Financial services contribute record taxes

Financial services firms contributed a record £75.6bn in tax to the Treasury in the past fiscal year, according to a report for the City of London Corporation by PwC. The contribution included £34.1bn in taxes borne directly by finance firms and an extra £41.5bn collected from staff and customers through employment taxes and VAT. The importance of the sector to the economy is underlined by data showing insurers, banks and pension funds account for 3% of the workforce – over a million jobs – but contribute one in every 10 pounds in employment taxes. Isabelle Jenkins, head of financial services at PwC, said: “This report shows the continuing importance of financial services to the economy and to the public finances. At a time when the Government is borrowing heavily to support the economy, the taxes generated by the sector are particularly important. We need to ensure that we have a tax system that supports growth in the sector, allowing it to contribute to the economic recovery following the pandemic, while generating tax revenue in a sustainable way.”

The Daily Telegraph City AM

HMRC pays nearly 90% more in legal costs as number of cases lost increases

HMRC has paid 88% more in legal costs to taxpayers after losing cases in 2019/20 than it did in the year earlier period. Pinsent Masons partner Steven Porter commented: “The rise in the number of cases where taxpayers were awarded costs may suggest HMRC has been too bullish in some of the cases it has chosen to litigate.” A HMRC spokesperson said: “HMRC litigates in accordance with its obligations as the tax authority, and the Litigation and Settlement Strategy supports the correct discharge of those obligations.”

City AM


‘Normal’ bank lending to SMEs down 10% last year from £168bn

Research by debt specialist ACP Altenburg Advisory reveals that ‘normal’ lending to SMEs fell from £168bn in December 2019 to £152bn in December 2020, with emergency coronavirus funding through the Coronavirus Business Interruption Loan Scheme (CBLIS) and the Bounce Back Loan Scheme (BBLS) seeing almost £61bn lent to such firms by December 2020. Will Senbanjo, partner at ACP Altenburg Advisory, remarked: “SMEs looking to raise additional funds for growth in the months ahead may need to look at the alternative options, such as asset-based lending or alternative lender funding. Alternative lenders are open for business and are keen to deploy capital to well-managed businesses that have strong growth potential.”

London Loves Business City AM


Sunak urged to boost access to SEISS

Chancellor Rishi Sunak is being urged to make the Self-employed Income Support Scheme (SEISS) more accessible, with many self-employed workers ineligible to claim support under the programme. Andy Chamberlain, Director of Policy at The Association of Independent Professionals and the Self-Employed (IPSE), stated: “We are calling on the Government to include these people in the next round of SEISS, because they would have done a tax return by now. Because they have done that, HMRC has the information it needs in order to process those grant payments.” He went on: “The problem is, because of the arbitrary nature of the criteria, many have not been able to access SEISS. What we are seeing is wildly different experiences – Person A has been well looked after while Person B has not been very well looked after at all.”

Daily Express

One in three small businesses plans to downsize offices

Research by Grant Thornton reveals that a third of small businesses intend to reduce their office space going forward as the pandemic accelerates the take-up of home working. Of those who expect to reduce their space, 74% anticipate decreasing their existing footprint by up to a quarter. A further 12% expect to reduce their office space by up to a half. John Burgess, associate director, real estate and assets, Grant Thornton UK, said: “Our research shows that as home working becomes the norm, and demand for office space reduces, businesses will be looking to scale back their property portfolios and optimise spaces to suit new working models.”

The Scotsman


Uber tax rebate as VAT dispute remains

Ride-hailing app Uber has received tax credit from HMRC even as a dispute continues over whether the firm should be classed as a transportation provider. Such a categorisation could see the company forced to pay £1.5bn in VAT. A spokesman for the firm, which does not pay VAT on its fares in the UK because it says it is a software business rather than a transportation provider, noted: “We will always fulfil the tax obligations in any country in which we operate.”

The Daily Telegraph, Business, Page: 4 Daily Express, Page: 50 Daily Mirror, Page: 18


PayPoint completes double takeover

PayPoint has completed the takeover of two Haydock-based card payment and terminal leasing businesses – Handepay and Merchant Rentals – in a £70m deal. PwC undertook financial and tax due diligence on behalf of PayPoint. PwC also acted as lead corporate finance adviser to the shareholders of Handepay and Merchant Rentals.

Insider Media


40% of advisers lift fees to pension transfer clients

According to a survey for the FT, conducted by the Personal Finance Society, 40% of UK financial advisers offering transfer advice on defined benefit pensions have raised their fees since 2018.

Financial Times


Developers hit with new taxes to pay for unsafe cladding removal

The Housing Secretary has announced two new taxes levied on property developers designed to help the Government pay for the removal of unsafe cladding from high rise buildings post-Grenfell. The move by Robert Jenrick sent shares in major UK property developers down yesterday.

The Times, Page: 40 City AM London Evening Standard


Petro-states could lose $13trn in revenue by 2041

A new report from the think-tank Carbon Tracker says that oil and gas producing countries face a multi-trillion-dollar hole in their revenue as efforts to contain the rise in global temperatures drive the decarbonisation of energy supplies. It estimates the cumulative total revenue loss for all oil-producing countries by 2040 will be $13trn. A group of 40 countries Carbon Tracker describes as “petrostates” could suffer an average loss of 46% of oil and gas revenue. The report says diversification – of government revenue and national economies – is an urgent task.

BBC News


KPMG’s UK boss steps aside as firm probes comments that offended staff

Bill Michael, the chairman of KPMG UK, is stepping aside while the firm investigates comments he made to staff during an online meeting this week. Mr Michael told colleagues to “stop moaning” about the pandemic and the impact of lockdown on people’s lives, adding that they should stop “playing the victim card”. His decision to step aside came shortly after the FT requested comment on additional statements that KPMG staff attributed to Michael during the same meeting. He also allegedly dismissed the concept of unconscious bias as “complete crap” and admitted he would be meeting clients for coffee in spite of lockdown rules. Mr Michael’s comments elicited angry responses from staff, many of whom had said during the meeting that they were “drained”. One of the meeting participants said: “People are struggling with serious mental health issues and having our leadership tell us to shut up and pull ourselves up by our bootstraps is heart breaking.” The FT’s Lex says the leaks of Michael’s comments are just the latest in a series exposing cultural tensions at the firm.

Financial Times, Page: 1 The Daily Telegraph, Business, Page: 1 The Guardian, Page: 16 Financial Times, Page: 24 City AM BBC News Daily Mail, Page: 74 The Times, Page: 1, 2

Polish media groups in blackout protest at advertising tax

Private media outlets in Poland suspended output on Wednesday in a 24-hour protest at a proposed tax on advertising they fear would undermine independent journalism. Independent television networks, newspapers and news portals say the tax is politically motivated and could force many to go bankrupt.

Financial Times, Page: 6 The Daily Telegraph, Page: 15 The Times, Page: 34

Contact Paul Southward

Paul Southward