NEWS – WEEKEND TO 29TH MARCH 2020

NEWS ROUNDUP

TAX NEWS – WEEKEND TO 29TH MARCH 2020

SUNDAY

Do you have any queries regarding your tax affairs?

In these unprecedented times there are many who may have queries of how their tax affairs may be impacted.  We can answer all of your queries whether they concern the special Covid-19 support measures, or any other matter.

Don’t forget, the end of the tax year is approaching – time for some year-end planning  

Check out our guide to some of the year-end planning tips here: –

2019 – 2020 Year-end tax planning

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REGULATION NEWS – WEEKEND TO 29TH MARCH 2020

SATURDAY

Shake-up of insolvency laws imminent

The government is expected to issue revised insolvency rules this weekend to prevent a slew of company collapses as the coronavirus crisis tears the economy apart. Sources said UK laws could be brought in line with US chapter 11 bankruptcy rules, which enable firms time to pay off their debts over time while remaining in business. Alok Sharma, the business secretary, is expected to amend “wrongful trading” rules, which make it a criminal offence for a company director to keep on trading if they know the business is unable to repay its debts. Roger Barker, head of corporate governance at the Institute of Directors, which has been pushing for changes, said: “A lot of companies will want to carry on and to maintain employment, take out emergency loans with government backing. But if at some future point they could be held personally liable for not putting their firms into insolvency, that may cause them not to carry on. At the current time of emergency we need as many companies as possible to keep going, providing employment and providing goods and services to keep the economy going.”

The Guardian, Page: 7

New guidance for AGMs released

The Financial Reporting Council, the Chartered Governance Institute and a raft of City law firms have published guidance for company annual meetings amidst the coronavirus crisis. Meetings can still go ahead even while the ban on gatherings applies. AGMs can be held with a bare quorum and attendees can travel to the venue because it is “essential” for work, the advice states.

The I, Page: 72

SUNDAY

UK to change insolvency rules to protect businesses

The UK government has confirmed that it is to change insolvency rules so businesses unable to meet debts due to the impact of coronavirus are not forced to file for bankruptcy. Business Secretary Alok Sharma said the suspension of the rules would allow companies to “emerge intact the other side of the COVID-19 pandemic”. Mr Sharma added that the wrongful trading law would also be temporarily lifted so company directors would not be personally liable for their decisions during the pandemic. Although business groups welcomed the move, R3, the trade association for the UK’s insolvency industry, believes the rule change could be open to abuse. Mr Sharma also announced that red tape would be removed to allow new producers of hand sanitiser to bring products to market “in a matter of days”.

Financial Times BBC News The Sunday Times The Sunday Telegraph, Page: 3 Sunday Express, Page: 6

EMPLOYMENT NEWS – WEEKEND TO 29TH MARCH 2020

SATURDAY

Two million self ? employed could be excluded from coronavirus bailout

Tory MP David Davis has criticised the Chancellor’s decision to tie future tax hikes with the bailout for the self-employed saying it was wrong to treat the £3bn package to protect them during the Covid-19 pandemic as a “trade-off” for higher taxes. Mr Davis welcomed the Chancellor’s relief for self-employed workers, but added: “Subsidising all parts of the economy while expecting increased repayment from a single sector is not fair.” Rishi Sunak said on Thursday that self-employed workers would be able to claim a government grant of 80% of their profits up to a maximum of £2,500 a month to cope with the effect of the virus on their livelihoods. The scheme will be open to those with trading profits of up to £50,000 a year and those who earn the “majority” of their income from self-employment. However, as many as 2m people registered as self-employed could miss out on the scheme, including those who became self-employed after the start of the tax year on April 5, those who made too little money to pay tax, and about one million contractors who work through limited companies. Accountants at Blick Rothenberg point out that a single mother earning £51,000 will re ceive nothing, while a couple with two earners on £49,000 each will be eligible to two lots of support.

Daily Mail, Page: 16 The Times, Page: 2 The Daily Telegraph, Page: 34 Financial Times, Money, Page: 6 The Times, Page: 59

Key workers allowed to carry over holiday

NHS workers, supermarket staff, police and delivery drivers and other key workers who are unable to take their annual holiday entitlement because of the coronavirus crisis will be able to carry it over into the next two years. Business Secretary Alok Sharma said rules will be relaxed to help key industries remain well-staffed as the UK battles the outbreak. The changes will amend the Working Time Regulations, which apply to almost all workers including agency workers, those who work irregular hours and workers on zero-hours contracts.

BBC News The Daily Telegraph The Times, Page: 2

SUNDAY

Unemployment in Britain set to double

The coronavirus pandemic could lead to a doubling of unemployment at least, economists have warned, with the rise in joblessness in the second quarter expected to be even sharper than during the financial crisis in 2008. Investment bank Nomura forecasts a rise to 8.5% in Q3, equivalent to an additional 1.4m people unemployed and a total jobless level of 2.75m.

The Sunday Times, Business, Page: 1

PROPERTY NEWS – WEEKEND TO 29TH MARCH 2020

SUNDAY

CBI Scotland in rates call

CBI Scotland has urged the Scottish Government to make more firms exempt from business rates to help combat the economic shock caused by the coronavirus outbreak. It follows a report from the CEBR which warned the economic impact of the pandemic would be worse in Scotland than the rest of the UK. It shows that Scotland’s GDP could drop -17% in the next quarter, and decline by between 5% and 6% this year.

The Sunday Times

CORPORATE NEWS – WEEKEND TO 29TH MARCH 2020

SATURDAY

Virgin Atlantic set to ask for state aid

Virgin Atlantic is expected to ask for a government bailout worth hundreds of millions of pounds in the coming days, with other airlines also expected to request state aid. The Transport Secretary told MPs he can’t rule out the state taking an ownership stake in UK airlines, but that current shareholders “must be part of the solution”. Elsewhere, aviation services company John Menzies has reduced its workforce by 17,500 worldwide and said it could no longer give financial guidance for this year. The company is attempting to secure emergency government funding to deal with the impact of Covid-19.

Financial Times, Page: 18 BBC News The Times, Page: 52

BrightHouse close to collapse

Rent-to-own retailer BrightHouse is on the verge of collapsing, putting 2,400 jobs at risk. BrightHouse is to appoint Grant Thornton as administrator within days after facing a dramatic surge of compensation claims for selling to people who could not repay. Stricter lending rules had put the business under strain long before shops were closed owing to coronavirus.

BBC News Sky News The Times, Page: 54 The I, Page: 72

Carluccio’s considering insolvency options as coronavirus bites

Italian casual dining chain Carluccio’s has appointed FRP Advisory to look at insolvency options after it was forced to close its restaurants as a result of the coronavirus pandemic. Carluccio’s has more than 70 restaurants across the UK but closed around 35 sites last year as part of a CVA.

Financial Times, Page: 18 The Daily Telegraph, Page: 35 The Times, Page: 52 The Guardian, Page: 45 Daily Mail, Page: 17

US investor eyes Laura Ashley

US retail company Authentic Brands has made an offer to buy the Laura Ashley brand out of administration, according to reports. The British retailer hired PwC to find a buyer after collapsing last week, putting 2,700 jobs at risk.

The I, Page: 72

SUNDAY

Casual dining sector in freefall

The Restaurant Group, which owns Wagamama, Frankie & Benny’s and Garfunkel’s, has been forced to shelve a £500m debt restructuring as credit markets dry up. The Group appointed RSM last week as administrators to pub business Food & Fuel and is now exploring other options to raise money. Casual Dining Group, which owns high street chains such as Bella Italia and Café Rouge, is also seen by analysts as being vulnerable. Fears for the sector are growing as more companies fold. Chiquito’s and Carluccio’s have both lined up administrators.

The Sunday Telegraph, Business, Page: 1 The Mail on Sunday, Page: 95

Arcadia to suspend pension payments

Arcadia Group, the empire run by retail mogul Sir Phillip Green, is to suspend pension scheme payments. The move has the agreement of trustees and has been done in an effort to preserve cash in response to the coronavirus pandemic.

The Sunday Telegraph, Business, Page: 1

Talks over nationalising Flybe

Flybe administrator EY is in talks with the government about nationalising the regional airline, which collapsed on March 5th after failing to secure a state bail-out.

The Sunday Telegraph, Business, Page: 1

PENSIONS NEWS – WEEKEND TO 29TH MARCH 2020

SATURDAY

Treasury to cover employer pension payments for furloughed staff

The government is to cover the employer national insurance and minimum auto-enrolment pension scheme contributions on the wages they pay staff furloughed due to the coronavirus outbreak. The Treasury says the extra cover could save firms £300 a month per employee.

BBC News

SUNDAY

Pensions schemes face depleted assets, higher liabilities, and less cash

Pensions experts are warning that companies funding defined benefit schemes in the UK have faced a “triple whammy” of cuts to asset values while liabilities increase due to interest rate cuts and quantitative easing, all while businesses run out of cash for day-to-day running let alone pension contributions. Sources tell the Sunday Telegraph that for most pension funds the combination of falling assets and rising liabilities means they are 10% to 15% further from being fully funded than at the turn of the year. At the end of last week, the Pensions Regulator said trustees can grant contribution holidays for up to three months while companies seek longer-term solutions and promised further updates to help companies battling to stay afloat.

The Sunday Telegraph

Experts call for ban on final salary pension transfers

Baroness Altmann, the former pensions minister, has called for a temporary ban on transfers out of final salary or “defined benefit” pension schemes, warning that any valuations would be “unreliable”. She said: “In the current market turmoil, it is impossible for trustees of pension schemes to be sure of the underlying value of a pension.” However, James Baxter of Tideway Investment Group said a ban on transfers would be an “overreaction” and “ill-informed”. It is in the best interest of some people to transfer and invest in a market where stocks are cheap, he said.

The Sunday Telegraph

SMEs NEWS – WEEKEND TO 29TH MARCH 2020

SUNDAY

Complaints persist of unhelpful banks

Some companies have just six or eight weeks of cash reserves left, warns Caroline Stockman, the chief executive of the Association of Corporate Treasurers, as banks continue to face criticism over their provision of emergency state-backed loans. Mike Cherry, the chairman of the Federation of Small Businesses, said: “It feels like the information has been handed over to those at the top and is yet to filter down to relationship managers.” Meanwhile, Royal Bank of Scotland and NatWest’s efforts have both been thwarted by India’s lockdown with teams there told to stay at home. The Sunday Telegraph’s Lucy Burton talks to businesses that have had swift service from banks, and those who have been told that the schemes do not even exist.

The Sunday Telegraph, Business, Page: 1 The Sunday Telegraph, Business, Page: 5

Funding collapses for start-ups

The Enterprise Investment Scheme Association has revealed that overall funding for start-ups through the tax-efficient enterprise investment scheme (EIS) has fallen by 70% since the coronavirus lockdown has been in place. “Start-ups are in freefall as there is no debt or equity support,” said Jasper Smith of Vala Capital, an EIS investor. “If we want the foundation for a recovery to be there after the virus, action has to be taken now.”

The Sunday Times, Business, Page: 1

Insurers to discuss pandemic cover

The Association of British Insurers is set to hold talks with the government about the creation of a state-backed insurance scheme for small businesses to protect them should another catastrophic pandemic occur.

The Mail on Sunday, Page: 95

ECONOMY NEWS – WEEKEND TO 29TH MARCH 2020

SUNDAY

Virus fears lead to £4bn of dividends being scrapped or deferred

Analysis by online investing platform AJ Bell shows £4.2bn of dividends have been axed or deferred so far this month as hundreds of companies across the economy show prudence in the face of the massive and unpredictable disruption caused by the coronavirus.

Daily Mail, Page: 92

Stocks fall following three-day rally

Major indices in Europe and the United States fell on Friday following a three-day rally. The FTSE 100 in London closed the day 5.3% lower at 5,510 while the CAC in France lost 4.2% and the German DAX was 3.7% off. The Dow was down 4.06% while the S&P 500 shed 3.37% and the Nasdaq finished 3.79% lower.

Sky News CNBC Yahoo! Finance

OTHER NEWS – WEEKEND TO 29TH MARCH 2020

SUNDAY

Insolvency specialist accused

R3 president Duncan Swift is a defendant in a court case where he is alleged to have taken a £30k bung to rig a property sale in favour of Geoffrey Guy, the millionaire founder of GW Pharmaceuticals. Swift is an insolvency specialist and a partner at Moore UK. A spokesman for the accountancy firm said the accusers had an obvious financial interest in making claims about Mr Swift and had done so only after he gave evidence linking them to an unlawful £2m gift.

The Sunday Telegraph, Business, Page: 1

Contact Paul Southward.

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