Concern voiced over Office of Tax Simplification’s CGT review

The Daily Telegraph’s Lauren Davidson considers the Office of Tax Simplification’s (OTS) review of capital gains tax, which has concluded that the levy is too complex, arguing that recommendations in the report “do little to untangle the tax”. Nimesh Shah of Blick Rothenberg suggests that some proposals in the report – which suggests increasing CGT rates to bring them in line with income tax – are “just a roundabout way of presenting an increase to CGT”, while Graham Boar of UHY Hacker Young has warned that some of the ideas put forward by the OTS would cause so much disruption “it’s hard to see how this would create a more user-friendly CGT system”. Elsewhere, David Byers in the Times says that while proponents argue that reform would make the tax system fairer, the Low Incomes Tax Reform Group is concerned that it could drag thousands of people into the self-assessment tax system for the first time. Meanwhile, the FT’s Emma Agyemang looks at what the review might mean for investors.

The Daily Telegraph, Money, Page: 2 The Times, Page: 66 Financial Times, Money, Page: 3

HMRC crackdown targets tax avoidance

Tax-related investigations and arrests have risen 40% on the back of a crackdown on offshore avoidance schemes. Figures show that HMRC’s Offshore Corporate and Wealthy unit carried out 70 arrests, dawn raids or interviews in the 12 months to the end of March, up from 50 in the previous year. Analysis by law firm Pinsent Masons shows these probes yielded £414m for the Treasury. Meanwhile, data show that whistleblowers who reported tax evasion were paid £473,000 in 2019/20 – a rise of 63% from a year before.

The Times, Page: 65 The Times, Page: 65

How can we reduce the tax burden on a flat given to us?

A Q&A in the FT sees Richard Jameson of Saffery Champness offer readers advice on inheritance tax after they were left a property in India in their mother’s will.

Financial Times, Page: 14


Think-tank warns Chancellor over CGT increase

The Centre for Policy Studies has urged the Treasury to ignore proposals that call for an increase in capital gains tax. The think-tank issued the warning to Chancellor Rishi Sunak after the Office for Tax Simplification suggested that doubling rates and reducing exemptions could raise around £14bn. Centre for Policy Studies tax expert Tom Clougherty has questioned the proposals, saying: “Fully aligning CGT with income tax would be a big mistake.” He added: “Doubling the tax paid on capital gains would deter investment, punish saving, and leave us with a very uncompetitive system internationally.” Mr Clougherty said minsters should look to simplify the tax system but added that the Government “needs to make sure it also supports entrepreneurs, savers, and economic growth.”

Sunday Express, Page: 26

Opinion: Tax rises not the best path to recovery

Daniel Hannan in the Sunday Telegraph says that as Britain looks at how best to foot its coronavirus crisis bill, a “dangerous consensus has formed” that suggests tax rises are the best option. He highlights that within the last week, the Office of Tax Simplification has proposed an increase in the rate of capital gains tax; Deutsche Bank has suggested a tax on people working from home; and the Resolution Foundation has called for an extra £40bn in tax rises, including a higher rate of corporation tax and a windfall levy on profitable firms. Mr Hannan points to a 2018 study from the European Central Bank which argues that spending cuts are a far better way to balance the books than tax rises. He argues: “Instead of weighing ourselves down with additional taxes, we should aim to shrug off some excess weight. Elsewhere, the Observer’s Business Leader column calls for Chancellor Rishi Sunak to look “imaginatively” at ways to raise money through tax increases, arguing that while tax rises “should not be applied until a recovery is at full throttle, the thinking needs to begin.”

The Sunday Telegraph, Page: 22 The Observer, Page: 54

Opinion: Higher CGT rates would deliver ‘unpalatable’ results

Jeff Prestridge in the Mail on Sunday welcomes the fact that Chancellor Rishi Sunak has yet to suggest he may embrace recommendations from the Office of Tax Simplification which would deliver reform of capital gains tax, arguing that reform is “simply code” for higher rates and restricted tax-free allowances. Mr Prestridge says the consequences of higher CGT rates are “unpalatable”, suggesting an increase would trigger a fire-sale of buy-to-let properties, deter potential landlords and discourage some entrepreneurs from setting up businesses. Elsewhere, Carol Lewis in the Sunday Times says aligning income tax and CGT would be likely to drive a shift in taxpayer behaviour, making projections of the money the Treasury could pull in inaccurate. In the same paper, James Coney says capital gains tax is “ripe” for reform but any shift requires proper consideration of what behaviours will change as a result.”

The Mail on Sunday, Page: 123 The Sunday Times, Home, Page: 3 The Sunday Times, Business, Page: 11

Opinion: Care needed on tax reforms

The Mail on Sunday’s Hamish McRae says businesses facing a period of uncertainty amid the pandemic and as Brexit nears need “order and competence” from the Government. Stressing the importance of tax policy, he suggests: “There will at some stage have to be a long cool look at taxation”, saying policymakers will have to ask whether the UK is “prepared to pay a higher proportion of GDP in tax than at any stage in the past 30 years”, and if so, which taxes. He adds that “much-needed” reforms of personal taxation need to be done with “enormous care”.

The Mail on Sunday, Page: 127

Tax breaks for grandparents

If you want to learn more about how you can help your grandchildren tax efficiently, contact Paul Southward.



Rates holiday saves supermarkets £2bn

Analysis by real estate adviser Altus Group suggests supermarket chains are set to benefit from almost £2bn in business rate tax breaks, despite sales soaring during the coronavirus crisis. Chancellor Rishi Sunak earlier this year announced a business rates holiday for retail, leisure and hospitality firms until March 2021, with this designed to support firms facing a financial hit from the pandemic. The Altus Group report suggests that the UK’s four largest chains – Sainsbury’s, Tesco, Asda and Morrisons – as well as rivals Aldi and Lidl, will save around £1.87bn as a result of the rates holiday. This represents more than a sixth of the total £10.1bn written off business rates bills during the year.

The Independent, Page: 44 The I, Page: 77 Daily Express, Page: 65 The Sun, Page: 44


Rates boost for supermarkets draws criticism

With analysis from advisory firm Altus showing that Tesco, Sainsbury’s, Asda, Morrisons, Aldi and Lidl will collectively save almost £1.9bn due to the Treasury’s 12-month holiday on business rates, some critics have called on the supermarkets to hand back the money. Liberal Democrat leader Sir Ed Davey has questioned the boost for the chains, which comes despite them seeing sales rise amid the pandemic and lockdown, saying that the Government made a “huge mistake in the design of the business rates holiday”. Conservative MP Kevin Hollinrake comments: “It’s now clear that supermarkets didn’t need this concession on business rates, yet they haven’t paid it back”.

The Sunday Times, Page: 1



Experts expect wave of corporate insolvencies

Experts have warned that the withdrawal of government support will deliver a wave of business closures. While official figures show that the number of corporate insolvencies fell to 856 in October, down from 925 in September and 1,485 in October 2019, analysts say the number would have been far higher but for Government support. Colin Haig, president of insolvency and restructuring trade body R3, said: “Gravity cannot be defied forever, and – with temporary measures stopping creditor enforcement actions against debtors due to expire at the end of the year – the first few months of 2021 could turn out to be difficult ones for large swathes of businesses which have built up arrears with landlords, suppliers, or the taxman.”

The Daily Telegraph, Business, Page: 39 The Sun, Page: 44

FCA: Carillion and bosses misled investors

The Financial Conduct Authority (FCA) has found that Carillion and some of its top executives misled markets as the outsourcer’s finances deteriorated before it eventually collapsed into liquidation in 2018. The FCA found that a series of the construction firm’s announcements in 2016 and 2017 were misleading and did not accurately or fully reflect the firm’s financial performance. It has issued warning notices to the company and “certain previous executive directors” over breaches of financial rules. The Financial Reporting Council (FRC) delivered a report to auditor KPMG in September outlining possible breaches of professional standards in the firm’s work for Carillion between 2014 and 2017.

The Daily Telegraph Financial Times, Page: 15 The Times, Page: 55 Daily Mail, Page: 93 The Guardian, Page: 41 City AM

Retailers hit as consumer confidence slides

Considering the climate for retailers, Janet Street-Porter in the Independent cites PwC analysis showing that consumer confidence has fallen to -10 amid England’s second national lockdown. She notes that PwC expects confidence to climb again providing shops can reopen after December 2.

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Companies split over whether to return furlough cash before resuming payouts

HMRC figures show that firms have handed back £382m of Coronavirus Job Retention Scheme grants, with £198m in repayments and £184m in adjustments to existing furlough loan claims.

Financial Times, Page: 1

EG Group’s owners cash out ahead of £6.8bn Asda deal

A look at EG Group raising debt-like financing from sovereign wealth and pension funds notes that the firm hopes to address concerns about governance which saw Deloitte quit as auditor.

Financial Times, Page: 20


Arcadia eyes administration

Directors of Sir Philip Green’s Arcadia Group are drawing up plans to place the business into administration. Advisers from Deloitte are reportedly working on a plan that would place the retail group into a trading administration that would allow directors to operate the business while they attempt to sell Arcadia’s brands separately. Arcadia owns Topshop, Topman, Miss Selfridge, Burton, Dorothy Perkins, Wallis and Evans. It employs 15,000 people and trades from about 550 sites.

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JD Sports could rescue Debenhams

JD Sports could step in to rescue Debenhams, with the retailer understood to be examining the department store chain’s finances ahead of a potential takeover. While momentum is reportedly with JD Sports as a buyer is sought, Sports Direct and House of Fraser owner Mike Ashley is said to remain close to the sale process, which is being managed by FRP Advisory and bankers at Lazard.

The Sunday Telegraph, Business, Page: 1

Nightclub group seeks support

Nightclub operator Deltic Group, which is currently seeking a buyer, is asking the Government for £1m-a-month in grants to cover costs as it remains shut amid the pandemic. CEO Peter Marks said the firm, which is set to start assessing bids from an initial 20 private equity firms and ten industry rivals, needs to find a buyer or investor by the end of the month. If no deal is reached, Deltic will be put into administration or a CVA by BDO, which is leading the sale.

The Mail on Sunday, Page: 118

Caffè Nero details rent plan

Caffè Nero has reportedly told some of its landlords not to expect any rent for three years. The chain is negotiating a CVA with landlords to cut costs and under the plans drawn up by KPMG, the owners of 69 sites would be paid no rent for three years, while owners of the best performers would receive a portion of rent based on turnover for the period.

The Sunday Times, Business, Page: 1



Firms hit by U-turn on job retention bonus

Businesses have warned that Chancellor Rishi Sunak’s decision to scrap a bonus scheme for firms that retain formerly furloughed workers has hit budgets, with the money having been factored into cashflow forecasts. Mr Sunak replaced the Job Retention Bonus – which pledged £1,000 for every worker kept on the payroll by the end of January – with an extension to the furlough scheme when England’s second national lockdown was announced. Craig Beaumont, external affairs chief at the Federation of Small Businesses, said: “Small businesses that have got lots of revenue issues were looking forward to a bit of guaranteed income in January.” He added: “That one little bit of light at the end of the tunnel has gone.”

The Sunday Times, Business, Page: 1



Missing stamp duty holiday may save some buyers money

While a number of homebuyers are looking to push through purchases before the stamp duty holiday concludes at the end of March 2021, Melissa Lawford in the Telegraph says some are waiting to buy in the hope that the end of the tax break will see prices dip. She notes that the stamp duty holiday has helped drive a post-lockdown property surge but with values climbing, some buyers have found that what they gain from the tax holiday is outweighed by price inflation.

The Daily Telegraph, Money, Page: 4


Eon calls for tax perks for green homes

Energy firm Eon has told the Government that homeowners who make their properties more energy efficient should pay less council tax and stamp duty. The firm’s boss, Michael Lewis, has outlined proposals for tax cuts linked to energy efficiency and called on ministers to make such incentives a part of property transactions. In talks with Energy Minister Kwasi Kwarteng, Mr Lewis said the Government should “align the tax system to zero carbon”. Mr Lewis hopes the proposals will be incorporated in Prime Minister Boris Johnson’s ten-point green energy plan and an Energy White Paper.

The Mail on Sunday, Page: 118



FCA pressed for details of pension transfers probe

A Freedom of Information request from Duff & Phelps shows that the Financial Conduct Authority opened 67 pension transfer mis-selling cases between April 2015 and September 2018.

Financial Times, Money, Page: 2


Dipping into pension pot has tax implications

With HMRC data showing that 347,000 people withdrew money from their pension pot between July and September, Shane Hickey in the Observer considers the tax implications of dipping into retirement savings. He notes that a person can take 25% tax free, but the rest will be taxed as income for the year, adding that it will be added to any other earnings and could push them into a higher tax bracket.

The Observer, Page: 57



Firms fight to survive amid the pandemic

Russell Lynch in the Sunday Telegraph reflects on the challenges small traders are facing as they look to stay afloat during the coronavirus pandemic, noting analysis which suggests more than half a million firms are in severe financial distress and concern that 2021 could deliver a spike in insolvencies. Begbies Traynor’s “red flag” alert system suggests 557,000 companies are in “significant” financial distress, with this based on outstanding county court judgments and financial metrics. Chairman Ric Traynor, who says his company is speaking to around twice as many businesses as usual, believes that “somewhere between 21,000 and 22,000” firms will become insolvent. While the number of companies falling into insolvency fell 39% year-on-year in September thanks to bans on winding-up orders and evictions, Mr Traynor says: “There will be a catch-up, no doubt”.

The Sunday Telegraph, Business, Page: 6



PM urged to adopt four-day working week

The Prime Minister has been called to adopt a four-day working week, with politicians and trade unions among those signing a letter that suggests the move would help the post-pandemic recovery. The letter to the PM, which lists former shadow Chancellor John McDonnell and Unite general secretary Len McCluskey among signatories, says reducing working hours is essential for the “advancement of civilisation”. Commenting on the letter from the 4 Day Week UK Campaign, New Economic Foundation chief economist Alfie Stirling said: “Reducing working hours while also providing pay protection is a powerful tool for minimising economic damage during any recession, and is has been put to particularly good use during the pandemic.” He added that a shortened working week “provides a double boost” as it reduces redundancies by distributing hours and maintains pay packets and wider spending, “which in turn protects more jobs.”

Sunday Express

More firms make remote shift permanent

The Observer reflects on the change in working life brought about by the coronavirus outbreak, saying most companies expect to offer more flexibility after the pandemic, while firms including PwC have said a shift to more remote working will be permanent.

The Observer, Page: 54



Charitable fund could help pay down deficit

A High Court judge has said a charitable fund set up by an anonymous donor in 1928 could be used to pay off some of the UK’s national debt. The National Fund was created with a gift of half a million pounds that was to be left until it had grown large enough to discharge the UK’s national debt. Mr Justice Zacaroli ruled that the fund, which is now worth £512.2m, is a valid charitable trust, meaning it can be used to help pay off the country’s national debt.

Daily Mail



Going phone-free for breakfast

Susannah Taylor in the Mail on Sunday details her efforts to keep the early part of her day free from technology, noting a Deloitte study which found that more than a third of smartphone users check their phone within five minutes of waking up in the morning.

The Mail on Sunday, You, Page: 61

Leaders in Lockdown

The Sunday Times notes that new book Leaders in Lockdown includes an interview with former Grant Thornton boss Sacha Romanovitch.

The Sunday Times, Business, Page: 10

Contact Paul Southward