Time for citizens to take back control, scientists say

In an open letter published today, leading scientists say ministers and Government advisers are exaggerating the threat from COVID-19 and that all restrictions must be lifted on June 21 – the final date in Boris Johnson’s roadmap out of lockdown. They argue that with data showing vaccines reduce the risk of death by 98% and hospitalisations by more than 80%, COVID-19 is being turned into a mild disease in Britain. The letter’s 22 signatories include Professors Carl Heneghan and Sunetra Gupta from Oxford University, Emeritus Professor Hugh Pennington from the University of Aberdeen and Professor Robert Dingwall from Nottingham Trent University. “We are being told, simultaneously, that we have successful vaccines and that major restrictions on everyday life must continue indefinitely. Both propositions cannot be true,” the scientists write. They add: “Mandatory face coverings, physical distancing and mass community testing should cease no later than 21 June along with other controls and impositions. All consideration of immunity documentation should cease.”

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“It is time to free up businesses and people to start really building back our economy and the nations health.”



Investors in uproar over Biden’s proposed capital gains tax rise

Investors have lashed out at Joe Biden’s plans to double capital gains tax with Scott Minerd at Guggenheim Partners declaring the plans “insanity” while Anthony Scaramucci, founder of SkyBridge Capital, believes the proposals would “have deleterious effects on job creation and wage growth for middle-class workers.” Stocks fell following the announcement and cryptos such as Bitcoin and Ether fell sharply. Although the plans will face stiff opposition in Congress, fund managers warn that investors could dump “momentum” stocks as they seek to crystallise gains ahead of a tax hike. Alasdair McKinnon, manager of the Scottish Investment Trust, said the impact of Biden’s proposals would be felt across America’s stock market. “New capital gains taxes are unhelpful to all asset prices,” he said.

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EU plans creeping tax harmonisation

The Express reports on plans touted by the European Commission to harmonise tax rates across the bloc for tobacco products. Pieter Cleppe, a research fellow with the Brussels-based Property Rights Alliance, said in a paper that the Commission is exploring ways to do this without EU Treaty change, “using health concerns as a pretext to obtain more power.”

Daily Express

HMRC deadline extension creates state pension headache

HMRC has warned that small business owners and those with ‘side hustles’ could miss out on state pension benefits if they filed their tax return after January this year.

Financial Times, Page: 2


Conservatives should fight an international tax stitch-up

Hamish McRae asserts in the Mail on Sunday that if Joe Biden gets his tax hikes though Congress other countries would have cover for introducing similar measures too. The new administration wants to tax capital gains as income, raise corporation tax and introduce a global minimum tax rate. McRae says following the extreme pandemic spending by governments, raising taxes on the wealthy is logical and fair and hard to argue against. The Observer’s business leader lauds Biden’s move believing the tax hikes and trillions in stimulus are intended to tackle “deep-rooted inequalities” and that the UK Government should use Washington’s move to inspire its own plans to build back better. But Daniel Hannon contends in the Sunday Telegraph that plans for international tax harmonisation, with legal threats against those who resist, “would mark the birth of a high-tax cartel, and the rate would surely rise”. Socialists have long resented the fact that exorbitant taxes redistribute people rather than wealth, but without international competition this inconvenience would end, he says, as would the right of poor nation states to try and improve their lot through tax cuts. Ultimately, Hannan adds, low taxes improve revenue, employment and economic activity – all things needed to repair shattered post-pandemic public finances, but this seems to have been forgotten by Conservatives in the UK.

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HMRC sends 18,500 fines to wrong address

HMRC has sent 18,500 fines to the wrong address with a software error said to be to blame for the fiasco, the Sunday Times reports. Accountants have reported finding demands for multiple taxpayers when opening envelops addressed to another taxpayer, with private codes and other reference numbers included in the correspondence. “This is an absolutely astonishing blunder,” said George Bull from RSM. “HMRC makes much of relying on self-employed workers getting their tax bills right, but appears incapable of managing its own data.” In a letter to the Association of Taxation Technicians (ATT), HMRC said: “We sincerely apologise and recognise that this is not in line with our Charter standards. We take all aspects of protecting data very seriously so there has been a lot of activity to understand this incident and mitigate future risks.” HMRC said it had taken urgent action to ensure the data breach did not happen again: “If any agents receive any correspondence for incorrect clients, we would ask that they return them to HMRC.”

The Sunday Times, Business, Page: 12



Stanlow refinery reaches with HMRC

Essar Oil, which controls the Stanlow oil refinery in north west England, has struck a deal with HMRC on its tax liability. The refinery produces a sixth of the country’s petrol and diesel and has now been thrown a £400m lifeline by the taxman amid fears it could collapse. Industry sources confirmed the “time to pay” deal reached with HMRC has removed the risk of insolvency. International travel restrictions have reduced demand while poor margins for refining alongside market volatility caused operating losses for the company.

The Sunday Telegraph

Charities ration services as pandemic bites

Fundraising experts warn that charities will inevitably have to ration their services after the pandemic left them struggling for cash. Some small operations are suspending services leaving others to pick up the slack. The Sunday Telegraph notes that between April 2020 and February, the Charity Commission saw a 25% increase in concerns being raised by auditors over reports and accounts. The main issue reported was insolvency or financial difficulties.

The Sunday Telegraph

Tate & Lyle auctions off primary products division

Tate & Lyle has been working with Deloitte for some time to figure out the best way to spin off its primary products division, with Apollo Global Management and Cerberus among the interested parties. City sources say a £1.2bn auction for the division is now underway.

The Sunday Telegraph, Business, Page: 1



Small firms suffer cashflow woes just as support is withdrawn

The Sunday Times talks to small business owners who, after being devastated by the pandemic, face paying back Covid loans before their cashflow has been repaired. One businessman said: “The speed at which the Government thinks you’re able to start hurling money back at them is crazy.” Craig Beaumont, chief of external affairs at the Federation of Small Businesses said the issue was common, adding: “The Government should be throwing everything it’s got at getting businesses across this ‘unlock’ phase and into the recovery, to avoid businesses falling at the final hurdle because of lack of cashflow.” But Steve Russell, head of restructuring services at PwC, says VAT deferrals, the furlough scheme and emergency loans are “not gifts. They are support schemes that need to be unwound.”

The Sunday Times, Business, Page: 3



Families increasingly using deed of variation

Irwin Mitchell solicitor Sarah Paton says there has been an uplift of families changing the wills of elderly parents after they pass to help younger generations hit hard by the pandemic. “A deed of variation can be used to give a fixed sum or a proportion of the estate directly to the grandchildren of the deceased instead of the children,” she explains. Mike Hodges, partner at Saffery Champness, points out that families often decide it is better to wait until after the death to work together to rejig the will, to save the loved one distress. Using a deed of variation can also reduce inheritance tax liabilities by shifting assets directly to a younger person’s estate.

The Mail on Sunday



Drop in pension income more startling than expected

With the closure of final salary pension schemes looming, Lane, Clark & Peacock believes the drop in pension income is going to be more startling than first thought. Its research suggests that the average man retiring this year will have an annual income of £14,634 and a woman £10,042, including state pensions. But by 2045, a man retiring would have an income of £12,460, and a woman £10,797, in today’s money. Female income improves because more are expected to be able to claim full state pensions. Public sector workers will suffer less because many will still have defined benefit pensions. Steve Webb, a former pensions minister and partner at LCP, commented: “For years, salary-related pensions from private sector jobs have supported the incomes of the newly retired, and men in particular. But these pensions are disappearing much more rapidly than we thought. And new-style workplace pensions are not being built up quickly enough to take up the slack.”

The Times



More action needed to close pensions gap

The Sunday Times warns that more needs to be done to close the pensions gender gap and promote equal pay in retirement. The paper reports that research from the Prospect union has found that the gap for pensions stands at 40.3%, more than double the gender salary gap of 15.5% reported by the ONS. The SNP MP Patricia Gibson said it was unacceptable that all types of pension inherently discriminate against women. It is noted that last week, Guy Opperman, the Pensions Minister, said there was a “clear passion” for making women better off in older age.

The Sunday Times



Tax deadline leads to frenzied market

House prices have rocketed over the course of the stamp duty holiday and there is a buying frenzy as the deadline looms, reports the Sunday Times. Figures from HMRC show almost 191,000 homes were sold in March – the highest number in a single month since July 2004. But the savings from the Chancellor’s tax cut have long since been cancelled out by property price rises, the paper’s Carol Lewis claims.

The Sunday Times, Page: 6



Former subpostmasters cleared over accounting scandal

Almost 40 former subpostmasters who were convicted of theft, fraud and false accounting because of the Post Office’s defective Horizon accounting system have finally had their names cleared by the Court of Appeal. The Horizon system, developed by Fujitsu, was first rolled out in 1999 but from an early stage it appeared to have significant bugs that could cause the system to misreport. Horizon-based evidence was used by the Post Office to successfully prosecute 736 people. Lord Justice Holroyde said the Post Office “knew there were serious issues about the reliability of Horizon” and had a “clear duty to investigate” the system’s defects. But the Post Office “consistently asserted that Horizon was robust and reliable”, and “effectively steamrolled over any subpostmaster who sought to challenge its accuracy”, the judge added. In all, 39 of the 42 appeals were allowed on the grounds that the prosecutions were “an affront to the public conscience.” Lawyers for the group said they would be seeking compensation and an urgent criminal investigation into the actions of those at the Post Office.

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Talent hunt kicks off as London firms launch hiring sprees

Financial services, legal, PR and construction companies across London are ramping up hiring with recruiters reporting a 349% jump in banking jobs advertised. But tech is driving job creation with KPMG’s quarterly tech monitor revealing that in the three months to March, UK tech sector firms hired staff at the fastest pace seen since the second quarter of 2019. Robert Walters’ UK managing director, Chris Poole, said: “March was incredibly busy for us. It almost felt like a line in the sand – it was incredibly busy across all sectors. Technology has been busy all the way through, but there has been a lot of pent-up demand within legal, within accountancy, within financial services. Even manufacturing, procurement, supply chain – it has been across the board.”

Evening Standard



Equivalence or no equivalence, London will stay financial services leader

KPMG ’s head of Financial Services Karim Haji has said if the UK and the EU fail to agree a deal on equivalence it won’t be the end of the world. Although it would “make life easier”, it was not mandatory for a successful financial services sector. “If you take a step back, the UK has been one of the leaders in financial services regulation and infrastructure, it’s one of the key innovators in the space as well, and one of the leaders in the world, and that’s why the UK has been successful in exporting financial services – that isn’t changing as a result of Brexit,” he continued. Mr Haji’s comments come after EU commissioner Mairead McGuinness said there was no pressure to reach agreement with the UK on financial services.

City AM Daily Express



UK economy rebounds with demand surging

Private sector activity grew at the fastest rate since November 2013 in April, hitting a reading of 60, according to IHS Markit’s purchasing managers’ index (PMI). This is up from 56.4 in the previous month and above the 58.2 forecast by economists. Service sector business activity rose from 56.3 to 60.1, while manufacturing output was up from 56.6 to 59.1. Chris Williamson, chief business economist at IHS Markit, said: “Companies are reporting a surge in demand for both goods and services as the economy opens up from lockdowns and the encouraging vaccine rollout adds to a brighter outlook.” Looking forward, Williamson added: “Business activity should continue to grow strongly in May and June as virus restrictions are eased further, setting the scene for a bumper second quarter for the economy.”

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UK retail sales jump

Data from the ONS show retail sales in Great Britain rose 5.4% in March compared with the previous month – a much stronger reading than the 1.5% forecast by economists. Sales of clothes was particularly strong rising by more than 17% while the easing of travel restrictions towards the end of the month led to an 11% increase in fuel sales. Howard Archer, chief economic advisor to the EY ITEM Club, said: “It does appear that many people were intent on having an enjoyable Easter break and this likely lifted retail sales later in the month.” Also commenting, Lisa Hooker, consumer markets leader at PwC, said: “Much though these figures will give cheer to the whole sector, retailers will be hoping that these positive signs translate into a sustained return to the physical stores as they reopen across the UK over the course of April. The real test of whether pent-up demand can be turned into actual sales w ill come with next month’s figures.”

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Covid response pushes UK borrowing to highest since second world war

Figures from the ONS show UK government borrowing hit £303.1bn in the year ending in March, a jump of £246.1bn on the previous year when the figure was only £57.1bn. The coronavirus pandemic has driven the UK’s total accumulated public debt to £2.14trn, or 97.7% of GDP, the highest level since the early 1960s. As a percentage of national output, borrowing in the year between April 2020 and March 2021 stood at 14.5% – the highest since the financial year ending in March 1946. KPMG senior economist Michal Stelmach said rising debt was a consequence of shielding the economy from COVID-19.

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Broadbent forecasts speedy recovery

The deputy governor of the Bank of England predicts “very rapid growth at least over the next couple of quarters” as Britons spend cash accumulated during the pandemic and save less of their forthcoming income. Ben Broadbent is more bullish than most of his Monetary Policy Committee colleagues on whether people will spend their savings but he warns that the year ahead is likely to be bumpy regarding inflation with multiple shifts in demand and supply.

The Sunday Telegraph

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Campaigners in tax credit debt call

Campaigners have called on ministers to write off old tax credit debts after it emerged payments to a number of Universal Credit (UC) claimants have been cut during the pandemic. HMRC has been deducting up to £100 a week from benefits to recoup mistaken tax credit overpayments and an investigation has shown that officials have targeted 47,000 low earners a week since January 18 because they were overpaid credits from up to 17 years ago. The analysis shows that HMRC has sent over 2.2m letters to UC claimants since 2016 telling them to expect deductions due to historical tax credit overpayments amounting to over £2bn, with claimants seeing £63m deducted from April to November last year. Sir Iain Duncan Smith, the former Work and Pensions Secretary, said clawing back tax like this was “a major mistake” causing “profound difficulties”. Stephen Timms, Labour chairman of the Work and Pensions Committee, said the process is “deeply unfair”, adding: “It shouldn’t be happening. These reductions ought to be suspended until the pandemic is over.” StepChange, Britain’s largest debt advice charity, said that almost one in five of its clients with Government debts had been told they had been overpaid tax credits.

The Times, Page: 12 Daily Mirror, Page: 2

Top tips ahead of the new tax year

Shashi Prashad and Jo Bateson of KPMG offer advice to businesses going into the new tax year, with guidance on issues including the super deduction which will allow companies to cut their tax bill by up to 25p for every £1 invested – a policy that was described by the Chancellor as “the biggest business tax cut in modern British history”. They also offer advice on research and development tax credits; emergency measures rolled out amid the pandemic, including VAT and business rates reductions; and a possible move to near real-time collection of income tax, corporation tax for small companies, and capital gains tax.

The Times


Business insolvencies set to rise 26%

A report from trade credit insurer Atradius suggests global insolvency rates are set to rise by 26% this year, with state support amid the coronavirus pandemic having delayed insolvencies that would have occurred in 2020. The report, 2021: A turn of the tide in insolvencies, suggests that a number of markets are set to exceed the average by a significant margin, with failure rates in the UK expected to rise by 56%. The report also says 2021 will bring “new hope” as recovery sets in after a year of global recession. Global GDP saw a 3.7% contraction in 2020 but 2021 is expected to deliver growth of 6%. While the UK saw a 9.9% drop in GDP in 2020, Atradius forecasts the UK economy will expand 5.9% in 2021.

Financial Times London Loves Business

Trade body warns over Liberty collapse

ADS Group, a trade body that represents more than 1,100 employers in the aerospace, defence, security and space sectors, has written to Business Secretary Kwasi Kwarteng warning that the potential failure of Liberty Steel could see supplies of specialist metals disrupted. Liberty is under threat after the collapse of Greensill Capital, the commercial lender and main backer of the steel business’s owner, GFG Alliance. Liberty’s immediate survival depends on a standstill agreement being reached with Grant Thornton, Greensill’s administrator.

The Times, Page: 32

Flybe set to take-off again

Flybe is set to be relaunched after regulators granted the airline permission to return to the skies. The airline closed down in March 2020 but a new company affiliated with Cyrus Capital, which was part of a consortium that bough the airline in 2018, has bought Flybe’s business and assets. It will be known as Flybe Limited and is expected to fly many of the previously operated routes. The deal between Cyrus Capital and administrators at EY excludes Flybe’s aircraft, which were mortgaged to lenders by the previous owners, but includes Flybe’s take-off and landing slots.

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Financial services firms see optimism increase

Financial services companies are seeing confidence in the economy surge at the fastest pace in more than seven years, according to a report from the CBI and PwC. The analysis shows that optimism rose at the fastest rate since December 2013 in March. A net balance of 52% of respondents said that they felt confident about the future, up from 44% in December. While businesses were hit during the most recent lockdown, a net balance of 43% said that they expected volumes to improve over the next three months. Businesses in the financial services sector expect profitability to rise in the next quarter, with a net balance of 32% forecasting higher profits. While employment fell for a fifth consecutive quarter in March, with a net balance of -12% reporting increased headcount, the pace of decline is expected to ease in Q2. Rain Newton-Smith, chief economist at the CBI, said: “It’s encouraging that financial services firms are feeling optimistic about the months ahead, likely warmed by the prospect of a phased reopening of the economy.”

The Times, Page: 34 City AM

City job listings surge

Morgan McKinley’s quarterly London Employment Monitor shows that financial services job posting s returned to growth in March. The sector saw a 70% increase in job postings and a 4.8% rise in job seekers. Available roles were up 50% year-on-year. Hakan Enver, managing director at Morgan McKinley UK, said: “As the vaccine rollout continues apace and the road out of lockdown clears, we are seeing the sector recover at a faster rate than anticipated.” Separate analysis shows that London remains a global financial centre, retaining second place behind New York in the Global Financial Centres Index, while PwC’s annual survey of chief executives revealed that the UK is a more attractive investment proposition than it was before Brexit. The Telegraph’s Simon Foy says the Morgan McKinley report appears to pour cold water on suggestions that Brexit would lead to a mass exodus of financial services professionals from the City. He notes EY analysis showing that 7,600 financial service s jobs have moved out of the UK due to Brexit, a “tiny proportion” of the UK’s finance sector roles and far less than many analysts had predicted.

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Young black workers hardest hit by pandemic

Young black and Asian workers have been the hardest hit by the rise in unemployment during the coronavirus pandemic, a study by the Resolution Foundation think-tank has found. Over the past year, the UK jobless rate for young black people rose by more than a third to 35%, while for young people of Asian descent saw the jobless rate increased to 24%. For young white people, the unemployment rate hit 13%. Overall, the unemployment rate among 18 to 24-year-olds rose from 11.5% to 13.6% between Q2 and Q3 2020. The 18% increase marks the largest quarter-on-quarter rise among this age group since 1992. Kathleen Henehan, a senior research and policy analyst at the Resolution Foundation, said the furlough scheme “has done a fantastic job of minimising job losses amidst unprecedented shutdowns of our economy” but warned that the pandemic “has created a highly generationally unequal unemployment surge and widened pre -existing gaps between different ethnic groups”.

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House prices hit record high

Analysis from Halifax shows that house prices have hit a record high despite rising at a slower rate than a year ago, hitting an average of £252,765. The report reveals a 5.7% year-on-year increase in Q1, with this down from a nearly five year high of 7% recorded last year. On a quarterly basis, prices rose 0.3% in the first three months of the year, marking a slowdown on the 2.5% increase seen in Q4 2020. Reflecting on the figures, AJ Bell analyst Laith Khalaf was optimistic about the outlook for the sector, saying: “While there might be a few bumps along the way, particularly at the end of the stamp duty…the property market has proved itself to be unbelievably resilient.” He notes that much of this “comes down to the efforts the Government and the Bank of England have made to make mortgage borrowing incredibly easy and cheap.”

Daily Express City AM


Productivity rises amid the pandemic

Office for National Statistics data show that productivity increased last year, with output per hour, the main measure of productivity, increasing by 0.4%. The climb comes despite lockdowns causing economic output to shrink by almost 10%, with the headline figure increasing largely because the lower-paying and least productive jobs had borne the brunt of the pandemic. Output per worker in 2020 was 9.5% lower than in 2019. Howard Archer, chief economic adviser to the EY Item Club, said that “the sectors which saw a fall in their relative share of hours worked typically had lower productivity levels”, while higher productivity industries “increased their relative share of hours worked”.

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How will Biden’s tax plan affect investment in Ireland?

The BBC’s John Campbell talks to experts about the possible impact of the Biden administration’s global corporate tax proposals on Ireland, which has famously lured multinationals to its shores with a 12.5% tax rate. This tax advantage could be wiped out with a global minimum rate which could be set at 21%, according to a suggestion from US Treasury Secretary Janet Yellen. But Peter Vale, tax partner with Grant Thornton in Dublin, thinks a figure in the teens is more likely, adding that another key issue will be exactly how what rate a company is paying is worked out.

BBC News


Supply chains will fight for tougher regulation if corporates fail them

Rashmi Dube asserts in the Yorkshire Post that it is small businesses that pay the price for corporate governance failings at large businesses, along with Big Four conflicts of interest. Companies such as Carillion and BHS are forced into insolvency by board-level failings and suppliers want to know how they are going to be protected going forward. “It’s time for regulation and legislation to become stronger and better.”

Yorkshire Post

SME confidence soars

A survey of over 1,500 firms by the Federation of Small Businesses found that confidence was at its highest since 2014 with 51% expecting their revenues to grow over the next three months, the highest proportion since the summer of 2015. Only 24% expected sales to fall.

The Times, Page: 33 The Guardian, Page: 27 Daily Express, Page: 43


London takes global top spot for luxury home sales

New figures show the world’s super-rich bought more homes in London than any other city in the world last year, spending almost $4bn on super-prime properties in the UK capital.

Financial Times


Savers hunt for lost pension savings

The Daily Telegraph profiles how savers have started hunting for £40bn in lost pension savings ahead of Government proposals to use forgotten pensions and other dormant assets to launch £800m of funding for charities and social enterprises in a bid to help local economies bounce back from the pandemic. Duncan Stevens of Gretel, an asset tracing firm, said there had been an increase in the number of people inquiring about lost savings during lockdown. “People have more time on their hands and financial concerns are at front of mind,” he said. The firm estimates that 20m people have a share of around £50bn in lost savings of some kind today.

The Daily Telegraph


Prospects improve as Brexit-related uncertainty wanes

New research from BDO indicates that employment prospects are improving amid the success of the vaccine rollout and extension of the job retention scheme. Although the pandemic has seen the number of payroll employees go down by 693,000 on a year ago, the absence of Brexit-related uncertainty has also helped to fuel renewed optimism, BDO said.

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Shared audits will not provide market resilience – Herbinet

David Herbinet, the head of audit at Mazars, has called for the eventual introduction of joint audits as part of a shake-up of the industry. He told the Telegraph that managed shared audits, which have been proposed in the Government’s white paper on audit reform, do not go far enough to increase competition and choice and he would only support them as a stepping stone to joint audits. These were proposed in a 2019 review by the Competition and Markets Authority and would mean two or more firms are appointed to take equal responsibility for an entire group. Mr Herbinet said: “The main concern is that, fundamentally, managed shared audits are not going to have any meaningful impact on the market’s resilience, which I think has got to be one of the key objectives in all of this.” Business Secretary Kwasi Kwarteng’s proposals for reform also include a requirement for Big Four firms to ringfence their audit and consulting arms to reduce conflicts of interest and the creation of the Audit, Reporting and Governance Authority, which will replace the Financial Reporting Council and could have power over large unlisted companies as well as those on the stock market.

The Daily Telegraph, Business, Page: 1

Optimism returns for finance bosses

A poll of FTSE 350 finance directors by Deloitte has revealed that the proportion expecting a reduction in capital spending over the next three years has fallen to 19% from 65% last summer. Additionally, 29% now expect to reduce hiring, down from 74% last summer. Hiring expectations have increased markedly while two-thirds of bosses expect the bulk of their workforces will return to the office by the third quarter of the year.

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Letter: Mid-tier auditors fear the scrutiny of big mandates

Kingsley Napley’s Julie Matheson says not all mid-tier auditors want the extra regulation that comes with auditing listed companies, as per proposals for shared audits, and the prospect of significant sanctions.

Financial Times, Page: 24


Kwarteng makes concession on new UK takeover regime

The Business Secretary has revised the Government’s National Security and Investment Bill so fewer takeovers of British companies will need to be scrutinised by the state. Kwasi Kwarteng has revised the stake threshold at which the business department must be notified about a deal, from 15% to 25%. It follows a move last month when Mr Kwarteng narrowed the list of which type of foreign investments will fall foul of the new takeover regime. The business secretary will still have the power to call in deals below the 25% threshold if there is a suspicion that a minority stake could give the foreign investor material influence over a company. But the Henry Jackson Society think tank, said the change “risks very real security risks being allowed to sail by without scrutiny,” adding: “The Government must urgently explain its justification for this reversal.”

Financial Times The Times


UK has best first quarter for IPOs in 14 years

EY ‘s latest IPO Eye report shows the UK had the strongest first quarter for initial public offerings in 14 years with 12 main market and eight Aim IPOs raising a total of £5.6bn. This is more than half of the £9.4bn raised in the whole of 2020. The same period in 2020 saw just three IPOs on the main market and two on Aim, which raised a combined total of £615m. EY said confidence in the UK’s IPO markets as an exit route had been reinforced by significant private equity activity in the quarter. The report also showed that the UK has maintained both its position as the leading listing location in Europe and its third place position globally behind the US and China.

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Future less than certain for Bonmarché

The Telegraph considers the fate of Bonmarché as administrators try to decide how many stores will reopen when Covid restrictions are lifted on Monday. Just over 70 of the chain’s stores were taken over four months ago and are set to reopen today but some or all of the remaining 148 stores may never reopen. Administrators at RSM have been reviewing the options but declined to say how many stores will reopen this week.

The Daily Telegraph, Business, Page: 1


Full extent of pandemic’s high street casualties yet to be revealed

More than 17,500 chain store outlets disappeared from British high streets last year as the pandemic drove the worst decline on record. As the survivors prepare for reopening, figures compiled by the Local Data Company and PwC show fashion retailers were the hardest hit, followed by betting shops, pubs and bars and restaurants. Lisa Hooker, the head of consumer markets at PwC, commented: “The full extent will be revealed in the coming months as many of the [company restructures] and administrations in the early part of 2021 still haven’t been captured, including department stores, fashion retailers and hospitality operators that will leave big holes.” Separate figures from the British Retail Consortium show the closures wiped out 176,000 retail jobs at a rate of 484 jobs a day with a further 11,986 jobs were lost through CVAs.

Daily Mirror

Consumer confidence returns

New analysis by YouGov and the Centre for Economics and Business Research shows consumer confidence has risen to its highest level since August 2018. Employment security is close to pre-pandemic levels, the research found, and for the first time since the start of the pandemic, more households than not believe their finances will improve in the year ahead.

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US tax plans could prove costly for British businesses

Although UK officials have welcomed moves by the Biden administration to force multinationals to pay more tax, the Treasury is urgently reviewing how the plans might affect UK businesses. The Telegraph reports that there is concern in Whitehall that British companies could end up paying more elsewhere in the world as a result of the proposals, potentially reducing revenues for the Exchequer. Washington’s plans would see a global minimum corporation tax and levies for companies based on the location of their sales. While tax campaigners and the Labour party urge the Chancellor to publicly back the plan – Tax Justice UK estimates the blueprint would bring in an extra £13.5bn a year for the public purse – Suren Thiru, head of economics at the British Chambers of Commerce, said while a co-ordinated international approach to addressing tax avoidance is preferable to a disjointed nation by nation approach, “significant questions remain on how it would work in practice.” In the FT, DeAnne Julius says Biden’s plans are brave and bold and could save companies a lot of time in tax planning.

The Daily Telegraph, Page: 35 Financial Times, Page: 11 The Guardian, Page: 42 The Times, Page: 53

One in ten cheques from HMRC not cashed

HMRC has said that nearly 3.8m cheques sent to taxpayers between 2015 and 2020 have not been deposited in accounts, amounting to a tenth of all tax rebates sent by post over the period. Less than 2% of tax refunds are made by cheque, according to HMRC, which said it pays money into people’s bank accounts directly where possible.

The Times, Page: 57


Could global tax reform at last be within reach?

Several sources cover news of the Biden administration’s corporation tax proposals with the FT reporting that the political battle lines in the US are being formed with many Republicans on Capitol Hill warning that the changes could harm US multinationals while two of the most influential Democratic lawmakers on tax policy have backed the plans. Elsewhere, the Observer’s business leader argues that the move from Washington has raised hopes of a breakthrough for a global agreement on tax and describes the proposals as a change that could make the world a fairer place and “kill tax havens dead”.

Financial Times The Observer, Page: 56

No IHT for Philip’s bequests, unless you’re a minor royal

The Sunday Times reports that due to a deal struck with former PM John Major bequests from Prince Philip to the Queen, the Prince of Wales and the Duke of Cambridge will be tax-free. However, anything from the Duke of Edinburgh’s estate which is passed to his other children or grandchildren, including his second son, the Duke of York, and the Duke of Sussex, would be taxed at the standard 40%, above the £325,000 threshold. The “sovereign to sovereign” rule was negotiated with the Conservative government in 1993 when the Queen and the Prince of Wales first agreed to pay income tax.

The Sunday Times, Page: 4



Suspect Sanjeev Gupta invoices used in Greensill loans raise fraud concerns

Several European metals companies have denied doing business with Sanjeev Gupta’s Liberty Commodities, raising questions over invoices purporting sales to the businesses which formed the basis of funding from Greensill Capital. Separately, the collapse of Greensill has led to 440 staff losing their jobs, administrators have revealed. Grant Thornton said 305 redundancies would be made at the firm’s head office in Warrington, with the rest in London.

Financial Times, Page: 1 BBC News

John Lewis chief says no more store closures expected

Pippa Wicks, John Lewis’s chief executive, has insisted there will be no further shop closures, as she defended the partnership’s revival strategy two weeks after shutting eight outlets. The Times cites analysis by PwC which shows nearly 99m sq ft of retail space has closed in the past year while 5,500 out of 30,000 non-essential retail stores remained closed between the three lockdowns and may never reopen.

The Times, Page: 49 The Daily Telegraph

Frasers Group to take £200m Covid hit

Mike Ashley’s Frasers Group is anticipating a £200m hit due to coronavirus, warning that further restrictions on retail are “almost certain”. Chris Wootton, chief financial officer, said the additional writedown had not been the result of pressure from RSM, its new auditor, and that the decision had not been reviewed by RSM although the group had informed the firm before telling investors.

The Daily Telegraph The Times, Page: 50 City AM The Guardian

Brooks Brothers UK enters administration

The British division of US clothing retailer Brooks Brothers has entered administration, after suffering from a lack of demand for its products as people worked from home. Begbies Traynor has been appointed as the company’s administrators.

City AM


Italian consortium to bid for National Lottery

The Sunday Telegraph reports that investment firm CVC Capital Partners is backing a bid to run the National Lottery led by portfolio company Sisal, the operator of Italy’s most popular lottery. The bid will be made in conjunction with children’s charity Barnardo’s, which will provide expertise on raising money for good causes in the UK. The Sisal-led consortium is attempting to displace incumbent operator Camelot, which has run the National Lottery since its launch more than a quarter of a century ago. The auction is being run by Rothschild, EY and Hogan Lovells on behalf of the Gambling Commission and is scheduled to culminate this autumn.

The Sunday Telegraph, Business, Page: 4

Day accused of manipulating Peacocks rescue

The Sunday Times reports on claims that Philip Day engineered the administration of his Peacocks business so it ended up being bought by Steve Simpson, his closest lieutenant. The paper’s Sam Chambers says the deal has ensured the key components of Day’s Edinburgh Woollen Mill Group have ended up being controlled by Simpson and that other suiters had no chance, leaving questions for advisers from FRP Advisory and RSM.

The Sunday Times, Business, Page: 5



Scotland’s entrepreneurs need vision and investment

Gillian Bowditch says in the Sunday Times that Scotland’s small businesses need investment from the Scottish government and leadership from Scottish Enterprise – an organisation she says, “has proved to be a bloated and inefficient body that ought to be disbanded.” SMEs are the key to economic growth and instead of dreaming about unicorns, Nicola Sturgeon’s government should recognise that uncertainty over independence makes business leaders nervous and red tape ties up entrepreneurs: what’s needed is “vision, courage and calculated risk” or there is little hope for economic growth.

The Sunday Times

Optimism returns for small businesses

A report from Hitachi Capital shows confidence among small businesses has returned to pre-pandemic levels, with 36% of business owners predicting they will grow during the second quarter, up from just 14% a year ago. The percentage fearing collapse has also fallen from 29% over the past year to 7%.

Sunday Express, Page: 59



Banks prepare to claw back billions in Covid loans

HSBC, NatWest, Barclays and Lloyds have begun writing to businesses warning them that repayments on emergency support loans will soon be expected. Banks have handed out more than £75bn to 1.6m firms under a number of schemes set up by Rishi Sunak, the Chancellor, and are expected to spend millions on recovery. One senior banker warned that lenders could go in hard to recover debts after a recent court case found banks do not have a duty of care to borrowers who fail to repay.

Daily Mail



Pension schemes take legal action over reformulation of inflation measure

Trustees of the Ford, BT and Marks and Spencer pension schemes are seeking a judicial review of the decision to change the calculation of inflation, which they say will leave millions of retirees with lower annual payouts. The Government’s recent decision to align the Retail Prices Index (RPI) with the Consumer Prices Index including owner occupiers’ housing costs (CPIH) will have “far-reaching implications” which have not been “fully considered” by officials, the trustees argue. The reform is also seen as likely to lead to an increase in scheme funding shortfalls because it reduces the value of RPI-linked assets. This in turn would add pressure on sponsoring employers, the trustees pointed out.

Financial Times Pensions Age Investment & Pensions Europe


How to get your own £7,000 state pension bonanza

The Telegraph reveals how pensioners were able to recoup thousands of pounds of pension underpayment after reaching out to Sir Steve Webb, the former Pensions Minister. Figures released last week by the Office for Budget Responsibility revealed the average arrears payment for the first time. More than 74,000 married women are to receive up to an average of £23,000 over the next five years, while widowed retirees are owed an average £17,000. Sir Steve, who has led the campaign resulting in thousands of women applying for back payments, said: “While it is good news that some married women will now be contacted and awarded an increased pension as part of the DWP’s exercise, even this group may have to wait up to five years to be put on the right rate.”

The Daily Telegraph

Britons may have to work an extra four years before retirement

Experts have suggested a recent study concluding that the average retirement age has risen from 64 to 66 may be off the mark by four years or more. Neil Moles, CEO of financial advice firm Progeny, says his research indicates “people are expecting to work for up to two years more, however, we could be looking at three, four or more years longer than this for many people.” Moles suggests this is a result of fears over high levels of government debt and future tax hikes, as well as concerns over looking after other family members after they retire.

Sunday Express



House prices expected to continue rising

Figures from Halifax on Friday show house prices rose 1.1% during March, the biggest increase in six months. In annual terms, prices rose 6.5%, the strongest reading in four months and taking the average house price to a record high £254,606, Halifax said. The lender added that it expected the upturn to persist in the next few months as consumer confidence grows on the back of Britain’s swift COVID-19 vaccine rollout. “However, with the economy yet to feel the full effect of its biggest recession in more than 300 years, we remain cautious about the longer-term outlook,” Halifax added.

Daily Mail

Property developer boss says workers must return to the office

Land Securities CEO Mark Allan is urging the Government to change its guidance that states people should continue work from home if they can until June at the earliest. A safe return to the office should be accelerated if we are to see economic activity in Britain’s cities revived, Allan said. His comments come as employers including HSBC, Lloyds, Grant Thornton and PwC have said they will slash office space after the pandemic recedes.

Daily Mail, Page: 91


NCP’s landlords gear up for battle over restructuring plans

Landlords are fighting back against demands from Japanese-owned car park operator NCP that substantial rent arrears are written off. Sky News reports that a group of landlords is said to be lining up AlixPartners and Hogan Lovells to advise them in a bid to overturn NCP’s proposals. Melanie Leech, the chief executive of the British Property Federation, said: “This Restructuring Plan, if approved, will signal to businesses that they can use this new business rescue procedure to simply walk away from debt owed to property-owners […] who represent local authorities and millions of pensioners and savers invested in commercial property, to a business’ shareholders.” NCP, which is being advised by Deloitte, has warned that it is likely to collapse unless the restructuring is implemented.

Sky News



Furlough fraud cases rocket

The Express reflects on the creation of a taskforce to claw back cash lost to furlough fraud during the pandemic. Official figures from HMRC show reports of furlough themed fraudulent activity have risen to just over 26,000; at the time of the Budget HMRC had 10,000 live inquiries. Iskander Fernandez, Head of White Collar Crime and Investigations at BLM, said of the Chancellor’s £100m funding for the taskforce that it may be considered “a conservative sum given the potential scale of fraud.”

Daily Express


MPs call for fairness as IR35 changes rolled out

The All Party Parliamentary Loan Charge Group has called for off-payroll reforms currently being rolled out to be re-examined during the passage of the Finance Bill this year. A report from the group stated that: “All ‘inside IR35’ workers should get full rights under all legislation dealing with agency workers, with a clear and transparent right to holiday and sick pay.” The APPG recommended an alignment of tax and employment law to ensure fairness, declaring: “We call on the Government to accept it is unfair for workers who are taxed as employees to be denied the rights and benefits of an employee or recognition in employment law. Anyone who is taxed as an employee should also receive the corresponding benefits; thus, by aligning tax and employment law, certainty for both contractors and hirers will ensue.”

Sunday Express



Consumers chomping at the bit

Experts are predicting a spending spree next week as shops reopen on what is being dubbed as “Bounceback Monday”. Analysts predict £4.5bn could be spent in the first seven days of post-lockdown shopping with Lisa Hooker, head of consumer markets at PwC, saying: “You will see a big bang, particularly if the weather is good. There is enormous pent-up demand. Retailers were quite cautious when we came out of lockdown last year but this time there is far more excitement.”

Daily Mail, Page: 43

Trade with France returns to pre-Brexit levels

March saw trade between the UK and France return to pre-Brexit levels raising hopes of a swift recovery as businesses get to grips with customs arrangements. Analysis by French customs officials shows imports from Britain climbed to 107% of typical levels after taking Covid effects into account, the research found – with exports back at 96%.German figures for February also showed improvement with the sharp slump witnessed in January shrinking markedly. However, trade experts said Anglo-German trade is still struggling badly with exporters hit particularly hard.

The Daily Telegraph


Take care of emerging markets, your future depends on it

The International Monetary Fund warned last week that the multi-speed recovery from the pandemic was leaving developing nations behind. The worst-hit countries will be emerging Asian economies which could suffer a near-8% loss in GDP by 2024 compared to pre-Covid projections. The US, by comparison, will be larger by 2024 than it would have been if Covid had never hit. “Last year, everyone spent like crazy, it was a big widening of fiscal deficits everywhere in advanced economies and in emerging markets,” explains Marcelo Carvalho, head of global emerging markets research at BNP Paribas. “The difference is the room for manoeuvre; the fiscal space is more limited for emerging markets. In advanced economies, you can print your own hard currency, it’s not the case for emerging markets.” The Telegraph’s Tom Rees concludes: “Advanced economies could soon put Covid in the rear-view mirror but for many poorer countries a longer, rougher road to recovery lies ahead.”

The Sunday Telegraph



Wall Street investors look warily at gathering tax ‘storm’

While many laud President Joe Biden’s corporation tax plans, analysts are warning they pose a serious risk to profit margins for US companies and could derail hiring plans. As if to illustrate the point, the Times reports on an exodus of millionaires from New York to Florida and Texas as tax rises threaten a drastic reduction in the city’s tax receipts.

Financial Times, Page: 17 The Times, Page: 44

Contact Paul Southward

Paul Southward





CIOT and ICAS call for increased tax awareness

Accounting bodies in Scotland have called on the country’s political parties to improve public understanding of the devolved tax system. The plea comes as a new poll reveals that a third of Scots don’t know the Parliament has changed their taxes. The Chartered Institute of Taxation (CIOT) and the Institute of Chartered Accountants of Scotland (ICAS) have also called for increased scrutiny of tax by MSPs with the introduction of an equivalent to the Westminster Finance Bill, which would make changes to the tax system easier and more visible. The organisations make the call in a new paper, Building a Better Tax System, after a recent poll found that 33% of Scots said they were unaware that the Scottish Parliament had made changes to the tax system since 2015 and 26% said they were “not aware” the Scottish Parliament even had the power to make changes to income tax rates.

The Scotsman

IMF proposes ‘solidarity’ tax on pandemic winners and wealthy

Companies that prospered during the coronavirus crisis and wealthy people should pay a temporary additional tax to show solidarity with those who were hit hardest by the pandemic, according to the International Monetary Fund (IMF). The idea of a wealth tax has been revived by growing intergenerational inequality and the blow dealt to public finances by the pandemic, with the IMF warning that average government debt will hit 99% of GDP in 2021. But Helen Miller, deputy director at the Institute for Fiscal Studies, warned that although there was a case for a one-off wealth tax but cautioned it would not help tackle a higher structural deficit caused by Covid.

Financial Times, Page: 8 The Daily Telegraph, Business, Page: 2 The Times, Page: 31 Daily Mail

Global minimum tax rate gains traction

A global minimum tax on corporate profits is being considered by G20 finance ministers after the Biden administration made the case for an international base rate this week. According to Reuters, France and Germany have signalled support for the US approach, which could pave the way for a landmark agreement on global tax changes this summer. Sky News points out that may countries will not be keen on the idea, with the Republic of Ireland likely one of them. Ireland currently has a corporate tax rate of 12.5% and has attracted more than 700 companies from the US alone as a result of the policy.

Financial Times The Guardian, Page: 26 Sky News Daily Mail


Women could be owed ‘lottery-winning’ pension sums

The BBC has learned that women on £1-a-week state pensions could be owed tens of thousands of pounds. A case study highlights the case of Carole Davies. Ms Davies is among 5,000 women entitled to potentially huge refunds, many of whom will not be captured by the DWP’s search, due to a rule change in 2008. Steve Webb, a former pensions minister said under a little-known rule, the women who qualify for this concession are those who are getting a tiny amount of what is known as “graduated retirement benefit” (GRB) under the old state pension system, which ran until 1975. The average amount they are receiving is around £1.24 per week, but this is enough to qualify for a married woman’s pension. They can backdate their claims to their husband’s 65th birthday and could be in line for tens of thousands of pounds. “It is incredible that there are thousands of women getting such tiny pensions, but even more incredible that many could potentially be entitled to tens of thousands in back payments,” said Mr Webb.

BBC News


Solid rebound will attract foreign workers back to Britain

International workers could flood back to Britain if the vaccine rollout encourages a more rapid reopening of the economy, Steffan Ball, an economist at Goldman Sachs said. “If jobs open up sooner in the UK than in the home countries of migrants who have recently left, then this would act as a strong force for them to return.”

The Daily Telegraph


Serco practice of moving profits within group ‘legitimate’, lawyer says

A court hearing a case brought against Serco alleging fraud heard the company’s lawyer argues that transferring profits between its business units was “not very admirable” but “lawful … legitimate accounting”.

Financial Times, Page: 12


BDO releases new survey results

BDO ’s latest Rethinking the Economy survey reveals that some 40% of North West businesses are planning major investment and hiring activities this year. Ed Dwan, partner and head of BDO in the North West, remarked: “It’s clear that as government restrictions start to loosen and the UK’s COVID vaccine programme continues to help suppress the virus, North West businesses are gaining the confidence needed to make key strategic decisions in the months ahead. Mid-sized businesses will play an integral role in the UK’s overall economic recovery.”

Insider Media


Hiring picks up as lockdown lifts

Employers stepped up their recruitment plans last month as companies prepared for the national lockdown to ease. A survey on employers by the Recruitment and Employment Confederation and KPMG found hiring activity picked up at its fastest pace in almost six years in March. Permanent starting salaries increased while temporary salaries also rose at the fastest rates since December 2019. Neil Carberry, chief executive of the REC, said: “This is the first month that we have really seen things getting better for most firms. We are at the bottom of the mountain and starting to climb up again.” The survey showed that the strongest growth in vacancies was for nursing and care jobs, and in the IT sector while hospitality businesses were starting to hire again. There was, however, weaker demand in the retail sector.

The Times, Page: 34 Financial Times, Page: 2 The Daily Telegraph, Business, Page: 2 The I, Page: 9 Daily Mail The Independent

Confidence hits 15-year high

Business optimism is at its strongest since late 2006 according to the latest IHS Market PMI survey, with just 8% of companies predicting a fall in activity over the next twelve months. Britain’s overall PMI rose to 56.4 in March, reflecting a resurgence in services sector activity after several months of slowdown. Separately, high street footfall was up 134% over Easter weekend compared to this time last year despite non-essential shops not being open yet. Meanwhile, figures from PwC show that consumer confidence is now at its highest level since the tracking of the data began in 2008. PwC says the figures show there are consumers with more disposable income and “a pent-up demand to spend after a year of lockdown restrictions”.

The Daily Telegraph, Business, Page: 2 BBC News Daily Express


Malaysia ex-PM served with bankruptcy notice

Najib Razak, the former prime minister of Malaysia, has been served with a bankruptcy notice for failing to pay more than $400m in unpaid taxes, a move that the ex-premier described as an attempt to destroy his political career.

Daily Mail

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Paul Southward





Global corporate tax deal edges closer after US backs minimum rate

European countries have backed US plans for a global minimum corporation tax, but UK and EU leaders have reiterated that the taxation of digital services would need to be linked for a deal to succeed. Meanwhile, the International Monetary Fund’s chief economist Gita Gopinath has stated that the organisation has long favoured adoption of a global minimum tax on corporate profits. Gopinath said on Tuesday that current disparities in national corporate tax rates had triggered “a large amount” of tax shifting and tax avoidance, reducing the tax base on which governments could collect revenues to fund needed economic and social spending. Chris Sanger, head of tax policy at EY, points out that if lots of countries to agree to a global solution then “there will be an advantage to any headquarter location that does not implement a global minimum tax.” Meanwhile, Eamonn Butler, director of the Adam Smith Institute, warned the plans would “represent the creation of a cartel designed to minimise competition and disadvantage consumers”.

Financial Times The Daily Telegraph Daily Mail

IR35 – Self-employed to pay more tax

New laws have come into force meaning around 170,000 self-employed workers are set to pay more tax. The change to off-payroll working rules – IR35 – hits those working in the private sector who pay less tax by setting themselves up as private companies. For now, contractors who work for small businesses will continue to determine their own employment status. However, contractors providing services to medium or large-sized private sector clients will need to get an employment status determination from the client. Ed Molyneux, co-founder of accounting software firm FreeAgent, told The Sun he is worried the change will “come too soon” for many contractors. He said: “This is the most significant tax change in the freelance and contracting economy for years. It essentially pushes many people who are contracting within the private and private sectors into quasi-employment, albeit without any of the protections that they would receive if they were actual employees. But those who will be most impacted are the same freelancers and contractors who have been worst affected by the pandemic, and who are still dealing with the ongoing economic fallout from it.”

The Sun Daily Express


Pandemic turns finance professionals on to more flexible working

New research indicates that 54% of financial services employees want alternative working patterns offered to them, such as flexible hours or the option of remote working. The study by Deloitte of 2,000 financial services employees found half (52%) wanted their employer to let them work from wherever they liked in the UK, and a quarter (24%) wanted their employer to enable them to work outside the UK post-pandemic. However, 34% felt that remote working had made their relationships with colleagues more superficial, although 45% felt their sense of autonomy had increased during the same time. Payal Vasudeva, financial services future of work partner at Deloitte, said: “Changes to how people work need to be reinforced by meaningful employee experiences. This could be a sense of belonging, purpose or greater flexibility in the hours they work and where they work from. There is not a one-size-fits-all approach. The new world of work is not about presenteeism but empowerment. Employees should be able to make some choices in how and where they work that makes them their most productive.” Separately, Grant Thornton’s CEO David Dunckley reveals that 88% of the firm’s staff want to spend less than half of the working week in the office after the pandemic.

City AM Financial Times, Page: 12


Peacocks bought out of administration by consortium of investors

All 1,850 store staff currently on furlough at Peacocks, as well as 150 head office and support roles are to be retained after it was announced that the chain is to be bought out of administration by a group of international investors, led by Peacocks’ former chief operating officer, Steve Simpson. Former owner Philip Day is providing the financial backing for the management buyout in the form of a deferred loan, while a group of unnamed investors are injecting cash into the business to allow it to restart trading. Tony Wright, joint administrator of the business from FRP Advisory, commented: “Jaeger and Peacocks are attractive brands that have suffered the well-known challenges that many retailers face at present. We are in advanced discussions with a number of parties and working hard to secure a future for both businesses.” Meanwhile, Mike Ashley’s Frasers Group said that it was frustrated with the unwillingness of administrators at FRP “to engage substantively” or “to provide key financial information” so it could make an informed offer for the chain. Frasers is to raise its concerns with the All Party Parliamentary Group on Fair Business Banking which is conducting an in-depth investigation into standards in the UK insolvency profession, in response to claims that some practitioners are prioritising lenders’ interests over those of business or other creditors.

BBC News The Daily Telegraph Daily Express Evening Standard City AM The Guardian


Recovery loan scheme now open to applications

The recovery loan scheme is now open to applications, with the aims of supporting smaller businesses with additional finance to manage cashflow, growth and investment as they steer a path towards a sustainable recovery. The maximum amount of a facility provided under the scheme is £10m per business and £30m per group. Minimum facility sizes vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts. Businesses can choose from term loans, overdrafts, asset finance and invoice finance, subject to the lender being accredited for each of these finance types. Businesses that have taken out a CBILS, CLBILS or BBLS facility are able to access the new scheme, although the amount they have borrowed under a previous scheme may in certain circumstances limit the amount they may borrow under RLS. Interest and fees will be paid by the business from the outset and the annual effective rate of interest and upfront and other fees cannot be more than 14.99%.

P2P Finance News Bridging and Commercial


Pimfa warns advisers over post-Brexit regulation

FT Adviser reports that Pimfa has issued a warning to advisers on new regulations being introduced post Brexit, in particular the Investment Firm Prudential Regime. The warning comes as the Financial Conduct Authority, Prudential Regulation Authority and the Treasury are all bringing forward regulations which Pimfa says will have significant impacts on UK wealth managers and large advisory firms.

FT Adviser


UK economy expected to outperform US and Europe next year

The UK’s economic growth will outpace that of the US and Europe next year due to the Treasury’s vast spending programme and the successful rollout of vaccines, according to the International Monetary Fund (IMF). In its World Economic Outlook, the IMF predicted UK growth of 5.3% in 2021 and 5.1% next year, after taking one of the biggest GDP hits from the pandemic. Global growth is expected to bounce back to 6% this year, followed by a 4.4% rise in GDP in 2022. This comes after a 3% contraction in 2020. Despite its vaccine struggles, the eurozone will still enjoy growth of 4.4% in 2021, the IMF predicts. However, the organisation did warn of “multispeed recoveries” with the developing world lagging behind and growing financial risks from booming markets and high-levels of business borrowing.

The Daily Telegraph

Optimism rises for manufacturers as sales and orders improve

The manufacturing industry lobby group Make UK has revealed that almost half of businesses in the sector had seen sales and orders improve since the start of the year. Investment is also set to rise in direct response to the Chancellor’s “super-deduction” tax cut. However, Verity Davidge, policy director at Make UK, said: “One swallow doesn’t make a summer and, with the economy at a crossroads, there is an urgent need to consider how we make a structural change to permanently increase investment in the future.” The growing confidence of manufacturers is echoed by research from BDO, which said 86% of mid-sized businesses are planning to hire more staff in the next six months.

Daily Express


Billionaires buoyed by crisis while businesses languish in debt

Despite the hit taken by corporates form the pandemic the wealth of the world’s billionaires has only risen, with the 10 richest people on the planet now worth a combined $1.15trn (£830bn) having grown their fortunes by around two thirds over the past year. According to Forbes’ annual world billionaires list, there are a total of 2,755 billionaires in the world whose fortunes add up to $13.1trn, a big jump on the year before when there were 660 billionaires worth a combined $8trn. For most businesses, however, the pandemic has led to increased debt with the Telegraph pointing out that Europe is now facing €1.8trn wall of debt, maturing in the next four years.

The Daily Telegraph

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Paul Southward





Supermarket boss: Overhaul rates and tax online sales

Richard Walker, managing director of Iceland, has called for an online sales tax and a rethink of business rates, describing the tax as “outdated and Victorian”. Mr Walker, who urged policymakers to “completely change business rates as they are”, said there must also be “some form of rebalancing with online because otherwise we will be killing off the high street as it is.” With bricks and mortar stores paying far more in business rates than online-only rivals, a number of high street retailers have urged the Chancellor to rework the tax system to put digital retailers such as Amazon on a “level playing field”, with Tesco recently calling for a 1% online sales tax. The Chancellor rolled out relief on business rates amid the pandemic. This has been extended until the end of June and businesses will then be given a two-thirds reduction on rates until March 2022.

The Times, Page: 37 The Independent, Page: 48 Daily Mirror, Page: 8

Yellen calls for minimum global corporate tax

US Treasury Secretary Janet Yellen has urged other countries to agree a global minimum tax for companies, saying this could “make sure the global economy thrives based on a more level playing field in the taxation of multinational corporations”. In a virtual speech to the Chicago Council on Global Affairs, Ms Yellen said there had been a “30-year race to the bottom” in which countries have slashed corporate tax rates in an effort to attract multinational businesses.” She added that it is “important to work with other countries to end the pressures of tax competition and corporate tax base erosion”.

The I, Page: 2 Daily Mail Financial Times

HMRC tackles football’s tax loophole

HMRC is clamping down on a tax loophole which enables footballers and agents working for both a player and a club during transfer or contract negotiations to save on tax. In cases where there is “dual representation”, the agent must pay income tax and national insurance on the fees they receive from the player but when representing a club, the club is charged VAT which it can reclaim as a tax-deductible expense. HMRC believes agents do far more work for players than clubs, despite it often claimed the split is even. Pete Hackleton at Saffery Champness said the previous rule had been “agreed historically” with HMRC as industry best-practice, while Nimesh Shah of Blick Rothenberg said the change in guidance would mean most players pay more.

The Times, Page: 23

Tax incentive set to drive investment

A poll from industry lobby group Make UK shows that the “super deduction” tax incentive announced in March’s Budget is set to boost investment for manufacturers this year. The survey saw 22.6% of businesses say they plan to increase investment as a direct response to the tax, with 28.1% bringing forward investment plans. Super deduction allows firms to deduct 130% of the value of plant and machinery from profits.

The Times, Page: 41 The Daily Telegraph, Business, Page: 1 Daily Express, Page: 46 Daily Mail

Tax break for veterans’ employers

As of today, companies that employ Armed Forces veterans will be exempt from paying national insurance on the first 12 months of their employment.

The Daily Telegraph, Page: 10


Slow progress on boosting female CEO numbers

Analysis shows that leading UK firms ha ve made little progress in increasing the number of female CEOs, with just 6.3% of firms run by female chief executives. This marks only a slight increase on the 6% recorded in 2019 and 6.2% seen in 2020. Despite the number of female leaders improving only marginally, the report from S&P Capital IQ shows that the UK ranks fifth among G20 nations when it comes to the proportion of large companies being led by women. Globally, the US leads the way with the highest proportion of female CEOs, at 8.4%. South Africa is next with 7.3%, followed by China’s 5.4%. Japan and Saudi Arabia have the lowest proportion of companies led by women, at 1.3%.

The Daily Telegraph

Redundancies for over-50s jump

Redundancies among the over-50s have almost tripled in the past year, with 107,000 made redundant between last November and January 2021. The report from Rest Less says the redundancy rate for those who are over 50 is now higher than all other age groups at 12.8 per 1,000 employees. As of the end of February, over-50s made up 28% of the total furloughed workforce. Rest Less founder Stuart Lewis voiced concern over the findings, noting research showing that unemployed workers over the age of 50 are two-and-a-half times more likely to drift into long-term unemployment than younger people, pointing to age discrimination in the recruitment process and a lack of tailored retraining programmes.

The Independent The I Daily Express

Aviva: WFH may hit women’s opportunities

Insurer Aviva has warned that the shift towards flexible working could harm women’s careers, saying female staff may feel more pressure than men to work from home due to family responsibilities and so miss out on promotion opportunities. It warned of a risk that managers could promote workers they see in person, rather than making judgements based on the quality of work. Gwen Rhys, chief executive of networking group Women in the City, said: “It’s likely to be women who take the work-from-home option more than men … I think men will go back to the office before women and it will be they who get noticed, get networking and get the opportunities.”

Daily Mail, Page: 67

Jump in remote working job ads

The proportion of UK jobs advertised as “remote working” roles has surged in the past year, with coronavirus restrictions seeing more firms embrace home-based working models. As of February, 3.6% of roles were advertised as being remote, up from 0.8% a year earlier. The report from New Street Consulting Group shows that the number of remote working roles advertised more than trebled to 78,000, with it noted that many of these involved permanent remote working rather than temporary arrangements linked to coronavirus rules and social distancing guidance.

The Times, Page: 36


Peacocks administrator finalises rescue deal

Up to 200 Peacocks stores and 2,000 jobs are set to be saved by an investment consortium which has agreed to back Steve Simpson, the chief operating officer of Peacocks’ sister company Edinburgh Woollen Mill (EWM). The transaction has been orchestrated by administrator FRP Advisory, which has also been in talks with Sports Direct owner Mike Ashley. Other parts of retail tycoon Philip Day’s empire, including EWM and Bonmarche, have already been sold to a vehicle controlled by Mr Simpson.

Sky News


Study reveals Help to Buy hotspots

Bristol has been identified as the most popular location for homebuyers taking advantage of the Help to Buy initiative, with analysis of data by property agent Benham and Reeves showing the city has seen the biggest uptake of buyers utilising the discount scheme. The study gathered stats from Zoopla and gave a percentage based on how many eligible properties in the city had been taken up by buyers. Bristol came out on top with 60%, followed by Portsmouth and Swansea, which both saw 50% demand. Benham and Reeves director of Marc von Grundherr said that while the stamp duty holiday has been “a great way of boosting market health during a very tough period”, increased demand has pushed house prices “further out of reach for many first-time buyers”. “It’s clear that many are reliant on a leg up via the Help to Buy scheme as a result”, he added.

Daily Express


Labour supply issues to hit growth

Analysts from Pantheon Macroeconomics have warned that economic growth could stall in the 2020s due to Britain’s ageing population and lower rates of immigration. The forecast suggests that the growth rate in the UK’s workforce will halve as an immigration clampdown sees fewer overseas workers, with labour supply also facing a hit as the Boomer generation enter retirement. The report predicts that workforce growth will fall to an average annual rate of 0.3% over the next five years, down from 0.8% in the second half of the 2010s. Pantheon economist Samuel Tombs said: “The days of strong workforce growth are long gone,” adding that expansion in the 2010’s had masked underlying weaknesses in the economy, such as “deficient business investment and sluggish growth in productivity”. HSBC economist James Pomeroy believes the working age population is set to shrink in the 2030s and may fall by the end of the 2020s, warning that this is “a massive fiscal problem when you’re taking on a lot of debt”.

The Daily Telegraph


Consultants see demand drop despite Covid contracts

Consultants saw a decline in demand for their services last year, despite the Government awarding a range of large contracts to firms advising on its response to the coronavirus crisis. Analysis by Source Global Research shows that the sector contracted by more than a tenth in 2020, with the size of the industry down by 12% to £10.65bn. The steepest drop came in the “change and people strategy” sector, with revenues falling 27% as firms tightened budgets and cut activities deemed unessential, such as leadership development courses and diversity and inclusion training. While the overall consultancy sector saw demand slip in 2020, Deloitte, EY, KPMG and PwC secured hundreds of millions of pounds worth of Government contracts linked to the pandemic, with ministers bringing in consultants to work on projects such as the test and trace system and the rollout of emergency business loan schemes.

The Daily Telegraph, Business, Page: 3

Why ranking workers by performance backfires

Sarah O’Connor looks at criticism of the forced distribution method for assessing staff performance, noting that KPMG plans to “move away” from the system to “allow much greater flexibility”.

Financial Times, Page: 23

Contact Paul Southward

Paul Southward





Tax day to outline administration strategy

Today marks ‘tax day’, an event that will see the Treasury publish 30 consultation papers as part of its 10-year tax administration strategy. The documents will set out policy ideas for future changes in the tax system. The Daily Telegraph’s Harry Brennan says tax day could see news of new taxes for online retailers and an overhaul of the tax return system. He also notes that the documents will include plans to crack down on firms promoting questionable income tax avoidance schemes. Nimesh Shah of Blick Rothenberg says that while the Treasury “is clear that tax day will be focused on tax administration”, it could “sneak in” proposals for future tax rises. These, he adds, could include a review of capital gains and property taxes. Dominic Stuttaford of law firm Norton Rose Fulbright says freelancers should expect changes to their tax status and the removal of lower rates of National Insurance. Elsewhere, Philip Aldrick in the Times says tax day is “a great idea, if used ambitiously”, arguing that “pulling big consultations into a single event is an opportunity to set a strategic vision.” This, he adds, gives business “much-needed clarity about the direction of travel, without the Government having to fix a specific route.” Meanwhile, the FT says much of the focus of the Treasury documents will be on tax administration and cutting red tape.

The Daily Telegraph, Business, Page: 2 Financial Times, Page: 3 The Times, Page: 38 The Times, Page: 39 Daily Mail, Page: 71 The I, Page: 10

Tax hikes for an independent Scotland

A report from the TaxPayers’ Alliance says an independent Scotland would have the highest deficit in Europe if it were to quit the UK, suggesting the Scottish Government would need to raise taxes and cut public spending. The paper says an independent Scotland would need to raise the basic rate of income tax to 46%, calculating that overall the Scottish Parliament would need to increase taxes by at least 10% of GDP and raise VAT to 49% to balance the books.

Daily Express

The case for taxing the rich more

Rhymer Rigby in the FT considers the case for higher taxes for the wealthy, noting that the Wealth Tax Commission has proposed a one-off 5% tax on total assets over £500,000.

Financial Times


Half of FTSE 100 link pay to ESG targets

A recent report from PwC shows that almost half of FTSE 100 companies are now linking their executive pay packages to at least one of their environmental, social or governance targets, with the analysis showing that the average executive at these firms stands to miss out on 15% of their bonus if the targets are not met .

Daily Mail, Page: 70

Arcadia fire sale starts

Administrator Deloitte has started a fire sale of Arcadia’s assets, with Hilco Global appointed to manage an online auction that will include IT, furniture, photographic equipment and fabric cutting and sewing machinery tools .

The Daily Telegraph, Business, Page: 1


SMEs see £126bn pandemic hit

A report from the insurance provider Simply Business suggests the cost of the coronavirus pandemic to UK SMEs is set to exceed £126.6bn. The study, which involved a survey of 1,206 small business owners, revealed that on average, SMEs have lost £15,673 each in earnings due to the pandemic and subsequent lockdowns. Alan Thomas, CEO of Simply Business, said: “No business, big or small, has been able to escape the impact of the C OVID-19 pandemic – with 12 months of restrictions, lockdowns, and uncertainty always likely to take its toll.” He added that with 6m SMEs in the UK – accounting for over 99% of all businesses, 33% of employment and 21% of all turnover – “this £126.6bn hole in the books of small businesses is a huge blow to the economy.”

Daily Express

I suggest that this whopping £126bn! cost is just the tip of the iceberg some businesses will never recover and be lost for ever, unemployment is set to soar.  The real cost of government strategies should be subject to enquiry.


Jobs needed to drive recovery

Research from Centre for Cities and HSBC UK suggests that the UK economy will need to create 9.3m jobs over the next few years in order to get 1.3m people back into work. The report also says the UK will need to create high-value, export-led jobs across all regions if it is to address the productivity puzzle. HSBC UK chief executive Ian Stuart says this presents a shared challenge to government and business. On the need to level up UK regions, he says that while focus has been on government action, the challenge must be shared with the private sector, calling for support for job creators so as to maximise the post-pandemic recovery and rebalance the economy.

The I

Government reviewing whistleblowing rules

The Government is to review rules on whistleblowing to make sure that they are “fit for purpose”. This comes with research revealing that a record number of employees claim to have lost their jobs for speaking up. Figures show that more than 2,289 employment tribunal cases where a worker claims they were sacked for whistleblowing were made between April and December 2020, with this marking a record high for the number of Public Interest Disclosure cases over a nine-month period.

The Daily Telegraph

Fewer CEOs expect to cut office space

A poll of business leaders suggests that a move toward remote working may not spell the end of the office, with KPMG’s CEO Outlook Pulse Survey showing that 17% of CEOs expect to reduce office space in the next three years – far less than the 69% who said the same six months ago. The survey, conducted between late January and early March, also saw 45% of chief executives say they expected a return to “normal” next year, while 31% expect it to occur this year.

The Times, Page: 44 City AM


First-time buyers in London need £132k deposit

The average deposit being put down by first-time buyers in London has increased by more than £20,000 since last year, according to new research from Halifax. The analysis shows that in the 12 months to February 2020, the average deposit put down by first-time buyers in the capital was £111,321 but in the 12 months to February 2021 it was £132,685. The average London house price in the 12 months to February hit £462,617, with the average deposit 24%. Across the UK, Halifax says first-timers need to find £11,677 more for a deposit than they would have done a year ago, with the average now £58,986 – 23% of the typical purchase price.

City AM


Inflation expectation

David Milliken of Reuters says inflation is on course to rise “rapidly” this year and is set to go “well above” the Bank of England’s (BoE) 2% target. While consumer price inflation was just 0.7% in January and the Bank has forecast it reaching just below 2% this year, economists at Bank of America and Pantheon Macroeconomics say it could hit 2.5% by late 2021. Samuel Tombs, chief UK economist at Pantheon Macroeconomics, says a rebound in oil prices is likely to push all central banks’ headline inflation rate above targets this year. Mr Milliken notes that BoE governor Andrew Bailey has stated that the Bank will not tighten policy at the first sign of inflation, while chief economist Andy Haldane has likened the economy to a “coiled spring” and said inflation is a “tiger” that is beginning to stir.


Economic scars from COVID-19 risk becoming permanent

The FT weighs the economic impact of the pandemic, with KPMG’s Yael Selfin saying the “poorest households have seen the sharpest fall in earnings”, forcing many to use any “safety net savings they had”.

Financial Times, Page: 3

Contact Paul Southward

Paul Southward





Sunak to delay online sales tax decision

Rishi Sunak will not make a decision on introducing an online sales tax until later in the year, with the Chancellor holding back on the proposed move in the hope that global reform of taxation for tech firms can be agreed. While the Treasury is mulling a levy that could level the playing field between online retailers and high street stores, the OECD is looking to develop a global approach to digital services taxation. It is said that US President Joe Biden “has shown some movement” on the possibility of a worldwide stance on the issue. Meanwhile, the outcome of a Government review of business rates is also set to be delayed until the autumn.

Daily Mail, Page: 63 Financial Times, Page: 2


Spotlight on Greensill

Alex Brummer in the Mail looks at the collapse of Greensill, saying that the Bank of England and the Financial Conduct Authority appear not to have heeded warnings over the firm’s practices. He also highlights that Grant Thornton, which is running the Greensill insolvency, is also audit adviser to several enterprises run by Greensill client Sanjeev Gupta and notes that Greensill Capital, the group’s main operating company in the UK, was audited by Saffery Champness. Elsewhere, City AM says that while Greensill appointed administrators last week, warning of “severe financial distress”, its issues “have been mounting for some time”. Meanwhile, the latest revelation shows that former Prime Minister David Cameron, a Greensill adviser, sent text messages to the Chancellor in a bid to secure emergency funding for the finance firm.

Daily Mail, Page: 63 City AM

LSE misses out on tech boom

A report from BDO shows that less than 4% of Britain’s fastest growing technology companies have floated on the London Stock Exchange in the last two decades, with only 43 of the 1,200 fastest growing technology businesses going on to do so. BDO’s Tony Spillett says: “If you believe that listing fast-growing tech companies on the stock market is an important part of helping to deliver economic growth, then the UK is missing out.” He adds that UK investors are currently only able to access many tech businesses indirectly through private equity funds. It is noted that a review of Britain’s stock market listing regime carried out by Lord Hill has called for an overhaul that would include the launch of dual class share listings allowing tech founders to retain control even if they only hold a minority stake.

The Daily Telegraph, Business, Page: 1

Odey Asset Management loses pay plan tax case

Hedge fund Odey Asset Management has lost a tax tribunal case over a partnership pay policy, with HMRC raising concern over the incentive plan and saying it was owed income tax.

Financial Times, Special Report, Page: 4

Customers face £90m Football Index losses

Customers of Football Index, which billed itself as the “football stock market”, are facing losses of almost £90m in the wake of its collapse. Legal firm Leigh Day is investigating a potential claim on behalf of punters, with Begbies Traynor expected to be appointed to handle the administration.

The Times, Page: 35

Travel companies seek return to pre-Covid growth

The FT reflects on the travel sector, citing Deloitte’s head of hospitality and leisure, Andreas Scriven, who says the sharing economy has become “a huge trend” in travel.

Financial Times, Page: 11


Professional firms face junior staff loss to burnout

With fears that heavier workloads and solitary working amid the pandemic could drive an exodus of junior staff from professional services, the Big Four are offering a range of support measures.

Financial Times, Page: 8

Britain’s businesses grapple with post-Brexit visas

The FT considers the post-Brexit climate for regulated professions, with Deloitte’s Amanda Tickel saying the UK sought a continued mutual recognition system for professional qualifications but the EU refused.

Financial Times, Page: 18


Pandemic set to deliver rethink on work patterns

Nicholas Bloom, professor of economics at Stanford University, says a large number of workers will not fully return to the office once lockdown restrictions are eased, with research pointing to a “widespread appetite for a new paradigm.” He says the shift toward working from home amid the pandemic is likely to see new patterns where work is split between the office and remote working, with several large firms already announcing plans for a 3-2 system where staff spend three days in the office and two working from home. Prof Bloom says a recent poll of 5,000 UK employees found that three days in the office was the preferred pattern, with staff saying the perk was worth about 6% of wages. He also points to research he undertook in 2010 which found home-based employees were 13% more efficient. Prof Bloom warns of the implications for inequality in a shift to remote working, saying only half of all employees can work from home, with these typically university-educated people in management, professionals or business services.

The Guardian

Skills concern over IT uptake

A report from the Learning and Work Institute (LWI) suggests that a digital skills crisis could be on the horizon, with analysis revealing a fall in the number of young people taking IT courses as employer demand for expertise increases. The study says just 48% of UK employers believe new entrants to the workforce have the necessary digital skillset. Data shows that the number of people taking IT subjects at GCSE has fallen by 40% since 2015, with the proportion taking related A Levels, further education courses and apprenticeships also declining. The LWI also warns of a gender gap in digital skills, with women accounting for just 22% of GCSE entrants in IT subjects, 17% of A Level entrants, 23% of apprenticeship starts and 16% of undergraduate starts. While the number of people opting for IT-focused courses has fallen, research shows that 60% of businesses believe their reliance on advanced digital skills is set to increase over the next five years.

The Guardian

How companies can ensure women get the top jobs, too

The FT looks at how women can reach the top positions in leading companies, saying initiatives such as the Breakthrough Leadership Programme at PwC can help female talent move ahead.

Financial Times, Business Education, Page: 11


British housing is expensive and its supply must increase

Research from Schroders shows that the ratio of average house prices to earnings was 8:4 in Q4, the highest level since the 1880s bar the year before the financial crisis.

Financial Times


Hong Kong promises investors its prized tax haven status is secure

Matthew Cheung, Hong Kong’s chief secretary for administration, says the territory’s status as a “tax haven” is safe despite political upheaval and economic turmoil, telling business “very low tax … is assured”.

Financial Times, Page: 4


Lockdown costs economy £520m a day

Centre for Economics and Business Research (CEBR) analysis suggests that each day of lockdown is costing the economy more than £500m, with output down £521m a day compared to its pre-pandemic level. The report says a quarter of businesses remain closed and 6m workers are on furlough, while the Government is borrowing almost £1bn a day to pay for support measures including tax breaks for struggling firms. The total bill for dealing with the pandemic is expected to hit £407bn, while state borrowing is set to hit £355bn in 2020/21 and another £235bn in 2021/22 to cover the cost of higher spending and lower taxes.

Daily Mail

Wake up call for a strategy re-think for the government.

Spending could drive demand on recovery path

Roger Bootle, chairman of Capital Economics, looks at the UK’s path toward economic recovery after the pandemic, saying the Government’s borrowing requirement will be about 18% of GDP in 2021, while plans for future tax rises set out in the Budget will tighten fiscal policy by 1.5% of GDP. Mr Bootle notes that the Office for Budget Responsibility has suggested COVID-19 will have a “scarring” effect on the UK economy, delivering a permanent reduction in GDP of 3% relative to what it would have been without the pandemic. He also suggests that the UK could see growth in aggregate demand “spurred by private spending rather than government largesse”.

The Daily Telegraph

Contact Paul Southward

Paul Southward






Treasury plans pay-as-you-go tax

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

The Times, Page: 4

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

Rate surge hits tax dividend

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

The Times, Page: 49

City concerned over possible tax raid on pensions

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

The Daily Telegraph, Business, Page: 31

A third of firms not ready for IR35 changes

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

Daily Express

Wealthy savers rush to VCTs

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

The Times

Self-employed boosted by tax clawback

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

The Daily Telegraph, Money, Page: 11

Taxing matters when selling a BTL property

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

The Daily Telegraph

Brussels sues Britain over Gibraltar tax breaks

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

Financial Times, Page: 8

Will tax shake-up hit our FIC?

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

Financial Times, Money, Page: 14


Tax day set to deliver a deluge of policy plans

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

The Sunday Telegraph, Business, Page: 6

Medical staff among biggest tax avoidance scheme users

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

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

Red tape to be cut in IHT reform plans

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

The Sunday Telegraph, Page: 2

Sunak urged to opt against tax raids

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

The Sunday Telegraph, Page: 17

Lib Dems call for tax break for small businesses

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

Evening Standard



Greensill sees job losses

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

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


Conflict concern over Grant Thornton and Gupta

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

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

CEO cyber fears climb

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

The Sunday Times, Business, Page: 5

Societies warn on rents

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

The Sunday Telegraph, Page: 17

Brewers serve up a pandemic success story

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

The Sunday Times, Business, Page: 2

Fashion house calls in administrators

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

The Sunday Times, Business, Page: 2



Post-Brexit deal for the City nears

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

The Daily Telegraph

Half of firms have no carbon neutral targets

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

City AM



More than half of staff travelled to work last week

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

Daily Mail


Super-rich utilise furlough scheme

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

The Mail on Sunday The Observer

City firms eye office returns

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

The Mail on Sunday, Page: 121

Tech shift set to stay

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

The Sunday Times, Business, Page: 2



Staff and owners apart on return expectations

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

The Mail on Sunday



UK audit reforms fail to address the real problem behind scandals

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

Financial Times



Cash concern for councils

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

The Sunday Telegraph, Business, Page: 3



Government borrowing hits record February high

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

The Guardian The Daily Telegraph Daily Mail Financial Times

Shopping habits shift since lockdown

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

Evening Standard


March PMI expectations drive GDP hope

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

Sunday Express, Page: 51

Contact Paul Southward

Paul Southward