NEWS – WEEKEND TO 10TH JANUARY 2021
NEWS – WEEKEND TO 10TH JANUARY 2021
TAX NEWS – WEEKEND TO 10TH JANUARY 2021
HMRC urged to waive fines for late payment
Accountants are calling on HMRC to waive fines for late tax returns this year arguing that a third national lockdown has “changed the playing field” and piled further pressure on freelancers and small firms. HMRC said before Christmas it would accept coronavirus as a reasonable excuse for missing the deadline, but taxpayers would have to appeal first. Richard Wild, of the Chartered Institute of Taxation, said forcing firms to appeal against fines that no one expected to be paid was a waste of time. “We have asked HMRC to waive late filing penalties for all returns filed before March 1 2021 in order to avoid adding further costs or compliance burdens,” he said. The Association of Accounting Technicians has also called for fines for late filing to be dropped. Phil Hall, of the trade body, said: “Three lockdowns and the tier regime have certainly restricted many people from getting their tax information to their account ants in the usual way. It’s pretty obvious that the number of taxpayers filing late this year is going to be much higher than in previous years.” Andrew Chamberlain, of the IPSE, said 2020 had been a “financially devastating year for many of the self-employed and now their end of year tax bill will only add to their financial woes. He also called for the Government to not penalise late payment.
The Daily Telegraph, Page: 31
Paul Southward says, “see below for an update from Sunday’s news and further comment from me”.
Tax hikes could be delayed until Autumn
Rishi Sunak’s March Budget will not include tax rises, according to a senior government source, the Times reports. “We’ll be in the midst of a recession and living under severe lockdown restrictions,” the source said. “The mutant strain of the virus has changed our entire perspective on this. It’s too soon.” Meanwhile, the Chancellor has reportedly rejected calls to extend the stamp duty holiday despite warnings that almost a quarter of a million house sales could collapse.
Inheritance tax refunds on portfolio and property losses rise
A little-known rule that allows refunds on share and property losses has spurred wealthy families to make more claims for IHT repayments from HMRC, with more expected to do so due to the pandemic.
HMRC to waive penalties for late filing due to Covid
HMRC will not fine people who file their tax returns late if they have been adversely affected by the coronavirus in what will be a huge relief to millions of self-employed people. Parents who are homeschooling children during lockdown will also be considered to have a “reasonable excuse” if they can show this has affected their ability to complete their accounts on time. HMRC said: “We want to encourage as many people as possible to file on time even if they can’t pay their tax straight away. But where a customer is unable to do so because of the impact of COVID-19 we will accept they have a reasonable excuse and cancel penalties, provided they manage to file as soon as possible after that.” It is understood that HMRC will make a form available online for anyone who believes they cannot file on time to apply to avoid a late-filing penalty. However, although late-filing penalties can be avoided, penalties for late payment will still stand. Accountants are calling for the filing deadline to be shifted to March 31st. Nimesh Shah, chief executive of Blick Rothenberg, commented. “HMRC will inevitably be inundated with appeals, and they do not have the resources to manage this. Consistency will be difficult, and there could be legal challenges if someone’s appeal on the grounds of COVID-19 is rejected while others are accepted.” Finally, the Chartered Institute of Taxation has called for HMRC to waive late penalties for returns filed before March 1st to avoid adding a further financial burden to struggling businesses.
Paul Southward comments “At the time of publishing there has not in fact been any official announcement about HMRC relaxing the rules for penalties for late filing of self-assessment tax returns. I would still urge taxpayers to file on time. There does not appear to be any intention to waive interest and possible surcharges for the late payment of taxes due. If you are having difficulties or need help with filing your self-assessment tax returns, contact KSK. We will be updating guidance once an official announcement is made.”
Minford: Flat tax key to stimulating post-Brexit economy
Writing in the Express, Professor Patrick Minford says the Government needs reform the tax system in order to give post-Brexit Britain the boost it needs. Minford advocates a flat tax on consumption which he claims would allow the standard rate of income tax to be cut to a 15%. As the “growth effect rolls in” this rate could be cut further. Professor Minford concludes: “Boris Johnson’s courage over the trade deal has paid off in the face of a bullying EU. He now needs to see off the chorus of Remainers bullying him to raise taxes and cut spending when the opposite not only can be afforded but is much needed to support the future growth of the economy.”
CORPORATE WEEKEND TO 10TH JANUARY 2021
New York clothing firm joins bidders for Arcadia
US clothing company G-III Apparel has emerged as a bidder in the auction of Arcadia. Administrator Deloitte will select parties for the next round of bidding this month, according to City sources. Between 30 and 40 potential buyers are believed to have initially shown interest.
Jobs hope for Edinburgh Woollen Mill
FRP Advisory , administrators to Philip Day’s empire, have accepted a rescue offer for the Edinburgh Woollen Mill (EWM) chain. FRP has issued sale contracts to the potential buyer, although a source said the deal was likely to save only a small number of EWM’s 400 stores.
PENSIONS WEEKEND TO 10TH JANUARY 2021
Dormant assets scheme to target lost pensions and investments
Following a four-year review of the “dormant assets scheme” the Government has approved plans to raid forgotten pensions, share certificates and unclaimed payouts from life cover, potentially unlocking £800m in long-abandoned personal wealth for state spending. The scheme has already paid out close to £750m to good causes, the Telegraph reports, adding that details of when pensions and the other new assets included in the scheme will be officially classed as dormant is still being worked out. The Economic Secretary John Glen said: “Banks and building societies across Britain are working tirelessly to reunite people with forgotten assets. But on occasions where this isn’t possible, it’s right that these funds are used to tackle some of the most pressing social and environmental challenges.”
SMEs NEWS – WEEKEND TO 10TH JANUARY 2021
Rishi Sunak mulls support for sole directors
The Chancellor is considering plans for a £3bn scheme to help a million small business owners who have been unable to claim furlough or business loans. Those who pay themselves through dividends rather than a salary could be paid up to 80% of lost profits for three months, up to a ceiling of £7,500 under the Directors Income Support Scheme. The Treasury is reportedly examining a plan put forward by the Federation of Small Businesses, the Forgotten Ltd campaign, former Office for Tax Simplification adviser Rebecca Seeley-Harris and the Association of Chartered Certified Accountants. An estimated three million people have been unable to claim business loans and grants or employee furlough payments since last March.
The Daily Telegraph, Page: 33 Daily Mail The Sun Daily Mirror
Rescue grants tied up in council red tape
Hundreds of millions of pounds intended to help businesses survive the coronavirus crisis is being held back by local councils, the Sunday Telegraph reports, leading to accusations local authorities are hoarding the cash while small businesses impacted by local Covid restrictions go under. Rishi Sunak told businesses in November that £2.2bn in grants would be distributed by local authorities to companies which had been forced to shut. But business operators say some local authorities are yet to open the application process and if they have, they are yet to receive the bulk of the money they are eligible for. Mike Cherry, chairman of the Federation of Small Businesses, said it was “paramount” that local authorities distribute funds in a timely manner to ensure that no business is left behind. He added: “We absolutely cannot see a repeat of some local authorities who last year dragged their feet when it came to the distribution of these critical funds.”
EMPLOYMENT NEWS – WEEKEND TO 10TH JANUARY 2021
A quarter of British employees could work from home permanently
One in four British employees could end up working from home long-term, according to a survey by Deloitte, which found 97% of CFOs predict this outcome as companies make changes introduced during the pandemic permanent. “By and large, this massive, forced experiment in home-working has been very successful. Sectors have been able to maintain quite a high degree of effectiveness operating from home,” said Ian Stewart, chief economist at Deloitte. However, this does not spell the end of the office, Mr Stewart continued, stating that people overwhelmingly want a combination of home and office work so they can continue to work with others.
The Daily Telegraph City AM
PROPERTY NEWS – WEEKEND TO 10TH JANUARY 2021
UK house price growth slows as end of stamp duty holiday nears
UK house price growth slowed to 0.2% in December, down from 1% the previous month, according to the Halifax. It was the lowest rise since June and less than the 0.5% growth forecast by economists. Halifax said UK house prices ended 2020 on average 6% higher than in 2019, hitting an average of £253,374, but with the stamp duty holiday coming to an end, a third national lockdown and a predicted rise in unemployment, downward pressure on prices remains likely over the course of 2021.
INTERNATIONAL NEWS – WEEKEND TO 10TH JANUARY 2021
EU Commissioner says digital tax agreement will be reached
Thierry Breton, the European Union’s Internal Market Commissioner, said yesterday that an agreement on digital tax will be reached at the Organisation for Economic Cooperation and Development (OECD). “I’m sure we’ll find an agreement and I am sure we will find an agreement with our U.S. friends”, he told an online conference, adding: “At the end of the day we are all in the same boat.”
California wealth tax could hit Harry and Meghan
A tax expert has warned that the Duke and Duchess of Sussex could find themselves hit with a huge wealth tax later this year. After the pair signed multi-million-pound deals with companies such as Spotify and Netflix, Prince Harry and Meghan Markle are expected to face “huge hurdles” with California mulling a tax hike on earnings over $1m.
ECONOMY NEWS – WEEKEND TO 10TH JANUARY 2021
Even with vaccine, lockdowns here for another year – OECD
The OECD has warned that despite a programme of vaccination in place more lockdowns and social distancing could be with us for another 12 months. The organisation’s chief economist Laurence Boone told the BBC: “We must keep going both with the non-pharmaceutical measures, the government support and deploy the vaccine, as long and efficiently as fast as efficiently and securely as possible.” However, the OECD says global GDP for 2021 will rise to pre-pandemic levels by the end of this year, but recovery won’t be equal across all countries.
UK’s FTSE 100 kicks off 2021 with 6% rally lifted by vaccine hopes
The FTSE 100 enjoyed a 6% gain in the first week of 2021 – its biggest rally since early November raising hopes of a turnaround in fortunes with Brexit over the line and the promise of more stimulus in the US under a Democrat administration.
OTHER NEWS – WEEKEND TO 10TH JANUARY 2021
Kwasi Kwarteng replaces Alok Sharma as Business Secretary
Boris Johnson has appointed Kwasi Kwarteng as the new business secretary, replacing Alok Sharma who goes on to become the full-time president of the COP26 United Nations climate summit. Before becoming an MP, Mr Kwarteng worked as an analyst in financial services after studying at Eton and Cambridge.
Financial Times The Daily Telegraph Reuters
Cwmbran financial director jailed for £800,000 fraud
Lauren Farr, a financial director who swindled her own firm out of more than £800,000 to feed an online gambling addiction has been jailed for 32 months. The mother-of-two gambled away about £1.5m and also used stolen cash to buy a BMW and to fund family holidays. Farr conned Cwmbran company We Fight Any Claim for more than three years while working there as a senior executive.
Tax avoiding celebs as bad as drink-drivers, says Norton
Television star Graham Norton believes celebrities who avoid paying their taxes should be scorned like drink-drivers now are. In a US radio interview, the chat host said: “There was a time when drunk-driving was sort of socially acceptable. Now if somebody did that, I think people would be like, ‘Please don’t… that is a bad idea, you might kill someone’. Hopefully we will get to a stage where tax avoidance is the same as that.”
Contact Paul Southward