NEWS – WEEKEND TO 25TH APRIL 2021
NEWS – WEEKEND TO 25TH APRIL 2021
OTHER NEWS – WEEKEND TO 25TH APRIL 2021
Time for citizens to take back control, scientists say
In an open letter published today, leading scientists say ministers and Government advisers are exaggerating the threat from COVID-19 and that all restrictions must be lifted on June 21 – the final date in Boris Johnson’s roadmap out of lockdown. They argue that with data showing vaccines reduce the risk of death by 98% and hospitalisations by more than 80%, COVID-19 is being turned into a mild disease in Britain. The letter’s 22 signatories include Professors Carl Heneghan and Sunetra Gupta from Oxford University, Emeritus Professor Hugh Pennington from the University of Aberdeen and Professor Robert Dingwall from Nottingham Trent University. “We are being told, simultaneously, that we have successful vaccines and that major restrictions on everyday life must continue indefinitely. Both propositions cannot be true,” the scientists write. They add: “Mandatory face coverings, physical distancing and mass community testing should cease no later than 21 June along with other controls and impositions. All consideration of immunity documentation should cease.”
The Sunday Telegraph, Page: 1 Sunday Express, Page: 1 The Mail on Sunday
“It is time to free up businesses and people to start really building back our economy and the nations health.”
TAX NEWS – WEEKEND TO 25TH APRIL 2021
Investors in uproar over Biden’s proposed capital gains tax rise
Investors have lashed out at Joe Biden’s plans to double capital gains tax with Scott Minerd at Guggenheim Partners declaring the plans “insanity” while Anthony Scaramucci, founder of SkyBridge Capital, believes the proposals would “have deleterious effects on job creation and wage growth for middle-class workers.” Stocks fell following the announcement and cryptos such as Bitcoin and Ether fell sharply. Although the plans will face stiff opposition in Congress, fund managers warn that investors could dump “momentum” stocks as they seek to crystallise gains ahead of a tax hike. Alasdair McKinnon, manager of the Scottish Investment Trust, said the impact of Biden’s proposals would be felt across America’s stock market. “New capital gains taxes are unhelpful to all asset prices,” he said.
EU plans creeping tax harmonisation
The Express reports on plans touted by the European Commission to harmonise tax rates across the bloc for tobacco products. Pieter Cleppe, a research fellow with the Brussels-based Property Rights Alliance, said in a paper that the Commission is exploring ways to do this without EU Treaty change, “using health concerns as a pretext to obtain more power.”
HMRC deadline extension creates state pension headache
HMRC has warned that small business owners and those with ‘side hustles’ could miss out on state pension benefits if they filed their tax return after January this year.
Conservatives should fight an international tax stitch-up
Hamish McRae asserts in the Mail on Sunday that if Joe Biden gets his tax hikes though Congress other countries would have cover for introducing similar measures too. The new administration wants to tax capital gains as income, raise corporation tax and introduce a global minimum tax rate. McRae says following the extreme pandemic spending by governments, raising taxes on the wealthy is logical and fair and hard to argue against. The Observer’s business leader lauds Biden’s move believing the tax hikes and trillions in stimulus are intended to tackle “deep-rooted inequalities” and that the UK Government should use Washington’s move to inspire its own plans to build back better. But Daniel Hannon contends in the Sunday Telegraph that plans for international tax harmonisation, with legal threats against those who resist, “would mark the birth of a high-tax cartel, and the rate would surely rise”. Socialists have long resented the fact that exorbitant taxes redistribute people rather than wealth, but without international competition this inconvenience would end, he says, as would the right of poor nation states to try and improve their lot through tax cuts. Ultimately, Hannan adds, low taxes improve revenue, employment and economic activity – all things needed to repair shattered post-pandemic public finances, but this seems to have been forgotten by Conservatives in the UK.
The Observer, Page: 56 The Mail on Sunday, Page: 122 The Sunday Telegraph, Page: 20
HMRC sends 18,500 fines to wrong address
HMRC has sent 18,500 fines to the wrong address with a software error said to be to blame for the fiasco, the Sunday Times reports. Accountants have reported finding demands for multiple taxpayers when opening envelops addressed to another taxpayer, with private codes and other reference numbers included in the correspondence. “This is an absolutely astonishing blunder,” said George Bull from RSM. “HMRC makes much of relying on self-employed workers getting their tax bills right, but appears incapable of managing its own data.” In a letter to the Association of Taxation Technicians (ATT), HMRC said: “We sincerely apologise and recognise that this is not in line with our Charter standards. We take all aspects of protecting data very seriously so there has been a lot of activity to understand this incident and mitigate future risks.” HMRC said it had taken urgent action to ensure the data breach did not happen again: “If any agents receive any correspondence for incorrect clients, we would ask that they return them to HMRC.”
The Sunday Times, Business, Page: 12
CORPORATE NEWS – WEEKEND TO 25TH APRIL 2021
Stanlow refinery reaches with HMRC
Essar Oil, which controls the Stanlow oil refinery in north west England, has struck a deal with HMRC on its tax liability. The refinery produces a sixth of the country’s petrol and diesel and has now been thrown a £400m lifeline by the taxman amid fears it could collapse. Industry sources confirmed the “time to pay” deal reached with HMRC has removed the risk of insolvency. International travel restrictions have reduced demand while poor margins for refining alongside market volatility caused operating losses for the company.
Charities ration services as pandemic bites
Fundraising experts warn that charities will inevitably have to ration their services after the pandemic left them struggling for cash. Some small operations are suspending services leaving others to pick up the slack. The Sunday Telegraph notes that between April 2020 and February, the Charity Commission saw a 25% increase in concerns being raised by auditors over reports and accounts. The main issue reported was insolvency or financial difficulties.
Tate & Lyle auctions off primary products division
Tate & Lyle has been working with Deloitte for some time to figure out the best way to spin off its primary products division, with Apollo Global Management and Cerberus among the interested parties. City sources say a £1.2bn auction for the division is now underway.
SMEs NEWS – WEEKEND TO 25TH APRIL 2021
Small firms suffer cashflow woes just as support is withdrawn
The Sunday Times talks to small business owners who, after being devastated by the pandemic, face paying back Covid loans before their cashflow has been repaired. One businessman said: “The speed at which the Government thinks you’re able to start hurling money back at them is crazy.” Craig Beaumont, chief of external affairs at the Federation of Small Businesses said the issue was common, adding: “The Government should be throwing everything it’s got at getting businesses across this ‘unlock’ phase and into the recovery, to avoid businesses falling at the final hurdle because of lack of cashflow.” But Steve Russell, head of restructuring services at PwC, says VAT deferrals, the furlough scheme and emergency loans are “not gifts. They are support schemes that need to be unwound.”
PERSONAL FINANCE NEWS – WEEKEND TO 25TH APRIL 2021
Families increasingly using deed of variation
Irwin Mitchell solicitor Sarah Paton says there has been an uplift of families changing the wills of elderly parents after they pass to help younger generations hit hard by the pandemic. “A deed of variation can be used to give a fixed sum or a proportion of the estate directly to the grandchildren of the deceased instead of the children,” she explains. Mike Hodges, partner at Saffery Champness, points out that families often decide it is better to wait until after the death to work together to rejig the will, to save the loved one distress. Using a deed of variation can also reduce inheritance tax liabilities by shifting assets directly to a younger person’s estate.
The Mail on Sunday
PENSIONS NEWS – WEEKEND TO 25TH APRIL 2021
Drop in pension income more startling than expected
With the closure of final salary pension schemes looming, Lane, Clark & Peacock believes the drop in pension income is going to be more startling than first thought. Its research suggests that the average man retiring this year will have an annual income of £14,634 and a woman £10,042, including state pensions. But by 2045, a man retiring would have an income of £12,460, and a woman £10,797, in today’s money. Female income improves because more are expected to be able to claim full state pensions. Public sector workers will suffer less because many will still have defined benefit pensions. Steve Webb, a former pensions minister and partner at LCP, commented: “For years, salary-related pensions from private sector jobs have supported the incomes of the newly retired, and men in particular. But these pensions are disappearing much more rapidly than we thought. And new-style workplace pensions are not being built up quickly enough to take up the slack.”
More action needed to close pensions gap
The Sunday Times warns that more needs to be done to close the pensions gender gap and promote equal pay in retirement. The paper reports that research from the Prospect union has found that the gap for pensions stands at 40.3%, more than double the gender salary gap of 15.5% reported by the ONS. The SNP MP Patricia Gibson said it was unacceptable that all types of pension inherently discriminate against women. It is noted that last week, Guy Opperman, the Pensions Minister, said there was a “clear passion” for making women better off in older age.
The Sunday Times
PROPERTY NEWS – WEEKEND TO 25TH APRIL 2021
Tax deadline leads to frenzied market
House prices have rocketed over the course of the stamp duty holiday and there is a buying frenzy as the deadline looms, reports the Sunday Times. Figures from HMRC show almost 191,000 homes were sold in March – the highest number in a single month since July 2004. But the savings from the Chancellor’s tax cut have long since been cancelled out by property price rises, the paper’s Carol Lewis claims.
LEGAL NEWS – WEEKEND TO 25TH APRIL 2021
Former subpostmasters cleared over accounting scandal
Almost 40 former subpostmasters who were convicted of theft, fraud and false accounting because of the Post Office’s defective Horizon accounting system have finally had their names cleared by the Court of Appeal. The Horizon system, developed by Fujitsu, was first rolled out in 1999 but from an early stage it appeared to have significant bugs that could cause the system to misreport. Horizon-based evidence was used by the Post Office to successfully prosecute 736 people. Lord Justice Holroyde said the Post Office “knew there were serious issues about the reliability of Horizon” and had a “clear duty to investigate” the system’s defects. But the Post Office “consistently asserted that Horizon was robust and reliable”, and “effectively steamrolled over any subpostmaster who sought to challenge its accuracy”, the judge added. In all, 39 of the 42 appeals were allowed on the grounds that the prosecutions were “an affront to the public conscience.” Lawyers for the group said they would be seeking compensation and an urgent criminal investigation into the actions of those at the Post Office.
EMPLOYMENT NEWS – WEEKEND TO 25TH APRIL 2021
Talent hunt kicks off as London firms launch hiring sprees
Financial services, legal, PR and construction companies across London are ramping up hiring with recruiters reporting a 349% jump in banking jobs advertised. But tech is driving job creation with KPMG’s quarterly tech monitor revealing that in the three months to March, UK tech sector firms hired staff at the fastest pace seen since the second quarter of 2019. Robert Walters’ UK managing director, Chris Poole, said: “March was incredibly busy for us. It almost felt like a line in the sand – it was incredibly busy across all sectors. Technology has been busy all the way through, but there has been a lot of pent-up demand within legal, within accountancy, within financial services. Even manufacturing, procurement, supply chain – it has been across the board.”
FINANCIAL SERVICES NEWS – WEEKEND TO 25TH APRIL 2021
Equivalence or no equivalence, London will stay financial services leader
KPMG ’s head of Financial Services Karim Haji has said if the UK and the EU fail to agree a deal on equivalence it won’t be the end of the world. Although it would “make life easier”, it was not mandatory for a successful financial services sector. “If you take a step back, the UK has been one of the leaders in financial services regulation and infrastructure, it’s one of the key innovators in the space as well, and one of the leaders in the world, and that’s why the UK has been successful in exporting financial services – that isn’t changing as a result of Brexit,” he continued. Mr Haji’s comments come after EU commissioner Mairead McGuinness said there was no pressure to reach agreement with the UK on financial services.
City AM Daily Express
ECONOMY NEWS – WEEKEND TO 25TH APRIL 2021
UK economy rebounds with demand surging
Private sector activity grew at the fastest rate since November 2013 in April, hitting a reading of 60, according to IHS Markit’s purchasing managers’ index (PMI). This is up from 56.4 in the previous month and above the 58.2 forecast by economists. Service sector business activity rose from 56.3 to 60.1, while manufacturing output was up from 56.6 to 59.1. Chris Williamson, chief business economist at IHS Markit, said: “Companies are reporting a surge in demand for both goods and services as the economy opens up from lockdowns and the encouraging vaccine rollout adds to a brighter outlook.” Looking forward, Williamson added: “Business activity should continue to grow strongly in May and June as virus restrictions are eased further, setting the scene for a bumper second quarter for the economy.”
UK retail sales jump
Data from the ONS show retail sales in Great Britain rose 5.4% in March compared with the previous month – a much stronger reading than the 1.5% forecast by economists. Sales of clothes was particularly strong rising by more than 17% while the easing of travel restrictions towards the end of the month led to an 11% increase in fuel sales. Howard Archer, chief economic advisor to the EY ITEM Club, said: “It does appear that many people were intent on having an enjoyable Easter break and this likely lifted retail sales later in the month.” Also commenting, Lisa Hooker, consumer markets leader at PwC, said: “Much though these figures will give cheer to the whole sector, retailers will be hoping that these positive signs translate into a sustained return to the physical stores as they reopen across the UK over the course of April. The real test of whether pent-up demand can be turned into actual sales w ill come with next month’s figures.”
Covid response pushes UK borrowing to highest since second world war
Figures from the ONS show UK government borrowing hit £303.1bn in the year ending in March, a jump of £246.1bn on the previous year when the figure was only £57.1bn. The coronavirus pandemic has driven the UK’s total accumulated public debt to £2.14trn, or 97.7% of GDP, the highest level since the early 1960s. As a percentage of national output, borrowing in the year between April 2020 and March 2021 stood at 14.5% – the highest since the financial year ending in March 1946. KPMG senior economist Michal Stelmach said rising debt was a consequence of shielding the economy from COVID-19.
Broadbent forecasts speedy recovery
The deputy governor of the Bank of England predicts “very rapid growth at least over the next couple of quarters” as Britons spend cash accumulated during the pandemic and save less of their forthcoming income. Ben Broadbent is more bullish than most of his Monetary Policy Committee colleagues on whether people will spend their savings but he warns that the year ahead is likely to be bumpy regarding inflation with multiple shifts in demand and supply.
Contact Paul Southward