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NEWS – FRIDAY 18TH DECEMBER 2020

NEWS – FRIDAY 18TH DECEMBER 2020

NEWS ROUNDUP

COVID-19 SUPPORT FOR BUSINESS

CORONAVIRUS JOB RETENTION SCHEME EXTENDED TO END OF APRIL 2021

CJRS-extension.pdf

TAX NEWS – FRIDAY 18TH DECEMBER 2020

HMRC defends tax debt enforcement

Mary Aiston, HMRC’s director of counter-avoidance, has defended enforcement tactics utilised by the Revenue, telling a House of Lords committee that it has acted “in the most sensitive way” when handling tax debts. This came after a Times investigation uncovered examples of aggressive tactics, with people struggling due to the economic impact of the coronavirus pandemic threatened with repossessions and accused of “deliberately” choosing not to repay tax debts. Viscount Chandos, a member of the House of Lords economic affairs finance bill sub-committee and chairman of the credit services association, asked Ms Aiston about the reports. She said early in the pandemic the Revenue had “pulled back from a huge amount of our debt collection” before restarting it “in as sensitive and data-led way as we can”. She added that the fact a “very, very high percentage quid pro quo; of payment terms reached with people are successful shows HMRC does “take a lot of care to reflect people’s personal circumstances and the sensitivity of being in tax debt”.

The Times, Page: 24

Hard to sell an online retail tax?

The Telegraph’s Ryan Bourne considers the implications of an online sales tax, with a poll showing that 56% of people believe web retailers should be taxed more to help drive down national debt. He suggests that the public will be less keen on an online sales tax once they are aware it will mean prices rise. He also argues that while some within government have suggested such a levy is needed, to “use taxes to try to prevent new business forms acquiring market share is especially damaging when consumers’ preferences are shifting sharply towards them.” Mr Bourne notes that proponents of an online sales tax say it will level the playing field between online and physical retailers, with the latter burdened more heavily by business rates. However, he argues that business practices designed to avoid the high fixed costs associated with inner-city rents and rates are “afforded to all retailer s”.

The Daily Telegraph, Business, Page: 2

Windfall tax could balance the books

Leo McKinstry in the Express says that large tech firms which have seen a “dramatic surge” in revenues during the coronavirus crisis should be the target of a windfall tax. He argues that such a move would boost public finances which “have been battered by the pandemic”, noting that national debt now exceeds £2trn while annual borrowing could reach £400bn this year. Mr McKinstry notes that some experts say a wealth tax on assets over £500,000 or a rise in corporation tax could help balance the books but warns that such levies could prove counter-productive by undermining enterprise. They are, he says, blunt instruments, whereas a windfall tax is a “precision weapon”.

Daily Express

The pandemic is an opportunity to simplify UK tax rules

BDO ’s Paul Falvey believes the coronavirus pandemic presents HMRC the opportunity to simplify the tax system, warning that it is a “confused and confusing web of rules” which “lacks coherence”.

Financial Times, Page: 2

CORPORATE NEWS – FRIDAY 18TH DECEMBER 2020

Businesses more concerned over COVID restrictions than Brexit

A new survey of more than 600 mid-market businesses by Grant Thornton has found the majority remain positive ahead of the UK’s exit from the EU. Only a fifth believe that Brexit will negatively impact on their business in the next six months, while 31% think it will not have any impact. Business leaders are more concerned about the negative impact of continued coronavirus-related restrictions. The poll saw 41% say further lockdown restrictions would be bad for their business, while 22% think Brexit would have a negative impact.

City AM

Facebook tax bill ‘beggars belief’

Facebook has been told to “pay its fair share” after its accounts revealed a slight increase in its tax bill despite profits surging. While operating profits climbed to £122m in 2019 from £97m the year before and recognised revenue climbed from £797m to £1.07bn, its total income tax outlay was £28.6m compared to £28.5m a year earlier. Margaret Hodge, former chair of the Public Accounts Committee and current chair of a parliamentary group on responsible taxation, said the tax figure “beggars belief”. “Facebook and the rest of the tech giants must do their moral duty and pay their fair share,” she added.

The Daily Telegraph, Business, Page: 5 The I, Page: 12 The Sun, Page: 8

Spotify pays less than £1m in UK tax

Despite global revenues of £6bn last year, Spotify UK paid £994,152 in tax to the Treasury. The firm had turnover of £90.3m in the UK with a pre-tax profit of £6.3m, with this far below the £434m in revenue reported by its parent company. A second Spotify UK business which earns money from intercompany commission fees generated £19.3m in turnover in 2019 and paid no corporation tax.

Daily Mirror, Page: 17 Daily Express, Page: 15

EMPLOYMENT NEWS – FRIDAY 18TH DECEMBER 2020

Chancellor extends furlough scheme

Chancellor Rishi Sunak has extended the furlough scheme for a month, with the job retention scheme to run until the end of April 2021. Confirming that the Government will continue to pay up to 80% of the wages of workers who have been furloughed, Mr Sunak said the move would provide “certainty for millions of jobs and businesses”.

The Daily Telegraph The Times BBC News

FINANCE NEWS – FRIDAY 18TH DECEMBER 2020

Loan schemes extended

The Treasury has announced extensions of its business loan guarantee schemes until the end of March. The new round of funding from the Treasury covers the Coronavirus Business Interruption Loan Scheme, the Bounce-Back Loans Scheme and the Coronavirus Large Business Interruption Loan Scheme. Rain Newton-Smith, chief economist at the Confederation of British Industry, said that “with cashflow difficulties still at the forefront of the minds of many business owners, continued access to Government-backed loans through to Spring will bring great comfort.”

The Times Financial Times The Daily Telegraph City AM

ECONOMY NEWS – FRIDAY 18TH DECEMBER 2020

BoE holds interest rates at 0.1%

The Bank of England (BoE) has kept interest rates at the lowest levels on record, with its monetary policy committee voting unanimously to keep the official interest rate at 0.1%. The committee also opted to keep the Bank’s quantitative easing bond-buying programme unchanged at £895bn, having pumped an additional £150bn into the economy last month. The BoE says it expects GDP to be down by 11% over 2020, with pandemic-driven lockdowns and restrictions delivering a decline in Q4, although a projected increase of 2.1% in Q1 2021 is set to avert a double-dip recession. The committee said the development of coronavirus vaccines was “likely to reduce the downside risks to the economic outlook” but warned that if no post-Brexit trade deal is agreed with the EU, “inflation would be likely to be higher and GDP growth weaker” than projections made in November. Meanwhile, economic output grew by 0.4% in October, the Bank revealed, but it still remained around 8% lower than at the end of 2019.

The Times The Guardian Daily Mail Sky News

Inflation expectations on the up

A YouGov poll for Citi shows that people expect average inflation in the UK over the next 12 months to hit 3.8%. The figure, which is up from 3.3% in November, is the highest since 2011. The poll of 2,020 people shows that expectations for inflation over a five- to 10-year period held steady at 3.4%. Citi economists said: “Despite recent moderation, inflation expectations remain relatively high.”

Reuters

OTHER NEWS – FRIDAY 18TH DECEMBER 2020

UK leads the world on cutting emissions

Analysis by PwC shows that the UK has cut its carbon emissions more than any other country this century, with carbon emissions down by 3.7% every year as it expanded the use of renewable energy while using less coal, natural gas and oil. The firm says countries need to cut CO2 production by 11.7% a year to meet targets set out in the Paris Agreement.

Daily Mail, Page: 15

Jet boost for economy

Lockheed Martin’s F-35 fighter jet will generate economic benefits of more than £40bn by 2038, mostly through its supply chain, according to a report from KPMG which also notes that the programme will support 20,000 British jobs a year.

The Sun, Page: 54

Contact Paul Southward

Paul Southward

NEWS – THURSDAY 26TH NOVEMBER 2020

NEWS – THURSDAY 26TH NOVEMBER 2020

NEWS ROUNDUP

COVID-19 SUPPORT FOR BUSINESS

SELF EMPLOYED INCOME SUPPORT SCHEME (SEISS) GRANTS

Full details of the third SEISS grant to support self-employed people affected by coronavirus (COVID-19) have been published on GOV.UK.

The rules for eligibility have changed but taxpayers will still need to have submitted a Self-Assessment tax return for the tax year ended 5 April 2019, showing self-employment income in order to claim.  (Exceptions may apply).

The third grant, which offers 80% of three months’ average trading profits, paid out in a single taxable instalment capped at £7,500, will be available covering the period from 1 November 2020 to 29 January 2021. Self-employed people who are eligible and in need of support will be able to claim the third grant at any time from 30 November 2020 to 29 January 2021.

Here is what you need to do: –

Check your eligibility to claim: –

SEISS

We can check for you, but you must make the claim yourself.  Claiming should be simple and only takes a few minutes.

For the third SEISS grant you must:

  • either be currently trading but are impacted by reduced activity, capacity or demand, or have been previously trading but are temporarily unable to do so due to coronavirus
  • declare that you intend to continue to trade, and that they reasonably believe that the impact on their business will cause a significant reduction in their trading profits
  • only claim if the reduction in profits is caused by reduced business activity, capacity or demand, or inability to trade due to coronavirus – reduction in profits due to increased costs (such as having to buy masks) does not count for this purpose.

We can assist you with the process

The business must have been impacted on or after 1 November 2020. You must keep evidence to show the impact and reduction in their business activity across the qualifying period.

Get in touch with your usual KSK contact for further information.

TAX NEWS – THURSDAY 26TH NOVEMBER 2020

Despite warnings over tariffs, France demands digital tax payments

The French finance ministry has begun demanding digital tax payments on the 2020 earnings of technology giants, including the US firms Google, Amazon, Facebook and Apple. The move comes despite threats from Washington that tariffs could be imposed on French imports in retaliation. The 3% tax will apply to digital companies that have global revenues of over €750m (£669m), and French revenues over €25m. About 30 companies, mostly based from the US, but also from China and Europe, will be affected. The UK is due to begin collecting its own 2% digital tax in April. The EU, meanwhile, has threatened to go it alone with a technology tax if the OECD does not act.

The Daily Telegraph, Business, Page: 7 Financial Times, Page: 6

Home working costs Treasury £9bn in tax receipts

Tax revenue has slumped as millions of workers undertake their duties from home, reducing spending on commuting and business trips, leading to losses on fuel duty and air passenger duty. Car fuel duty income is set to plummet by £5.7bn this year, while ministers expect £3.6bn less from air passenger duty. Tom Selby, senior analyst at AJ Bell, said: “Having the vast majority of the country working at home for much of the year has played havoc with the Treasury’s tax receipts.” Meanwhile, home workers are costing an extra £25m in tax relief.

Daily Mail, Page: 82

EMPLOYMENT NEWS – THURSDAY 26TH NOVEMBER 2020

OBR: Unemployment to hit nearly 3m by spring

The Office for Budget Responsibility (OBR) has warned that 2.6m Britons will be jobless by the second quarter of 2021 when the Chancellor’s support for millions of workers is withdrawn. Unemployment will reach a peak of 7.5%, well above the current level of 4.8%, but lower that the 12% predicted by the OBR in the summer. The jobless rate is forecast to return to 4.5% by 2024. In yesterday’s Spending Review, Rishi Sunak confirmed a “targeted” public sector pay freeze but said the Government will still provide an increase in wages for NHS workers. In addition, the 2.1m public sector workers that earn less than the median wage of £24,000 will be guaranteed a pay rise of at least £250. The national living wage will still increase by 2.2% to £8.91 next year, which combined with an increase in the minimum wage will benefit around 2m Britons. The Chancellor also announced a three-year £2.9bn Restart scheme to provide the long-term unemployed with tailored and intensive jobs support. Some £1.4bn will be provided to increase Job Centre Plus capacity.

The Daily Telegraph The Daily Telegraph BBC News The I, Page: 8 Daily Mail, Page: 6

FINANCE NEWS – THURSDAY 26TH NOVEMBER 2020

Taxpayer faces £40bn bill for emergency loans

The Office for Budget Responsibility (OBR) has warned that between £30bn and £40bn will be lost to soured coronavirus loans, an increase on earlier predictions. The figures come as banking industry chiefs warn that billions of pounds of Government money is being lost to fraudsters. Virgin Money chief executive David Duffy said yesterday that his bank had decided to only hand out Bounce Back loans to existing customers in order to reduce fraud. Meanwhile, the Government-backed British Business Bank (BBB) estimates that 5% to 20%of the large businesses who have borrowed under CLBILS could default on their debt. The BBB also expects 10% to 25% of smaller CBILS borrowers and 35% to 60% of Bounce Back borrowers will become unable to pay back their debt.

Daily Mail, Page: 81

SMEs NEWS – THURSDAY 26TH NOVEMBER 2020

Mixed response to Spending Review

Business groups have given a lukewarm response to the Chancellor’s Spending Review, describing it as “sobering” and requiring bold decisions on the ground to deliver the sort of impetus the economy needs. The infrastructure bank plans were lauded by the British Chambers of Commerce as an important step in overcoming the nation’s “longstanding infrastructure deficit”, but the Federation of Small Businesses said the review was a “missed opportunity” to help smaller employers aid an economic recovery. Mike Cherry, national chairman, said: “A government which claims to be pro-enterprise had very little to say today about the importance of business and private sector job creation.” Darren Jones, chairman of the BEIS committee also said an opportunity was missed to “spell out more targeted support for sectors such as hospitality who continue to bear a terrible strain”.

The Times, Page: 42

HMRC data on Eat Out to Help Out scheme released

HMRC figures reveal that a total of almost £850m was claimed under the Government’s Eat Out to Help Out initiative, with some 93% of claims made by small businesses with only one outlet, while a total of 172 large businesses including the likes of McDonald’s and Pizza Express represented 18,134 outlets which had claimed during the scheme.

Evening Standard

CORPORATE NEWS – THURSDAY 26TH NOVEMBER 2020

Fraud investigation hits Lookers results

An investigation by Grant Thornton into car dealership Lookers which uncovered cash expenses fraud has led to a £25.5m hit to the chain. Lookers reported a £45.5m pre-tax loss in 2019, compared to a £41.9m profit in the year earlier period. Executive chairman Phil White remarked: “The last 12 months have been extremely challenging for Lookers with the ongoing impact of COVID-19 and the accounting issues. Significant restructuring activity has been necessary to ensure we lay the right foundations for the future.”

The Daily Telegraph, Business, Page: 7 Financial Times, Page: 12 Daily Mail, Page: 84

PENSIONS NEWS – THURSDAY 26TH NOVEMBER 2020

Millions of pension payouts to be cut under RPI reform

Millions of retirees will see the future value of their pension cut owing to a planned change in the way payments are calculated from 2030. The retail prices index measure of inflation will be altered in February 2030, saving the Government £2bn a year in interest payments on RPI-linked bonds. The Pensions Policy Institute has calculated that members of defined benefit schemes that use RPI will be about 9% worse off over their lifetimes. About 64% of schemes in the private sector are upgraded by using RPI. Holders of index-linked government bonds were told that they would receive no compensation for the change, which has been estimated to cost them as much as £100bn over the decades to come.

Money Marketing Daily Mail Daily Mirror

INDUSTRY NEWS – THURSDAY 26TH NOVEMBER 2020

Government harms business by delaying audit reform

The Government has been accused of damaging the reputation of the accounting sector by failing to act on reforming the industry regulator. It is almost two years since Sir John Kingman’s review recommended replacing the Financial Reporting Council with a tougher regulator. The Government has also not responded to Sir Donald Brydon’s recommendations for reforming the purpose of audits, which he published last December, and the Competition and Markets Authority’s recommendations for improving choice in the market. Alok Sharma, the business secretary, failed yesterday to offer a timeline for publishing its proposals for reform, leading Michael Izza, chief executive of the ICAEW, to say: “This question mark of trust over the regulator and the profession needs to be addressed. The longer that it goes on, the more damage potentially is being done to the profession and by extension business and UK prospects.” Scott Knight, head of audit at BDO, added: “We have long been saying there’s a risk that this will get kicked into the long grass, overshadowed by Brexit and the necessary economic recovery from COVID-19. It’s important for the international standing of UK plc that this legislation gets an appropriate hearing.”

The Times, Page: 47

Big Four taking bigger slice of legal pie

Research from Thomson Reuters found that British companies spent 13% more on alternative legal service providers than last year as they shift away from traditional law firms and choose to get legal advice from the Big Four accountancy practices. The increase elsewhere in Europe was about half that, at 7%.

The Times, Page: 59

INSOLVENCY NEWS – THURSDAY 26TH NOVEMBER 2020

Insolvency rules relief extended

A relaxation of insolvency rules designed to help business owners to trade through the pandemic has been reinstated and will now run until April 30 next year.

The Times, Page: 50

ECONOMY NEWS – THURSDAY 26TH NOVEMBER 2020

Sunak warns of ‘economic emergency’ as borrowing hits record £394bn

The Chancellor yesterday warned that the economic emergency made manifest by the coronavirus pandemic has only just begun and that there will be lasting damage to growth and jobs. The Office for Budget Responsibility (OBR) predicts that GDP will plummet by 11.3% this year and not return to its pre-crisis size until the end of 2022. Unemployment will hit 7.5% by the middle of next year with 2.6m people out of work. The UK is expected to borrow £393.5bn this financial year to help pay for economic relief measures. Borrowing is also forecast to remain above £100bn-a-year – or 4% of the size of the UK economy – in five years’ time. The head of the OBR, Richard Hughes, warned that Rishi Sunak will need to find £20bn to £30bn in spending cuts or tax rises if he wants to balance revenues and day-to-day spending, and stop debt rising by the end of this parliament.

Financial Times, Page: 1 The Daily Telegraph, Page: 1, 4 The Daily Telegraph The Times, Page: 1, 2 The I, Page: 8 The Guardian Daily Mail

Spending Review – key announcements

The Chancellor yesterday announced that the foreign aid budget would be reduced from 0.7% of GDP to 0.5% in 2021 but intends to return it to 0.7% when the fiscal situation has improved. Rishi Sunak also confirmed a new National Infrastructure Strategy that will invest £600bn over five years and £100bn next year – a £27bn year-on-year increase in real terms. Broadband, housebuilding and new roads are a key focus of this. A new National Infrastructure Bank based in the North of England has been launched and a new “levelling up fund” worth £4bn was unveiled. Health spending will increase, as will funds for schools while the Ministry of Defence has secured an additional £16.5bn over four years, making the department one of the big winners from the Spending Review.

Financial Times The Daily Telegraph The Times

OTHER NEWS – THURSDAY 26TH NOVEMBER 2020

UK local councils banned from making risky property bets

The Treasury announced on Wednesday that local authorities would be banned from accessing the Public Works Loan Board as a source of cheap finance to fund risky property investments.

Financial Times

Contact Paul Southward

Paul Southward

NEWS – TUESDAY 25TH NOVEMBER 2020

NEWS – TUESDAY 25TH NOVEMBER 2020

NEWS ROUNDUP

COVID-19 SUPPORT FOR BUSINESS

Here is an update on the latest information on the Coronavirus Job Retention Scheme and the VAT Deferral New Payment Scheme, see what actions you may need to be taking: –

Coronavirus Job Retention Scheme (CJRS)

The CJRS has been extended to 31 March 2021 for all parts of the UK.  From 1November, the UK Government will pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month. The government will review the terms of the scheme in January.

Employers and their employees do not need to have benefited from the scheme before to claim for periods from 1 November.

Time limits you need to be aware of

  • Submit any claims for periods up to 31October on or before 30 November – they will not be accepted after this date. Claims are subject to eligibility and the rules in force at the time.
  • Submit any claims for November, no later than 14 December. You can claim before, during or after you process your payroll as long as your claim is submitted by the deadline.
  • Keep any records that support the amount of CJRS grant you claim, in case HMRC needs to check them. You can view, print or download copies of your previously submitted claims by logging onto your CJRS service on GOV‌.UK.

For claim periods from 1 December, employers cannot claim CJRS grants for any days that their employee is serving a contractual or statutory notice period, including notice of retirement or resignation.

You can check if you’re eligible, and work out how much you can claim using HMRC’s  CJRS calculator and examples – here:

Gov.CJRS

Claims deadlines

There are now monthly deadlines for claims. Claims for periods starting on or after 1 November must be submitted within 14 calendar days after the month they relate to, unless this falls on a weekend in which case the deadline is the next weekday. The deadline to make claims for employees furloughed in November is Monday 14 December.

Here is a summary of the CJRS deadlines:

Claim for furlough days in;Claims must be submitted by:
November 202014 December 2020
December 202014 January 2021
January 202115 February 2021
February 202115 March 2021
March 202114 April 2021

Publishing employers’ information

HMRC will publish the names, an indication of the value of claims and Company Registration Numbers of employers who make CJRS claims for periods from December onwards. HMRC will notify you with details of when this information will be published.

For claim periods from December, employees will also be able to check if their employer has made a CJRS claim on their behalf through their online Personal Tax Account.

VAT Deferral New Payment Scheme

Businesses who deferred VAT due from 20 March to 30 June 2020 will now have the option to pay in smaller payments over a longer period. Instead of paying the full amount by the end of March 2021, businesses can make up to 11 smaller monthly payments, interest free. All instalments must be paid by the end of March 2022. They will need to opt-in to the scheme, and for those who do, this means that their deferred VAT liabilities do not need to be paid by the end of March 2021.

The VAT Deferral New Payment Scheme will require a Direct Debit to be set up as part of the digital opt-in process and this must be done by the authorised bank account holder. Because of that, HMRC is unable to provide an agent service for the scheme. Businesses that can pay their deferred VAT should still do so by 31 March 2021.

You can find further information on GOV.UK by searching ‘Pay VAT deferred due to coronavirus’.

TAX NEWS – TUESDAY 25TH NOVEMBER 2020

UK bosses rush to sell stakes over capital gains tax fears

City brokers and accountants say they had been swamped with calls from company bosses preparing to sell down stakes in businesses ahead of a potential increase in capital gains tax next year. Tim Stovold, partner at Moore Kingston Smith, calculated that selling a business worth £5m at current CGT rates would see an entrepreneur pay £900,000 in tax – a 10% CGT rate on the first £1m and 20% on the remaining £4m. However, if CGT and income tax rates were aligned and business asset disposal relief scrapped, an additional rate income taxpayer would pay CGT at 45% on the £5m business – a total of £2.25m. Heather Self, partner at Blick Rothenberg, said many of her clients who had been thinking about selling were bringing forward plans since a review commissioned by Rishi Sunak last week recommended aligning CGT with income tax. Separately, research by private equity firm Growthdeck found Londoners pay nearly 30% of the UK’s CGT despite being home to just 13% of the population, with taxpayers in Kensington and Chelsea paying the most. Gary Robins, head of business development at Growthdeck, said: “For over £500m of capital gains tax to be paid a year in Kensington & Chelsea is astonishing […] More taxpayers should look into whether EIS investment might be a sensible way for them to defer enormous CGT bills, as well as saving on income tax and inheritance tax.”

Financial Times, Page: 10 City AM

Energy industry calls for UK to adopt carbon trading after Brexit

The UK has been urged to reject calls for a carbon tax after Brexit and instead opt for a carbon trading system, arguing that this would be the most efficient way to cut pollution.

Financial Times, Page: 3

SMEs NEWS – TUESDAY 25TH NOVEMBER 2020

Government urged to tell shoppers to snub Black Friday sales

Retail and business groups have urged the Government to tell shoppers to avoid the Black Friday sales and save their Christmas spending for the high street. They warned that small shops could disappear from communities if they do not receive support when they reopen. Mike Cherry, chairman of the Federation of Small Businesses, said: “After eight months of disruption, and fresh restrictions on the way, small businesses need your help now more than ever. We’re calling on all shoppers to buy from independents over Black Friday and beyond – be that online, or safely in-person when they’re allowed to re-open their doors. It would be fantastic to see politicians of all stripes getting behind this message.”

The Daily Telegraph, Page: 5

New council powers to tackle COVID-19 breaches

Downing Street has announced new powers for local authorities, allowing them to shut down businesses for up to a week for breaching coronavirus regulations. The new measures will allow councils to “formally request rapid improvement” from offending firms, and close premises for 48 hours or seven days “where appropriate through the issuing of notices”, according to the Prime Minister’s spokesman. Breaking improvement notices and restriction notices will attract fines of £2,000 and £4,000 respectively. Business leaders warned against a “heavy-handed” approach. “The last thing a small business needs right now is the return of Captain Clipboard,” warned Craig Beaumont of the Federation of Small Businesses.

The Daily Telegraph, Business, Page: 1 Daily Mail

Ministers told to extend access to Ombudsman

Hundreds of thousands more small companies must be granted access to independent redress services, the Government has been told, in order to address an “imbalance of power” with telecoms and energy suppliers. The size of businesses able to make a complaint about telecoms or energy, for example, is different – with the limits described as “arbitrary” by the FSB. Matthew Vickers, chief executive of Ombudsman Services, said that it was regularly forced to “turn away” businesses because they were too large and that dispute resolution in energy and telecoms should be brought into line with financial services.

The Times, Page: 50

EMPLOYMENT NEWS – TUESDAY 25TH NOVEMBER 2020

Sunak pledges £4.5bn to help the unemployed back to work

Rishi Sunak will today pledge to spend £2.9bn to help a million unemployed people back into work. As part of his Spending Review, the Chancellor will announce a new “Restart” programme that will see those who have been out of work for more than 12 months provided with intensive and regular support that is tailored to their circumstances. Additionally, Mr Sunak will put another £1.4bn into extra help for those who have been jobless for more than three months. There will also be £1.6bn for the Kickstart scheme, launched in August, which the Treasury has said will create up to 250,000 state-subsidised jobs for young people. Matthew Fell, policy director of the CBI, said the chancellor was right to focus on job creation as the economy looked to recover in 2021. “COVID-19 has swept away many job opportunities, for young people in particular,” he said. “The scarring effects of long-term unemployment are all too real, so the sooner more people can get back into work the better.”

BBC News Financial Times The Times The Guardian Daily Mail

PROPERTY NEWS – TUESDAY 25TH NOVEMBER 2020

Property boom as buyers trade up

With the stamp duty holiday boosting the property market earlier this year, residential transactions were up 8.1% to 105,630 in October compared to the year earlier period. “Residential transactions have increased incrementally each month [since May], reflecting the gradual easing of coronavirus public health restrictions for the property market and the introduction of residential transaction tax holidays within the various UK administrations,” HMRC said. Growth has been driven at the higher end of the market by householders looking to trade up for bigger homes, but analysts said some of this demand was starting to fade due a reduction in stock on the market.

The Times, Page: 48 City AM

PENSIONS NEWS – TUESDAY 25TH NOVEMBER 2020

Government tipped to introduce 25% flat rate pensions tax relief

Rishi Sunak’s rumoured move to create a flat rate on pensions tax relief of 25% could leave a “big dent” in top earners’ pension pots according to Aegon. The Chancellor is said to be “very attracted” to the idea of moving to a flat rate, which could be announced in today’s spending review and would help the Government recoup some of the costs of COVID-19. Analysis from Aegon found under a flat rate of 25%, a basic rate taxpayer paying £100 a month into their defined contribution pension would see this topped up to £133.33 rather than the current £125, an extra £8.33. However, a higher rate taxpayer who currently sees their £100 increased to £166.66 would see this reduced by £33.33.

Pensions Age Professional Adviser FT Adviser Daily Express

CORPORATE NEWS – TUESDAY 25TH NOVEMBER 2020

Booming retailers told to return coronavirus aid

The CEO of online electricals retailer AO World has urged fellow retail executives to reconsider their decision to keep business rates relief and furlough cash handed out during the pandemic. John Roberts said the argument that business rates were unfair was a separate issue – this is about whether it is right to pay out dividends on profits after taking taxpayers’ cash. Mr Roberts said: “The pandemic is a societal challenge, and I think all people and individuals and businesses should do their bit.” He added: “We live by the mantra of if I had to explain my actions to my mum over dinner tonight, would she be proud? Everyone knows what that means for their businesses. Maybe they [the supermarkets] should go and ask their mum.”

The Times, Page: 45 The Guardian, Page: 37 The Independent, Page: 52 Daily Mail, Page: 75

ECONOMY NEWS – TUESDAY 25TH NOVEMBER 2020

Chancellor to unveil spending plans for the coming year

Rishi Sunak will unveil the Government’s spending plans for the coming year today with his Spending Review expected to include details on public sector pay, NHS funding, the state of the economy and a new jobs programme. The Chancellor will announce that the foreign aid budget will be cut by £4bn a year to £10bn as part of moves to shore up Britain’s finances as the country recovers from the pandemic. Ministers will introduce legislation to allow spending to be kept at a reduced level for several years. There have also been reports that the Chancellor is considering a pay freeze for all public sector workers except frontline NHS staff. The economy is projected to be 10% smaller than it was pre-virus with tax revenues dramatically down and public borrowing forecast to rise to £372bn, compared to the £55bn the Government had originally expected to borrow.

BBC News The Sun, Page: 10 The Daily Telegraph, Page: 1, 2

OTHER NEWS – TUESDAY 25TH NOVEMBER 2020

Accountants and bankers swear the most at work

A survey of 1,400 employees at 100 UK companies commissioned by Savoy Stewart found that bankers, accountants and lawyers are the most foul-mouthed during internal meetings across British workplaces. Accountants and bankers lead the league table in a survey of 14 business sectors. Lawyers were in second position, followed by workers in travel and hospitality and sales. The preferred expletive for bankers and accountants was the old Anglo-Saxon stalwart of f***. Lawyers, on the other hand, were more partial to bullshit, presumably in reference to their opponents’ legal arguments. The research found that media professionals were mostly fond of bollocks. Those working for charities and volunteering were found to be the least likely to swear during meetings.

The Times, Page: 28

Contact Paul Southward [Tax Consultant]

Paul Southward

NEWS – FRIDAY 13TH NOVEMBER 2020

NEWS – FRIDAY 13TH NOVEMBER 2020

NEWS ROUNDUP

COVID- 19 – SUPPORT FOR BUSINESSES

Updated guidance regarding the extended Coronavirus Job Retention Scheme

On the 10th November 2020, the government updated its guidance online which can be found here:

gov.uk/guidance/coronavirus-jobretention-scheme

Below, we summarise the key elements for you:

  • As before, businesses can use the scheme ‘if you cannot maintain your workforce because your operations have been affected by COVID-19’.
  • You can claim for employees that you have made a PAYE RTI submission to HMRC for between 20th March 2020 – 30th October 2020. You do not need to have previously furloughed the employee to claim under the extended scheme.
  • You must submit your claim for periods ending on or before 31st October 2020 by 30th November 2020.
  • You’ll be able to make claims for periods starting on or after 1st November 2020 from the 11th November 2020.
  • The extended scheme will remain open until 31st March 2020. For the period 1st November 2020 – 31st January 2021, the government grant will be 80% of wages, capped at £2,500, with employers required to pay NI contributions and pension contributions. We are therefore expecting to see some shift in contributions from 31st January 2021.
  • If you don’t have an agreement with your staff in place but are planning to claim for the period from 1st November 2020, you must put that retrospective agreement in place by 13th November 2020.
  • You can still fully furlough and flexibly furlough staff. Furlough arrangements can last for any amount of time, but the claim period continues to be for a minimum of 7 calendar days. Also, there is now no maximum for the number of employees you can claim for.
  • You can continue to claim for a furloughed employee who is serving a statutory notice period. However, a word of warning – the government is reviewing its position on this and will likely change the approach for claim periods starting on or after 1st December 2020 with further guidance published in late November 2020.
  • Staff can continue to take holiday during furlough (paid at their normal rate of pay).

Summary kindly provided by HRDept. www.hrdept.co.uk/west-herts-south-beds/

TAX NEWS – FRIDAY 13TH NOVEMBER 2020

Sunak warned off CGT move

Rishi Sunak has been warned that a move to align capital gains tax with income tax will elicit a furious response from entrepreneurs with business leaders warning any recovery would be stifled and innovators would flee the UK. Lord Leigh of Hurley, senior treasurer of the Conservative Party and a senior partner at Cavendish Corporate Finance, said: “Proposals to simplify tax by equating income and capital don’t reflect the differences between the two. Capital gains are rewards for a risk taken by investing in an asset which might become worthless. Income involves no risk at all. If you want people to move from a comfortable salary to invest in a new business, take a risk, employ people, as I did, they have to feel that tax on any success reflects that risk.” Elsewhere, the Centre for Policy Studies and the Centre for Policy Studies both said the plans were ill-advised. The Telegraph’s Jeremy Warner asserts that tax reform that undermines growth “merely leaves the Exchequer with a greater share of a shrinking pie, and is therefore ultimately at best a zero sum game.” Finally, in a letter to the FT, Andrew Joy asserts that what the proposers are really after is a wealth tax, but “CGT is a rotten proxy”. Equalisation is a “seductive but dangerous chimera,” he adds.

The Times, Page: 39 Daily Mail, Page: 2 Financial Times, Page: 24 The Daily Telegraph, Page: 19

Treasury permanent secretary: New Budget to come in March

The Treasury’s permanent secretary says the Chancellor will announce a new government Budget in March as part of plans to raise income tax. Speaking at a Public Accounts Committee meeting on the government’s furlough scheme, Tom Scholar said: “We have to have a Budget before the end of the financial year otherwise the Government can’t continue to raise income tax”. The UK’s Budget deficit is expected to swell to £400bn this year, amid forecasts that the pandemic will push the country into a double-dip recession. The Government’s tax advisory body has urged the Chancellor to roll out a tax raid on buy-to-let properties and other forms of wealth in a bid to shore up more than £14bn to help repair the UK economy. The permanent secretary’s comments are the first clear signal that significant income tax hikes lie on the horizon.

City AM

Rishi Sunak extends investment relief for manufacturing firms

The Chancellor is to extend a temporary £1m cap on tax relief for manufacturing firms on investments in plant and machinery until January 2022. The annual investment allowance break had been due to end on January 1 when the cap would have reverted to £200,000.

Daily Express, Page: 8

CORPORATE NEWS – FRIDAY 13TH NOVEMBER 2020

Second lockdown puts Caffe Nero on brink of ruin

Caffe Nero has entered into a Company Voluntary Arrangement with KPMG hired to advise. The move was triggered by the second lockdown, said founder Gerry Ford. The chain has suffered from curbs on socialising, fewer shoppers in town centres and the government advice for workers to stay away from their offices. Will Wright, head of regional restructuring at KPMG, said: “Caffe Nero is an iconic brand on the UK’s high streets with a terrifically loyal customer base. However, like many others across the sector, the impact of measures introduced in response to the COVID-19 pandemic has been devastating.”

The Times, Page: 48 The Daily Telegraph, Business, Page: 3 Daily Mail, Page: 2

FRAUD NEWS – FRIDAY 13TH NOVEMBER 2020

Industry calls for crackdown on ‘dangerous’ clone scams

Finance experts have called for action to tackle clone scams, after analysis from Quilter revealed that an average of 45% of all warnings from the Financial Conduct Authority since 2015 involved the ‘clone’ of a financial services firm. Tom Selby, financial analyst at AJ Bell, warned that trust in financial services and saving would be “eroded” if an increasing number of people fell victim to scams.

FT Adviser

PROPERTY NEWS – FRIDAY 13TH NOVEMBER 2020

CGT plan would spark second-home fire sale

Following recommendations from the Office of Tax Simplification that the Chancellor equalise capital gains tax and income tax as part of efforts to pay for the Government’s response to the pandemic, experts have warned the move could crash the property market by sparking a fire sale of second homes and investment properties. Jonathan Schuman of Luton landlord Magnet Properties said small buy-to-let landlords would be hit hardest after already enduring stamp duty hikes and the loss of mortgage interest relief. Mr Schuman said: “It will massively distort the market. Landlords will be rushing to sell before the capital gains tax (CGT) rise, but after, higher taxes would be a big incentive to hold on to properties.”

The Daily Telegraph, Business, Page: 1

EMPLOYMENT NEWS – FRIDAY 13TH NOVEMBER 2020

Letter: Job retention must be the aim in Brexit countdown

Recruitment & Employment Confederation CEO Neil Carberry urges the Government to reduce employers’ NICs to help struggling businesses retain jobs and encourage hiring.

Financial Times, Page: 24

ECONOMY NEWS – FRIDAY 13TH NOVEMBER 2020

Economy grows by record 15.5%

Official data shows that the UK economy grew at a record pace in the third quarter of the year. The country’s emergence from the first lockdown saw GDP rise by 15.5% between July and September. However, growth was weaker in September than in the preceding months, while the country’s economy is still 8.2% smaller than before the virus struck. Despite the rebound in July to September, analysts warned that the economy was likely to shrink again in the final three months of the year because of the impact of renewed lockdowns in different parts of the country.

Financial Times Sky News The Guardian Daily Mail, Page: 2 Daily Mirror, Page: 8

Chancellor hints at new giveaways

Rishi Sunak has hinted the Government could take steps to boost consumer spending in the run-up to Christmas, telling Sky News that “we’ll look at a range of things to see what the right interventions are at that time”. He added: “We’ll talk about specific measures, but more broadly I think it’s right when we finally exit this [lockdown] and hopefully next year with testing and vaccines, we’ll be able to start to look forward to getting back to normal.”

The Daily Telegraph, Business, Page: 1

INDUSTRY NEWS – FRIDAY 13TH NOVEMBER 2020

Big Four dominance continues to put market at risk – FRC

The Financial Reporting Council has raised renewed concerns about the fallout from the potential failure of a Big Four firm. The accountancy regulator said it had requested detailed information from firms including Deloitte, KPMG, EY and PWC on their responses to the pandemic and financial resilience. “The concentration of the FTSE 350 audit market, the limited choice available for these companies to obtain a high quality audit, and the market’s vulnerability to the failure of one of the Big Four firms remain risks to market resilience,” the regulator said.

The Times, Page: 40

REPORTING NEWS – FRIDAY 13TH NOVEMBER 2020

FRC sets out company reporting expectations

The Financial Reporting Council (FRC) has published its annual end of year letter to CEOs, CFOs and Audit Committee Chairs setting out its reporting expectations for preparers of reports and accounts for the year ahead. The FRC said this year’s letter is of particular significance given the continuing backdrop of economic uncertainty and the impact of COVID-19 on the scope and timing of company reporting, while companies are also dealing with commercial and operational change associated with the UK’s exit from the EU. The letter covers what disclosures should be made to understand the impact of particular events on the company’s position and financial performance, as well as any judgements involving significant estimation uncertainty. The FRC expects increased disclosure of relevant sensitivities or ranges of possible outcomes to help users understand the assumptions underlying those estimates and the extent of the changes that might be reasonably possible in the next twelve months. The regulator also outlines its expectations of companies’ climate disclosures including the impact of climate change on their activities, their own environmental impact as well as explanations of how directors are discharging their section 172 duties.

Financial Reporting Council PQ Magazine Yahoo! Finance Compliance Week ICAEW Reuters This is Money

Green business reporting rules at risk of pale response

The UK aims to become the first country in the world to require climate risk disclosures across the economy. However, critics have questioned whether the rules will make enough difference to investors.

Financial Times

Contact Paul Southward

Paul Southward

NEWS – WEEKEND TO 1ST NOVEMBER 2020

NEWS – WEEKEND TO 1ST NOVEMBER 2020

NEWS ROUNDUP

TAX NEWS – WEEKEND TO 1ST NOVEMBER 2020

SATURDAY

Shah: Tax rises could cover pandemic costs

Nimesh Shah, CEO at Blick Rothenberg, says that with the UK’s debt now greater in size than the economy, a 1% increase in income tax, national insurance and VAT would be the “easiest mechanism” for the Chancellor to raise money as the country looks to foot the coronavirus bill. Writing in the Express, he says adding 1% to each rate of income tax would raise approximately £5.7bn, while the same increase across national insurance and VAT would raise £6.4bn and £7.2bn, respectively. However, Mr Shah notes that such increases would break the triple lock pledge made by the Conservatives and be likely to draw “severe political challenge” from the opposition. On alternative options, Mr Shah notes that a new wealth tax has been strongly rumoured, as have increases to capital gains tax and changes to the inheritance tax regime. Mr Shah predicts that Rishi Sunak will announce increases to income tax, national insurance and capital gains tax in autumn 2021, with the increases taking effect from April 2022.

Daily Express

HMRC unsure over non-dom policy impact

The Telegraph’s Harry Brennan says the Government does not know if a policy designed to pull in more tax from non-doms has worked. In a move that was predicted to raise more than £385m by 2021, former Chancellor George Osborne in 2015 reduced the time it takes for a non-dom to start paying tax in Britain at standard rates from 17 years to 15. However, HMRC has said it would be too much work to cross-reference non-dom and standard tax returns to track the impact. Some experts suggest that some nom-doms may have opted to leave the UK, with figures showing that in 2015 there were 120,000 non-doms but the total had fallen to 78,300 by 2018-19.

The Daily Telegraph, Money, Page: 2

Trusts fall from favour for tax planning

HMRC statistics show 151,000 trusts submitted a tax return in 2018/19 compared to 154,500 the year before. Zena Hanks of Saffery Champness notes this marks the fifth consecutive year-on-year decline.

Financial Times, Money, Page: 3

SUNDAY

Ministers torn on taxes

David Maddox and David Williamson in the Sunday Express say ministers “are torn” over whether taxes should be raised or cut in the Chancellor’s next Budget. They cite a source close to the Prime Minister who says public finances “are shot” and there “may be little choice” but to raise taxes to start paying off the debt brought about by the coronavirus pandemic. However, another insider tells the paper that some ministers believe tax cuts are the way to go, saying: “This country is already overtaxed as it is and any more taxes could mean that we choke off the recovery.”

Sunday Express, Page: 6

Tax fear for the self-employed

The Sunday Times’ Kate Palmer says the self-employed are “facing a squeeze” because of the way they pay their tax, with many required to pay their income tax in advance twice a year, using the previous year’s earnings to work out the bill. However, with the coronavirus crisis potentially hitting income this year, “they could face bills that look larger than the income they are likely to receive.” Zena Hanks at Saffery Champness says: “People are thinking, ‘Crumbs, where has my income gone?’ yet have these looming tax bills”. “If you had a stellar 2019 and are now earning less, you need to do something about it, ” she adds.

The Sunday Times, Business, Page: 11

Contact Paul Southward to learn how you may be able to reduce your tax liability and apply for time to pay with HMRC

PENSIONS NEWS – WEEKEND TO 1ST NOVEMBER 2020

SATURDAY

Pension pot withdrawals up 6%

HMRC figures show that 347,000 people withdrew from their pension pots in July, August and September – a 6% rise on the same period last year. Despite the increase in withdrawals, the average amount taken out was £6,700 – a 7% drop on the previous year. Former pensions minister Baroness Ros Altmann issued a warning over people taking money from their pension in their 50s and 60s, saying: “We’ll have a whole generation of pensioners in poverty in future and that’s the real risk.” Jon Greer of Quilter said the rise suggested more people needed additional cash to see them through the crisis, while Steven Cameron of Aegon warned: “Pensions are designed to provide an income throughout retirement and reducing the amount of income withdrawn during a period of down turn could be important for the longevity of the pension pot.”

The Daily Telegraph, Page: 8 Daily Express, Page: 1

EMPLOYMENT NEWS – WEEKEND TO 1ST NOVEMBER 2020

SATURDAY

Major firms cut 184k jobs amid pandemic

Large British companies have cut around 183,900 jobs this year, analysis by the Daily Mail suggests, with the coronavirus crisis delivering a wave of job losses. With the Government’s furlough scheme coming to an end today, employers have voiced concern that the Jobs Support Scheme being rolled out to replace it may not be enough to prevent further redundancies if new lockdowns and tighter restrictions are enforced. The Mail notes that while unemployment has reached a three-year high of 4.5%, the Bank of England predicts it could hit 7.5% by year end. The Federation of Small Businesses yesterday called on ministers to offer greater support to firms, with national chairman Mike Cherry saying its small business index shows that 30% of employers expect to make some staff redundant in the next three months. “That is the scale of concern and uncertainty that small firms are faced with for their businesses, with many letting staff go for the very first time,” he added.

Daily Mail, Page: 98

SUNDAY

Furlough scheme extended at 80% rate

The Prime Minister has confirmed that the furlough scheme will be extended for a further month after England was placed under a four-week lockdown in an effort to bring down the rate of coronavirus infections. The Chancellor confirmed that the scheme will cover 80% of wages capped at £2,500 per month before tax during the new lockdown. This matches the original rate set out in March, not the version that had been in operation until yesterday which paid 60% of wages and saw businesses pay 20%. Before the nationwide lockdown, the Job Retention Scheme had been set to be replaced by the Job Support Scheme today, with this set to have been worth 49% of wages. Jonathan Geldart, director-general of the Institute of Directors, said: “Reinstating furlough is absolutely the right decision, and should bring relief to many businesses.”

The Sunday Telegraph The Sunday Times The Independent

Furlough extension what we know:-

Yesterday, the Government announced that the Job Support Scheme would not launch as intended today and they have instead extended their Furlough scheme until December.

Full guidance is yet to be published but the details we know are:

  • The extended scheme will be more generous for employers than October and the subsequent cost for retaining employees will be reduced.
  • Employees will receive 80% of their current salary for hours not worked, up to a maximum of £2,500 per month.
  • Businesses will only have to cover National Insurance and employer pension contributions which, for an average claim, accounts for just 5% of total employment costs.
  • They will have flexibility to bring furloughed employees back to work on a part time basis or furlough them full time.

PROPERTY NEWS – WEEKEND TO 1ST NOVEMBER 2020

SATURDAY

House prices up 5.8% year-on-year

Figures from Nationwide show house prices have risen at their fastest pace in almost six years, jumping 5.8% year-on-year in October. This marks the highest rate of growth since January 2015. Month-on-month, prices were up 0.8%, with the average house price hitting a new record high of £227,826. Nationwide’s chief economist, Robert Gardner, says the outlook remains “highly uncertain”, saying much depends on how the coronavirus pandemic and measures to contain it play out. He also suggested the “efficacy of policy measures implemented to limit the damage to the wider economy” will have an impact. Mr Gardner says activity is “likely to slow” in the coming quarters, “perhaps sharply”, adding that the end of the stamp duty holiday in March 2021 will be a factor.

The Daily Telegraph, Page: 33 Daily Mail

SUNDAY

Mortgage holidays extended

Mortgage payment holidays have been extended by three months in the wake of England being placed under a second national lockdown. The Financial Conduct Authority says borrowers who have not yet requested a payment deferral can do so for up to six months, while those who already have a payment deferral in place can extend it for up to six months. “It may also be in the interests of mortgage borrowers who expect to have long-term financial difficulties to agree other forms of tailored support with their lender,” the FCA added. A spokesman for the FCA said it will work with trade bodies and lenders on how to implement the extension “as quickly as possible”. The City watchdog is also considering whether to apply a similar extension to high-cost credit.

The Sunday Telegraph Reuters

SMEs NEWS – WEEKEND TO 1ST NOVEMBER 2020

SUNDAY

CMA looks to protect start-ups from takeovers

The Competition and Markets Authority is planning to block large tech firms from snapping up start-ups that have the potential to grow into rivals. While the competition watchdog tends only to step in where there is a strong probability that a deal could harm competition, new plans would see it intervene in cases where the damage to competition is less certain. Under the plans, the watchdog could also demand that the likes of Google, Facebook and Amazon hand over their business plans when they launch takeover bids for smaller entities.

The Mail on Sunday

CORPORATE NEWS – WEEKEND TO 1ST NOVEMBER 2020

SATURDAY

Executives resign over accounting error

The chief executive and finance director of domain name company Minds + Machines have resigned over an accounting error that saw money attached to three contracts incorrectly recognised as revenue in the company’s accounts when it should have been classified as deposits against future sales. Mazars, the company’s auditor, is understood to have failed to spot the issue. Correcting the error means 2019 revenues fell by $1.7m to $17.2m while profits fell from $4.7m to £2.8m. CEO Toby Hall and finance director Michael Salazar have stepped down so as to ease investor concerns over corporate governance.

The Times, Page: 57

Deltic up for sale

Deltic Group, the UK’s largest nightclub owner, has put itself up for sale having been driven to the brink of collapse by the COVID-19 pandemic. The business has begun a sale process while it considers other options, including a CVA. The group recently brought in BDO to explore potential options. More than 10 potential buyers, many of them private equity firms, are said to have expressed interest in Deltic.

The Daily Telegraph, Page: 33 Financial Times, Page: 15 The Guardian, Page: 42 The Sun, Page: 44 City AM

SUNDAY

Business leaders voice lockdown fears

Businesses have warned of the impact the nationwide restrictions announced by the Prime Minister will have, saying England’s second coronavirus lockdown could prove a devastating blow to business communities. Adam Marshall, director general of British Chambers in Commerce, said market confidence has been “hit hard by the unclear, stop-start approach” taken by officials during the pandemic, adding: “Many firms are in a much weaker position now than at the start of the pandemic, making it far more challenging to survive extended closures.” Mr Marshall added that while the temporary extension of the furlough scheme “will bring short-term relief to many firms”, details of the full financial support package for businesses facing hardship “must immediately be clarified and communicated.” Confederation of British Industry director-general Dame Carolyn Fairbairn said that while firms share ministers’ ambition of defeating COVID-19, “for many businesses, a second national lockdown marks the start of a bleak midwinter.” She added that “with the right support firms will do everything possible to minimise the damage”, while noting that some sectors “may need more tailored support”.

The Mail on Sunday

EWM seeks rescue deal

Edinburgh Woollen Mill is looking to secure a rescue deal and prevent it from collapsing this week. The firm, which owns Peacocks, Austin Reed, Bonmarché and Jaeger, is in talks with potential investors, as well as groups that are keen on buying parts of its business. Sources say that if owner Philip Day fails to agree a rescue deal by Friday, administrators from FRP will be appointed. This could put more than 20,000 jobs at risk.

Sunday Express, Page: 43

Councils go to court for Caffè Nero rent

The Local Authorities’ Mutual Investment Trust, which invests on behalf of councils, has lodged a court claim against Caffè Nero, saying the coffee shop chain has not paid £135,389 in rent on a London site. Caffè Nero has clashed with landlords over rent payments during the pandemic. It has hired KPMG and is reportedly examining a CVA to cut rents and close branches.

The Sunday Times, Business, Page: 3

Rolls-Royce starts boat engine sale

Rolls-Royce has hired Deloitte to run the sale of its Bergen Engines division, a unit which makes large engines used to generate electricity to power ships. Sources say a sale is expected early in 2021, with a price tag of up to £100m.

The Sunday Telegraph, Business, Page: 3

Retailers better placed for second lockdown

The Sunday Telegraph looks at the impact the new England-wide lockdown could have on the retail sector, citing Lisa Hooker, consumer markets leader at PwC, who says that while retailers are better prepared to deal with a second lockdown, consumer confidence could be hit.

The Sunday Telegraph, Business, Page: 1

Hotel hit to stretch to 2022

The Sunday Times considers the impact the pandemic has had on international travel and businesses linked to it, noting that a Deloitte poll of hotel businesses shows that 95% do not expect performance to return to pre-coronavirus levels until 2022.

The Sunday Times, Business, Page: 5

EFL clubs owe £77m in taxes

Figures show that clubs in the English Football League account for around £77m in unpaid taxes. Around £59m of the tax debt is owed by clubs in the Championship, with more than £13m due from those in League One and close to £5m owed by from those in League Two.

Sunday Express, Page: 10

Boohoo crying out for an auditor

Sam Chambers in the Sunday Times looks at the fortunes of online retailer Boohoo. He notes that PwC has resigned as auditor, saying that finding a replacement might prove challenging as, under tighter scrutiny of the profession, Deloitte, KPMG, BDO and Grant Thornton have all ruled themselves out of the running.

The Sunday Times, Business, Page: 4

FINANCE NEWS – WEEKEND TO 1ST NOVEMBER 2020

SUNDAY

Fee and interest concern over bailout loans

The Sunday Times’ Sabah Meddings reports that lenders are charging struggling firms large arrangement fees and high interest rates for bailout loans that are guaranteed by the Treasury. Looking at the costs associated with the Coronavirus Business Interruption Loan Scheme, she reveals that some providers are charging fees of up to 5% of the value of each loan, which can be £5m per business, and interest rates of up to 15%, which are paid by taxpayers in the first year. Greg Taylor, head of financial solutions at MHA MacIntyre Hudson, comments: “These are not business interruption loans, they’re business go-bust loans … This is supposed to be saving businesses rather than putting them under.”

The Sunday Times, Business, Page: 1

ECONOMY NEWS – WEEKEND TO 1ST NOVEMBER 2020

SATURDAY

Record climb in Eurozone growth

The European economy grew by 12.7% in the third quarter, figures from EU statistics agency Eurostat show, with this marking the largest increase since statistics were first recorded in 1995. The increase follows a 11.8% decline recorded across the 19 EU member countries that use the euro in Q2. France led the surge, with its economy growing 18.2%, while Spain (16.7%) and Italy (16.1%) also saw large gains.

The Daily Telegraph, Page: 34 Daily Mail

SUNDAY

Bank of England expected to boost bond buying

Economists expect the Bank of England (BoE) to unveil a £100bn bond buying spree as the country goes into its second national lockdown, with the Bank forecast to boost the economy by expanding its quantitative easing programme. The potential increase in bond purchases will take the Bank’s balance sheet of government and corporate debt to a record £845bn. Talk of additional bond buying comes as fears of a double-dip recession intensify, with concern over the pressure a second lockdown will put on the economy. Capital Economics economist Ruth Gregory has warned that a UK-wide lockdown would “cause GDP to shrink again, perhaps significantly in the fourth quarter”. Analysts at HSBC suggest bond-buying operations are “running out of room”, increasing the likelihood that the BoE could turn to negative interest rates.

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

OTHER NEWS – WEEKEND TO 1ST NOVEMBER 2020

SATURDAY

Business confidence falls

Analysis by Lloyds Bank shows that British business confidence has fallen for the first time in five months, with the increasing rate of coronavirus infections and subsequent restrictions designed to slow the spread of the virus having an impact. The bank’s business barometer, which polled 1,200 businesses, fell by seven points to -18, with the services sector driving the decline, although confidence among manufacturers and retailers improved slightly. Lloyds Bank economist Hann-Ju Ho noted that as well as concerns over the pandemic, businesses are also worried over a possible no-deal Brexit.

Reuters

Contact Paul Southward

NEWS – FRIDAY 23RD OCTOBER 2020

NEWS – FRIDAY 23RD OCTOBER 2020

NEWS ROUNDUP

COVID-19 BUSINESS SUPPORT

EMPLOYMENT NEWS – FRIDAY 23RD OCTOBER 2020

Chancellor announces more generous UK jobs support scheme

Chancellor Rishi Sunak has revised the Government’s Job Support Scheme – set to replace furlough in November – amid fears for the survival of businesses affected by Tier 2 coronavirus restrictions. Employers will be required to pay just 5% of workers’ unworked hours, down from 33% previously. The state will pay 62% of the hours not worked, and the employee will forgo about a third of their unworked wages. Worth an estimated £13bn over six months, the package will also include a new round of funding for the self-employed, grants for whom will be doubled from 20% of previous earnings to 40%. Cash grants worth £3,000 a month will be made available for hospitality firms forced to close under Tier 3 restrictions, which will be backdated. Businesses in Tier 2 areas can access grants worth up to £2,000.

The Daily Telegraph, Page: 1 Financial Times The Times The Independent, Page: 5 City AM

TAX NEWS – FRIDAY 23RD OCTOBER 2020

Hong Kong immigrants will boost tax revenues

Home Office estimates suggest over 1m people from Hong Kong could immigrate to Britain in the next five years, with up to 500,000 possibly arriving in the first year. The UK Government announced a new route for British overseas nationals (BNOs) in the territory to settle in Britain after Beijing imposed strict new security laws on Hong Kong. The arrivals are projected to boost the economy by up to £2.9bn net over five years through extra tax revenue.

The Times, Page: 4 Daily Express, Page: 16 The Daily Telegraph, Page: 2

EFL seeks delay on tax payments for clubs

The English Football League has asked for permission to defer tens of millions of pounds of tax payments until the Government ban on crowds is lifted. Approximately half of clubs’ salary bills goes to HMRC in tax and national insurance, but the EFL says it is losing a combined £22m a month playing behind closed doors and is seeking a postponement of the payments.

The Times, Sport, Page: 77 The Daily Telegraph, Sport, Page: 4

CORPORATE NEWS – FRIDAY 23RD OCTOBER 2020

Dutch ‘departure tax’ is illegal, Unilever told

A proposed “departure tax” that will hit Dutch companies leaving Holland has been deemed illegal by the boss of Unilever, which is looking to move its legal base to London as it looks to end its dual Anglo-Dutch structure. Alan Jope said two out of three of the law firms the company consulted said the legislation would contravene EU law and multiple tax treaties.

The Daily Telegraph, Business, Page: 5 The Times, Page: 46

FRAUD NEWS – FRIDAY 23RD OCTOBER 2020

Furlough fraudsters stole as much as £3bn, HMRC says

HMRC believes between £2bn and £3.9bn may have been fraudulently paid out under the Treasury’s Job Retention Scheme, which saw £39bn paid out to employers to support furloughed workers. The estimates from HMRC were used in a National Audit Office report which said there was evidence of “significant levels of furlough fraud” from both organised gangs “hijacking” claims and employers taking money collected on behalf of staff. Meg Hillier, who chairs the public accounts committee commented: “HMRC has paid out billions of pounds to fraudsters. Most of this is likely to be gone for good.”

Financial Times, Page: 3 The Times, Page: 1, 10 The Daily Telegraph, Page: 4 Daily Mail, Page: 6 The Independent, Page: 9

Paul Southward comments “How can this be acceptable and no-one in government and/or public office be accountable, no doubt a few small employers will be identified as having made fraudulent claims and will be hung out to dry, but organised criminals will be laughing all the way to the bank”.

FINANCE NEWS – FRIDAY 23RD OCTOBER 2020

Government lending schemes see £62bn paid out to firms

New Treasury figures reveal that the total value of loans paid out under the coronavirus business lending schemes provided by the Government reached nearly £62bn as of mid-October. This is up from £57.3bn the previous month, with a total of £17.2bn paid out to 73,094 firms as part of the Coronavirus Business Interruption Loan Scheme (CBILS), £4.57bn of financing approved for 623 larger firms under the Coronavirus Large Business Interruption Loan Scheme (CLBILS), £770.8m paid out under the Future Fund to 745 businesses and the Bounce Back Loan Scheme (BBLS) seeing a total of 1,336,320 loans worth £40.20bn approved.

City AM

PROPERTY NEWS – FRIDAY 23RD OCTOBER 2020

Property boom could be hit by ‘perfect storm’ of collapsed sales

The Telegraph looks at how logistical delays could put a strangle hold on the property market “mini-boom” as buyers are increasingly pulling out of sales. The summer surge in buyer demand combined with reduced processing capacity after lockdown means that lenders, local authorities, conveyancers and surveyors are overwhelmed, with sales at serious risk of being dragged beyond the stamp duty and Help to Buy scheme deadlines at the end of March. The Daily Telegraph

Paul Southward comments: “I have reported before that it is no surprise that a SDLT rate cut would lead to a short-term housing boom, that will undoubtedly come to an end when rates rise again.  I advise all buyers and sellers to use their “business head” when making such a major purchase and or sale.  Do not forget to consider the tax consequences and seek appropriate advice where necessary. ”

ECONOMY NEWS – FRIDAY 23RD OCTOBER 2020

Drop in UK consumer confidence fuels double-dip recession fears

Data from research company GfK show a fall in consumer confidence in the first half of October as coronavirus infections rose and restrictions tightened, fuelling fears of a double-dip recession. Joe Staton, client strategy director at GfK, said: “There’s a worrying threat of a double dip in consumer confidence as concerns for our personal financial situation and even deeper fears over the state of the UK economy drag the index down six points this month. The prospect of rising unemployment is severely depressing our outlook. Worryingly, this data was collected before the new restrictions came into force and the end of the furlough scheme, so this will negatively impact the index in the run-up to Christmas.”

Financial Times The Times, Page: 44

UK manufacturing decline slows – survey

The CBI’s industrial trends survey has shown that UK manufacturing activity continued to fall in the most recent quarter, but at the slowest pace since March. Output dropped in ten of the seventeen manufacturing sub-sectors followed in the CBI’s industrial trends survey, with aerospace leading the falls. Separately, a survey by Lloyds Bank has found that 31% of manufacturers believe that a no-deal Brexit would be good for business while 81% said they had made the necessary preparations for operating outside the EU. Those who thought business would improve cited increased demand from domestic buyers and the ability to be more competitive with EU rivals on pricing.

City AM The Times The Times

OTHER NEWS – FRIDAY 23RD OCTOBER 2020

Brits suffer largest erosion of wealth

A study by Credit Suisse has found that Britain has suffered the biggest hit to household wealth of that in any of the world’s major economies this year. Total wealth in the UK fell from $14.6trn to roughly $13.7trn in the six months to the end of June while the number of ultra-high net worth individuals – with assets of more than $50m – declined by 1,544 between the start of 2019 and the middle of this year. Over the same 18-month period the number of super-wealthy adults in the US rose by 14,008 and in China by 4,148. The report suggested currency fluctuations driven by Brexit concerns and a failure of equity markets in the UK to recover from the onset of the pandemic have created a “perfect storm” leaving the UK the biggest casualty of the pandemic among major economies.

The Times

Contact Paul Southward

CHANCELLOR’S STATEMENT 24TH SEPTEMBER 2020 – COVID-19 SUPPORT FOR BUSINESS

CHANCELLOR’S STATEMENT 24TH SEPTEMBER 2020

COVID-19 SUPPORT FOR BUSINESS

As reported earlier the chancellor set out his much-awaited plans in the continuing struggle against the coronavirus pandemic and the effect that lockdown restrictions are having on businesses and individuals.

We await publication of full details of the latest proposals which are expected to be made available later today.

Check back on the KSK website for further information once the finer details have been revealed.

Meanwhile here is a summary of what Rishi Sunak had to say.

We are now entering a new phase of living with this current crisis, with a warning that lockdown restrictions are going to be with us for at least the next six months.

Rishi acknowledged that people are afraid and exhausted by the ebb and flow of the seemingly ever-changing government restrictions and rules that are having an impact on all our personal and working lives.

Despite this Rishi reassured us that there are reasons to be optimistic, for this I fear we may have some time to wait.

A whopping £12bn has been spent by the government on “Test and Trace” that has finally been launched today, I do hope that this proves to be money well spent.

Rishi then went on to outline what his plans were to protect jobs and the economy: –

COVID-19 SUPPORT FOR BUSINESS

A new Jobs Support Scheme will be launched for employees working and being paid for at least a third of their normal hours.  The government and employers will jointly increase their wages to cover two-thirds of their lost pay and the employee will keep their job.

Larger businesses must show that they have been adversely affected during the crisis.  Employers who have not previously used the furlough scheme will be eligible.

The new scheme will run for 6 months from November.

The existing grant for the self-employed will be similarly extended.

Bounce Back loan terms may be extended from six to ten years, reducing the outgoing payments to ease cashflow.

Payments can be made on an “interest only” payment and there will be options to suspend repayments for up to six months, credit ratings will be unaffected.

The government guarantee on Coronavirus Business Interruption Loans will be extended to 10 years and a new successor loan guarantee programme will be announced in January.

The temporary reduction of VAT from 20% to 5% on hospitality and tourism will now continue until 31st March 2021.

So has Rishi served a palatable dish of measures?  We will have to wait and see, meanwhile check back on www.ksk.co.uk for full details of the measures later.

Contact Paul Southward.

NEWS – THURSDAY 24TH SEPTEMBER 2020

NEWS – THURSDAY 24TH SEPTEMBER 2020

NEWS ROUNDUP

TAX / EMPLOYMENT – EMERGENCY COVID-19 MEASURES

Rishi to unveil emergency jobs scheme

The chancellor is expected to announce new measures to replace the furlough scheme which expires next month.  It is also expected that the VAT temporary reduction will be extended.  Don’t forget to check back here after the announcements have been made.

TAX NEWS – THURSDAY 24TH SEPTEMBER 2020

Tax tech firms thriving on pandemic, say campaigners

The Independent looks at some of the companies that have thrived during the lockdown, particularly Amazon, Apple, Microsoft and videoconferencing company Zoom. The paper cites Robert Palmer, director of Tax Justice UK, who says these companies also pay less tax than businesses with a physical retail presence and calls on the Government to hit the tech firms with a windfall tax to help the country rebuild after the pandemic. In the longer term, he says the Government should rebalance the tax system by increasing corporation tax above its current level and crack down on corporate tax avoidance. “Polling shows increasing taxes on multinationals would be really popular with voters, including Conservative voters,” says Palmer. “I think there’s a feeling in the business community too that it is important for firms to pay back and contribute.”

The Independent, Page: 44

Majority back tax rises to pay for Covid

A poll by the think tank Demos has found that 58% of the public would back increasing income tax for everyone by 2p in the pound to help pay for the coronavirus crisis, while raising the personal allowance to £20,000. Just 37% of respondents supported the idea of a 1p in the pound rise for everyone while 69% of people would support raising income tax on earnings over £100,000 per year by 10p in the pound.

Yorkshire Post, Page: 5

CORPORATE NEWS – THURSDAY 24TH SEPTEMBER 2020

City of London abandons plans for widespread return to office

A raft of City companies have halted plans to bring staff back into the office. Thousands of staff at firms such as JPMorgan and PwC who had been brought back will now revert to working from home after Boris Johnson reversed guidance on returning to offices. The FT’s Lombard says the City of London risks being permanently damaged by the atomisation that comes with coronavirus restrictions. The Times cites Catherine McGuinness, policy chairwoman of the City of London Corporation, who comments: “We are disappointed at the blanket call for office workers to return to working from home where possible. Firms have taken huge steps to make sure that their offices are Covid-secure. It’s clear that this virus isn’t going to go away quickly so we need to find a way of living with it that doesn’t cripple our economy.”

Financial Times, Page: 11 Financial Times The Times, Page: 7

Pendragon delays results

Pendragon has delayed publishing its interim results less than 24 hours before they were due to be issued. The car dealer said the hold-up was requested by auditors KPMG as extra reviews are needed due to the pandemic.

The Daily Telegraph, Business, Page: 7 The Times, Page: 42

PENSIONS NEWS – THURSDAY 24TH SEPTEMBER 2020

Government confirms it will maintain triple lock

The Government has confirmed it will maintain the triple lock and increase the state pension in 2021-22 despite speculation that it might be scrapped due to COVID-19. Legislation was tabled yesterday to avoid the state pension being frozen in April because of the fall in average earnings. Rishi Sunak has been pushing for the triple lock to be suspended for fear of soaring costs because of the recession and a fall in wages caused by the furlough scheme, which covers 80% of earnings. Ian Browne, a pensions expert at Quilter, said that the triple lock could lead to “intergenerational unfairness” as wages fall and pension incomes rise.

International Adviser FT Adviser The Daily Telegraph The Times, Page: 4

SMEs NEWS – THURSDAY 24TH SEPTEMBER 2020

Watchdog urged to force insurer to pay firms hit by Covid

The Financial Conduct Authority is being urged to use its enforcement powers against Hiscox to force the company to start making payouts to small businesses hit by the pandemic. Lawyers acting for almost 400 firms want the insurer to start making interim payments after a High Court judgment last week found in favour of arguments that the FCA had presented for policyholders.

The Times, Page: 41

Lord Digby Jones: Help businesses create wealth

Lord Digby Jones writes in the Express on ways Rishi Sunak could help boost the economy. Forefront in his mind should be support for small businesses and the first thing the Chancellor should do is exempt them from employers’ National Insurance. He also calls for fairer taxes for online giants which continue to get away with paying little tax on UK sales.

Daily Express, Page: 4

PERSONAL FINANCE NEWS – THURSDAY 24TH SEPTEMBER 2020

Brits veer away from asking banks about financial advice

A new survey carried out by SimpleUsability has found that 68% of UK banking customers would seek financial advice from sites like MoneySavingExpert or ask family members, before their own bank or app. The results also revealed changes in spending habits, reduced incomes and new ways of managing money. Judith Doherty, strategy director at SimpleUsability, comments: “Brands should be asking themselves, what can we do to make sure our customers come straight to us instead, and how can we support them across every touch point?”

The Fintech Times

ECONOMY NEWS – THURSDAY 24TH SEPTEMBER 2020

UK business activity growth slows as new Covid-19 restrictions take effect

Growth in business activity in the UK slowed in September, according to a closely watched survey that indicated a summer economic surge was at risk from new restrictions to curb coronavirus. The IHS Markit/Cips UK flash composite purchasing managers’ index, down from a 72-month high of 59.1 in August but still above the 50-mark separating expansion from contraction. The flash reading, based on 85% of the usual monthly responses, was taken before the prime minister announced further restrictions to control coronavirus on Tuesday. IHS Markit economist Chris Williamson warned: “Unemployment is likely to soon start rising sharply…(which) raises fears that growth could fade further as we head into the winter months, especially as lockdown measures are tightened further”.

Financial Times Sky News The Guardian, Page: 27 Daily Express, Page: 47 The Scotsman, Page: 47

Sunak scraps Budget to focus on jobs and business support

The Chancellor has postponed his November Budget until next year amid the financial turmoil created by the pandemic, but today will announce how a replacement for the furlough scheme will form part of a new economic rescue package. Rishi Sunak is expected to announce a wage subsidy scheme for people only able to work part-time, along with an extension to four different lending schemes. These should help keep credit flowing to businesses hit by the fallout from the virus, while companies could be given more time to pay VAT and other tax bills. The FT reports that the CBI, the TUC and Acas have issued a joint call to businesses to “exhaust all possible alternatives” before making redundancies, but if they became inevitable, to treat workers fairly.

The Daily Telegraph Financial Times, Page: 1 Financial Times The I, Page: 7 Daily Mail, Page: 1, 8-9 Daily Express, Page: 1, 4-5 The Guardian

BREXIT NEWS – THURSDAY 24TH SEPTEMBER 2020

UK companies under-prepared for Brexit, BCC finds

Analysis by the British Chambers of Commerce suggests only half of UK firms have taken steps recommended by the Government to prepare for Brexit while just 38% have completed a Brexit risk assessment this year, compared with 57% in 2019. BCC Director General Adam Marshall said: “The Government must ramp up engagement with businesses urgently to ensure that the real-world issues facing firms get tackled immediately.”

Bloomberg

INTERNATIONAL NEWS – THURSDAY 24TH SEPTEMBER 2020

Dimon open to higher income taxes for the wealthy

JPMorgan chief Jamie Dimon has backed the idea of higher taxes on the income of the rich but said a wealth tax would prove over-complicated and ultimately unworkable. “There are taxes which will slow down growth, like taxes on capital formation or labor, and there are taxes which will not affect growth, like taxes on, you know, well-to-do people like me,” he told CNBC on Wednesday. “I’m not against having higher tax on the wealthy,” Dimon said. “But I think that you do that through their income as opposed to, you know, calculate wealth, which becomes extremely complicated, legalistic, bureaucratic, regulatory, and people find a million ways around it. I would just tax income.”

New York Post

OTHER NEWS – THURSDAY 24TH SEPTEMBER 2020

Syndicate boss owes victims over £158m

Mike Stanley, whose Layezy Racing group collapsed last year, owes savers more than £158.7m, creditors say. Members of the betting syndicate alerted investigators after becoming concerned the outfit was a Ponzi scheme. After Layezy’s demise, some members were initially told by administrators Duff and Phelps that the liabilities from the syndicate could be as much as £80m. But a court recently heard that the figure is far higher than this.

Daily Mail, Page: 78

Contact Paul Southward

CORONAVIRUS (COVID-19) SUPPORT FOR BUSINESS UPDATE (29.05.2020)

CORONAVIRUS (COVID-19) SUPPORT FOR BUSINESS UPDATE (29.05.2020)

On Friday 29th May 2020 the Chancellor, Rishi Sunak, announced more details about the extension of the Coronavirus Job Retention Scheme (CJRS) and the Self-Employment Income Support Scheme, and we’ve outlined these below for you.

Coronavirus Job Retention Scheme

The Chancellor has announced three changes to the job retention scheme:

  1. From 1st July 2020, the scheme will be made more flexible to enable employers to bring previously furloughed employees back part time and still receive a grant for the time when they are not working.
  2. From 1st August 2020, employers will have to start contributing to the wage costs of paying their furloughed staff and this employer contribution will gradually increase in September and October.
  3. The scheme will close to new entrants from 30th June.
  1. Part time furloughing

From 1st July 2020, businesses using the scheme will have the flexibility to bring previously furloughed employees back to work part time – with the government continuing to pay 80% of wages for any of their normal hours they do not work up until the end of August. This flexibility comes a month earlier than previously announced to help people get back to work.

Employers will decide the hours and shift patterns their employees will work on their return, and will be responsible for paying their wages in full while working. This means that employees can work as much or as little as the business needs, with no minimum time that they can furlough staff for.

Any working hours arrangement agreed between a business and their employee must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, they will need to report and claim for a minimum period of a week. They can choose to make claims for longer periods such as on monthly or two weekly cycles if preferred. Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.

If employees are unable to return to work, or employers do not have work for them to do, they can remain on furlough and the employer can continue to claim the grant for their full hours under the existing rules.

  1. Employer contributions

From August, the government grant provided through the job retention scheme will be slowly tapered.

  • in June and July, the government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICs) and pension contributions for the hours the employee doesn’t work – employers will have to pay employees for the hours they work
  • in August, the government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs that they would have incurred if the employee had not been furloughed
  • in September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500
  • in October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500
  • the cap on the furlough grant will be proportional to the hours not worked.

Many smaller employers have some or all of their employer NIC bills covered by the Employment Allowance so will not be significantly impacted by that part of the tapering of the government contribution.

Around a quarter of CJRS monthly claims relate to wages that are below the threshold where employer NICs and auto enrolment contributions are due, and so no employer contribution will be required for these furloughed employees in August.

  1. Important dates

It’s important to note that the scheme will close to new entrants from 30th June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30th June.

This means that the final date by which an employer can furlough an employee for the first time will be 10th June for the current three-week furlough period to be completed by 30th June. Employers will have until 31st July to make any claims in respect of the period to 30th June.

Guidance and support

Further support for employers and agents on how to calculate claims with this extra flexibility will be available by 12th June, including webinars and detailed online guidance. For information about how to claim, go to GOV.UK and search ‘Coronavirus Job Retention Scheme’. Please do not call us for more information, everything you need to know about this scheme will be published online on GOV.UK.

Self-Employment Income Support Scheme

The Chancellor also announced plans to extend the Self-Employment Income Support Scheme (SEISS) for those people whose trade continues to be, or is newly, adversely affected by COVID-19 (coronavirus). Eligible self-employed people will be able to claim a second and final SEISS grant in August; this will be a taxable grant worth 70% of their average monthly trading profits for three months, paid out in a single instalment and capped at £6,570 in total.

The eligibility criteria for the second grant will be the same as for the first grant. People do not need to have claimed the first grant to claim the second grant: for example, their business may have been adversely affected by COVID-19 (coronavirus) more recently.

Claims for the first SEISS grant, which opened on 13th May, must be made no later than 13th July. Eligible self-employed people must make a claim before that date to receive the first SEISS grant (a taxable grant of 80% of their average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £7,500 in total). So far, we’ve seen over 2.3 million claims worth £6.8 billion.

It’s really important to note that as with the first SEISS grant, the eligible individual must make the claim themselves. If you attempt to make a claim on behalf of your client, this will trigger a fraud alert and will result in significant delays to payment. However, you can help to prepare your clients by ensuring they have the relevant information ready. The claims process is simple: we will calculate the amount of self-employment support individuals will receive, they don’t need to do this themselves.

More information about the second SEISS grant will be available on GOV.UK on 12th June.

In the meantime, please help us reach those self-employed people who could benefit from a SEISS grant now, by encouraging anyone you think might be eligible for the first grant but hasn’t yet made a claim to do so before 13th July.

Protect yourself from scams

Stay vigilant about scams, which may mimic government messages as a way of appearing authentic and unthreatening. Search ‘scams’ on GOV.‌‌UK for information on how to recognise genuine HMRC contact. You can also forward suspicious emails claiming to be from HMRC to phishing@hmrc.gov.uk and texts to 60599.

Return to the KSK recent news pages to keep up to date with the latest developments.

GOVERNMENT SUPPORT LINKS

GOVERNMENT SUPPORT LINKS

CORONAVIRUS (COVID-19) GOVERNMENT SUPPORT

29th April 2020

Here are links to the government support links giving the latest guidance:

FUNDING AND SUPPORT FOR BUSINESSES

This links to the main finance support, covering:

  • Paying your employees
  • Paying sick pay
  • Paying tax
  • Business rates relief
  • Business support grants
  • Support for the self-employed
  • Support for small and medium-sized businesses
  • Support for large businesses

Here: financial-support-for-businesses-during-coronavirus-covid-19

GOVERNMENT SUPPORT LINKS

SELF-EMPLOYED PEOPLE AND SOLE TRADERS

  • Claim a grant:

claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

  • Universal credit:

self-employment-and-universal-credit

  • If you cannot pay your tax bill on time:

difficulties-paying-hmrc

  • Continuing working -safe social distancing:

social-distancing-in-the-workplace-during-coronavirus-covid-19-sector-guidance

  • Relaxation for Drivers’ hours:

covid-19-guidance-on-drivers-hours-relaxations

  • Negotiating a mortgage payment holiday:

mortgages-coronavirus-consumers

GOVERNMENT SUPPORT LINKS

EMPLOYER RESPONSIBILITIES

  • General guidance and safeguarding employees:

guidance-for-employers-and-businesses-on-coronavirus-covid-19

  • Claiming wages through the Job Retention Scheme

claim-for-wages-through-the-coronavirus-job-retention-scheme

  • Social distancing in the workplace:

social-distancing-in-the-workplace-during-coronavirus-covid-19-sector-guidance

  • Statutory Sick Pay (SSP) Guidance:

employers-sick-pay

  • Claim back SSP:

claim-back-statutory-sick-pay-paid-to-employees-due-to-coronavirus-covid-19

  • Guidance if employee needs time off:

what-to-do-if-an-employee-needs-time-off-work-to-look-after-someone

  • Working from home – employee expenses:

check-which-expenses-are-taxable-if-your-employee-works-from-home-due-to-coronavirus-covid-19

  • Apprenticeships during the coronavirus outbreak:

coronavirus-covid-19-apprenticeship-programme-response

  • Advice for Tier 2, 4 and 5 sponsors:

coronavirus-covid-19-advice-for-tier-2-4-and-5-sponsors

GOVERNMENT SUPPORT LINKS

MANAGING YOUR BUSINESS DURING CORONAVIRUS

  • Cleaning your workplace safely:

covid-19-decontamination-in-non-healthcare-settings

  • Hand hygiene posters:

hand-hygiene/resources/

  • Temporary relaxation of rules to help businesses:

rules-that-have-been-relaxed-to-help-businesses-during-the-coronavirus-pandemic

  • Construction sites and safe working:

remediation-and-covid-19-building-safety-update-27-march-2020

  • Farmers, landowners and rural businesses:

information-for-farmers-landowners-and-rural-businesses

  • Food businesses:

guidance-for-food-businesses

  • Freight transport industry:

covid-19-guidance-on-freight-transport

  • Medical and Healthcare industry:

mhra-guidance-on-coronavirus-covid-19

  • Shipping and seaports businesses:

shipping-and-sea-ports-guidance

  • Supported accommodation, residential care and home care:

residential-care-supported-living-and-home-care-guidance

  • Transport businesses:

guidance-for-staff-in-the-transport-sector

  • Avoiding and supporting scammers:

report-suspicious-emails-websites-phishing

BUSINESS CLOSURES

  • Businesses that must close:

further-businesses-and-premises-to-close-guidance

  • Staying safe and continuing in business:

guidance-for-employers-and-businesses-on-coronavirus-covid-19

  • Holiday accommodation:

covid-19-advice-for-accommodation-providers

  • Closed businesses and the Coronavirus Job Retention Scheme:

claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

CAN YOUR BUSINESS PROVIDE HELP?

  • Offer the help of your business:

coronavirus-support-from-business

All the links are correct at the time of publication, please reporting missing / broken links to Paul Southward.

If you need any further help or guidance on any of the matters above contact Paul Southward or your usual KSK contact.

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