HMRC swoops on suspect funds

HMRC froze 166 bank and building society accounts in the 2019/20 tax year, blocking access to £19.5m suspected to have been derived from crimes including tax fraud.

Financial Times, Money, Page: 2


PM warned over tax increases

The Prime Minister has been warned that reneging on election pledges that personal taxes will not rise would damage both the economy and public trust in his government. This comes on the back of suggestions the Prime Minister and Chancellor Rishi Sunak could increase income tax, national insurance or VAT to help tackle debt brought about by the coronavirus. Mr Johnson refused to rule out such measures when quizzed by the Liaison Committee of senior MPs. Answering questions from Mel Stride, chairman of the Treasury Select Committee, the PM was asked about the taxes and said: “You’re going to have to wait until Rishi Sunak brings forward his various proposals.” He added that he would share Mr Stride’s instincts to “try and keep taxes as low as we conceivably can consistent with our desire to invest in our fantastic public services”, adding: “But I don’t want to anticipate now wha t we are going to do now on our economic package.” John O’Connell, chief executive of the TaxPayers’ Alliance, commented: “The Government has a tough job on its hands in repairing the public finances, but increasing a 50-year high tax burden should not be a part of the plan”, while Owen Paterson, chairman of the Centre for Brexit Policy think-tank, said tax rises would harm Britain’s competitiveness as it completes Brexit.

Sunday Express

Think-tank calls for tax cuts

A report by the Conservative Policy Forum (CPF), the party’s official grassroots think-tank, has urged Boris Johnson to cut business rates and introduce a stamp duty holiday to help revive the economy. Some 74 CPF groups in more than 100 constituencies were asked to come up with policy proposals falling into five broad areas relating to the coronavirus response. Around one-in-six groups suggested reducing business rates to help boost the economy when the current restrictions are lifted, with a similar proportion calling for an extension of the Government’s VAT deferral scheme, while 8% said the Government should introduce a stamp duty holiday. The analysis has been sent to the PM as well as Alok Sharma, the Business Secretary, and Chancellor Rishi Sunak.

The Sunday Telegraph, Page: 4

Building bosses seek delay to VAT reforms

Construction trade bodies are calling on the Chancellor to delay a change in VAT which they say threatens to the survival of firms hit by the coronavirus crisis, arguing changes would put pressure on cash-strapped firms. The reform, which seeks to help reduce tax fraud, will mean VAT charges on certain construction services are paid directly to HMRC instead of the supplier as of October. In a joint letter, more than a dozen trade bodies, including the Federation of Master Builders and Build UK, warn that many firms no longer have the financial resources or man power required to prepare for the changes, with many staff in finance and IT departments currently on furlough. They also warn that the change could hit cash flow for businesses no longer receiving VAT payments, particularly smaller firms and those that have requested Government-backed rescue loans.

The Sunday Telegraph, Business, Page: 3

Lord O’Neill: Sovereign wealth fund could level up UK without raising taxes

Lord Jim O’Neill, a former chief economist at Goldman Sachs and one-time Treasury Minister, has suggested the UK could create a £25bn sovereign wealth fund that would buy shares in key businesses outside London to aid the Government’s agenda to “level up” the country. He says this would offer “an alternative to taxation as it produces higher returns for the British Government and reduces the burden on the taxpayer.”

The Mail on Sunday, Page: 125



Advisers warned over assistance claims

HMRC has ordered tax advisers to stop claiming for coronavirus assistance on behalf of their self-employed clients as they are triggering fraud alerts and slowing payments. The Revenue said applications for the self-employed income support scheme are causing an issue as the disparity between the adviser’s name and their clients’ Government Gateway credentials mean they may be registered as scams. The matter was revealed by Saffery Champness, which received correspondence from HMRC saying: “We have noticed some agents are using their clients’ Government Gateway credentials to make claims on their behalf. Please don’t do this.” Saffery Champness’ Mike Hodges said: “It seems counterintuitive to insist that these agents, who spend their life interacting with HMRC, and filing applications and returns of all shapes and sizes on behalf of their clients, should be barred from doing so on this occasion, when the need for prompt and accurate delivery of information to allow taxpayers to receive payments to keep their businesses afloat is higher than ever.”

The Times, Page: 56



Employers to contribute to furlough scheme from August

Chancellor Rishi Sunak has announced that firms will have to begin contributing towards the Government’s furlough scheme from August. From August firms will be asked to pay pension and national insurance contributions while the Government continues to pay 80% of salaries up to £2,500. From September the Government will cover 70% of salaries up to £2,190, with companies asked to pay the remaining 10%. For October, the final month of the initiative, employers will pay 20% of wages, with the Government covering 60%. It was also announced that firms will be able to bring back employees part-time from 1 July, and will be responsible for paying them for the hours they work. Mr Sunak also announced that self-employed workers would be able to claim a second grant worth up to £6,570, extending the Self-Employment Income Support Scheme. Commenting on the announcements made in the daily Downing Street briefing, Mike Cherry, chairman of t he Federation of Small Businesses, said the Chancellor has “given thousands of small business owners the certainty they need to plan for the coming months.” Edwin Morgan of the Institute of Directors said he was “delighted” the Treasury had taken on board calls to bring in part-time furloughing, while Adam Marshall, director general of the British Chambers of Commerce, said Mr Sunak had “listened to firms and struck a careful balance” which would enable them to bring employees back to work.

The Independent, Page: 6 Daily Mail, Page: 4 The Daily Telegraph, Page: 2 The Guardian, Page: 1 Daily Express, Page: 6 City AM


Economist expects Government to support workforce

Jill Treanor considers the aftermath of the coronavirus pandemic, citing Yael Selfin, chief UK economist of KPMG, who expects the Government to continue supporting the workforce, saying: “I assume there will be continued support, because people on furlough are not going to be absorbed back to the labour market before autumn next year – even if we have a vaccine by January.”

The Sunday Times, Business, Page: 4



Directors miss out on handouts

Analysis from Blick Rothenberg suggests hundreds of thousands of directors of limited companies who pay themselves annually are likely to be left without any government support during the coronavirus crisis. It calculates that one in 10 small business directors pay themselves only once a year through their own limited companies to minimise accounting fees, but details how those filing company tax returns at the end of the tax year are likely to miss out on the Government’s furlough scheme. This is due to a technicality in the initiative which only recognises employees registered before March 19. Directors are considered as employees of their own companies for tax purposes, and so are also excluded from the Government’s self-employed income support scheme.

The Sunday Times, Business, Page: 11



Bella Italia owner eyes sale

Casual Dining Group, owner of brands including Bella Italia and Café Rouge, is in talks with several possible buyers over a sale of the business, saying financial adviser AlixPartners has received strong expressions of interest from other restaurant groups and private equity firms. Interested parties are believed to be seeking to buy the company as a whole, rather than targeting better-performing brands such as Las Iguanas. Casual Dining Group has suggested that while selling the business in its entirety is an option, putting individual brands through an insolvency process such as a CVA or a pre-pack administration remains a possibility.

The Daily Telegraph, Page: 29

NMC likely to be dissolved

Administrators Alvarez & Marsal say NMC Health will probably be dissolved or put into liquidation, adding that preferential creditors could receive a dividend of approximately £1. NMC Health, which came under scrutiny last year when Muddy Waters criticised its financial statements, is currently the subject of an accounting investigation.

The Times, Page: 48

Ted Baker to unveil share sale plan

Fashion brand Ted Baker will aim to raise £80m from the sale of new shares, with the company reportedly close to proceeding with the fundraising after consulting with leading shareholders. The firm last year experienced a number of governance and accounting issues, including profit warnings and a massive stock overstatement. Sky News says that the stock overstatement may “pose a headache” for Ted Baker’s auditor, KPMG.

Sky News

Value slips prompt takeover talk

Louisa Clarence-Smith in the Times says a decline in share values could see a surge in takeover bids for property firms. Andy Pyle, head of real estate at KPMG, comments: “From speaking to a number of investors when the crisis hit, there were a lot of people buying small toehold stakes below the amount that you have to disclose. Lots of people are looking at the valuation difference between public and private markets and some are looking at the potential for mergers and acquisitions.”

The Times, Page: 44

Volga Gas to delay final results

Oil and gas producer Volga Gas has delayed publishing its annual accounts amid governance concerns, having hired consultants to review how its sales agents were recruited and paid. Volga said the report into sales agents has been concluded but auditors at KPMG had not yet decided how to deal with it in their audit report.

The Daily Telegraph, Page: 31


Matalan owner applies for state-backed loan while HMRC chases him over £84m tax bill

The Mail on Sunday reports that Matalan owner John Hargreaves has been criticised for applying for a taxpayer-backed loan while being chased by HMRC over a large tax bill. Matalan expects to access £25m under the Coronavirus Large Business Interruption Loan Scheme, warning that it has never “faced such difficult and unpredictable times” and has been “seriously impacted” by the coronavirus pandemic. While Mr Hargreaves was successful in a court case over an £84m bill linked to a £237m share windfall he received in 2002, HMRC is appealing the case. Labour MP Dame Margaret Hodge, a tax campaigner and former chair of the Public Accounts Committee, said: “No taxpayer would believe that the money they’ve worked hard to earn and that they dutifully pay in tax is being used to subsidise an individual or a company that deliberately arranges their financial affairs for no other purpose than to avoid tax.” The Mail notes that Mr Hargreaves is suing PwC over claims it gave him bad advice before he relocated to Monaco and what he needed to do to avoid paying taxes.

The Mail on Sunday, Page: 122

Food chains seek rent cuts

Fast-food chains Leon and Pret A Manger are demanding rent cuts from landlords, with the former hiring advisers from restructuring firm Quantuma and the latter calling in Alvarez & Marsal and property consultancy CWM as they look to bring down costs. Meanwhile, Pizza Express has hired Deloitte to look at options, including a CVA.

The Sunday Times, Business, Page: 1

Two-tier hierarchy on office returns

Peter Evans in the Sunday Times says that a “two-tier hierarchy is emerging” as firms look to make tentative plans for the return to offices, with large companies able to buy protective equipment, reconfigure workspace and stagger shifts, while smaller businesses are likely to give up on offices altogether as they cannot cover such costs. Mr Evans notes that some accountants have suggested offering improved tax benefits if businesses invest in safety measures in their offices.

The Sunday Times, Business, Page: 3

Pre-pack administration for Everest

Venture capitalist Jon Moulton is set to put his double-glazing firm Everest through a pre-pack administration that will result in about 200 job losses. He has lined up FRP Advisory to handle the process that will restructure Everest’s debts.

The Sunday Times, Business, Page: 1

Car spend set to fall

A look at the motor industry as showrooms prepare to open following the COVID-19 lockdown notes a KPMG forecast that total spending on cars could fall by half this year.

The Sunday Times, Business, Page: 3



Will London’s newest skyscraper become a monument to the market peak?

A look at property in the City notes a Deloitte report showing 100% of developers were pessimistic about the outlook for the London leasing market at the end of March.

Financial Times, Page: 16


Nationwide: House prices set to fall 13.8%

Nationwide expects house prices to fall 13.8% this year as people delay home moves, with CEO Joe Garner saying first-time buyers and second-steppers would be deterred from purchasing in the midst of a recession. However, he does expect prices to rebound, saying: “We do think it is inevitable that there is some kind of recession, but over the long term, property prices have always trended upwards.” Mr Garner added that Nationwide was seeing huge demand from customers looking to remortgage their homes following the base rate cut from the Bank of England, with the building society also expecting a surge in the number of customers looking for equity release products and retirement interest-only mortgages.

The Mail on Sunday



Pandemic accelerates desire to pass down wealth

The FT looks at how the COVID-19 crisis in regard to personal finance, with BDO’s Paul Falvey considering the impact the economic fallout of the pandemic will have on different generations.

Financial Times, Money, Page: 6

Coronavirus hits one-in-ten pensions

A survey of 2,251 people by Scottish Widows shows that one in ten people with a pension has stopped paying into it or reduced the amount they pay since the coronavirus pandemic. While the proportion of men and women stopping contributions were the same, men were twice as likely to say they had begun contributing more to their pension since coronavirus, with 2% doing so compared to 1% of women. this has raised concerns over a widening of the pensions gap.

The Times, Page: 51


Share declines can ease CGT bill

The Sunday Times’ Mark Atherton says investors who have seen the value of their stocks hit by the coronavirus crisis may be able to minimise their capital gains tax (CGT) bills. He highlights that selling shares that have fallen in value since being bought creates a capital loss that can be set against future gains and thus reduce a CGT bill.

The Sunday Times, Business, Page: 11



Companies and investors are under-estimating the coronavirus tax

Tom Braithwaite considers the cost of state support amid the coronavirus crisis, with Larry Fink of BlackRock suggesting corporate taxes in the US could climb from 21% to 28% next year.

Financial Times, Page: 14

Costa accused of tax fraud

Spanish state prosecutors will seek a six-month prison sentence against Atlético Madrid footballer Diego Costa, with the player accused of tax fraud related to a failure to pay more than €1m from money earned through image rights. If found guilty, Mr Costa could avoid jail time because in Spain sentences for less than two years can be suspended by a judge.

The Sun, Page: 68 Daily Mail



National debt set to hit £2trn

The cost of the coronavirus crisis is set to see Britain’s national debt reach £2trn for the first time, with projections from the Office for Budget Responsibility suggesting the milestone will be hit next month. Hitting the £2trn mark – a decade after the £1trn point was first exceeded – would push national debt beyond 100% of national income for the first time since the end of the Second World War. This forecast comes in the wake of a Bank of England warning that Britain faces the deepest recession for more than 300 years, while borrowing this year is predicted to reach £300bn. Philip Booth, senior academic fellow at the Institute of Economic Affairs, said the likely scale of the national debt following the pandemic “will be staggering”, adding: “We cannot just deal with this by more austerity.” Howard Archer, chief economic adviser at EY Item Club, said the level of debt was “extraordinary and very much a sign of the times we are living in”, but said the “huge” debt is “a price worth paying” to try and limit long-term damage to the economy.

Daily Mail, Page: 87


Lord O’Neill: Treasury could change BoE inflation mandate

Lord Jim O’Neill, a former commercial secretary to the Treasury, says Government officials are “probably” considering whether to change the Bank of England’s (BoE) inflation-targeting mandate on the back of the coronavirus crisis. He has suggested the BoE should move away from its current target of keeping inflation at 2% and instead target a steadily rising trend of nominal GDP growth. Lord O’Neill said: “I think the environment has come where this is what a lot of central banks should do…I think it is something that should be considered”. Noting that such a move “wouldn’t guarantee a V-shaped recovery but it would certainly increase the probability of one”, he suggested: “I do suspect there are some people around the Treasury that that are probably thinking about things like this.” Lord O’Neill said the idea of moving to nominal GDP targeting would “scare” those in the Treasury and BoE who regard the current inflation-targeting regime as a proven success but believes “where really big things happen, a lot of conventional economists and an inflation targeting type framework aren’t really relevant for dealing with the challenge.”

The Independent



Jenner finances called into question

Forbes has claimed that Kylie Jenner is not a billionaire, accusing her of “inflating the size and success” of her makeup business. Forbes, which in 2019 declared Ms Jenner the “world’s youngest self-made billionaire”, said her business is “significantly smaller and less profitable” than her family has spent years leading the cosmetics industry and media outlets to believe. It claims that Ms Jenner and her family have lied about the size of the business every year since 2016, “including having their accountant draft tax returns with false numbers” to help “juice” Forbes’ estimates of Ms Jenner’s earnings. It adds that efforts to convince Forbes of Ms Jenner’s net worth include “creating tax returns that were likely forged”.

The Sun, Page: 25 Daily Mail, Page: 3 The Independent Daily Mirror


FDI and levelling up

David Smith in the Sunday Times looks at foreign direct investment (FDI), with EY having published its 2020 UK Attractiveness Survey. The report shows that the UK was successful in attracting FDI in 2019, both from the rest of Europe and the rest of the world but lost top spot for the first time since 1997. Mr Smith also looks at Government efforts to level up UK regions, with Mark Gregory, EY’s chief economist, commenting that the UK “has struggled to spread the benefits of FDI beyond the larger urban centres”. He adds: “There’s a similar and even more concerning trend in terms of digital tech investments, with 83% of FDI located in the major cities and a further 10% in large towns. Digital rebalancing is a prerequisite for successful levelling up in the UK.”

The Sunday Times, Business, Page: 7

Contact Paul Southward