NEWS – WEEKEND TO 14TH JUNE 2020

NEWS ROUNDUP

COVID-19 UPDATE

HMRC UPDATES CORONAVIRUS JOB RETENTION SCHEME

Coronavirus Job Retention Scheme

You can find this guidance by searching for ‘Coronavirus Job Retention Scheme’ on GOV.UK.

What the new online guidance covers

The guidance includes:

  • changes to the scheme and key dates that you need to be aware of
  • how you can claim if you bring previously furloughed employees back to work part-time from 1‌‌ July (known as flexible furloughing) and how many employees you can claim for in any one claim
  • how to claim, and the information you’ll need to do so
  • how to work out how much you can claim, including an online calculator to help you
  • more information on amending your claim.

Webinars offering more support on changes to the scheme and how they impact you are now available to book online – go to GOV.UK and search ‘help and support if your business is affected by coronavirus’.

We’d be grateful if you don’t call us for more information. All details are on GOV‌‌.UK and in our webinars. This will leave our phone lines open for those who need them most.

What you need to do now

  • read the guidance to see how changes to the scheme impact you, using the calculator to understand how much you’ll be able to claim
  • book a webinar via GOV.UK if you’d like more support
  • consider which employees you want to keep on full-time furlough and which employees will come back to work – on what hours – to agree arrangements with them as needed for your business.

What you need to do from July

  • start your flexible furloughing of employees from 1st July onwards. You can decide the hours and shift patterns they work to suit the needs of your business – you’ll pay their wages for the time they’re in work and can apply for a job retention scheme grant to cover any of their usual hours they are still furloughed for. You can still keep employees on full furlough if you need to
  • claim for periods ending on or before 30‌‌ June, by 31st July – this is the last date you can make those claims
  • claim for further furlough periods as needed – the first time you will be able to make a claim for days in July will be 1st July.

Self-Employment Income Support Scheme

We have also updated our guidance on the Self-Employment Income Support Scheme, with further details on terms for claiming a second grant in August. You can find this guidance by searching for ‘Self-Employment Income Support Scheme’ on GOV.UK.

Protect yourself from scams

Stay vigilant about scams, which may mimic government messages as a way of appearing authentic and unthreatening. Search ‘scams’ on GOV.UK for information on how to recognise genuine HMRC contact. You can also forward suspicious emails claiming to be from HMRC to phishing@hmrc.gov.uk and texts to 60599.

TAX NEWS – WEEKEND TO 14TH JUNE 2020

SATURDAY

Forbes backs windfall tax

Kate Forbes, Scotland’s finance secretary, has said a “windfall tax” should be imposed on companies like Amazon and Google to boost public funds. Appearing at Holyrood’s finance committee, Ms Forbes agreed when SNP MSP George Adam suggested a windfall tax should be introduced for big retailers that had “done so well” during the pandemic. She said: “Clearly there are some very large organisations, corporations that have benefited from the pandemic and I think we should be looking to them in order to fund some of our needs. ”

The Press and Journal, Page: 4

SUNDAY

Ministers urged to tax online giants

Policymakers are being urged to roll out tough new taxes for large online firms like Amazon in an effort to level the playing field for struggling high street stores. Tesco CEO Dave Lewis and Sports Direct boss Mike Ashley have called for an online sales tax, with Mr Lewis saying business rates should be reduced by 20% and the shortfall made up with a 2% levy on all online retail sales. Paul Monaghan, of the Fair Tax Mark campaign group, said: “The financial cost of coronavirus is going to be in the region of £300bn. It’s vital all sectors of society make a fair contribution and a great place to start would be to tackle tax avoiders and their enablers.” He added that with profit-shifting to tax havens costing the UK £7bn per year in corporation taxes, there is a need to “act to redress the unfair playing field many businesses face from competitors who aren’t making a fair contribution”, adding that doing so “will help national coffers and the local high street alike.” Shadow Business Minister Lucy Powell added: “It’s vital there’s a level playing field for our high streets so they don’t lose out,” while Helen Dickinson of the British Retail Consortium said Government support “has provided a lifeline but more will be needed.”

Sunday Mirror

IHT refund claims climb

Analysis by insurer NFU Mutual shows that the number of people reclaiming inheritance tax (IHT) due to falling share prices has more than doubled in the past two years. The study shows 1,851 families reclaimed overpaid IHT after falling share values in 2019/20, more than twice the 858 who made such claims in 2017/18. Sean McCann, a chartered financial planner at NFU Mutual, said: “These figures show that more people are becoming aware they can reclaim overpaid IHT. After recent falls in the stock market it’s likely that many more bereaved families will be able to benefit.” He added: “IHT can also be reclaimed when houses are sold at a lower value within four years of the death. If coronavirus affects house prices, it’s important families are aware of this. ”

The Sunday Times, Business, Page: 13

HMRC fails to support homeowners on CGT

While HMRC has granted an extension for stamp duty refunds on house sales delayed because of the COVID-19 lockdown, it has yet to offer relief for homeowners hit by extra capital gains tax (CGT) charges as they were unable to sell before changes in April. The levy has seen three large changes in recent times: where landlords who let out a property that was once their primary home could claim lettings relief on CGT, this is now available only to those who continued to live in the property while letting part of it out; where once the past three years of ownership were exempt from CGT, this was reduced to 18 months in 2014 and to nine months in April; and CGT payments must now be made within 30 days of the sale, rather than via a self-assessment tax return the following year. Heather Powell of Blick Rothenberg said it is “an absolute disgrace” that the Government hasn’t extended reliefs to cover CGT.

The Sunday Telegraph, Business, Page: 12

Windfall tax could help tackle profiteering

Ian Cowie in the Sunday Times looks at coronavirus profiteering and how authorities can crack down on the practice. He cites George Bull of RSM who points to how gangster Al Capone was brought to justice, saying that while legislation giving the Competition and Markets Authority greater power is “unlikely to be forthcoming soon”, when law enforcers struggled to convict Capone, “it was the American Internal Revenue Service that secured an 11-year prison sentence on charges of tax evasion.” Mr Cowie says a windfall tax might enjoy cross-party support, with Mr Bull suggesting it could be based on the difference between businesses’ average profits before and during the crisis.

The Sunday Times, Business, Page: 11

Opinion: Tax cuts may boost recovery

Hamish McRae in the Mail on Sunday considers the economic fallout of the coronavirus crisis and measures that could help drive a recovery. He says that while the Bank of England is likely to offer a boost after a Monetary Policy Committee meeting this week, with another bout of quantitative easing the minimum to expect, “to be realistic, there is not much more that monetary policy can do.” Mr McRae says responsibility will fall on the Government and suggests a mini-Budget of tax cuts may be an option, noting that Germany recently agreed to cut VAT in an attempt to boost its economy, adding “there is an argument for that”. He suggests that while there is a case for temporary tax cuts, there is also a case for a “radical revamp” of the entire tax system. “A mini-Budget would be helpful, but the cleaning up of our hideously complex tax system is ultimately much more important, and that will have to wait,” he concludes.

The Mail on Sunday, Page: 124

Campaigner who helped close tax loophole faces bankruptcy

Businessman Richard Allen, who exposed tax loopholes and scams to help save the Government more than £1bn a year, faces bankruptcy after losing a case against HMRC. Mr Allen helped shut down a tax loophole in the Channel Islands and helped expose how some overseas Amazon and eBay traders were avoiding VAT. In 2012, International Tax Review recognised him as one of the top 50 global leaders influencing tax policy. Mr Allen launched an unsuccessful legal action for compensation against the taxman because his business was destroyed by the loophole – and HMRC is now pursuing him for £72,000 in legal costs, with an additional charge linked to a freedom of information request he submitted taking the bill to £125,000. Campaigners are now calling for Mr Allen’s work to be officially acknowledged with an HMRC financial reward that would help him avoid bankruptcy.

The Sunday Times, Business, Page: 12

REGULATION NEWS – WEEKEND TO 14TH JUNE 2020

SATURDAY

Employers given 30 days to ‘confess’ to furlough abuses

The Government plans to give businesses a 30-day window to confess to furlough fraud. With draft legislation being rushed through Parliament and set to become law early in July, HMRC has warned employers that it will be able to charge a penalty for any deliberate non-compliance. An online fraud reporting hotline set up by the Government has received more than 1,900 calls related to such fraud, while whistleblower charity Protect has seen a jump in calls to its advice line. Dawn Register of BDO expects HMRC to follow up whistleblower reports, using its Connect computer system to flag anomalies in claims. She said that where HMRC suspects fraud, “we can expect serious investigations,” adding that the draft legislation includes “powers to pursue company office holders where businesses become insolvent, with joint and several liability.” Ms Register says that while the legislation is expected to introduce a 30-day window for firms to confess to any issues or mistakes, after this it will be “gloves off” for HMRC to pursue incorrect claimants using criminal and civil powers.

The Times, Page: 60 The Daily Telegraph, Page: 35 The I, Page: 13 Daily Express

INSOLVENCY NEWS – WEEKEND TO 14TH JUNE 2020

SATURDAY

Insolvency fall a ‘calm before the storm’

Insolvency Service figures show a year-on-year decline in the number of people going bankrupt across England and Wales in May. There were 739 bankruptcies last month, down 49% on May 2019, while the number of debt relief orders, another form of personal insolvency, was down by 32%. Christina Fitzgerald, vice president of insolvency and restructuring trade body R3, said: “Indicators over recent months suggest that an increase in insolvency numbers is coming, but this has not yet materialised,” warning: “We are potentially in the period of calm before the storm. ” Ms Fitzgerald added: “I t’s clear that we’re set for a period of economic turbulence. ”

Daily Express, Page: 61

SMEs NEWS – WEEKEND TO 14TH JUNE 2020

SUNDAY

SMEs go digital

A study by Hitachi Capital Business Finance shows that almost 80% of SMEs have had to move parts of their business online to stay operational amid the coronavirus pandemic. The report also reveals that more than two-thirds of SMEs that described themselves as offline businesses prior to the pandemic now have an online presence, with payroll and invoicing among functions taken online.

Sunday Express, Page: 47

CORPORATE NEWS – WEEKEND TO 14TH JUNE 2020

SATURDAY

KKR asks its advisers for discounts to share the pain

US private equity group KKR has asked its legal and financial advisers, which include EY, to provide discounts on their work and share in the “economic pain” caused by the coronavirus outbreak.

Financial Times, Page: 13

European football clubs’ route to easy borrowing under threat

The FT looks at football clubs securing funding against future income, citing a BDO study which details funds raised by Premier League teams against broadcast revenues and future transfer income.

Financial Times

Retailers edge gingerly towards reopening doors to shoppers

With shops in England set to reopen this week, Paul Martin, head of retail at KPMG, believes retailers will use phased reopenings to “reassess which sites are most commercially viable”.

Financial Times, Page: 3

Investors Chronicle: Hummingbird Resources, Lookers, The Restaurant Group

An overview of car dealer Lookers notes that auditor Deloitte will resign its brief once annual results have been released. In March Lookers hired Grant Thornton to conduct a fraud investigation.

Financial Times, Money, Page: 8

SUNDAY

BLM pushes diversity focus

Vinjeru Mkandawire in the Sunday Telegraph considers the impact the Black Lives Matter movement is having on large companies, saying it has given fresh momentum to a push for boardroom diversity, with some of Britain’s largest firms looking to recruit non-white directors. Sir John Parker, who has been commissioned by the Government to help increase representation of ethnic minorities, has been meeting boards to urge them to act, with FTSE 100 bosses set a target to have at least one non-white director by 2021. Ms Mkandawire says FTSE 100 companies have also had meetings with EY partner Arun Batra, with the audit firm collaborating with Sir John on the Parker Review to improve boardroom diversity. Mr Batra says for FTSE 100 companies to meet the 2021 target “the remaining all-white FTSE boards need to transform intent into action.”

The Sunday Telegraph, Business, Page: 1

Jamie Oliver restaurant bill hits £1m

The Mail on Sunday says auditors dealing with Jamie Oliver’s failed restaurant chain have racked up a bill of more than £1m, with the probe not yet complete. It notes that KPMG last week requested more time to investigate the collapse, having already spent a year delving into the accounts.

The Mail on Sunday, Page: 42

Matalan puts HQ up for sale

Matalan is seeking to raise £28.5m through a sale and leaseback of its headquarters, with the Sunday Times saying some commentators believe the move is being made so founder John Hargreaves can avoid pumping more money into the fashion chain. The paper notes that Mr Hargreaves is suing PwC after it advised him that relocating to Monaco meant he would avoid paying taxes when he sold £237m of Matalan shares almost 20 years ago.

The Sunday Times, Business, Page: 1

Scoreboard: Easy money in football dries up in restart

The FT looks at the week’s sport-related business news, noting that Duff & Phelps calculates that pausing the Indian Premier League due to COVID-19 may cost the cricket tournament $1bn.

Financial Times

PROPERTY NEWS – WEEKEND TO 14TH JUNE 2020

SATURDAY

Primark finance boss: Pandemic means ‘new reality’ for retail landlords

John Bason, Primark’s finance chief, says the coronavirus pandemic has delivered a “new reality” for high street landlords. He said COVID-19 is a “step change in rent renegotiations”, suggesting that while the “pace of change in the high street was already picking up for a number of years, led by a move to online”, COVID-19 has “underlined that.” Mr Bason added: “There will be no doubt in my mind that when new leases are agreed, that the price will reflect the new reality.”

Daily Mail, Page: 85

SUNDAY

First-time buyers hit as banks pull small deposit deals

Those looking to get onto the property ladder face being frozen out of the housing market as a number of banks have pulled deals for those with the smallest deposits. Lenders including Virgin Money, Clydesdale Bank and Accord have pulled home loan deals for those who can only manage a 10% deposit. When the market shut down due to the coronavirus outbreak on March 27, more than 30 lenders withdrew mortgages for those looking to borrow 90% as they could not carry out physical valuations on houses. Although the market was reopened last month, few banks have reintroduced the deals. HSBC is the only major lender offering deals above 90% – and has limited them to a set number each day. Meanwhile, TSB has become the first bank to withdraw mortgage deals for customers with a 15% deposit amid fears of a fall in house prices.

Sunday Express The Mail on Sunday

EMPLOYMENT NEWS – WEEKEND TO 14TH JUNE 2020

SATURDAY

Firms urged to improve racial equality

Diversity lobbying network INvolve’s chief executive Suki Sandhu has urged UK firms to improve racial equality, saying it “feels like the climate is right for something to really change” adding: “Employers need to be bolder and more daring.” INvolve has urged ministers to make ethnic minority pay gap reporting mandatory for businesses with 250 or more staff. Bank of England analysis last year found that the pay gap between ethnic minority and white workers was 10%.

Evening Standard

Home working does not hinder productivity

Elizabeth Anderson in the I looks at productivity and whether the COVID-19 lockdown has proven that workers can be just as productive at home. She points to a survey of financial services industry staff by Deloitte which saw more than 75% say they were equally productive while working remotely.

The I, Page: 75

SUNDAY

Unemployment could reach 10%

Prime Minister Boris Johnson has been warned that the economic fallout of the coronavirus crisis could mean one in ten working age British adults are unemployed by the end of 2020. A report by the Learning and Work Institute says the “sharpest ever rises are taking unemployment to historic highs”, saying unemployment could h it 10% in the second half of the year. The report suggests unemployment could reach levels not seen since 1938, with more than 4m people out of work. Lord Forsyth, chair of the House of Lords Economic Affairs Committee, warned: “A great tsunami is going to sweep away the jobs of many people who thought they were in secure employment.” The Sunday Express’ Brian McGleenon says the period between August, when employers are set to start contributing to wage subsidies, and October, when the furlough scheme is due to end, could be “crunch time for the labour market”. If lockdown measures are still in place, he adds, Chancellor Rishi Sunak may have to choose between extending the job retention scheme or seeing “a wave of job losses”.

Sunday Express

Jobless figure expected to hit 2.47m

Office for National Statistics data set to be released on Tuesday is expected to reveal that the number of people claiming unemployment benefits has reached 2.47m, climbing by 370,000 in May following a record 856,500 increase in April. The figures are expected to show that the unemployment rate has risen from 3.9% to 4.7% due to the coronavirus pandemic. Howard Archer, chief economic adviser to the EY ITEM Club, warns that 2020 is likely to be “the worst year for unemployment in years” and that the unemployment rate for the year could be double 2019’s 3.8%. He added: “The furlough scheme has done a lot of good but it is being wound down and the big concern is what happens afterwards.”

Sunday Express, Page: 47

ECONOMY NEWS – WEEKEND TO 14TH JUNE 2020

SATURDAY

GDP falls by record 20.4%

Figures from the Office for National Statistics (ONS) show that the economy shrank at its fastest pace on record in April, with GDP declining by 20.4%. This follows a 5.8% fall in March and 0.2% dip in February, with GDP down 10.4% over the three-month period. The analysis shows that the economy was 25% smaller in April than in February. All large sectors have been hit by the lockdown rolled out amid the coronavirus crisis, with car manufacturing falling 90.3%, the hospitality sector down 88.1% and private housebuilding dropping 59.1%. Prime Minister Boris Johnson said the while the economy would see “big, big economic knock-on effects” from COVID-19, Britain can “bounce back” from the crisis. He said: “We’re going to work slowly to get the economy back on its feet.” Bank of England governor Andrew Bailey said the ONS figures were “not surprising” and “pretty much in line” with what the Bank expected. Considering measures that could boost the economy, the TaxPayers’ Alliance has called for cuts to capital gains tax and a boost to the annual investment allowance, with the Institute of Directors says an expansion of R&D tax credits and national insurance reliefs may be the way to go. Looking ahead, Ian Stewart, chief economist at Deloitte, said the return to previous output levels “will take years, not weeks”. EY estimates that UK GDP will shrink by 15% this year, having previously pointed to a 13% decline. Yael Selfin, chief economist at KPMG, believes the ONS figures represent the bottom of the crisis, saying the sharp contraction in activity in April “should be followed by a very gradual improvement over the rest of the year . ”

The Daily Telegraph, Page: 33 The Times, Page: 43 Financial Times, Page: 3 The Independent, Page: 11 Daily Mail, Page: 83 The Guardian, Page: 1 Sky News BBC News

Contact Paul Southward.