Savers look to avoid a tax raid

David Byers in the Times reports that wealthy savers concerned that the Chancellor may look to increase taxes in an effort to cover the costs of the coronavirus crisis are pumping their cash into risky tax-efficient investments to shelter their money. Analysis shows that investors have put £9.65m into Venture Capital Trusts (VCTs) and the Enterprise Investment Scheme (EIS) in the two weeks since November 11, the day a government-commissioned report on increasing CGT was published – a 56% increase on the amount invested in such funds in the fortnight before. VCTs and the EIS support start-ups and small businesses, offering tax advantages but also carrying the risk money will be lost if the entities go bust. Considering concerns over the matter, Nimesh Shah, chief executive of Blick Rothenberg, said: “Clients should not let tax dictate their decisions. As my old tutor used to say, you should never let the tax tail wag the investment dog.”

The Times, Page: 67

Ministers told to scrutinise tax-free shopping move

Mel Stride, chairman of the Treasury Select Committee, has called for an independent evaluation into the decision to remove a tourist tax break. As of January, the Retail Export Scheme – which allows non-EU tourists to claim VAT refunds on purchases made in the UK – is to be scrapped. Mr Stride voiced concern that no estimate of the effects on the wider tourism and leisure sectors has been put forward . He added that the Government should now commission and publish an independent evaluation of the effects of the measure. The Treasury estimates that the move to scrap the tax break will add £460m to the public coffers by 2025. However, the Office for Budget Responsibility has said the Treasury estimates are “highly uncertain” due to factors including a lack of HMRC data on VAT-free shopping.

The Daily Telegraph, Page: 37 Daily Mail, Page: 10

More heirs hit by IHT gift rules

Saffery Champness research shows the number of estates liable for IHT on gifts climbed from 873 in 2015/16 to 993 in 2017/18, with the tax charged up from £135m to £197m.

Financial Times, Money, Page: 3

Can I leave my estate to my nieces free of inheritance tax?

A Q&A in the FT sees Liz Cuthbertson, a private client tax partner at Mercer & Hole, offer a reader advice on inheritance tax.

Financial Times, Money, Page: 10


Entrepreneurs warn against raid on CGT

More than 2,200 entrepreneurs have signed an open letter to the Chancellor urging him to scrap plans to align capital gains tax with income tax, warning it would stifle innovation and discourage risk-taking. Rishi Sunak is considering plans to equalise the taxes, which could see many business owners paying CGT at the higher rate of 45%. The letter, organised by Lord (Howard) Leigh, founder of Cavendish Corporate Finance, and Shalini Khemka, chief executive of entrepreneurs’ group E2E, says CGT must remain at an “appropriate level to reflect the risk we have taken and the prosperity we have brought to others in creating a new enterprise”.

The Sunday Times, Business, Page: 1

Rules mean predictable overstays could be costly

Lynne Rowland, a tax partner with Moore Kingston Smith, provides advice to a Sunday Times reader who lives and works in the UAE and is concerned about their tax status due to being stranded in the UK as a result of Covid restrictions. She points out that although HMRC allows in exceptional circumstances for stays in the UK of up to 60 days per UK tax year to be disregarded, those circumstances must be beyond the individual’s control and will not include those which could have been foreseen.

The Sunday Times, Business, Page: 16



More stores pledge rates relief return

Lidl, Pets at Home and WholeFoods have said they will hand back business rates relief, following moves by a number of fellow retailers that were granted a rates holiday despite remaining open throughout coronavirus lockdowns. Lidl yesterday confirmed it will refund more than £100m in rates relief, Pets at Home will repay £28.9m and Amazon-owned WholeFoods will pay back £2m. Tesco was first to announce plans to hand back money, pledging to return £585m, while Sainsbury’s has announced an intention to repay £440m. Asda has said it will return £340m, while Morrisons is giving back £274m and Aldi is handing over £100m. B&M has said it will repay £80m in relief, with CEO Simon Arora calling on ministers to reform the “outdated” business rates system. Meanwhile, Waitrose owner John Lewis and Marks & Spencer say they will not hand back money as the forced closure of department stores hit sales, while Co-op will determine its approach in January and Iceland is yet to comment.

The Daily Telegraph, Page: 37 Financial Times, Page: 18 The Times Daily Mail, Page: 99 Daily Mirror, Page: 4

Chancellor urged to boost small stores with returned rates money

With a number of large retailers pledging to hand back business rates relief, smaller retailers have called on Chancellor Rishi Sunak to use the returned money – which currently stands at close to £2bn – to extend support for smaller stores. Andrew Goodacre, chief executive of the British Independent Retailers Association, said: “This money should be used wisely by the Government by using it to extend the existing rates holiday for a further 12 months for the smaller independent retailers.” Craig Beaumont, chief of external affairs at the Federation of Small Businesses, believes the business rates system is in need of a revamp, saying: “We have asked the Government to look at the next wave of bills in April, and into the medium-term, to finally sort this out”.

The Daily Telegraph



Lenders ban business accounts over fraud fears

HSBC, NatWest and Lloyds Banking Group have temporarily halted opening new accounts for small businesses after industry data showed up to 55% of applications were potentially fraudulent. Smaller banks including Virgin Money and Metro Bank have also put a block on new small business accounts. One source told the Mail that just 15% of those applying ended up opening a current account after identity and fraud checks, meaning vast resources were being wasted. Kevin Hollinrake, Tory MP and chairman of the All Party Parliamentary Group on Fair Business Banking, commented: “You have people made redundant who want to open businesses, yet we’re closing the door to them. The banks doing this are excluding our most important sector that drives economic activity.”

The Mail on Sunday, Page: 123

A strategic rethink can mean ambitions are realised

Stuart Lisle, a senior tax partner at BDO and co-chairman of the firm’s Brexit taskforce, considers how business owners have had to adapt to the pandemic and how some of the strategic thinking managers employed can be applied to other challenges. Writing in the Sunday Times’ Fast Track 100 supplement, Mr Lisle says Britain’s exit from the EU is one example stressing that companies that trade overseas need to act, whatever the outcome. Although the immediate road ahead will be “full of pitfalls,” Lisle concludes, “we are confident that for every obstacle, Fast Track 100 companies will seize opportunities and continue to grow.”

The Sunday Times, Fast Track 100, Page: 2



Lenders urge savers to move cash to investment products

High street banks including Lloyds, Barclays and NatWest have all started offering their current account customers the option to move cash to investment products. According to the Sunday Times, lenders are seeking ways “to boost their squeezed margins and cash in on beleaguered savers who are seeking a better return than they can get from cash.” The Financial Conduct Authority expects all retail banks to offer an automated advice service soon, noting in a report last week: “Consumers may be more inclined to trust an established brand and the entry of retail banks into the market may attract more first-time investors.”

The Sunday Times, Business, Page: 14



Home loan demand climbs amid stamp duty holiday

UK Finance data show that home purchase lending recovered strongly in the third quarter, coming close to levels seen in Q3 2019 after the nationwide lockdown earlier in the year paused much of the market. The trade association’s Household Finance Review says that while activity is likely to be strong through the first three months of 2021 as the stamp duty holiday remains in place, demand is likely to come under pressure once the relief measure concludes at the end of March. Eric Leenders, managing director of personal finance at UK Finance, said: “As the stamp duty holiday and current Help To Buy schemes come to a close at the end of quarter one 2021, demand for mortgages is likely to be inflated over the next couple of months – beyond that the outlook is uncertain.”

Daily Mail

Berkeley boss: Make stamp duty cut permanent

Rob Perrins, CEO of housebuilder Berkeley Group, has called on Chancellor Rishi Sunak to permanently scrap stamp duty for houses worth under £500,000 and halve the rate for those above that cut off. Mr Perrins said the holiday on the levy rolled out until t he end of March 2021 has “proved what a poor tax stamp duty is”, adding that it “causes a huge drag on the economy, and causes people to live in the wrong home.”

The Daily Telegraph Financial Times, Page: 18

Scottish house prices see biggest climb

Analysis from letting firm DJ Alexander shows that house prices in Scotland have risen at a faster rate than the other UK nations since lockdown began. The report reveals that the average house price north of the Border climbed 6.8% between March and September, while in England prices rose 4.9%, Wales saw an increase of 1.9% and typical prices in Northern Ireland were up 1.6%.

Daily Mail


Mini property boom set for abrupt end

The property boom triggered by the stamp duty holiday looks to be slowing down with experts saying new mortgage searches dropped by 12.6% in November. This follows the build-up of a backlog of transactions as lenders, conveyancing solicitors and local authorities struggled to process a mass of deals, leaving many homebuyers fearing they will fail to complete before the stamp duty deadline expires. PwC economist Jamie Durham warns that property transactions are likely to drop off sharply after March as the stamp duty holiday and the extended furlough scheme both come to an end.

Sunday Express, Page: 54



Management offer for Peacocks

Administrator FRP Advisory has seen a management buy-out bid submitted for the Peacocks fashion chain. Josh Lowes, a senior e-commerce manager at the retailer, has submitted a bid backed by a private investor after Peacock’s parent firm Edinburgh Woollen Mill Group collapsed into administration. While financial details of the offer have not been disclosed, it is known that the proposal includes intentions to acquire the full company and retain its 4,908 staff and 470 stores.

The Daily Telegraph, Page: 39

Ann Summers launches CVA

Lingerie and adult toy retailer Ann Summers has announced plans for a CVA, having agreed rent cuts with landlords for two-thirds of stores but failing to reach deals on 25 premises. In return for landlords’ approval of the CVA, the chain’s owners have committed to provide Ann Summers with £10m of additional funding to support its turnaround and future growth.

The Daily Telegraph, Page: 37 Financial Times, Page: 18


Half of retailers at risk of collapse, report finds

Analysis by corporate health monitoring group Company Watch has found that 49.7% of all retailers are at risk of going bust, with health scores of 25 out of 100 or less. While historically, the average health score for the sector would be 50, it currently stands at 35. A score of 25 or under indicates a weak position with a one in four chance of failing within three years. The research also found that 18% of retailers are “zombies” with negative balance sheets, with a combined total of deficits of £2.4bn. However, the analysis is based on the latest accounts retailers have filed with the Government, with the majority not including trading since the COVID-19 pandemic hit in March, meaning that the situation is likely to be far worse. Nick Hood, senior adviser at Opus Restructuring, said that more retailers are likely to collapse after Christmas, particularly as their quarterly rent will be due.

Sunday Express

MoD looks at buying Trident steel maker

The Ministry of Defence is in talks about taking over Sheffield Forgemasters, one of Britain’s oldest steel makers, to protect the supply chain of the nuclear submarine fleet. Sources told Sky News the department Deloitte had been brought in to advise it on negotiations.

The Sunday Telegraph, Business, Page: 3 The Sunday Times, Business, Page: 1

Ashley makes another move for Debenhams

Mike Ashley is making a last ditch move to rescue Debenhams in a move that could save 12,000 jobs. Ashley’s Frasers Group is in discussions with advisers to Debenhams about a deal which could value the chain at more than £200m.

The Sunday Times, Business, Page: 1 The Mail on Sunday, Page: 125



German prosecutors investigate EY partners over Wirecard audits

With Germany’s audit watchdog having flagged concerns over auditors’ conduct in the audit of Wirecard, prosecutors have launched a criminal investigation into potential violations of professional duties by EY partners.

Financial Times, Page: 14



Goldman Sachs optimistic on rebound

Goldman Sachs analysts predict a rebound for the UK economy next year, with the bank forecasting that GDP will expand 7% in 2021, exceeding economists’ consensus. Goldman Sachs says the economy is likely to regain its pre-pandemic size by early 2022, climbing 6.2% that year, with economist Sven Jari Stehn saying: “We see substantial room for bounceback”. He adds that the UK is “well placed” to benefit from a COVID-19 vaccine, given the quantity it has pre-ordered and the speed with which regulators have approved the first jab. Meanwhile, Bloomberg Economics suggests the UK could see growth of 6% in 2021 on the back of the rollout of the vaccine. However, other analysts have urged caution, with Peter Dixon, an economist at Commerzbank, expecting the UK to “pick up more slowly than the rest of the EU.” He added that with “the complexities of Brexit to deal with, I don’t think the UK is in a very good place.” The median private sector forecast for GDP growth next year is 5.7%, according to forecasts compiled by the Treasury. The report shows that JPMorgan and Pantheon Macroeconomics are the most optimistic, having both predicted GDP growth of 7.5% next year.

Bloomberg Yahoo! News Daily Mail, Page: 10


Small Business Saturday sees shoppers spend £1.5bn

Shoppers spent an estimated £1.5bn yesterday, on Small Business Saturday, as they flocked to high streets for the first weekend since the second national lockdown in England was lifted. While the high spend will bring some relief to struggling retailers, the scenes of packed crowds in the busiest areas have sparked concerns of a rise in COVID infection rates, even before the five-day window where three households will be able to mix from December 23. Small business campaigner Michelle Ovens said: “We are optimistic that Saturday will be one of the biggest days for small businesses, helping boost those facing a compressed Christmas. The rising groundswell of affection we’re seeing for small firms from the public is also a positive indicator.”

The Mail on Sunday Daily Express

OBR chairman supports shake up of fiscal rules

The chairman of the Office for Budget Responsibility has backed a change to UK fiscal rules that would take account of national assets as well as debts in judging the health of the public finances. Providing a “comprehensive understanding” of the national balance sheet would allow ministers more flexibility to rebuild Britain after the pandemic, Richard Hughes said, adding that having all assets and the cost of debt on the balance sheet would inform policy makers on whether they were getting a good return on investments.

The Sunday Telegraph



Honours for exiles

The Mirror’s Brian Reade questions whether tax exiles should make the Honours List. He highlights reports that Prime Minister Boris Johnson has intervened to ensure Lewis Hamilton is knighted in the new year, saying that the racing driver’s tax behaviour, “although entirely legal, is beyond poor.” Mr Reade says that it was only two years ago that the Government pledged to stop handing out honours to people with “poor tax behaviour”. He also notes that a YouGov poll in October showed that only 21% of respondents believed Hamilton should be knighted.

Daily Mirror, Page: 19

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Paul Southward