has urged the Government and British Business Bank to “pull out all the stops to ensure the scheme has sufficient capacity to meet demand”. Meanwhile, Mike Cherry, national chairman of the Federation of Small Businesses, says full transparency over the loan scheme is “a must”, adding: “All accredited banks should be publishing details on applications, approvals and declines – as well as the speed with which money is reaching accounts after approval”.
The Guardian, Page: 32
CORPORATE NEWS – WEDNESDAY 6TH MAY 2020
EFL clubs face £200m financial hole
Considering the impact the coronavirus crisis could have on the finances of the English Football League, chairman Rick Parry has warned clubs face a £200m financial hole by September. Mr Parry says he supports the Professional Footballers’ Association’s decision to appoint Deloitte to look at clubs’ books to assess if there was genuine need for a club to be deferring wages. He said: “We are really having an open-book policy … We are absolutely on board with the Deloitte process.” Meanwhile, the Times looks at parachute payments handed to clubs relegated from the Premier League and arguments that they drive wage inflation. Looking at systems elsewhere in Europe, the paper cites KPMG analysis of average payments in Italy and France. KPMG research also highlights a decline in player values on the back of the pandemic.
The Independent, Page: 56 The Daily Telegraph, Business, Page: 11 Daily Mirror, Page: 58 Daily Express, Page: 54 The Times, Page: 58 Financial Times, Page: 10
Blackmore Bonds savers await news on investments
The Telegraph looks at issues at Blackmore Bond, which called in administrators from Duff and Phelps last month, noting that 2,500 investors have around £45m invested in the firm.
How the paper trail went cold in KPMG’s special audit of Wirecard
The FT features a report on KPMG’s audit of payment processing firm Wirecard, noting that it revealed the company’s “extensive reliance on a convoluted network of outside parties.”
Half of online ad spending goes to industry middlemen
A study from PwC focused on “the highest-profile advertisers, publishers, agencies and adtech” suggests publishers receive just half of money spent on their digital ads by premium brands.
David Smith in the Times looks at a decline in globalisation, saying it was “severely damaged” during the financial crisis, which marked the end of “hyper-globalisation”. He declares a liking for PwC’s description of the shift: “slowbalisation”.
The Times, Page: 37
Mexico’s oil champion drains state funds
The FT looks at Mexico’s state oil company Pemex, noting it has acknowledged that auditor KPMG had expressed “substantial doubt” over its ability to continue as a going concern.
Business feels the fear in Australia-China trade dispute
Amid ongoing trade tensions between Australia and China, KPMG research suggests the strained political relationship with Beijing is the biggest risk for Australia’s China-facing businesses.
LEGAL NEWS – WEDNESDAY 6TH MAY 2020
Regulators’ powers are limited by legal professional privilege
The Times looks at a Court of Appeal decision centred on professional privilege, with the case involving the Financial Reporting Council and Sports Direct where the regulator made a request for documents in connection with an investigation into Sports Direct’s auditors, Grant Thornton.
PROPERTY NEWS – WEDNESDAY 6TH MAY 2020
UK property groups plead for extended business rates holiday
Over 50 commercial property firms have warned the government that without assistance, many companies risk bankruptcy, calling for all sectors of the economy to benefit from a business rates holiday.
Pandemic may see increase in flexible leases
Kazim Razvi, a director of Financial Reporting Policy at CFA Institute, believes that coronavirus lockdown restrictions will make businesses “rethink their commitment to renting office spaces when modern technology could be used to chip away at this fixed cost,” and lead them to renew lease contracts with maximum flexibility. He suggests that real estate leases “have long represented a point of disagreement between accountants and financial analysts.”
ECONOMY NEWS – WEDNESDAY 6TH MAY 2020
Index slump prompts recession warning
The coronavirus crisis may be driving the UK toward the worst recession in living memory, with concerns raised after a closely watched survey revealed the dominant services sector contracted at the fastest pace on record. The latest IHS Markit/Cips composite purchasing managers’ index for the UK fell to 13.8 last month, representing the lowest score in over two decades on an index where anything below 50 represents decline. Nearly 80% of companies reported a drop in activity in April, compared with 43% in March. Tim Moore, economics director at IHS Markit, commented: “April’s PMI data highlights that the downturn in the UK economy during the second quarter of 2020 will be far deeper and more widespread than anything seen in living memory.” A further warning sign came from Society of Motor Manufacturers and Traders data showing just 4,321 new cars were sold in April, a decline of 97% on April 2019 and the lowest total since 1946.
Extended lockdown would put 1m firms at risk
A report from the Centre for Economics and Business Research (CEBR) think-tank and polling company Opinium shows that 591,000 businesses are at high risk of going bust as a result of the COVID-19 pandemic – a figure representing one in ten UK businesses. The study also suggests that more than a quarter of a million firms will not survive if the lockdown lasts for another month, while a second wave of coronavirus and fresh lockdown measures “could prove fatal for the business community.” Assessing a poll of 500 firms, the report predicts that 1.1m firms could collapse if the lockdown rolls on for another three months. Pablo Shah, senior economist at CEBR, said that the findings “provide the first glimpse of the deep and long-term scars that the coronavirus crisis is set to inflict upon the UK economy”.
The Times, Page: 39 Daily Mail, Page: 69
OTHER NEWS – WEDNESDAY 6TH MAY 2020
Universities must do more on social mobility
In a letter to the FT, Anthony Carey of Mazars suggests universities keen to recruit students as coronavirus hits international applications should focus on students from less advantaged socio-economic backgrounds.
Contact Paul Southward