Treasury plans pay-as-you-go tax

The Treasury is planning a pay-as-you-go tax model in a bid to tackle evasion by freelance workers, landlords and investors, reports the Times. The measures, which will make it harder for people to hide their earnings, are based on a system used in New Zealand. The move will see annual or twice-yearly manual tax returns replaced with a system that sees tax paid throughout the year. Taxpayers would be given a digital tax account that is automatically updated by banks, investment managers, workplaces and pension providers, with information about earnings, investments and pensions logged. The reforms will be at the centre of HMRC’s ten-year tax strategy and will play a part in efforts to recoup the £31bn the Revenue believes people are not paying in tax each year. Chancellor Rishi Sunak believes the pay-as-you-go tax model could prevent people from failing to declare major earnings, including interest on investments and offshore bank accounts.

The Times, Page: 4

The truth is finally out as the government has always denied that Making Tax Digital was never about collecting tax earlier, but now we find it is.

Rate surge hits tax dividend

Analysis shows that a surge in market interest rates has wiped out more than two thirds of the £17bn the Chancellor sought to pull in via an increase in corporation tax. While Rishi Sunak is increasing the levy from 19% to 25% in 2023 as he looks to stabilise the national debt, market rates have moved higher on the back of a return of inflation and the possibility of a strong economic recovery, post-pandemic. HSBC economist Liz Martins said the increase in Government borrowing costs since the Office for Budget Responsibility fixed its forecasts will add £3.6bn to debt service spending in 2021/22, which rises to £12.2bn at the end of the parliament in 2025. Ms Martins said the Chancellor’s tax rise “might not reduce the deficit as much as he had hoped if those extra revenues end up going towards higher interest payments on government debt”.

The Times, Page: 49

City concerned over possible tax raid on pensions

The Telegraph reports that there is concern in the City that the Treasury is considering radical cuts to tax relief on pensions, with officials having signalled higher-rate tax relief on pensions contributions could be reduced. The paper says that while a pensions tax hike is not set to feature among measures being announced on March 23 – which has been dubbed “tax day” – reforms are being considered. The Chancellor is said to be considering limiting tax relief on pensions contributions to a flat rate of 20% or 25%. Experts have warned that a tax raid on pensions would hit millions of workers’ retirement prospects, leaving savers hundreds of thousands of pounds worse off in retirement. AJ Bell founder Andy Bell said: “Removing higher-rate tax relief would be politically toxic when people realise what it means for them”, while Peter Glancy of Scottish Widows said reform would be “horrendously difficult” to implement.

The Daily Telegraph, Business, Page: 31

A third of firms not ready for IR35 changes

With IR35 changes coming into effect from April 6, new research suggests that many organisations are not ready for the rollout of new tax legislation that will make businesses responsible for setting the tax statuses of contractors they hire. A Grant Thornton survey of 605 senior decision makers from mid-market businesses conducted in late January shows that 38% are not fully prepared for the transition. It was found that 13% had done only “minimum preparation” or were in the early stages of planning, while 25% had preparations underway but said they were not ready for the deadline.

Daily Express

Wealthy savers rush to VCTs

Wealthy savers are turning to risky tax-efficient investment schemes, amid a crackdown on pensions and fears of an increase in capital gains tax. The amount being put into venture capital trusts (VCTs) is rising rapidly as investors hunt for tax breaks. Investors can put up to £200,000 into these trusts each year and get 30% income tax relief, as long as VCT shares are held for five years. Investment firm Wealth Club has overseen £112.7m invested this way in the 2020/21 tax year, up 42.4% from the £79.1m invested in 2019/20.

The Times

Self-employed boosted by tax clawback

Thousands of small business owners who have lost money during the coronavirus crisis can claim more than £1bn in tax rebates to help mitigate losses, with ministers having announced an emergency extension to “loss carry back” rules. Previously losses could only be carried back one year to offset historical tax bills but the new measures enable firms to claw back profit and income taxes paid in the past three years.

The Daily Telegraph, Money, Page: 11

Taxing matters when selling a BTL property

The Telegraph’s Marianna Hunt and Rachel Mortimer offer advice on how landlords can save money on their tax bill, with guidance for those looking to sell a buy-to-let property. They note that some landlords may be able to reduce their CGT bill by claiming Private Residence Relief if the rental property has at some point been their main residence. Zena Hanks of Saffery Champness says the period where it was occupied as such will qualify for exemption from CGT, while Chris Etherington of RSM warns that moving into a rental property before selling it could store up CGT issues for the eventual sale of any other home the landlord owns.

The Daily Telegraph

Brussels sues Britain over Gibraltar tax breaks

The European Commission is suing the UK at the European Court of Justice over tax breaks given to companies in Gibraltar, saying Britain has failed to fully recover €100m of illegal state aid.

Financial Times, Page: 8

Will tax shake-up hit our FIC?

Mike Hodges of Saffery Champness advises an FT reader who has set up a family investment company on whether the Chancellor’s plans to raise corporation tax will affect their tax liability.

Financial Times, Money, Page: 14


Tax day set to deliver a deluge of policy plans

Russell Lynch in the Sunday Telegraph says that while the “circus” surrounding the Budget “may be receding into the rear-view mirror”, Tuesday’s “tax day” means “the real action is still to come” for tax aficionados. With the ICAEW’s Anita Monteith saying she has cancelled all leave and is “waiting for the deluge to hit”, Mr Lynch says the deluge will take the form of around 30 consultations and calls for evidence on subjects including HMRC administration, taxation of the self-employed, and the future of capital gains tax and VAT. Ms Monteith says the Government “has actually been fairly clear that it wants to actually fix the tax system, rather than just fiddle”, adding that plans outlined on Tuesday could be a step toward “one of the biggest sea changes to our tax system that we have seen in a generation.” Chris Sanger, head of tax at EY, calls tax day the “thinking man’s Budget”, saying it is where the Chancellor “will imprint his vision on the future of the tax system.” On what tax day may bring, Richard Wild, technical head of tax at the Chartered Institute of Taxation, is expecting consultations on the sharing of information with HMRC by third parties, a move that would seek to improve the revenue harvested and cut out mistakes made by individual taxpayers. George Bull, a senior tax partner at RSM, says issues like indexing capital gains to inflation, as well as CGT’s interaction with inheritance tax, could feature.

The Sunday Telegraph, Business, Page: 6

Medical staff among biggest tax avoidance scheme users

Data from HMRC shows that health service staff are among the most prolific users of tax avoidance schemes, with one in five of people signing up to schemes designed to reduce their tax bills working in hospitals. Of those caught using tax avoidance schemes, bookkeepers were the most common participants, with healthcare workers second in the rankings. The HMRC report said: “There is a notable level of use of avoidance schemes within the healthcare sector. HMRC has already stepped in where promoters have targeted NHS workers returning to the workforce to support the UK’s COVID-19 response.” The tax office said it suspects that “the majority of people who used avoidance schemes didn’t look too deeply into the tax arrangements they were being offered.” HMRC noted that 30,000 workers are using avoidance schemes compared with 22,000 seven years ago, while nine in ten people who use the schemes earn under £50,000 a year. John Hood of Moore Kingston Smith notes that the use of such schemes can spread “like wildfire” in certain areas as workers in office jobs or big employment hubs copy each other.

The Sunday Times, Page: 6 The Sunday Times, Business, Page: 12

Red tape to be cut in IHT reform plans

The Treasury is expected to cut the red tape around inheritance tax this week, with changes set to be detailed on “tax day” to reduce the amount of paperwork families are required to fill out. It follows recommendations from the Office of Tax Simplification calling for the administrative burdens for those dealing with inheritance tax to be reduced. Jesse Norman, the Financial Secretary to the Treasury, said: “We want to cut red tape and make the tax system as simple as possible for people to use, especially during difficult times. The change is part of our wider drive to remove unnecessary paperwork and obstacles so that taxpayers can manage their affairs with less effort.” The reform plans due to be outlined on Tuesday will also see the Treasury publish an update on its consultation for an online sales tax, outline harsher measures against those who promote tax avoidance schemes and propose a move to force tax advisers to hold professional indemnity insurance.

The Sunday Telegraph, Page: 2

Sunak urged to opt against tax raids

Ahead of this Tuesday’s “tax day”, which will see the Treasury outline a series of proposals to reform the tax system, a Sunday Telegraph editorial has called on Chancellor Rishi Sunak to refrain from tax hikes. It argues that after a “crippling, historic raid unleashed at the Budget”, the last thing needed is a further increase in taxes. It urges Mr Sunak to opt against increases in capital gains tax, an assault on pension tax relief and a pay-as-you-go tax model for freelancers and investors, arguing that the latter would be “bureaucratic, undermine their ability to manage their financial affairs and deter entrepreneurial effort.” Noting that the economy and the budget deficit need to be addressed after the blow dealt by the coronavirus crisis, the piece argues that governments “cannot tax their way out of an economic crisis”. If the Conservatives try to do so, it adds, “they will also destroy the opportunities opened by Brexit.”

The Sunday Telegraph, Page: 17

Lib Dems call for tax break for small businesses

Liberal Democrat leader Sir Ed Davey has urged the Government to put small firms at the heart of a post-pandemic recovery, calling for a £5.5bn-a-year tax break for smaller businesses. He will today urge Chancellor Rishi Sunak to cut national insurance contributions for small firms by quadrupling the employment allowance from £4,000 to £16,000. Sir Ed will tell an online Lib Dem conference: “The UK’s economic recovery starts with small business. Small businesses are at the heart of every local community, and every local economy”. He will call on the party to “challenge the Chancellor to give small businesses a bold new tax cut to support thousands of new jobs.”

Evening Standard



Greensill sees job losses

Administrators of Greensill Capital have announced the first job losses since the lender collapsed into administration last week. Grant Thornton confirmed that 440 staff had been let go. The firm added that it is still seeking a buyer that could potentially save the rest of the Greensill business after a deal with private equity group Apollo Global Management fell through. It was also revealed that Greensill’s Australian parent company has been hit with claims for $1.35bn from creditors. Elsewhere, the FT looks at issues at Greensill, noting that auditors at KPMG were unable to verify the existence of certain invoices.

The Guardian, Page: 43 The Times, Page: 50 The I, Page: 77 Financial Times, Page: 14


Conflict concern over Grant Thornton and Gupta

The Sunday Times reports that Greensill Capital administrator Grant Thornton faces conflict of interest claims after advising its biggest debtor, steel tycoon Sanjeev Gupta, on a string of deals. Shadow Chancellor Anneliese Dodds commented: “In the week that the Government launched what it called a major overhaul of the UK’s audit regime, it is important that the administration of Greensill Capital takes place transparently and that there is no question of any conflict of interest.” Grant Thornton said it had given “careful consideration to the code of ethics relating to such matters and satisfied ourselves that there is no threat to our independence as a result of any prior relationships.” Elsewhere, the same paper says that Grant Thornton will have to pursue Mr Gupta’s GFG Alliance for cash it did not pass on, adding that if GFG goes under, the situation “could descend into a legal battle between two sets of administrators”. Separate analysis of Mr Gupta’s affairs notes that he has tended to use small auditors for his accounts, including King & King and < strong>HW Fisher.

The Sunday Times, Business, Page: 1 The Sunday Times, Business, Page: 9 The Sunday Times, Business, Page: 4

CEO cyber fears climb

A PwC poll of more than 5,000 chief executives has found that 91% are concerned about cyber threats, up from 80% last year. Richard Horne, PwC’s UK head of cybersecurity, said: “For many organisations, up until a few years ago cybersecurity was seen as this technical thing that we left to the chief information security officer to deal with … Where many organisations are getting to is realising that every big business decision will impact your cyber-risk.”

The Sunday Times, Business, Page: 5

Societies warn on rents

A letter to the Sunday Telegraph warns that rents which have increased by 3,000% in a decade are forcing the Society of Antiquaries, the Geological Society and the Linnean Society towards costly relocations, threatening to disperse their priceless collections, libraries and archives. Signatories including Royal Academy of Arts chief executive Axel Rüger note a PwC estimate that the societies contribute £39.7m to the country every year in public value.

The Sunday Telegraph, Page: 17

Brewers serve up a pandemic success story

The Sunday Times looks at how craft brewers have navigated the challenges brought about by the coronavirus pandemic, highlighting UHY Hacker Young estimates that there are now more than 3,000 breweries in the UK, an increase of 200 over the past year.

The Sunday Times, Business, Page: 2

Fashion house calls in administrators

Sam Chambers in the Sunday Times muses on the issues that led to the collapse of fashion brand Ralph & Russo, which has appointed administrators from Begbies Traynor and Quantuma.

The Sunday Times, Business, Page: 2



Post-Brexit deal for the City nears

Britain and the EU are said to be close to striking a limited deal on post-Brexit financial services co-operation following months of negotiations, with partial regulatory equivalence on some financial products and a memorandum of understanding on regulation reportedly on the horizon. The Telegraph reports that the memorandum of understanding is expected to include agreement that regulators keep each other informed of their plans for taxation and measures to counter financial crimes.

The Daily Telegraph

Half of firms have no carbon neutral targets

A poll by EY suggests that financial services firms are struggling with net zero targets, with 51% saying they do not yet have a target in place to achieve carbon neutral status. The survey of financial services firms including 45 banks, 44 insurers and 29 asset managers saw 57% say the climate change regulatory agenda was proceeding at the right speed, while 34% said “very few” companies in the sector currently have the appropriate focus on sustainability. Gill Lofts of EY said: “While advancements have undoubtedly been made across the financial services sector, progress on sustainability is somewhat uneven amongst firms.”

City AM



More than half of staff travelled to work last week

More than half of Briton’s workers returned to the office last week, according to Office for National Statistics analysis. In the week ending March 14, 53% of workers travelled to the office, with the move away from remote working coinciding with the reopening of schools in England and a decline in coronavirus cases. The report shows that the proportion of people who worked exclusively from home decreased six percentage points from the previous week, to 30%.

Daily Mail


Super-rich utilise furlough scheme

An investigation by the Mail on Sunday reveals that a number of wealthy business owners have used the taxpayer-funded furlough scheme to pay staff. Analysis of official documents show that companies owned and run by super-rich individuals with a combined personal wealth of £19.4bn have taken money from the emergency scheme rolled out to protect jobs during the pandemic. MP Alexander Stafford, who sits on the Commons Business Select Committee, commented: “Those who could afford not to take the money should not have done so, and if they did they have a moral duty to pay the money back.” The Mail report follows a separate probe showing that billionaire tax exiles, Saudi royals and oil-rich Gulf states have claimed millions in taxpayer-funded furlough money. Robert Palmer, executive director for campaign group Tax Justice UK, said: “It’s pretty galling that tax exiles who have minimised their contributions in the good times are asking for a handout when things get tough.”

The Mail on Sunday The Observer

City firms eye office returns

US Investment banks are set to lead the return to the office, with the first wave of City workers preparing to head back to their desks. Several banks are preparing to open their offices again as soon as March 29, with Goldman Sachs, JP Morgan and Credit Suisse among those leading the charge as the Government’s ‘stay at home’ rule comes to an end. Amid the coronavirus lockdowns, only key traders and staff who have not been able to work from home have been allowed into offices. With official advice suggesting people should still work from home where they can, some firms are concerned they could be penalised for bringing more staff back to the office so soon. However, a banker has told the Mail on Sunday the Government gave “a nod and a wink” that they will not be punished for allowing staff to return.

The Mail on Sunday, Page: 121

Tech shift set to stay

The Sunday Times reflects on the impact of the coronavirus crisis, noting changes to working life. KPMG economist Yael Selfin expects some technology that has been utilised amid the pandemic to have a lasting change, saying she expects long-haul flights and business trips to be less common. She adds: “We’re going to come out of the pandemic much more environmentally and socially conscious, and more aware of our work-life balance”.

The Sunday Times, Business, Page: 2



Staff and owners apart on return expectations

Research shows that a third of SME owners expect staff to come back full time when lockdown ends in June, with this double the figure for employees, where 16% expect to return to work as soon as restrictions are lifted. In a survey conducted for Cignpost ExpressTest, it was found that 38% of 1,100 employees polled do not expect to return to the office for the foreseeable future, with a further 20% not expecting to return until the entire workforce has been vaccinated. By contrast, 51% of employers said they expect those who have been vaccinated to return to the office immediately.

The Mail on Sunday



UK audit reforms fail to address the real problem behind scandals

Professor Karthik Ramanna reflects on the Government’s audit reform plans, arguing that issues stem from boards and auditors’ lacking a systematic culture to “challenge chicanery when it presents itself”, not badly designed rules.

Financial Times



Cash concern for councils

The Local Government Association (LGA) has urged ministers to look into new funding sources for councils, with the body warning that a planned shake-up of the business rates system must “recognise the importance of this income stream for funding key local services”. With the Treasury set to publish a number of consultations on future policy on March 23, officials are expected to deliver an interim report on a proposed overhaul of business rates. A quarter of council spending is funded by the levy but Richard Watts, chair of the LGA’s Resources Board, says local government confidence in business rates “as a reliable income source with a future has reduced”.

The Sunday Telegraph, Business, Page: 3



Government borrowing hits record February high

Office for National Statistics (ONS) data shows that public sector borrowing hit £19.1bn in February, with this £17.6bn more than in the February 2020 and the highest February borrowing since monthly records began in 1993. While the coronavirus pandemic drove up government spending, February’s borrowing came in below expectations, with City economists having forecast that the deficit would hit £21bn. The ONS data showed borrowing is on course to match the Office for Budget Responsibility’s forecast of £355bn for the 2020/21 financial year. The total for 2020/21 reached an estimated £278.8bn, pushing the UK’s total debt to £1.125tn and the debt-to-GDP ratio to 97.5%. The ONS report shows that the cost of financing the UK’s debts had remained stable over the last year, climbing from £4.2bn to £5.3bn.

The Guardian The Daily Telegraph Daily Mail Financial Times

Shopping habits shift since lockdown

Helen Dickinson, chief executive of British Retail Consortium, says shopping has “changed dramatically” in the year since the first coronavirus lockdown was put in place, saying the retail environment feels “a world apart” from a year ago and noting the “degree of uncertainty” felt in March 2020. With the lockdown seeing increased demand for online retailers while high street competitors have been hit by enforced closures and lower footfall, BDO’s Sophie Michael says that while online has seen “five years’ growth in one”, it has not offset lost in-store sales.

Evening Standard


March PMI expectations drive GDP hope

Economists believe GDP could beat growth forecasts for the year as the economy weathers the latest lockdown better than had been expected. Initial readings from the Markit/CIPS purchasing managers’ indices (PMI), due to published on Wednesday, are expected to show that the service sector has edged back into growth while manufacturing continues to show expansion. On an index where a score above 50 indicates growth, the service sector is expected to post a 51 reading for March, up from 49.5 on February, while manufacturing is likely to repeat the 55 score seen the month before. Howard Archer, chief economic adviser to the EY ITEM Club, believes Britain’s 2021 growth forecast could be upgraded, saying: “Our forecast currently is for 5% GDP growth this year but that might go up by a reasonable amount. That is because we thought that GDP would contract by 4% in the first quarter, but we now think it will be lower than that.”

Sunday Express, Page: 51

Contact Paul Southward

Paul Southward





Here is a summary of the Chancellor Rishi Sunak’s Budget:





Here is the latest update of tax rates and allowances:



Income tax allowances frozen

The Budget saw the Chancellor announce that as of April, there will be a freeze on the amount of money employees earn before paying income tax at £12,570, with this to continue until the middle of the decade. The Office for Budget Responsibility estimates that the move will see an extra 1.3m people start to pay income tax by 2026. The level at which employees start paying the higher rate of tax will be frozen at £50,270, with an extra 1m people set to fall into the 40% band within five years as a result. The policy will bring an extra £8bn a year for the Treasury, analysis suggests. Iain McCluskey of PwC calculates that freezing the personal allowance will impact low earners who may currently be under the threshold. Meanwhile, the Chancellor also announced that inheritance tax thresholds, pensions lifetime allowances and annual capital gains tax exemptions are to be frozen at 2020/2021 levels until 2025/26. Several papers note that the freezes to personal allowances will see the tax burden increase to its highest level since 1969, hitting 35% of GDP, while Blick Rothenberg said the freezes mark “a clear tax rise for all taxpayers”.

The Daily Telegraph, Page: 4 The Daily Telegraph, Page: 1 The Times, Page: 1 The Times, Page: 2 Financial Times, Page: 1 Financial Times, Page: 10 The Guardian, Page: 1,4 Daily Mail, Page: 10 The I, Page: 15 Daily Mirror, Page: 12 Daily Express, Page: 5 Daily Star, Page: 2 BBC News BBC News

Corporation tax lifted to 25%

The headline rate of corporation tax will rise from 19% to 25% from 2023, the Chancellor has announced, an increase he says is necessary to make public finances sustainable in the long-term. Mr Sunak said he wanted to reduce borrowing by raising more tax revenue rather than by cutting public spending, adding: “The only other alternative would be to increase the rates of tax on working people, but I don’t think that would be right”. He also announced that businesses with profits under £250,000 will be spared the increase, seeing a 19% rate instead. EY’s Chris Sanger said the Chancellor “seems to be focusing on small rather than small and medium-sized businesses”. Meanwhile, PwC’s Jon Richardson said that following years of a declining headline corporation tax rate, Mr Sunak’s “hand has clearly been forced” by the pandemic and the strain on public finances. KPMG analysis shows that the 25% rate exceeds the EU average of 21.7% but is lower than the US’ 27% and Japan’s 30.62%.

The Guardian, Page: 1, 4 The Times, Page: 6 The Daily Telegraph, Page: 1, 4, 5 The I, Page: 11 Daily Mail, Page: 12 The Independent BBC News

No penalty for one-off late filing

A move to make rules around filing of tax returns “fairer and more consistent” was announced as part of the Budget, with those filing returns late on a one-off basis now set to be spared HMRC’s £100 penalty. The new system, which will be introduced for VAT taxpayers from 2022 and for those filing income tax self-assessments from 2023, will see heftier penalties for repeat offenders than the current rules. The Budget Red Book said: “The new late payment regime will introduce penalties proportionate to the amount of tax owed and how late the tax due is.” The Government will legislate the shift in the Finance Bill 2021, with the reform forecast to raise £5m in 2022/23, £90m in 2023/24 and £155m in 2024/25 and 2025/26. Meanwhile, a crackdown on evasion and avoidance is expected to raise £2.2bn by 2025/26. BDO’s Dawn Register comments that catching tax cheats will help repair public finances, although RSM’s George Bull fears the increased tax take from the crackdown will “not be a game-changer”.

The Daily Telegraph, Page: 10 Financial Times, Page: 8

Tax break concern over super-deduction

Under a new tax “super-deduction” detailed in yesterday’s Budget, companies investing in new plant and machinery assets will be able to deduct 130% of the investment from their taxable income for the next two years. This means they would be able to cut their tax bill by up to 25p for every £1 that they invest. PwC has suggested the move may boost “levelling up” as manufacturers are more concentrated outside London and the south-east. However, Labour’s Dame Margaret Hodge suggested the way the tax was structured was a “big concern”, saying that the “devil will be in the detail” as it appears the initiative may be “little more than a tax break” for Amazon and other tech giants. The Telegraph notes that an online sales tax may still be put in place to target such firms, with Mona Bitar of EY suggesting “greater certainty is needed in this area” .

The Daily Telegraph The Daily Telegraph, Page: 7 The Guardian, Page: 9 The Sun, Page: 6

Hospitality sees VAT cut extended

The 5% reduced rate of VAT for the hospitality sector will continue for another six months, the Chancellor has announced. Rishi Sunak told the House of Commons the reduced rate would be extended until September 30. He also announced there will be an interim rate of 12.5% for another six months until April 2022. In total the move will see VAT cut by around £5bn. Christian Mole of EY warned that the sector will face challenges, even as restrictions are lifted, calling for ongoing Government support and describing the sector-specific support being offered as “encouraging”.

BBC News City AM

Tax rethink for banks on the cards

The Government is due to roll back a surcharge on banks’ corporation tax to help to boost the sector’s competitiveness, with a review of tax on banks coming in the autumn. The move could see banks brought closer in line with other sectors where corporation tax will rise to 25% from 2023. Without reform, banks could face a rate of around 33%. Isabelle Jenkins of PwC said banks will welcome the Government’s review of the sector’s tax burden, while Richard Milnes at EY noted: “It seems that banks should still brace themselves for an overall increase in tax on profits from 2023.”

The Times, Page: 11 The Daily Telegraph, Business, Page: 3

New freeports confirmed

The Chancellor has announced the eight English that are to be designated as freeports, claiming that policy for the low-tax areas will be “on a scale we’ve never done before” and will “exemplify the future economy”. East Midlands Airport, Felixstowe and Harwich, Humber, Liverpool City, Plymouth, Solent, Thames and Teesside have all been chosen. The freeport model allows companies to import goods tariff-free, with critics suggesting they can act as tax-avoidance sites for the wealthy. Questions have been raised over regulation and governance, with concerns over whether the tax breaks could breach trade agreements.

The Guardian, Page: 8 Daily Mail The Independent


Three-months added to business rates holiday

The business rates holiday rolled out to support firms during the pandemic has been extended for another three months, with the break, which had been set to run for a year and conclude at the end of the month, now running until the end of June. Real estate adviser Altus Group said the cost of extending the relief will be around £3bn. With some retailers having been criticised for accepting business rates relief despite being able to remain open under lockdown rules, a number of big chains last year committed to repaying £2.2bn of the support. Following yesterday’s announcement of the three month extension, Tesco, Sainsbury’s, Asda and Morrisons said they would not take advantage of the relief.

The Daily Telegraph, Page: 5 Daily Mail The Guardian Daily Mirror


Stamp duty holiday to continue

The stamp duty holiday has been extended by six months until the end of September, an extension that includes a tapering of support, with the nil-rate band gradually lowering from June. The extension applies to all transactions in England and Northern Ireland, meaning buy-to-let investors will continue to benefit from the tax savings. The deadline for buyers to take advantage of the higher £500,000 nil-rate band has been extended by three months. This means that buyers can save up to £15,000 in tax if they can complete their sales by June 30. After this date, the nil-rate band will drop to £250,000 until September 30, with the maximum tax savings falling to £2,500 during this period. From October 1, the nil-rate band will fall back to its original level of £125,000. On the extension, Sean Randall, a partner at Blick Rothenberg, said: “Buyers due to complete between April 1 and June 30 will breathe a sigh of relief; estate agents, surveyors and mortgage brokers will rub their hands with glee; and conveyancers, exhausted by the pressure to complete before April 1, will look ahead with dread.”

The Daily Telegraph The Times The I Daily Express, Page: 8 BBC News

OBR: Stamp duty holiday will lift prices

The Office for Budget Responsibility (OBR) expects the extension of the stamp holiday to “result in some additional transactions and raise house prices a little” – but added that house prices will fall back again as pressure on the labour market increases. While house prices are forecast to climb 5.1% over 2021 and then slip 1.7% in 2022, the OBR expects growth of 0.8% in 2023, 3.9% in 2024 and 4.3% in 2025. The analysis suggests that house prices will be 13.5% higher at the beginning of 2025 than they were at the start of 2020. A November report from the OBR predicted that growth in the period would be around 11.4%.

The Daily Telegraph

Lenders back loan support plan

Britain’s biggest mortgage lenders have backed a Government scheme to help people get on the property ladder, with Lloyds, NatWest, Santander, Barclays and HSBC among the banks agreeing to offer 95% mortgages to creditworthy customers from next month. The initiative will see the Government guarantee part of the loan, compensating the bank in the event of repossessions. David Farr at Grant Thornton said that the scheme was likely to “prop up demand and therefore house valuations”, while Howard Archer of the EY Item Club said he was worried about a housing market correction later this year or next year that could leave buyers in negative equity.

The Times, Page: 4


Furlough extension confirmed

Chancellor Rishi Sunak has confirmed that the furlough scheme, which was due to end in April, will be extended to the end of September. The extension will mean the Government will continue to contribute 80% towards wages to help firms keep staff on the payroll. As of July, employers will start paying 10% of furloughed employees’ pay, with this increasing to 20% from August. It was also announced that a fourth round of self-employment grants will help support those left out of previous support because they had not filed tax returns. The fresh round of grants, which will be worth up to £7,500, will see support for an additional 600,000 people. The Office for Budget Responsibility expects the cost of the furlough scheme to be £10.8bn extra between April and September.

The Daily Telegraph Daily Mail Daily Mirror City AM

UK staff take fewer sick days in 2020

Figures from the Office for National Statistics (ONS) show that workplace absences due to illness fell in 2020. The UK’s sickness absence rate declined from 1.9% to 1.8% last year – the lowest level since its records began in 1995. The ONS said that coronavirus lockdowns, restrictions and social distancing rules in the workplace may “have led to less exposure to germs and minimised some of the usual sickness absences”. It added: “Homeworking could allow people to work from home when they were a little unwell … they might not have travelled to a workplace but feel well enough to work from home.” The report shows 118.6m working days were lost because of sickness or injury in 2020, equating to 3.6 days for each worker.

The Guardian

Apprentice cash doubles

Payments to employers that take on apprentices are to be doubled, with employers to receive £3,000 for each new apprentice they hire between April and September. KPMG’s Shashi Prashad believes the doubling of the grant could stimulate new jobs and Zlatina Loudjeva of PwC said the Chancellor “has pulled some of the most immediate levers available to get people back into work.”

The Times, Page: 11 The Daily Telegraph, Business, Page: 5


Sunak reveals ‘restart’ grants

Retail, hospitality and personal care businesses, which are set to reopen from April as coronavirus restrictions are eased, are to be offered support in the form of the new Restart Grant. The Chancellor announced that retailers will be eligible for grants of up to £6,000 per premises, while pubs, restaurants and salons, which will be closed until June, will be able to claim grants of up to £18,000. Detailing the support in his Budget announcement, the Chancellor said the new grants will total an extra £5bn of help. He added that this takes the Government’s direct cash support to business to £25bn.

City AM


German regulator files complaint against Greensill Bank

Germany’s financial watchdog BaFin has reportedly filed a criminal complaint over suspected balance sheet manipulation at Greensill Bank. A probe by BaFin found irregularities over how the bank had booked certain assets, with the watchdog tasking KPMG with performing a forensic investigation last year. The probe found that Greensill had booked claims for transactions that had not yet occurred but which were accounted for as if they had been.

The Daily Telegraph The Guardian, Page: 32 Financial Times

Deloitte strikes $80m Malaysian settlement over 1MDB

Deloitte has agreed an $80m settlement with Malaysian officials over its role as an auditor to scandal-hit state investment fund 1Malaysia Development Berhad.

Financial Times, Page: 21


Vaccines to drive economic recovery, says OBR

The Office for Budget Responsibility (OBR) says the UK’s coronavirus vaccine programme will help drive a “swifter and more sustained” economic recovery, with the Government’s independent forecaster saying it expects growth of 4% this year and 7.3% in 2022. The latter would mark the highest growth rate since official records began and see the economy hit its pre-pandemic level by the middle of next year – six months earlier than previously estimated. The OBR analysis noted that British households have built up savings of around £180bn in the past year, with it forecasting that around a quarter could be spent once coronavirus-related restrictions are lifted, pointing to a potential “degree of euphoria” among consumers. It also warned that economic uncertainty remained “considerable”. The OBR also said unemployment is set to peak at 6.5%, considerably lower than the 11.9% expected last July.

BBC News The Guardian, Page: 10 Daily Mail The Sun, Page: 6 City AM


Budget response

Reflecting on the details of yesterday’s Budget, Labour leader Sir Keir Starmer said the scale of what the Chancellor announced “is nowhere near ambitious enough”, saying the measures are “a quick-fix, papering over the cracks”. Ian Blackford, the SNP’s leader at Westminster, said the measures are “carefully laying the ground for more Tory austerity”, while Plaid Cymru said it was a “Budget of half measures and quick fixes”. Meanwhile, Institute for Fiscal Studies director Paul Johnson said the overall tax burden is set to hit its “highest sustained level in history.” Separately, Chris Sanger, head of tax policy at EY, described the Budget as “three years of support, followed by three years (and more) of pain”, adding “that time is the Chancellor’s friend in his aim of replenishing the Government’s coffers.” The FT’s Merryn Somerset W ebb says all taxes that affect income and wealth “are set to rise substantially in real terms”, while Iain Martin in the Times says Rishi Sunak “earmarked tax rises when the focus should be wholly on dynamism”.

BBC News BBC News Financial Times, Page: 13 The Times, Page: 27 Evening Standard

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Paul Southward





Chancellor eyes corporation tax rise

Chancellor Rishi Sunak is considering an increase in corporation tax in his March budget as he looks to balance the books in the wake of the coronavirus crisis, reports the Times’ Steven Swinford. Mr Sunak is considering partially reversing cuts made by former Chancellor George Osborne under which corporation tax has fallen from 28% to 19%. Mr Swinford says the Treasury could target corporation tax as it is considered one of the few “genuine revenue raisers” in the Government’s arsenal, but notes that cabinet colleagues may not be receptive to an increase, suggesting it could deter business. He adds that the move could also put Mr Sunak at odds with Boris Johnson, with the Prime Minister having suggested that taxes for businesses should be cut as Britain tries to seize on the opportunities brought about by Brexit.

The Times, Page: 4

Wealth tax warning over mooted property levy

With Treasury officials having reportedly modelled a plan to scrap council tax and stamp duty and replace them with a proportional property tax based on a percentage of a home’s value, the Chancellor has been urged not to push ahead with such a measure, with some analysts concerned it equates to a wealth tax. Iain McCluskey of PwC said the challenge of such a levy lies in the fact that it “is not a tax on liquid assets, like money you are actually receiving, but rather on illiquid assets – where you have to pay whether you have got the money or not.” A Mail editorial argues that an annual charge on a property’s value “would be, in all but name, a wealth tax”. However, charity Fairer Share has backed such a levy and suggests policymakers should create a proportional property tax with a rate representing 0.48% on the current value of a property.

Daily Mail, Page: 12, 18 Daily Express, Page: 2

Think-tank: Tax rethink could help level-up the UK

Think-tank Onward has urged Chancellor Rishi Sunak to cut taxes that disproportionally hit the UK’s poorest regions, saying doing so would help advance the Government’s levelling up agenda. Onward analysis highlights how the tax system could be targeted to reduce inequalities, suggesting that while corporation cuts would “overwhelmingly benefit London”, raising investment allowances would benefit the north, the Midlands and Wales. Onward director Will Tanner has warned that “ministers are trying to overturn decades of regional economic divergence with one hand tied behind their back” by overlooking tax policy. He said decisions such as whether to raise council tax or to cut corporation tax “are not regionally neutral decisions”, arguing that the Treasury has “probably not done enough to understand the regional consequences of its tax policies.”

The Daily Telegraph, Business, Page: 1 The Times, Page: 2 The Independent, Page: 13 The I, Page: 4 The Sun, Page: 2

Commons to debate stamp duty

The House of Commons has confirmed that there will be a debate about stamp duty after more than 100,000 people signed a petition for the stamp duty holiday to be extended for six months beyond the March 31 deadline. The Express notes that MP Kevin Hollinrake is backing calls for property taxes to change, saying they are “unfair, complicated and block aspiration.” Despite calls for the tax break to be extended, some experts have called for more permanent action, with Nick Sanderson, CEO of Audley Group, saying the stamp duty holiday is “by no means a long term cure” for issues the housing market. Tom Clougherty, head of tax at the Centre for Policy Studies, has called for the stamp duty cuts rolled out amid the pandemic to be made permanent, arguing “there’s a case for going further” and saying the levy is “a remarkably destructive tax at the best of times”.

Daily Express The Daily Telegraph, Business, Page: 2

HMRC urged to extend tax return deadline

With the January 31 deadline for self-assessment tax returns on the horizon, HMRC has been urged to extend the cut-off due to concern that coronavirus-related pressures will see a spike in late filing. Kevin Sefton, CEO of tax app untied, said that while a million people miss the January tax deadline most years, “it looks like there’s going to be an even higher number this year because of COVID-19 and related knock-on effects.” He added: “Whilst a delay isn’t the sort of thing that HMRC will agree to readily, we are calling for an extension to the filing deadline and the payment deadline this year as a one off.”

Daily Express

Sun says Sunak should cut taxes

A Sun editorial says that while the Chancellor is expected to raise taxes to help foot the state’s coronavirus bill, tax cuts are the way to go, arguing that highly taxed economies grow more slowly. It says that post-pandemic, the economy will need “rocket boosters … not the dead weight double-whammy of tax rises and massive public spending.”

The Sun, Page: 10


Timpson calls for ‘common sense’ on rates

Sir John Timpson, chairman of Timpson, says that unless policymakers get their “thinking straight on business rates”, retailers will continue to close, saying: “I pray the Treasury will see common sense.” Sir John believes Rishi Sunak’s rates holiday and furlough scheme “was a shrewd investment” when many shops were shut, arguing that by keeping strong firms solvent, the Chancellor has secured a substantial future source of tax revenues. However, he says a lack of news on any extension to the business rates holiday before the March budget has left retailers “on our knees”, arguing that confirming a concession now could help retailers plan ahead and avoid closures. Sir John adds that there are two “even more fundamental business rate problems”, a lack of a level playing field between bricks-and-mortar and online retailers; and a continual increase in rates when rental values have been falling.

The Daily Telegraph


Concerns raised over workplace safety

Unions have expressed concern that employees are being forced to go into workplaces that are not compliant with coronavirus-related safety guidelines during lockdown. Analysis shows that the Health and Safety Executive (HSE) received 2,945 complaints about safety issues between January 6 and January 14. Pointing to a Government pledge to get tougher on those flouting lockdown rules, TUC general secretary Frances O’Grady said: “If the Government is upping enforcement, ministers should start with employers who break COVID safety rules.” She added a call for greater resources for HSE, saying this would help “stop rogue employers getting away with putting staff at risk.” HSE said inspectors “continue to be out and about, putting employers on the spot and checking that they are complying with health and safety law”.

BBC News

The pandemic tests a new generation of graduate trainees

The FT considers the pressures graduates face amid the pandemic, with Deloitte‘s Global Millennial Survey showing that 46% of Generation Z have reported anxiety or stress about their job or career prospects.

Financial Times, Page: 18


Buyers take on higher rates to avoid stamp duty

Home buyers are turning to less-common forms of borrowing to ensure their property purchases complete before the stamp duty holiday comes to an end on March 31, with the Telegraph’s Adam Williams warning that some buyers are taking on “sky-high interest rates”. He says that while bridging finance differs from a normal mortgage because it can be arranged in a matter of days, the higher cost of borrowing means it is rarely recommended for house purchases. However, the tax savings offered by the stamp duty cut mean bridging finance has become an option for some. Mr Williams says that while rates appear low, the figures of between 0.7% and 1.25% are monthly rates so the annual cost is between 8.7% and 16.1%.

The Daily Telegraph


Arcadia bid deadline nears

Today marks the deadline for bids from those interested in acquiring Arcadia in a sale being overseen by administrators from Deloitte that could see the retail empire snapped up for more than £200m. Next, which is bidding for the group in partnership with US hedge fund Davidson Kempner, is said to be the frontrunner, with Frasers Group, JD Sports, Boohoo and Juicy Couture owner Authentic Brands thought be among other bidders. Brands under the Arcadia umbrella include Topshop, Topman, Dorothy Perkins, Wallis, Miss Selfridge and Burton. Evans has already been hived off and sold to Australian retailer City Chic Collective for £23m.

The Guardian, Page: 27 Daily Mail, Page: 71


ESG accounting needs to cut through the greenwash

Karthik Ramanna of Oxford’s Blavatnik School of Government calls for better accounting in regard to firms’ ESG claims, arguing that prudence, dual reporting and matching are “virtually unheard of” in ESG accounting standards.

Financial Times, Page: 23


EU rules promise to reshape opaque world of sustainable investment

The FT looks at the EU’s sustainable finance disclosure regulations, noting a PwC estimate that ESG funds could increase their share of European assets from 15% to 57% by 2025.

Financial Times, Page: 8


Bank chair: Britain’s recovery may exceed expectations

William Vereker, chairman the UK arm of Spanish banking group Santander, believes the UK’s economic recovery this year could be stronger than most experts predict, saying: “I can see sterling strengthening and the economy growing faster than forecast”. Mr Vereker feels the Brexit deal and the coronavirus vaccination programme could deliver a “big uptick” in consumer spending and business investment. He said that despite there being “so many negative predictions … there is another possibility – things might be okay.” Mr Vereker said he can see a “quick bounce-back”, with “significant” pent-up consumer demand and savings set to flow into the economy later this year. He added that the Brexit deal is “going to remove a big element of uncertainty” and encourage business investment, while “on a relative basis, the UK looks good in terms of the opportunity to invest, employ and develop businesses”.

Daily Mail


Treasury, FCA and HMRC spend £3m coronavirus-proofing offices

A Freedom of Information request shows that around £3.1m has been spent making Treasury, Financial Conduct Authority (FCA) and HMRC offices COVID-19 secure for staff. HMRC has spent £2.9m on coronavirus safety measures since March, while the FCA spent £211,218 between March and October and the Treasury paid out around £17,300. HMRC said that measures have enabled its 90 offices across the UK to remain open to staff.

Daily Express, Page: 45 Aberdeen Evening Express

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Paul Southward






Lords criticise ‘flawed’ plan to give HMRC extra tax powers

The Lords Economics Affairs Committee says proposed powers allowing HMRC to force financial institutions to divulge information about people’s assets without court approval are “flawed”, voicing concern over the removal of taxpayer safeguards. The measures, to be included in the 2021 Finance Bill, are “poorly targeted, disproportionate and lacking necessary safeguards”, the committee said. Meanwhile, the committee welcomed plans to give HMRC tougher powers to go after promoters of tax avoidance schemes.

The Times, Page: 10 Financial Times

HMRC urged to delay self- assessment deadline

Industry groups including ICAEW have urged HMRC to push back the self-assessment tax return deadline, saying people may require more time to file their accounts due to the coronavirus pandemic.

Financial Times, Money, Page: 3

Advisers suggest sacrifice salary for tax break on broadband

A government advisory group has suggested that employees should be offered a salary sacrifice scheme that lets them buy ultra-fast broadband in exchange for tax breaks. An interim report from the Gigabit Take-up Advisory Group says voucher schemes or salary sacrifice schemes would boost the uptake of faster broadband.

The Daily Telegraph


Opinion: Tax higher earners more as cuts do not trickle down

The Observer’s Business leader column says pressure is building on the Chancellor to tax City financiers and business owners, saying studies suggest nations that follow a tax-cutting agenda “do nothing for the underlying strength of their economies”. It cites London School of Economics analysis of fiscal policies in 18 countries over 50 years which concludes that tax cuts for the rich “have never trickled down” and tend only to benefit those who are directly affected, boosting the finances of higher earners, increasing inequality and doing little to stimulate investment. The piece says higher taxes will help address concern over executive pay, arguing that increases cause no harm, “except to the bank balances of those they target.”

The Observer, Page: 68


Permanent stamp duty cut could deliver £139m tax boost

Research from the Centre for Economics and Business Research (CEBR) suggests a permanent increase in the stamp duty threshold to £500,000 could reap £139m of extra tax receipts a year. The study, for lender Kensington Mortgages, says such a move would stimulate more transactions and increase house prices. The Chancellor earlier this year announced a stamp duty holiday on house purchases of up to £500,000 until the end of March next year in a bid to boost the sector amid the coronavirus outbreak. Property consultancy Savills estimates that the move resulted in £550m of lost receipts to the Treasury in the quarter to the end of September.

The Times, Page: 38

Wealth levy goes against principle of fair tax

The Mail’s Ruth Sutherland questions calls for targeting wealth with taxation as a means to rebalancing the nation’s finances after the economic hit of the coronavirus crisis. She says the suggestion that the rich can foot the bill is a “superficially attractive but dangerous idea.” She argues that hiking capital gains tax rates would deter entrepreneurs and investors, while tax benefits on retirement pots “have already been whittled away”. Ms Sutherland says a one-off wealth tax of 5% on net assets above £500,000 is “by far the worst proposal.” A wealth tax, she says, would be retrospective, “which goes against a basic principle of a fair tax regime”.

Daily Mail, Page: 66

UK firms face £34bn VAT bill after Brexit

British companies will face a £34bn tax bill for transporting goods around Europe after the Brexit transition period ends, tax firm VAT IT has said. It warns that thousands of UK businesses are “unprepared” for VAT laws in European countries once the country leaves the EU next month, noting that rates range from 20% to 27%. Selwyn Stein, managing director of the firm, said it is “clear this is something a lot of business just aren’t prepared for”.

The Daily Telegraph, Page: 30 Daily Express, Page: 43 The I



Next in line for Arcadia

Retailer Next is in talks with asset management firm Davidson Kempner Capital Management about joining forces and financing a bid for Arcadia, the collapsed retail group which includes Topshop, Topman, Burton and Miss Selfridge. With Deloitte, which is running the sales process, setting Monday as the deadline for first round bids for Arcadia, Next has just two days to agree the tie-up. CEO Lord Wolfson is also reportedly holding talks with rival financial backers including Carlyle and Alteri. Other potential bidders include Boohoo, Mike Ashley’s Frasers Group, Barney’s owner Authentic Brands and Shein, a Chinese fast-fashion firm. Documents circulated to potential bidders by Deloitte show that Arcadia’s revenues came in at £829m for the year to September 2019, compared with £846m the year before.

The Times, Page: 51 The Daily Telegraph, Page: 33 Financial Times, Page: 13 Daily Mail, Page: 90

Administrators warn of ‘vexatious’ LCF claims

Smith & Williamson administrators trying to recover money invested into collapsed mini-bond firm London Capital & Finance (LCF) say they have been dealing “with over a dozen spurious, we would say vexatious, legal challenges” involving parties linked to LCF and London Oil & Gas, a closely tied company that is also in administration. The administrators, who last year warned investors that they had identified “a number of highly suspicious transactions” involving their money, are also suing 13 people and two companies linked to LCF in an attempt to recover £178m.

The Times, Page: 52

Mayday in focus

The Mail’s Neil Tweedie looks at Mayday Rescue, a project which trained and equipped civilian rescue teams in Syria’s civil war. He details allegations over financial issues that have been suggested drove founder James Le Mesurier to suicide, noting that a forensic audit by Grant Thornton was commissioned following his death. An anonymous official who has seen the report says it shows claims made by CIO Johan Eleveld are unsubstantiated.

Daily Mail, Page: 52


MPs tell HMRC to name companies using furlough scheme

Ministers have been told to reveal the names of companies that took furlough money, with the Commons Public Accounts Committee (PAC) saying HMRC should publish a list of all businesses that have used the Coronavirus Job Retention Scheme. Ministers have also been urged to outline plans to recover furlough funds from companies that have performed well despite the pandemic. PAC chairwoman Meg Hillier said: “Sunlight is the best disinfectant – if a company has got nothing to hide, it should not be worried about its name being made public”, adding: “Profiteering from the taxpayer is not acceptable.” The Sunday Times notes that BDO U-turned on a decision to keep the £4.1m it had received under the furlough scheme, with this coming on the back of criticism of £500,000-per-partner payments.

The Sunday Times, Business, Page: 1

EOT appeal rises on CGT speculation

A Freedom of Information request by Price Bailey shows that record numbers of employees are being handed ownership of the businesses they work for as owners seek ways to mitigate tax liabilities, with HMRC seeing a five-fold increase in employee ownership trusts ( EOT) it approved in the last three years. Under EOTs, employees pay nothing to own the business, with owners paid from existing assets and future profits of the company, via the trust, with no capital gains tax to pay on the sale. With speculation that CG T could be increased to help foot the Treasury’s coronavirus bill, Price Bailey says E OTs have become more attractive for business owners planning their succession.

The Sunday Times, Business, Page: 12

Ashley eyes empty Debenhams stores

The Mail on Sunday says Frasers Group owner Mike Ashley is considering moving his brands into empty Debenhams stores as part of a deal to acquire the company, prompting concern that a full rescue of Debenhams is becoming increasingly unlikely. Debenhams, which is being run by administrators at FRP, is running a sale to clear stock as it prepares to close stores if a deal is not struck.

The Mail on Sunday, Page: 123

Critical RICS report not shared

The Sunday Times gives details of a 2018 report by BDO which criticised management of the Royal Institution of Chartered Surveyors (RICS), with the analysis making headlines last week after it was reported that four non-executive directors had been dismissed for trying to raise the alarm over its findings. The BDO report, which went to four people including then finance director Andrew McManus, gave the lowest possible “no assurance” rating for the effectiveness of the RICS’s controls. Of the six areas it assessed, it flagged four as “high priority”.

The Sunday Times, Page: 10

Struggling restaurant chains on the menu for investors

Sabah Meddings in the Sunday Times says Boparan Restaurant Group’s £6m purchase of Gourmet Burger Kitchen – which was worth £120m in 2016 – is one of several cut-price deals struck recently by opportunistic investors looking for bargains amid a crisis for casual dining chains. Ms Meddings says there is concern in some quarters that allowing weak brands to “limp on” under new owners could ultimately harm the high street. Will Wright of KPMG comments: “There are great opportunities out there, and plenty of buyers for good businesses. The challenge is sorting the wheat from the chaff.”

The Sunday Times, Business, Page: 2

Issa brothers target Nero

EG Group, led by Mohsin and Zuber Issa, has offered to fund a legal challenge for landlords against Caffè Nero, with the brothers looking to derail the coffee chain’s CVA and take control of the firm. As part of the CVA, which is being run by KPMG, landlords face losing most of their outstanding rent and EG is promising to pay them in full.

The Sunday Times, Business, Page: 1

Sir Stelios set to ground easyJet plans?

A look ahead to easyJet’s AGM points to speculation that the airline may have to go to shareholders to raise more capital, a move the Mail on Sunday’s Alex Lawson says could stoke the ire of founder and biggest investor Sir Stelios Haji-Ioannou. Sources tell Mr Lawson that Sir Stelios is set to vote against a string of proposals including reappointing its directors and its auditors PwC.

The Mail on Sunday, Page: 124


Business confidence climbs

UK business confidence has risen by the biggest month-on-month total in more than four years, climbing 17 percentage points to -4% in December, according to the Lloyds Bank Business Barometer. The reading is the highest since March, when the economy had yet to see the impact of the coronavirus pandemic. Corporate optimism increased, driven by a more upbeat outlook for the wider economy, confidence in which rose 23 points to -5%. Confidence in trading prospects climbed 11 points to -3%. The Lloyds report also shows that 32% of the 1,200 firms surveyed expect to cut staff next year, while 22% plan to increase numbers. Lloyds economist Hann-Ju Ho said: “The news of the vaccine progress has bolstered this month’s confidence figures, more than offsetting uncertainties around the UK’s new trading relationship with the EU.”

The Times Reuters

Bidders show interest in Arcadia

Administrators at Deloitte are believed to have received around 30 expressions of interest ahead of today’s deadline for bids for collapsed retail group Arcadia. Mike Ashley’s Frasers Group and fashion chains Next and Boohoo are said to be among potential bidders for Sir Philip Green’s retail empire, which owns brands including Topshop, Burton and Miss Selfridge.

Daily Mail, Page: 66



Retailers call for more rates relief

Retail bosses have urged Chancellor Rishi Sunak to extend the business rates holiday, warning that the latest round of coronavirus restrictions which have forced the closure of non-essential retailers in London, the South East and the east of England could hit the sector and put jobs at risk. A holiday on business rates was announced earlier in the year, with the measure designed to support firms hit by the coronavirus crisis set to come to an end in April. Property adviser Altus Group estimates that ending the business rates holiday will cost companies £12.8bn next year. Calling for fresh support, Helen Dickinson, chief executive of the British Retail Consortium, said: “The Government needs to be a little bit more sophisticated in how business rates relief is targeted going forward to those that have been impacted the most.”

The Daily Telegraph



Concern over CCP links

The Telegraph considers reports revealing that many Western firms are employing hundreds of members of the Chinese Communist Party (CCP), with the paper suggesting KPMG, PwC, EY and Deloitte are “jam-packed with CCP members”. The piece suggests there may be concerns over the firms, which are leading suppliers to the UK Government, having ties with the CCP, an organisation it says holds “a monopoly on power, information and wealth.”

The Daily Telegraph, Page: 21



Location hits hiring, say SME leaders

Research from freelance service provider AnyTask suggests that businesses are having to employ workers who are unsuitable for roles simply due to their location. A poll of 500 SME leaders saw 84% say they have given someone a job despite them not being the ideal candidate, with 58% saying their location had restricted the applicants available. The SME leaders said hiring the right staff was their biggest challenge, followed by keeping up with changing rules and regulations. A fifth said they struggled to find time to deal with HR issues, while the same proportion have had issues with inconsistent quality of work from staff. Just under 70% said an inconsistent order book means permanent, full-time staff sometimes don’t have much work to do, with 57% saying outsourcing work to freelancers makes financial sense. Cash flow was a concern when hiring staff for 64% of bosses.

Daily Mirror




Employers back ethnicity pay gap disclosure rule

A leaked report seen by BBC News shows that three quarters of employers believe large firms should be forced to release data on the pay gap between staff of different ethnicities. The findings stem from a consultation exercise on ethnicity pay gap reporting launched in 2018. Of the 321 responses to the consultation, 73% supported compulsory ethnicity pay gap reporting for organisations with more than 250 staff – an obligation similar to one already in place which covers gender pay gaps. BBC News notes that a group of 30 business leaders wrote to Prime Minister Boris Johnson in October, calling for the mandatory duty to be introduced. CBI president Lord Karan Bilimoria told BBC News that members want to disclose their ethnicity pay gap “because they know this is such an important issue” “If they address this issue, they will have companies that are more diverse, more inclusive, more profitable, more innovative,” he added.

BBC News



Understanding equivalence

The Sunday Times’ Jill Treanor offers a bluffer’s guide to equivalence, saying that it has become the City’s new buzzword having become a sticking point in trade talks. Peter Bevan of law firm Linklaters says equivalence is “mitigating the effect of hard Brexit on the ability of firms to access the EU single market”, with Ms Treanor offering that this makes it a “way of smoothing financial firms’ trading with the bloc” post-Brexit. She says financiers have been exploring ways to maintain access to the EU, including relocating, with EY analysis suggesting 7,500 UK staff have been switched to EU offices. Andrew Gray of PwC says the longer a lack of engagement on equivalence continues, “the more firms will adjust – and the less valuable it will be.”

The Sunday Times, Business, Page: 5



Average house price climbs £13k in 2021

Analysis from Halifax shows that the average UK house price climbed by £13,316 in 2020. The report shows that the average UK home was valued at £239,927 at the start of 2020, fell towards £237,00 after the first national lockdown and then jumped to £253,243 by the end of last month, with the stamp duty holiday driving activity. The increase in prices record between the end of June and the end of November marks the fastest five-month jump since 2004.

The Observer

Third of buyers would pull out if they missed stamp duty deadline

A survey has revealed that 31% of home buyers would abandon their purchase if they missed the March 31 deadline for taking advantage of the Government’s stamp duty holiday. The survey, from the Guild of Property Professionals, asked 1,000 people who were currently in the process of buying a home whether they would continue with their purchase if the sale did not complete before the deadline.

The Mail on Sunday


Extra £62bn of housing sales agreed this year

A post-lockdown surge in activity has contributed to an increase in property sales in 2020, with analysis from Zoopla showing an extra £62bn has been spent on homes this year. The property platform estimates that overall sales have increased from about £238bn in value in 2019 to £300bn this year, with increased demand driven by the stamp duty holiday for homes under £500,000.

Daily Mail



Retail sales down in November

Retail sales fell in November, with the first decline in six months coming on the back of the closure of non-essential shops amid England’s second national lockdown. Office for National Statistics (ONS) data show that sales were down 3.8% last month when compared to October. Food and household goods were the only sectors that saw sales growth in November, with respective increases of 3.1% and 1.6%, while clothing sales were hit hardest, falling 19%. Despite the month-on-month decline, sales were up 2.4% on November 2019. Year-on-year, online sales were up 74.6% on November 2019, while sales made online accounted for 31.4% of retail sales last month – up from a 28.6% market share in October. Silvia Rindone of EY says the impact of the November lockdown is clear, with consumers continuing to shop more online. “Physical shops are hoping to catch up on trading in the remaining festive period&rd quo;, she adds. She suggests that with many retailers “under acute pressure”, they need to evolve to meet “seemingly permanent changes in consumer habits.”

Daily Mail The Guardian The Independent City AM BBC News


Former LSE chief in debt warning

Xavier Rolet, former boss of the London Stock Exchange, has warned that companies are now “so awash with debt that central banks simply can’t control it”, saying that this poses a major risk to the long-term economic recovery. He believes the issue could see ministers come under pressure to consider debt cancellation programmes. Arguing that governments would have to cancel their own debts and that of individuals before turning attention to company loans, Mr Rolet said: “It’s going to be very difficult for any government to tell their taxpayers they should essentially support the cancellation of debt of companies that have borrowed in order to increase their profits”. TheCityUK estimates the total amount of unsustainable debt taken on by British businesses at around £70bn. Richard Peberdy of KPMG said the level of unsustainable debt is a “massive issue for the economy”, adding: “This is not the sort of base that we hoped to spring into post-Brexit”.

The Mail on Sunday, Page: 121

Inflation expectations

Philip Inman in the Observer looks at what path inflation may take in 2021, noting that it has fallen toward zero as 2020 nears its end, hitting 0.3% in November. He says some commentators have warned that prices may jump as the economy “overheats” post-pandemic and post-Brexit. He questions the concern, noting that the economy is set to be around 10% smaller at the end of the year than it was at the beginning, with the Office for Budget Responsibility (OBR) not expecting it to recover its previous peak until the end of 2022. The OB R foresees economic growth of 5.5% in 2021 and 6.6% in 2022. This, Mr Inman, argues, seems “electrifying” compared with the annual expansion of 1% to 2% seen over the past 10 years, but it is “playing catch-up and no more”. He also says that without wage increases “there can be no boom”, at least not a sustainable one.

The Observer


Analysts expect November borrowing to hit £31bn

With the Office for National Statistics (ONS) this week set to disclose the scale of Government borrowing in November, economists expect economic support rolled out to deal with tightened coronavirus restrictions will have driven up borrowing. Analysts at Investec forecast that public sector net borrowing will hit £31.4bn for November, about £26bn higher than the same month last year and up on October’s £22.3bn. In the current financial year, borrowing has increased by an average of £24.2bn compared with the corresponding month in the previous year. If this pace continues, the UK’s deficit would reach £346bn over 2020/21. Investec analysts expect Chancellor Rishi Sunak to address concerns over fiscal sustainability with “a selected rise in taxes at some stage”.

The I, Page: 46

Report warns of economic hit from Brexit

Analysis suggests that no part of the UK economy will be immune from a financial hit from the UK’s exit from the EU, with a sector-by-sector analysis of the impact of Brexit from Blick Rothenberg revealing significant problems for many sectors, with or without a trade deal. The analysis suggests the automotive, construction, food and drink and hospitality industries will be hardest hit, with products, raw materials and skilled workers in short supply in early 2021 at least, with higher costs likely to be passed on to consumers. The financial services industry will lose some access to EU markets for certain products, the report warns. Alex Altmann, head of Blick Rothenberg’s Brexit advisory group, says that while many industries face an “extremely difficult” time in 2021 as they recover from the impact of the coronavirus pandemic, “Brexit will compound the problems for many sectors”.

The I



How can I get money back from a friend facing bankruptcy?

BDO ’s Jon Claypole offers advice to an FT reader concerned about losing money owed to them by someone who may be declared bankrupt in a tax dispute.

Financial Times, Money, Page: 10


Gamblers turn to black market sites

Analysis by PwC shows that 200,000 Britons have tried black market online gambling, staking a combined £1.4bn on unregulated sites in the last 12 months. The report shows that nearly one in ten gambling search results were for black market sites.

The Sun

Mum’s game to boost well-being

With a report suggesting that video games can improve well-being, the Sunday Telegraph’s Anna Maxted reflects on efforts to play computer games with her sons. She notes PwC research showing that, bar a few exceptions, children’s most wanted gifts this Christmas are technology-based, with games consoles, phones or tablets among the most-desired items.

The Sunday Telegraph, Page: 19


Teaching learns to attract talent

The Independent profiles Brett Wigdortz, founder of Teach First, who details how he used the same principles businesses use to attract and retain talent to attract talented graduates to teaching. Describing it as the “war for talent”, he muses: “Deloitte does it, Microsoft does it, why not teaching?”

The Independent, Page: 44

Contact Paul Southward

Paul Southward





Ministers urged to extend or adapt stamp duty holiday

Banks have urged the Treasury to extend the stamp duty holiday rolled out to support the property sector amid the coronavirus pandemic beyond the March 31 cut-off, arguing that pushing the deadline back could prevent close to a quarter of a million sales from collapsing. Yorkshire Building Society estimates that 240,000 sales worth £58bn could miss the deadline. While some banks and those within the property sector are calling for the stamp duty holiday to be extended, others have mooted a technical change that would mean contracts had to be exchanged by the end of March, with current rules saying deals must be completed by the end of Q1 2021. Nitesh Patel from Yorkshire Building Society has called on ministers to give buyers three months to complete purchases if their mortgage offer has been accepted by the current cut-off.

The Daily Telegraph, Page: 3

Treasury plans UK tax shake-up for asset holding companies

The Treasury has detailed proposed reforms to taxation of specialist vehicles used by private equity and infrastructure funds, a move that could “remove barriers” to establishing such companies in the UK.

Financial Times, Page: 2

Wealth tax debate

With former MP Michael Meadowcroft having suggested that land could offer a viable route to taxing wealth, Robert Rhodes, QC, writes to the Times to argue this may be “unduly optimistic”. He says most land outside towns and cities is used as working farmland, with few farms sufficiently profitable to bear a wealth tax. He adds that a wealth tax is “not a realistic option to raise a huge amount of money quickly”.

The Times, Page: 30


Record spike in redundancies

Office for National Statistics (ONS) figures show that redundancies rose by an all-time high as 370,000 jobs were lost in the three months to October. The losses mean the jobless rate has hit 4.9%, up from 4.8% in September to the highest level since 2016. The number of UK workers on payrolls has fallen by 819,000 between February and November due to the impact of the coronavirus pandemic. On top of this, the ONS estimates that around 4.5m workers are currently on furlough. Experts have suggested that the Chancellor may be forced to extend the furlough scheme beyond March, with Investec’s chief economist Philip Shaw warning that a no-deal Brexit may have an impact, saying: “That is a non-C OVID-19 event but one that could disrupt the economy in such a way to persuade the Chancellor to extend.” Paul Dales, chief UK economist at Capital Economics, said that if the pandemic means the Government is forced to continue tiers or lockdowns beyond March, “I think they are obliged to continue the furlough.”

The Daily Telegraph The Guardian, Page: 37 The I, Page: 8 Daily Mirror, Page: 2


UK firms see highest impairment charges since 2012

UK companies have recorded the highest goodwill impairments since 2012, with Duff & Phelps analysis showing that FTSE 100 companies recorded an aggregate impairment of €16bn in 2019, a 248% increase on the year before. UK companies within the pan-European Stoxx 600 recorded a 172% increase in impairment charges, with an aggregate of €19.3bn. Michael Weaver, Duff & Phelps’ managing director and head of valuation advisory, said: “The data is already showing that aggregate goodwill impairments will likely exceed 2019 levels as the effect of C OVID-19 as well as Brexit negotiation uncertainty continue to weigh on companies’ outlook”. He added that while the full impact of the pandemic remains uncertain, “the outlook for European companies has deteriorated significantly from the beginning of the year”, with analysts dramatically cutting earnings growth forecasts for 2020.

City AM

WPP gets its numbers wrong by £300m

Advertising agency WPP has admitted to understating its losses by £301m, with the accounting error meaning a record half-year loss of £2.6bn reported in August has been corrected to a loss of £2.9bn. WPP said its finance team spotted the error after the results were issued, adding that it plans to restate accounts for 2017 to 2020 to correct them. Lord Sikka, a professor of accounting at Sheffield University, said the disclosure raised questions about why no one at WPP or Deloitte – which signed off accounts in 2017, 2018 and 2019 – spotted the mistake sooner. He commented: “What on earth were the auditors doing and where are the regulators?”

Daily Mail, Page: 65 The Times, Page: 46


Pandemic prompts insolvency warning

Patrick Collinson in the Guardian reflects that while UK Insolvency Service figures show that individual bankruptcies and debt relief orders have fallen over the last year to the lowest level in a decade, the Citizens Advice Bureau has warned that the coronavirus crisis has driven up energy bill debt, unemployment and rental arrears. He highlights that the number of applications forcing someone into bankruptcy has fallen as various initiatives reduced proceedings, while noting that a “broad system of support” for those in debt has emerged. However, Mr Collinson says the “great reckoning is to come”, with history pointing to an 18 month to two-year lag after a crisis “before the proverbial rug gets pulled”. He notes that the peak period for individual insolvencies was in Q4 2009 – two years after financial crisis first hit. “Expect that record crash; and many people’s lives – to be shattered some time in 2022”, he warns.

The Guardian, Page: 39


Big Four employ CCP members

Documents seen by the Telegraph show that the Big Four have employed more than 2,000 members of the Chinese Communist Party (CCP), including at least one partner in every firm. At least 400 KPMG staff had CCP membership in 2016, while EY and Deloitte each employ more than 800 party members, including Deloitte’s deputy director in China. The report also shows that some senior staff at PwC are members, including at least one partner. MP Bob Seely, a member of the Foreign Affairs Select Committee, said the issue “is a bizarre and scandalous state of affairs,” arguing that alongside an “espionage risk, which is clearly highly serious in itself”, the matter raises “significant questions” about client confidentially. The Telegraph notes that there is no evidence to suggest that any of the CPP members have prejudiced the interests of clients.

The Daily Telegraph, Page: 1


To save the high street, first fix business rates

An FT editorial calls for reform of the business rates system, saying it needs to be fit for purpose so as to help address the challenges facing the retail sector.

Financial Times, Page: 24


Capital Economics issues optimistic prediction

Economists at consultancy Capital Economics have predicted that the coronavirus vaccine will see the UK economy recover more quickly than most analysts expect. While the Government’s official forecaster has predicted growth of 5.5% in 2021 and 6.6% in 2022 following a decline of 11.3% this year, Capital Economics believes that following a record decline of 11.5% this year, the economy will grow by 7.5% next year and by the same rate the year after. Paul Dales, chief UK economist at Capital Economics commented: “We think the C OVID-19 crisis will lead to minimal long-term scarring. Later this decade GDP will return to the path it would have been on if C OVID-19 never existed.” The firm also suggested that chancellor Rishi Sunak will not raise taxes or reduce spending in 2021 or 2022.

City AM

Retail sales fall north of the Border

The latest monitor from the Scottish Retail Consortium and KPMG shows that retail sales in Scotland fell by 10.2% last month compared with November 2019. On a like-for-like basis, sales decreased by 9.6%. Paul Martin, UK head of retail at KPMG, said ongoing localised lockdowns have “hit the sector at a time when it usually reaps the rewards from a pre-Christmas sales surge.” He added: “November’s data reflects the near-daily fight for survival facing many of Scotland’s retailers.”

The Scotsman, Page: 40 The Press and Journal, Page: 31

Contact Paul Southward

Paul Southward






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

Contact Paul Southward

Paul Southward





PM vows to overhaul business taxes

Boris Johnson has pledged an overhaul of business taxes in a bid to drive Britain’s post-coronavirus recovery. The Prime Minister said the Government would be looking at taxation and regulation in a bid to encourage and support businesses. During an online Q&A, Mr Johnson said Chancellor Rishi Sunak is looking at the fiscal and regulatory environment required “to make sure that this is the best place in the world to start a business, the best place to invest.” The Telegraph’s Harry Yorke says the PM’s comments could “set him on a collision course with fiscal hawks in the Treasury”, with the Chancellor considering ways to cover the nation’s coronavirus costs. The paper says that while Mr Sunak is studying proposals that suggest bringing capital gains in line with income tax and mulling a cut in pensions tax relief for higher earners, he is understood to be sympathetic to calls for cuts to business rates. The FT notes that the Chancellor hinted in his spending review that tax rises may be imminent, with the outlook for public finances “clearly unsustainable”.

The Daily Telegraph, Business, Page: 1 The Times, Page: 48 Financial Times


Retail failures will shine a spotlight on auditors

Menzies partner James Hadfield says corporate failures in the retail sector could see focus turn to auditors. This week has seen Arcadia and Bonmarche collapse into administration, while it was confirmed that Debenhams is being wound up – and Mr Hadfield said he can foresee further failures. He told a webinar: “It wouldn’t surprise me if there were more failures coming through … It’s been such a challenging time for businesses.” He argues that auditors “don’t have a crystal ball, and there’s only so much that we could be expected to predict” but suspects “the spotlight will once again fall on the auditor” in some cases. Noting that many of the firms that collapse will have had their last audit signed off during the pandemic, Mr Hadfield says: “You would hope that auditors will have taken the right level of risk aversion in their opinion and made the necessary disclosures, but there will be some examples where there are unforeseen circumstances”.

City AM


Supermarkets to pay back rates relief

Asda, Sainsbury’s and Aldi have announced they will repay business rates relief received during the coronavirus pandemic, with Tesco and Morrisons having already committed to the move. The announcements mean the supermarket chains will collectively return more than £1.7bn. Asda yesterday said it will pay back its £340m relief in full, while Sainsbury’s will hand back £440m of rates relief and Aldi has pledged to repay £100m. They follow Tesco and Morrisons, who promised to repay £850m between them. Meanwhile, John Lewis, which owns Waitrose, said it has no plans to repay rates relief, insisting the support measure “remains crucial to help us navigate the crisis.” Reflecting on the business rates relief rolled out amid the coronavirus crisis, the Times’ Alistair Osborne says it highlights issues with the rates, saying there is a need for reform as retail increasingly moves online. He argues that the tax regime is skewed in favour of online retailers. Louisa Clarence-Smith in the same paper says repayment of the rates by the retailers has renewed scrutiny of the tax.

The Daily Telegraph The Times, Page: 45 Financial Times, Page: 14 The Daily Telegraph Daily Mail, Page: 79 The Guardian, Page: 35 The Independent, Page: 49 The I, Page: 9 The Times, Page: 50 The Times, Page: 47


Arcadia could see half-price sale

Experts suggest that brands under the Arcadia umbrella could be sold for less than half of the amount they were worth at the start of 2020 following its collapse into administration. Arcadia’s brands were valued at £800m by consultancy Brand Finance in January, with Topshop alone accounting for almost £400m. However, Richard Haigh of Brand Finance says the brands will now be worth less than half that figure. He said: “Ultimately, you are always going to see a reduction in price when you go into administration because people know you have to sell”. He added that with the coronavirus crisis adding further damage, “I would say the price will be below 50% of what we had valued.” The Telegraph says Arcadia’s administrator Deloitte will be seeking to preserve as much of the business as possible, meaning buyers are likely to get preferential treatment if they are wil ling to take on the entire operation, rather than just the brands and online platforms.

The Daily Telegraph, Business, Page: 3 The Independent, Page: 51 Daily Mail, Page: 17


Companies prepare to lift pay freezes

Private sector workers are set to receive average pay rises of 2.4% next year, according to Willis Towers Watson. While this year has seen a third of private sector companies freeze pay increases, this is expected to fall to just over 3% next year. The most optimistic industries include insurance, with an average increase of 2.9% on the cards, fintech (2.8%) and business and technical consulting (2.8%). The most pessimistic are leisure and hospitality (1.4%), construction, property and engineering (1.8%) and automotive (1.9%). Keith Coull, a senior director in Willis Towers Watson’s global data services business, commented: “After a difficult year for employers and employees, battling lockdowns, employee safety issues, working from home and declining revenues, many employers are finding ways to manage their employees with a more focused work and reward strategy.”

City AM


Turnover troubles put small firms at risk

Labour Party analysis suggests an estimated 390,000 small businesses are worried they will not survive the next three months. The report says around 1m small businesses do not have cash reserves to last beyond three months, with more than 520,000 small firms having seen turnover fall by more than half amid the pandemic, even before the recent England-wide lockdown. Labour says a majority of businesses forced to close during the latest lockdown received smaller Government grants than during the initial shutdown, with most seeing payouts a third or half of those received in March. Shadow Business Secretary Ed Miliband said: “Small businesses are being let down by shrinking government grants … Unless ministers change course we’ll see hardworking businesses go bust and high streets crumbling before winter is through.”

Daily Mirror, Page: 58 Daily Express, Page: 52


Economy shrinks, with services sector hit by lockdown

While the economy shrank in November due to the England-wide lockdown, the downturn was not as severe as analysts had feared. The IHS Markit/CIPS composite purchasing managers’ index (PMI) fell from 52.1 to 49 last month on an index where a figure above 50 points to growth. While this marks the first shrinking of the economy since June, it outperformed the fall to 47.4 economists had forecast. With the lockdown seeing the closure of many shops, restaurants and pubs, the service sector was the hardest hit, with the services sector PMI falling from 51.4 to 47.6 in November. An increase in Brexit-related stockpiling offered a boost the manufacturing sector, however, with the manufacturing PMI up from 53.7 to 55.6, its highest reading since December 2017. Economists note that the PMI captures whether business activity is rising or falling but not by how much. Samuel Tombs, an economist at Pantheon Macroeconomics, suggests the economy most likely shrank by 5% last month and will rebound by about 4% in December.

The Times

Sales up in November

Analysis from BDO shows that combined in-store and online retail sales rose 3.3% year-on-year in November amid heavy discounting on – and in many cases ahead of – Black Friday. The increase delivered the best November performance since 2017. While like-for-like lifestyle sales were up 17.6 %, fashion sales slid by 5.7%. Sophie Michael, BDO’s head of retail and wholesale, said: “While November results were promising, the figures have been heavily impacted by widespread discounting and lockdown’s knock-on effect on in-store sales and strong online demand.”

The Times, Page: 48 The I, Page: 51


The problem with zero-carbon pledges

The FT looks at banks’ climate change policies, citing PwC research showing that only 29% of UK lenders have “a science-based or net-zero climate target”.

Financial Times, FT Wealth, Page; 32

Contact Paul Southward

Paul Southward





Chancellor hints at tax rise

With the UK deficit on course to hit £394bn this year due to the increasing cost of the coronavirus crisis, Rishi Sunak has suggested tax rises could be needed sooner rather than later as he looks to balance the books. The Chancellor told Times Radio that with interest rates low, “servicing that debt, the interest we pay on that debt is exceptionally low, which means it is affordable.” Noting that the country is “much more sensitive” to changes in interest rates and inflation, he added: “And if they moved against us, that’s problematic.” The Telegraph’s Harry Yorke cites Government sources who last night insisted it is too early to discuss potential tax rises, adding that any decisions were unlikely to come until the economic outlook was more certain.

The Daily Telegraph, Page: 2

Sunak warned over tax hikes and austerity

Experts warn that inheritance tax bills could increase as the Treasury moves to stabilise the economy in the wake of the coronavirus pandemic, with a review carried out by the Office of Tax Simplification laying out potential changes to capital gains tax that could also have consequences for IHT bills. Graham Boar of UHY Hacker Young says recent proposals are “designed to increase tax revenue and add complexity rather than simplify CGT.” Meanwhile, Richard Murphy of Tax Research UK reflects on options open to Chancellor Rishi Sunak, saying: “If he opts for austerity and tax hikes, then frankly we are heading for depression rather than a recession.”

Daily Express

HMRC clarifies stamp duty rules on mixed use buildings

HMRC has clarified rules regarding stamp duty payments, stating that investors buying buildings which consist of residential and commercial premises should not be forced to pay a 3% surcharge usually applied to buy-to-let properties and second home purchases. Blick Rothenberg says that many landlords who own mixed use buildings will have paid over the odds and could now be entitled to claim the tax back. The firm’s Sean Randall said a “significant tax saving may be due” for some owners.

The Daily Telegraph

Taxman criticised over scam stance

A Work and Pensions Committee inquiry has been told that HMRC has benefited from criminal activity by pursuing victims of pension scams. Victims have told MPs, money had vanished despite being in funds registered with HMRC, with some then facing fines because the schemes broke tax laws. Labour MP Debbie Abrahams said the registration of pension schemes by HMRC and the Pensions Regulator appeared “absolutely worthless”, while Rick Muir of the Police Foundation told the hearing that the Revenue’s approach to victims was “unrelenting and uncompromising”.

Daily Mail, Page: 23


IS urged to ‘rigorously’ examine Arcadia report

Business Secretary Alok Sharma has asked the Insolvency Service (IS) to take a “rigorous” look at the actions of directors at Arcadia and their conduct in regard to the collapsed retail empire’s pension scheme, which has a £350m deficit. As is normal practice in such circumstances, administrators Deloitte are required to provide the IS a report into the conduct of directors within three months. Meanwhile, Lady Tina Green, the retailer’s ultimate owner, is to add the second half of a promised £100m injection into the fund within the next 10 days. The payout had been due in September 2021 as part of a previously struck agreement with The Pensions Regulator and trustees.

The Guardian, Page: 35 The Daily Telegraph, Business, Page: 1 Daily Mail, Page: 28 Daily Mirror, Page: 20 Financial Times, Page: 9 The Times The Independent, Page: 51 Daily Mirror, Page: 20 Daily Express, Page: 7

Bonmarché back in administration

Retailer Bonmarché has fallen into administration for the second time in little more than a year, putting almost 1,600 jobs at risk. Administrators at RSM have been appointed to find a buyer for the chain, with the retailer expected to continue trading while RSM assesses its options. Bonmarché was snapped up by retail entrepreneur Philip Day in February. His other brands – including Peacocks, Jaeger and Edinburgh Woollen Mill – went into administration last month. Damian Webb of RSM says interest to date suggests that there will be a number of potential buyers.

The Times

Debenhams claimed £40m under furlough scheme

HMRC records show that Debenhams, which is being liquidated after FRP Advisory was unable to find a buyer, claimed £40.5m through the furlough scheme after it fell into administration. A spokesman for Debenhams said the money was used “in exactly the way the scheme was intended”, to preserve jobs while stores were closed during the coronavirus lockdown. The Telegraph notes that administrators are allowed to furlough staff and make claims under the job retention scheme, with HMRC saying this should only be used if there is a reasonable likelihood of retaining the employees.

The Daily Telegraph, Business, Page: 1

Prezzo on the menu for investment firm

Restaurant chain Prezzo has been bought by private investment firm Cain International for an undisclosed sum. Cain said it bought Prezzo, which underwent a CVA in 2018, as a going concern after it was put up for sale by the private equity firm TPG, with FRP Advisory hired to conduct an auction in July. Elsewhere, natural fast-food chain Leon has appointed Quantuma to launch a CVA that will seek to deliver a reduction in rents.

The Daily Telegraph, Business, Page: 3 The Times, Page: 50 The I, Page: 52


Tesco and Morrisons repay rates relief

Tesco has announced that it will repay £585m in business rates relief received from the Government during the coronavirus crisis, with chairman John Allan describing it as “the right thing to do” now that some of the risks from the pandemic were behind the business. Morrisons has also vowed to return the Government support, saying it will hand back its £274m of rates relief. Experts from real estate advisers Altus Group estimate that between them, Britain’s four largest grocers – Tesco, Sainsbury’s, Asda and Morrisons – and German discounters Aldi and Lidl would save around £1.87bn via the rates holiday.

The Daily Telegraph, Business, Page: 1 The Guardian, Page: 35 Daily Mail, Page: 86 The Independent, Page: 50 The Times Financial Times, Page: 14  Daily Mirror, Page: 8 Daily Express, Page: 53 City AM


Wages in UK kept down by pandemic

A report from the International Labour Organisation (ILO) shows that the UK has seen the clearest drop in wages during the coronavirus pandemic, with average real wages down by around 2% in the first half of this year compared to 2019. The analysis highlights that countries including Canada, France, Italy and the US have seen average pay levels rise during the crisis, with this attributed to the fact that most of those losing jobs were low earners. The report also shows that among G20 countries, the UK saw the joint-biggest fall in average real wages between 2008 and 2019, with Japan and Italy the only other countries to record a decline. The period saw real wages in the UK slip by 4%.

The Daily Telegraph, Business, Page: 3


Vaccine may protect against house price slump

Analysts believe the approval of a coronavirus vaccine could help prevent a downturn in the housing market. Although the market has been strong since the end of the UK’s initial lockdown – with Office for National Statistics data showing a 4.7% year-on-year price increase in September and Nationwide reporting a 6.5% annual climb in November – there has been concern that the end of the stamp duty holiday in March 2021 might see prices and activity slide. PwC economist Jamie Durham says a vaccine and the potential for a return to something nearing normality by Easter “may help to mitigate the risk of a more severe downturn in house prices in 2021 than would otherwise have been the case.”

Daily Express


Analysts: Vaccine will inject optimism but economic benefits may take months

Analysts have predicted that the approval – and impending rollout – of the Pfizer/BioNTech coronavirus vaccine is unlikely to deliver an immediate boost to the economy. Michael Hewson, chief market analyst at CMC Markets, said that even if the first round of jabs are given out this month “it’s likely to be several months before we start to see a possible economic benefit in terms of an easing of restrictions”. Caroline Simmons, CIO at UBS Global Wealth Management, said the vaccine will inject a “dose of optimism” into domestic and global markets, saying global output and corporate earnings “are on course to return to pre-pandemic highs by the end of 2021”. PwC chairman Kevin Ellis said the start of the immunisation programme may support consumer spending in the short term and enable employers to plan for a post-coronavirus world. “The economy will recover , but won’t look exactly the same and people will need help with the transition,” he added.

City AM

Contact Paul Southward

Paul Southward





OECD candidate optimistic over tech tax

Michal Kurtyka, a candidate to become secretary-general of the Organisation for Economic Co-operation and Development (OECD), says agreement over an international tax on large tech companies is possible if countries show “political will”. The OECD has been overhauling tax rules but a lack of agreement has prompted many countries, including the UK, to press ahead with their own measures for taxing tech giants. Commenting on the efforts, EY’s Chris Sanger said the OECD will look to convince states that there is “a workable solution that can be implemented and managed.”

The Daily Telegraph, Business, Page: 3

MPs warn Chancellor over end to tax-free shopping

A group of Conservative MPs have written to Rishi Sunak, warning the Chancellor that axing duty-free shopping will make Britain less attractive to international visitors. The MPs told Mr Sunak that they believe the tax rethink will “set back the Government’s levelling-up agenda, and damage our ambitions for a global Britain.” Retail groups say tax-free shopping is worth £3.5bn a year and directly supports 70,000 jobs.

Daily Mail, Page: 20

Superdry boss calls for VAT ‘goodwill gesture’

Julian Dunkerton, CEO of fashion retailer Superdry, has called on ministers to cut VAT and extend business rates relief to support stores hit by England’s national lockdown. He said a 5% reduction in VAT in December would be a “goodwill gesture” from the Treasury to the public and retailers. Mr Dunkerton also called for “targeted help” in regard to business rates, saying any extension of the holiday from the levy should not apply to supermarkets or food retailers as they have been able to remain open during lockdowns.

The Daily Telegraph, Business, Page: 1

HMRC launches tax crackdown on businesses shifting profits overseas

HMRC is cracking down on profit diversion by multinationals, asking firms to review their transfer-pricing arrangements having found that large businesses with UK operations may owe an additional £34.8bn in tax for 2019/20.

Financial Times, Page: 1

Taxing of private equity needs a rethink

The FT looks at tax and private equity, saying reform of capital gains tax proposed in a government-commissioned review could help address concerns centred on taxation of the industry. The paper’s Jonathan Ford says that with buyout groups’ executives paying a lower rate of CGT, it is “fiscal perk” that has helped create many billionaires in the private equity sphere.

Financial Times, Page: 24 Financial Times, Page: 13


Firms lack Brexit plans

A study from BDO shows that almost two in five medium-size businesses have no plan for Brexit or have delayed their preparations as a result of the coronavirus outbreak. More than a quarter of 500 business leaders surveyed said adapting their plans for Brexit is their most immediate concern. BDO managing partner Paul Eagland comments: “There are rough seas ahead for businesses. As we draw closer to exiting the EU, it is important that those in the sectors most impacted are offered support and information to help them navigate a myriad of complex challenges.”

The I, Page: 4

Arcadia denies administration reports

Retail group Arcadia Group has rejected reports it is about to enter a type of administration that would allow it keep trading while selling its assets. It came after a Sunday Times report claimed Arcadia was drawing up plans for the administration and a break-up of Sir Philip Green’s retail empire, with Deloitte administrators reportedly set to be appointed. However, Arcadia declined to comment on reports it is in talks to secure £30m in loans and in negotiations with the Pensions Regulator and its lifeboat fund over a £350m pensions black hole.

The Daily Telegraph, Business, Page: 1 Financial Times


Further criticism of rates boost for retailers

With it revealed that Tesco, Sainsbury’s, Asda, Morrisons, Aldi and Lidl will save around £1.87bn thanks to a business rates holiday rolled out amid the coronavirus crisis, the chains have come under fire, with critics noting that supermarkets have seen strong sales during the pandemic. The fact that some of the chains have made dividend payments while accepting state support has also drawn criticism. Retail analyst Richard Hyman says “something doesn’t feel right or smell right” about the shareholder payouts, given the circumstances. Robert Hayton, head of property tax at Altus Group, said that with some parts of the retail sector thriving during the pandemic, “the rates holiday has been the icing on an already very sweet cake.” Shadow Business Minister Lucy Powell believes firms that received government subsidies but performed strongly should waive their entitlement to the rates holiday, urging them to “do the socially and morally responsible thing”. Conservative MP Esther McVey said supermarkets should hand back the money, suggesting it would be better directed toward owners of small companies that have not been eligible for emergency support.

The Guardian, Page: 12 Daily Mail, Page: 10 Financial Times, Page: 3


Office exodus puts valuers in the spotlight

Louisa Clarence-Smith in the Times looks at concerns over office valuations, noting that vacancies are rising and rents are falling while some of the UK’s biggest corporate office occupiers, including Deloitte, are looking to shift toward home-working following a change in working practices brought about by the COVID-19 pandemic. Ms Clarence-Smith notes that the ICAEW raised the alarm about the lack of evidence for objectivity of property valuations in accounts in September.

The Times, Page: 36


Investors call on European businesses to include climate change risks in accounts

Investors have urged large companies to include climate change risks in financial statements. A recent Financial Reporting Council review found that few listed companies’ statements made reference to the issue.

Financial Times, Page: 12


Incomes barely boosted by lockdown exit

A report from the Resolution Foundation think-tank shows that the end of Britain’s first coronavirus lockdown did little to boost the incomes of people hit financially by the restrictions, with the proportion of adults reporting a drop in incomes hitting 23% in Q3 compared to 27% in Q2. Those in the top 20% income band were more likely to have seen their finances improve than deteriorate from before the pandemic, with many managing to save more, while those on £13,000 a year were more than twice as likely to have seen their budgets deteriorate.


Pandemic widens wealth gap

Research from the Centre for Enterprise, Markets and Ethics (CEME) shows that the coronavirus crisis has widened the wealth gap between rich and poor people in the UK. The think-tank says that a third of people now have less than £1,500 in the bank, with many lower-paid employees’ finances taking a hit as they have been furloughed or made redundant. The CEME report says households have been able to save an average of 29.1% of their disposable income since March, while savings ratios in 2019 stood at around 5%. CEME has suggested an increase in tax relief on savings would encourage more investment by the less well-off, with the think-tank also calling for higher interest rates on savings.

Daily Express, Page: 5 City AM


German auditors fight tighter regulation after Wirecard scandal

Germany’s auditing industry has questioned government plans for tougher regulation following the Wirecard accounting scandal, with the chief executive of Germany’s association of accountants describing the plans as a “knee-jerk reaction”.

Financial Times


Analysts: Toxic loans could hit eurozone economy

Analysts at UBS have warned that the eurozone economy risks being stifled by a surge in toxic loans, with corporate debt levels pointing to an increase in defaults next year. While stimulus measures from policymakers amid the coronavirus crisis have delayed possible bankruptcies, UBS analysts say defaults could almost quadruple in Italy, rise 180% in Spain and double in Germany and France.

The Daily Telegraph, Business, Page: 3


Sunak to invite freeport bids

Chancellor Rishi Sunak will today detail plans for low-tax business hubs, inviting bids for at least seven “freeports” in England. Cities and towns with freeport status will benefit from tax breaks, simpler customs procedures and Government support to attract investment.

Daily Express, Page: 4

Contact Paul Southward

Paul Southward






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.

The Independent, Page: 34 The I, Page: 27

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.

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

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