NEWS – WEDNESDAY 8TH APRIL 2020
NEWS – WEDNESDAY 8TH APRIL 2020
CORONA VIRUS GOVERNMENT SUPPORT – LATEST
CORONA VIRUS – self-employed income support scheme (SEISS)
Latest update of how the scheme will work: –
HMRC reimbursement for furloughed employees:
As the government release more details, here is the latest update for furloughed employees: –
TAX NEWS – WEDNESDAY 8TH APRIL 2020
Google tax bill revealed
Google reportedly paid £44m in corporation tax in Britain for 2019, as over £1bn in pay and bonuses was awarded to its 4,439 staff in the country. Accounts filed with Companies House revealed the tax payment, which is down on the £66m paid for 2018. This comes as the government attempts to stem the transfer of profits and cash to countries with lower tax levels, with a proposed 2% digital service tax bringing in some £32m extra in taxes from the US internet firm. Advertising revenues made by Google in the UK are reported in other jurisdictions with analysts estimating the company made £5.7bn in ad revenue in the UK last year. Paul Monaghan, chief executive of Fair Tax Mark, said: “Once again, it seems like Google are writing their own rules in the UK. Income is up but corporation tax charges are down. That’s before we get to the puzzle of how they continue to get away with booking so little of their UK advertising revenue through their UK subsidiary.”
CORPORATE NEWS – WEDNESDAY 8TH APRIL 2020
Airlines gain £1bn in fees relief
The UK government has given airlines permission to delay £1bn in air traffic control fees to help them cope with the coronavirus pandemic. Transport minister Chris Heaton-Harris refused to rule out the state taking a stake in airlines that have been worst hit, as talks continue with Virgin Atlantic over a £500m bailout. Meanwhile, global airline trade body Iata has warned that if governments do not intervene 25m jobs in the industry are at risk. Carriers are facing unprecedented claims for refunds, estimated at £4.5bn as well as missing out on new bookings. In the UK, Abta is calling for a change in the law so refunds can be delayed by several months and replaced with a “refund credit note”, otherwise many firms will be forced into bankruptcy.
The Daily Telegraph The Independent, Page: 46
SMEs NEWS – WEDNESDAY 8TH APRIL 2020
Coronavirus loan scheme failures risk mass defaults
Data from UK Finance show that banks have paid out just £291.9m to just over 2,000 businesses under the coronavirus business interruption loan scheme. This translates as an approval rate of just 0.65%. Alberto Thomas of Fideres Partners warns of an “immense wall of redundancies and defaults coming” if the pace of lending is not accelerated. A report from Fideres shows the monthly pay roll of the UK’s 6m SMEs amounted to £41bn. Giles Murphy, a partner at Smith & Williamson, said directors were mulling over winding up their business now instead of taking the risk of handing assets to a bank later, after being required to make personal guarantees on loans. Meanwhile, a survey by the British Chambers of Commerce found a fifth of small businesses still plan to apply for support. It also found that more than half of businesses have at most three months cash left, while 6% said that they had already run out of cash. Over a third said they were planning to furlough 75-100% of their workforce over the next week.
City AM City AM The Daily Telegraph, Business, Page: 3, 5 Financial Times, Page: 2 The Guardian, Page: 33
EMPLOYMENT NEWS – WEDNESDAY 8TH APRIL 2020
Loss of working hours to equal 195m full-time jobs, UN agency warns
The International Labour Organization, an agency of the UN, has warned that the coronavirus crisis will cut working hours by almost 7% worldwide in Q2 2020, equivalent to the loss of 195m full-time workers. “Workers and businesses are facing catastrophe, in both developed and developing economies,” said ILO director general Guy Ryder. “We have to move fast, decisively, and together. The right, urgent, measures, could make the difference between survival and collapse.” In the UK, KPMG and REC’s permanent placements index fell from 52.9 in February to 31.7 in March, while the temporary billings index fell from 49.7 to 35.6. Any reading below 50 signals contraction. The vacancies index fell from 56 to 47.8 in March, marking the first negative reading since 2009.
HMRC have updated their Coronavirus support guidance for employers:
HMRC have published a guide for employers covering parental bereavement leave and statutory parental bereavement pay, which apply from 6 April 2020 onwards:
PROPERTY NEWS – WEDNESDAY 8TH APRIL 2020
Anger over rates holiday for large retailers
The government is being urged to revise its coronavirus support package after it was revealed that Tesco will benefit to the tune of £700m from a 12-month business rates holiday, despite a predicted increase in profits. Labour MP and member of the Treasury select committee, Rushanara Ali, commented: “It’s an absolute scandal that the government is providing a £700m tax break to Tesco while millions of self-employed and freelance workers, even those who qualify, cannot get any money until June.”
WEALTH MANAGEMENT NEWS – WEDNESDAY 8TH APRIL 2020
St James’s Place boss has bonus cut
Andrew Croft, the CEO of St James’s Place, has had his bonus cut by £188,000 due in part to “certain criticisms aimed at the business”, according to the group’s pay committee. Overall pay for 2019 came in at £1.554m, down from £1.887m after his long-term bonus was also reduced. The company faced criticism for sending advisers on cruises for meeting sales targets, which were seen as not necessarily in the interests of clients.
PERSONAL FINANCE NEWS – WEDNESDAY 8TH APRIL 2020
FCA freezes fees for small advice firms
The Financial Conduct Authority has confirmed a freezing of minimum fees for smaller advice firms in light of the coronavirus pandemic. Keith Richards, chief executive of the Personal Finance Society, welcomed the concessions but warned the impact of the pandemic would also see compensation paid by the industry to consumers increase.
PENSIONS NEWS – WEDNESDAY 8TH APRIL 2020
FCA delays pension transfer qualifications to next year
The Financial Conduct Authority has confirmed its pensions transfer specialist qualification rules have been delayed until October 2021 as it sheds non-critical work amid the coronavirus lockdown.
ECONOMY NEWS – WEDNESDAY 8TH APRIL 2020
ONS figures show UK productivity weak before pandemic
The Office for National Statistics (ONS) has revealed that UK productivity was up 0.3% year on year in the final quarter of 2019, with the figure barely growing since the 2008 financial crisis. The ONS stated: “In historical terms 0.3% is still a very low productivity growth rate, significantly below the post-2008 economic downturn median,” while Howard Archer, chief economic adviser to the EY Item Club, noted that “coronavirus is bound to take a major near-term toll on business investment.”
OTHER NEWS – WEDNESDAY 8TH APRIL 2020
HMRC have updated their guidance on recognising genuine HMRC contact to confirm HMRC are currently sending SMS message confirmations about PAYE or self assessment complaints.
Singer’s accountant fined after bankruptcy enquiry
Singer Amelle Berrabah’s accountant Ben White has been accused of failing to file her bankruptcy order in 2013 after her group, the Sugababes, split up. A tribunal heard that Mr White did not try to halt the bankruptcy order and lied about not receiving messages from his client. An Institute of Chartered Accountants ruling declared that the bankruptcy could have been avoided or postponed had Mr White performed his duties as expected. He was fined £7,500 with costs of £83,000.
Don’t miss out, claim Child Benefit by phone or post, HMRC tells new parents
Parents of new-borns will still be able to claim Child Benefit despite the outbreak of coronavirus, HMRC has announced. Even though General Register Offices remain closed for now, parents can still claim Child Benefit without having to register their child’s birth first to ensure that they do not miss out.
Press Release See HMRC’s notice here:
Contact Paul Southward