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NEWS – WEDNESDAY 14TH APRIL 2021

NEWS – WEDNESDAY 14TH APRIL 2021

NEWS ROUNDUP

TAX NEWS – WEDNESDAY 14TH APRIL 2021

UC claimants hit by tax raid

HM Revenue & Customs has cut payments to hundreds of thousands of Universal Credit (UC) claimants during lockdown because they were mistakenly overpaid tax credits as long as 17 years ago. As many as half a million struggling families have been affected. HMRC data shows such deductions have been occurring “at a rate of 47,000 cases per week” since January 18. Figures also reveal that between April and November last year it cut £63m from claimants’ payments. UC architect Sir Iain Duncan Smith said using the benefits system to claw back tax in this way is “a major mistake” that is “causing profound difficulties.”

The Times, Page: 15 The Times The Times

Wales – Labour vows ‘no income tax rise in Covid recovery’

Mark Drakeford has promised not to increase income tax while the economy is recovering from the impact of coronavirus if his party is re-elected into government at the Senedd election. The Welsh Labour leader pledged to create a “stronger, greener, fairer Wales” if in power after the 6 May vote.

BBC News

Denmark charges 3 Americans and 3 Britons in tax fraud scandal

Three British citizens and three US nationals have been charged by Danish authorities with defrauding Denmark of $175m as part of a European investigation into dividend tax fraud. The cum-ex trading scheme is also being investigated by authorities in Germany, Belgium and Britain.

Financial Times, Page: 10 Daily Mail

CORPORATE NEWS – WEDNESDAY 14TH APRIL 2021

Babcock in writedowns warning

Defence contractor Babcock has warned of writedowns totalling some £1.7bn, more than double analysts’ estimates, following a review of historic contracts and future income. In a trading update, the firm noted that the “vast majority” of impairments are one-off in nature and non-cash affecting, with group underlying operating profit expected to be reduced by around £30m annually. Babcock’s annual results are likely to be delayed because of the volume of work needed on the writedowns and write-offs and because the company effectively has two auditors as Deloitte prepares to take over from PwC.

The Times, Page: 33 Financial Times, Page: 12

Peacocks bidders had no chance, critics say

The Times reviews the move by Philip Day’s right-hand man to rescue Peacocks, with the backing of Day himself. The “phoenixing” of Day’s various retail interests in new vehicles fronted by Steve Simpson, his long-term lieutenant, has led to criticism. The Peacocks move infuriated rivals who have accused FRP Advisory, the administrators to Day’s assets, of “merely going through the motions, wishing to create the appearance of a fair and equal bidding process, when in fact they have a settled intention to compete with one particular party — an insider”. FRP insists it ran a full and fair process and rejects allegations that it had frustrated other bidders, such as Frasers Group’s attempts.

The Times

PENSIONS NEWS – WEDNESDAY 14TH APRIL 2021

Working from home can turbocharge women’s pensions

Former pensions minister Ros Altmann has welcomed the move to flexible working, adding that it will “alleviate” some of the pension discrepancies between men and women. She says: “The more women can combine their caring duties with their careers, the better. It is certainly a good thing if workplaces make it easier for women to continue working full-time hours while balancing their other responsibilities.” But, she adds: “Lots of women are still unable to commit to full-time hours even when flexible working is an option.”

Daily Mail This is Money

SMEs NEWS – WEDNESDAY 14TH APRIL 2021

HMRC gives update on SEISS payments

HMRC has issued an update on SEISS grants, stating that the service to claim the fourth grant will be available from late April 2021. HMRC said: “If you are eligible based on your tax returns, HMRC will contact you in mid-April to give you a date that you can make your claim from. It will be given to you either by email, letter or within the online service.” HMRC added that self-employed claimants will need to confirm they meet all the eligibility criteria when making their claim – which has to be made on or before June 1, 2021.

Daily Express

ECONOMY NEWS – WEDNESDAY 14TH APRIL 2021

Positive Covid data pressures Johnson to reopen faster

New official figures show 23% of recorded coronavirus deaths are now people whose primary cause of death was not COVID-19. Additionally, daily death figures by “date of death” reveal that Britain has had no more than 28 deaths a day since the beginning of April while Oxford University has calculated that the number of people in hospital with an active Covid infection is likely to be around half the current published daily figure. Covid deaths now make up just 4.9% of deaths registered in England and Wales, compared with 45% in mid-January, according to the ONS. MPs are now calling on Boris Johnson to take a less cautious approach to lifting restrictions to reduce the other harms caused by lockdown. Prof Carl Heneghan, the director of the Centre for Evidence Based Medicine at Oxford University, commented: “The issue is as we go about our daily lives there will be a slight increase in cases, but the key is not to panic. I think this over-cautiousness c an be overcome by using a data-driven approach.”

The Daily Telegraph

February export figures released

The Office for National Statistics has released figures showing that UK trade with the EU recovered in February, with exports increasing by £3.7bn, or 46.6%, after a £5.7bn decline a month earlier. AJ Bell financial analyst Danni Hewson commented: “There is small comfort to be had in February’s trade figures. Exports to the EU, which dropped so dramatically off a cliff in January, have bungeed back up, though they are still £2bn down on pre-Brexit levels. Notably imports from the EU were less resilient and remain more than £5bn down.”

The Daily Telegraph The Times Evening Standard

INTERNATIONAL NEWS – WEDNESDAY 14TH APRIL 2021

SEC says warrants issued by blank-check companies may be liabilities

The Securities and Exchange Commission has issued guidance indicating that the warrants issued to early investors in SPAC deals should not be classified as an equity, but rather “a liability measured at fair value, with changes in fair value each period reported in earnings.” In a statement late Monday, SEC officials said: “The evaluation of the accounting for contracts in an entity’s own equity, such as warrants issued by a SPAC, requires careful consideration of the specific facts and circumstances for each entity and each contract.” Forbes reports that uncertainty over how the SEC will treat warrants has stopped all new SPAC offerings as accounting firms will not sign-off on any financial statements or company audits until they receive clarity from the government.

Bloomberg Forbes Daily Mail City AM

US should require crypto-trading to be reported to help close tax gap

Internal Revenue Service Commissioner Charles Rettig estimates that the US now has a $1trn tax gap – up from the last official estimate of a $441bn annual average from 2011 to 2013. Rettig reckoned trading in cryptocurrencies was escaping taxation, as was rising foreign-sourced income and abuses of business income passed through as personal income. Among his recommendations Rettig suggested new legislation requiring transactions in cryptocurrencies such as Bitcoin be reported.

Daily Mail

OTHER NEWS – WEDNESDAY 14TH APRIL 2021

Katie Price owes £3.2m to creditors

Former glamour model Katie Price reportedly owes more than £3.2m to her creditors after accountants submitted a report raising concerns about her financial conduct. Price allegedly owes the cash from her company Jordan Trading Ltd, despite being declared bankrupt in 2019 and vowing to pay back £12,000 a month through an individual voluntary arrangement. The reality star was once worth more than £45m.

Daily Mail The Sun Daily Mirror

Bank of England’s chief economist to run Royal Society of Arts

Andy Haldane is leaving the Bank of England after a 30-year career to join the Royal Society for Arts, Manufactures and Commerce (RSA) as chief executive in September. The Bank of England’s chief economist has been among the most optimistic forecasters throughout the pandemic. “Haldane’s departure means the Bank of England is losing its major – and maybe only – current hawk,” said James Smith, economist at ING. “In theory, at the margin this tilts the committee towards a more favourable view on negative interest rates if more stimulus were needed, though we still think this is unlikely.”

Financial Times The Daily Telegraph The Times

Contact Paul Southward

Paul Southward

NEWS – WEEKEND TO 11TH APRIL 2021

NEWS – WEEKEND TO 11TH APRIL 2021

NEWS ROUNDUP

TAX NEWS – WEEKEND TO 11TH APRIL 2021

SATURDAY

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

SUNDAY

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

CORPORATE NEWS – WEEKEND TO 11TH APRIL 2021

SATURDAY

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

SUNDAY

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

SMEs NEWS – WEEKEND TO 11TH APRIL 2021

SUNDAY

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

FINANCE NEWS – WEEKEND TO 11TH APRIL 2021

SUNDAY

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

PENSIONS NEWS – WEEKEND TO 11TH APRIL 2021

SATURDAY

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

SUNDAY

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

PROPERTY NEWS – WEEKEND TO 11TH APRIL 2021

SATURDAY

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

SUNDAY

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

EMPLOYMENT NEWS – WEEKEND TO 11TH APRIL 2021

SATURDAY

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

SUNDAY

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

ECONOMY NEWS – WEEKEND TO 11TH APRIL 2021

SATURDAY

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

SUNDAY

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

INTERNATIONAL NEWS – WEEKEND TO 11TH APRIL 2021

SATURDAY

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

NEWS – FRIDAY 9TH APRIL 2021

NEWS – FRIDAY 9TH APRIL 2021

NEWS ROUNDUP

TAX NEWS – FRIDAY 9TH APRIL 2021

US offers new plan in global corporate tax talks

Washington has suggested multinational companies to pay levies to national governments based on their sales in each country as part of proposals for a global minimum tax. The Biden administration’s plans would subject about 100 of the world’s biggest multinationals, including the tech giants like Google, Apple, Facebook, Microsoft and Amazon, to a regional tax settlement while a global minimum tax rate would mean reduced tax competition between states. Pascal Saint-Amans, head of tax administration at the OECD, welcomed the US proposals. “This reboots the negotiations and is very positive,” he said. The Telegraph reports that Ireland, the Netherlands, Luxembourg, Switzerland, Singapore and the Caribbean will be the biggest losers from the plan. Goldman Sachs economist Jan Hatzius says the move illustrates how much Biden plans to rely on taxing foreign profits for new tax revenue while Chris Sanger, head of tax policy at EY asserts that any policy that ends profit shifting is likely to be good for the UK as it “benefits those countries with a large consumer base”.

Financial Times, Page: 1 Financial Times, Page: 22 The Times, Page: 22 The Daily Telegraph, Business, Page: 5 The Guardian, Page: 2, 33 The Times, Page: 32 Daily Mail, Page: 2

CORPORATE NEWS – FRIDAY 9TH APRIL 2021

Construction activity hits seven-year high

IHS Markit’s construction Purchasing Managers Index for March registered 61.7, as construction output increased at the fastest rate in six and a half years. Steve Plaskitt, partner at MHA, commented: “The spring budget was a boon for both house buyers, who stand to benefit from the extension and phased ending of the Stamp Duty holiday, and house builders, who will hope that the government’s guaranteed support for 95% mortgages until the end of 2022 will drive demand.” Elsewhere, Howard Archer from EY ITEM Club noted that civil engineering’s return to growth was particularly impressive following three consecutive months of contractions.

The Daily Telegraph City AM

Lookers enjoys sales boom

Car dealer Lookers said it would smash profit forecasts following a lockdown sales boom. The Mail notes that the Financial Conduct Authority has closed an investigation into the group – but the Financial Reporting Council is looking into Deloitte’s audits of the company. Mark Raban, chief executive of Lookers, said: “The events of the last year have highlighted the inherent strength of our franchised dealership model and the importance of an integrated customer experience which fully embraces both digital and physical channels.”

The Times, Page: 40 Daily Mail

SMEs NEWS – FRIDAY 9TH APRIL 2021

Small businesses supported by venture capital fundraising

Ian Sayers, chief executive of the Association of Investment Companies has spoken out on how the coronavirus crisis has affected fundraising for smaller companies, noting that “It’s really positive that during the pandemic 11% more was raised to support the UK’s most innovative and fast-growing businesses than the year before.” With venture capital trusts raising £685m last year to support such firms, he remarked: “This investment will support healthcare, science and technology businesses which have helped in the battle against coronavirus and supported us to adapt to life in lockdown. It demonstrates that demand for VCTs and the benefits they bring investors remains high at an extremely difficult time.”

City AM

City offers support for SMEs

The City of London Corporation will on Monday launch a £50m Covid Business Recovery Fund designed to support SMEs which directly provide services to returning City workers, visitors and residents. Grants will be based on individual requirements after a financial evaluation but will not exceed £100,000 per business. Policy Chair at the City of London Corporation, Catherine McGuinness, said: “Many City businesses are preparing to reopen their doors next week and start welcoming back customers. This will be a welcome return to a semblance of normality but inevitably some SMEs that have struggled during the pandemic will need support to get back on their feet.”

The Times, Page: 40 City AM

PROPERTY NEWS – FRIDAY 9TH APRIL 2021

House sales surge after stamp duty extension

House sales picked up in March after signs that the extension of a stamp duty holiday had an immediate impact, the strongest surge since last August. Half of property professionals reported an increase rather than a decrease in agreed sales, the Royal Institution of Chartered Surveyors (Rics) said. Simon Rubinsohn, of Rics, said: “All key activity indictors rebounded in March. Demand is outstripping supply so prices go upwards.” The pick-up also boosted expectations that sales activity will increase over the next three months, with 35% of surveyors predicting an uptick – the most upbeat reading on this measure since January 2020.

The Times The Daily Telegraph Daily Mail

PENSIONS NEWS – FRIDAY 9TH APRIL 2021

Thousands of married women could be owed millions

The I follows up on the news that thousands of married women could be owed by millions by the DWP because of underpayment. Former pensions minister Sir Steve Webb, who has been investigating this issue, said that the “scale of these underpayments is shocking” and urged the Government to repay women as a “matter of urgency”.

The I

ECONOMY NEWS – FRIDAY 9TH APRIL 2021

Fashion retail sales soared in March

Total like-for-like fashion sales jumped 57.5% in March – from a base of minus 25.9% in the same month last year. Sophie Michael, head of retail and wholesale at BDO, said: “Sales have improved, without a doubt, as retailers have found ways to adapt to lockdown. From virtual assistants to live video sales appointments, retailers have found technological solutions to drive sales, instead of simply shutting down like they did last year. However, as last March’s result was so disastrous, these results simply look better on paper as they’re set against such a poor base.” Separately, according to a survey by Deloitte, 56% of shoppers will feel safe about coronavirus risks when heading out to the high street next week, a 16 percentage point increase compared to last month.

City AM The Sun, Page: 47

FTSE rebounds to new post-pandemic high

Growing optimism as the economy reopens pushed the FTSE 100 to its highest level since the beginning of the pandemic on Thursday, rising 56.9 points to 6,942.22. The FTSE 250 rose to another all-time high following a top performance on Wednesday. Michael Hewson, chief market analyst at CMC Markets commented: “While other major indices have led the way in posting record highs in recent weeks, UK stocks appear to be finally finding favour with investors as an economic reopening beckons.”

The Daily Telegraph Evening Standard, Page: 22

INTERNATIONAL NEWS – FRIDAY 9TH APRIL 2021

An end to ECB bond buying poses risk to weaker eurozone economies

Experts warn that heavily indebted eurozone countries such as Italy and Greece face mounting debt costs after the pandemic – a situation that could unnerve investors and drive up interest rates. M&G fund manager Eric Lonergan said: “Europe is ironically vulnerable to recovery because it seems you only get temporary elimination of credit risk in European sovereigns when you are in an emergency, in which case the ECB underwrites your bond market. The problem is that when you come out of an emergency, you are back to market forces in the bond market, and some of these numbers look really, really bad.” Italy was particularly exposed, Mr Lonergan added, because the interest rate on its debt was higher than its rate of GDP growth.

The Daily Telegraph Daily Express

OTHER NEWS – FRIDAY 9TH APRIL 2021

UK businesses consulted on prolonged social distancing in offices

The Government has been consulting with professional services firms and other businesses over the long-term use of masks in offices and six months more social distancing as they make arrangements for the economy to reopen.

Financial Times

Contact Paul Southward

Paul Southward

NEWS – WEDNESDAY 31ST MARCH 2021

NEWS – WEDNESDAY 31ST MARCH 2021

NEWS ROUNDUP

TAX NEWS – WEDNESDAY 31ST MARCH 2021

HMRC urged to show empathy over pension scams

HMRC has been urged to take a gentler position in regard to pension scam victims facing large fines, with MPs saying the tax office “lacked empathy” as it chased people hit by schemes which also broke tax laws. The report from MPs on the Work and Pensions Committee said that if the tax authority did not voluntarily review its stance, the Government should consider changing the law to allow some victims an amnesty. The report says victims lost savings in funds registered with HMRC, making them appear legitimate, but also faced tax bills often worth 55% of their lost pension pot because the schemes breached laws covering retirement savings. MPs noted that HMRC has been described as “unrelenting and uncompromising” in pursuit of unauthorised payment charges, adding that while the tax office’s position is “legally correct”, it has “often lacked empathy or understanding of the impact that its demands have on victims.” The report added that the Treasury “should recognise that, in some clearly defined circumstances … it may not be in the public interest to demand payment of tax due.”

Daily Mail

CORPORATE NEWS – WEDNESDAY 31ST MARCH 2021

Vaccine a shot in the arm for business confidence

The latest Lloyds Business Barometer shows that the vaccine rollout has helped drive business confidence to its highest point in a year. The analysis shows that overall business confidence has increased 13 percentage points to 15% in the last month, the highest level since March 2020. Firms’ trading prospects for 2021 have jumped 10 points to 12%, with 34% of firms anticipating a pick-up in activity. On the outlook for hiring, over a quarter of companies anticipate expanding their workforce while 22% expect reductions. Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “It’s been a year since the first lockdown and the surge in confidence this month tells us firms are increasingly confident about economic recovery.” He added: “The broadly positive outlook is driven by steady vaccine deployment, the roadmap out of lockdown and the extension of government support measures.”

City AM

Investors want ESG evidence

Josephine Moulds in the Times says firms are “increasingly aware of the need to get a handle on their sprawling, global supply chains”, noting that some countries have regulations in place forcing them to act, such as the Modern Slavery Act which, as of January, introduced fines for UK businesses that fail to make their supply chains transparent. She notes that some investors are asking for independent verification that companies are living up to claims made in ESG reports, suggesting this presents a business opportunity for the big auditors and testing firms.

The Times, Page: 46

Hollow businesses need more than empty gestures

The FT looks at companies which have been emptied out by excessive payouts to shareholders, saying concern over such entities was “quietly acknowledged” in the Government’s overhaul of the audit and corporate governance regime.

Financial Times, Page: 12

EMPLOYMENT NEWS – WEDNESDAY 31ST MARCH 2021

City policy chair says most workers will return to offices

City of London policy chair Catherine McGuinness says the financial centre is likely to see most workers return to their offices after the pandemic, although there are likely to be changes to the way people work. She told the BBC: “What people are telling us is that they are expecting their central office base to remain at the core of their business with people coming in three or four days, working different hours, so we are expecting the bulk of the return … What it will mean in terms of the overall footfall, we are not yet quite clear.” A KPMG survey suggests that while most major global firms no longer plan to reduce their post-pandemic office space, few expect business to return to normal this year.

Daily Mail City AM

Hiring for bankers hits three-year high

Recruitment for bankers has hit a three-year high, according to research by Morgan McKinley and Vacancysoft. The analysis shows that Britain’s top banks posted 1163 professional banking vacancies last month, with this a 43.9% increase on the same period last year. The report also reveals that overall vacancies in the sector rose 19.4% year-on-year, their highest point since July 2019.

City AM

Khan fears job losses when furlough ends

London mayor Sadiq Khan has warned that without action to protect roles, there is likely to be a wave of job losses when the furlough scheme ends in September. Mr Khan said: “My concern as somebody who lived through the 1980s is we could have another period of mass unemployment where a generation is written off.”

Evening Standard

SMEs NEWS – WEDNESDAY 31ST MARCH 2021

Danske Bank to refund SMEs

Danske Bank has agreed to refund around 300 small businesses that it charged to set up business accounts when they applied for bounce-back loans, with the Competition and Markets Authority saying the bank will refund around £16,450 for breaking rules.

The I, Page: 22

PROPERTY NEWS – WEDNESDAY 31ST MARCH 2021

Urban prices up as office returns near

House prices in cities and towns are increasing as people prepare for a return to the office, research from estate agent Savills suggests. Winchester, Oxford and Bath saw price rises of 4%, 3.7% and 3.2% respectively in the first three months of 2021, while Edinburgh and York saw average values climb 2.6%. The report shows that central London, where house prices have taken a hit since the start of the coronavirus pandemic, has seen house prices increase for the first time since 2019. On average, the value of prime property outside of London increased by 2.2% in Q1 – the highest quarterly increase since March 2010.

Daily Mail

Saudi investor buys PwC office

A Saudi Arabian investor has bought the new PwC office block in Belfast for £87m. The figure is believed to represent the highest price paid for a single office investment in Northern Ireland. The development, Merchant Square, was sold by Oakland Holdings. PwC is due to start moving staff into the city centre building in the summer.

BBC News

INTERNATIONAL NEWS – WEDNESDAY 31ST MARCH 2021

Biden to announce tax hikes

US president Joe Biden is expected to announce tax increases targeting the wealthy and middle class when he unveils a $3trn infrastructure package today. The Build Back Better programme will reportedly impose a global minimum tax on profits from foreign organisations, increase capital gains taxes for the rich, lift the corporate tax rate to 28% from 21% and see an individual rate of 39.6% for those making over $400,000.

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

PERSONAL FINANCE NEWS – WEDNESDAY 31ST MARCH 2021

Cash Isa savers see worst tax year on record

Cash Isa savers have seen the worst tax year on record with returns averaging just 0.63% over the last 12 months. Inflation since April 2020 has averaged 0.78%, outstripping the typical Isa rate. Research from Moneyfacts shows that investors fared better, with an average return of 13.5% from stocks and shares Isas. This compares to a 13.3% loss investors suffered during the previous tax year. Despite payouts on cash falling as the Bank of England cut rates amid the pandemic, savers have deposited more money into cash Isas than ever before, with balances peaking at £302bn in May 2020.

The Daily Telegraph

ECONOMY NEWS – WEDNESDAY 31ST MARCH 2021

IMF head: Growth prospects rising but dangers remain

Kristalina Georgieva, managing director of the International Monetary Fund (IMF), says that while prospects for global growth have improved since January, uneven progress in fighting the coronavirus pandemic could jeopardise the economic gains. Noting that the IMF’s updated economic forecast will next week show the global economy growing at a faster pace than the 5.5% gain projected at the start of the year, she said this has been driven by a $1.9trn US rescue package and rising confidence from increased vaccinations in many advanced economies. However, Ms Georgieva warned that economic prospects are “diverging dangerously” and called on major central banks to “carefully communicate their policy plans to prevent excess financial volatility at home and abroad.”

Daily Mail

OTHER NEWS – WEDNESDAY 31ST MARCH 2021

Not looking forward to hearing from you

A conversation on Reddit has revealed many of the ‘facts’ and ‘attributes’ that front line HR professionals find most annoying on curriculum-vitaes. Blood type, shoe size and eye colour is not key information required and weightlifting personal bests and childhood cycling proficiency proof are among the more bizarre offerings from job seekers. One HR manager found the Goals section on résumés tiresome. “Your goal should be to get an interview, that’s it”, she commented. An emerging bugbear cited by some is “proficient on Zoom”.

Industry Slice

Contact Paul Southward

Paul Southward

NEWS – WEEKEND TO 28TH MARCH 2021

NEWS – WEEKEND TO 28TH MARCH 2021

NEWS ROUNDUP

TAX NEWS – WEEKEND TO 28TH MARCH 2021

SATURDAY

HMRC cracks down on second-home owners

People who register their properties as holiday lets but don’t rent them out are facing a crackdown after the Treasury said it would seek to verify the number of days the property was let for. HMRC will rescind eligibility to pay business rates instead of council tax and force homeowners to pay their local authority any money owed. They may also have to repay any additional tax relief they might have claimed. “In the crudest sense the suspicion is that a lot of these owners who say they are trying to rent a property for 140 days and so benefit from this lucrative status aren’t actually interested in doing so at all,” said Adam Matthews, a manager at RSM. “The system is clearly open to abuse — it’s an easy way to save on tax.”

The Times, Page: 61 The Daily Telegraph, Money, Page: 2

Missed opportunities of ‘tax day’

Claer Barrett outlines in the FT what opportunities she thinks the Treasury missed with its Tax Day announcements, namely reducing and simplifying the UK tax code.

Financial Times, Money, Page: 6

HMRC seeks to support taxpayers with overseas assets

Although HMRC only collects 5% of international tax debt, it says incorrect reporting is not always deliberate and so is now focussing on raising taxpayers’ awareness of their obligations.

Financial Times, Money, Page: 2

SUNDAY

HMRC unit checks rebate claims are legitimate

Some people applying for a simple tax rebate are being asked to prove their identity by an HMRC repayment credibility team, which has been granted extra powers to find fraudsters. They are being asked to fill in a three-page questionnaire and submit bank or building society statements, P60s, P45s and expenses receipts as well as one proof of address and two of identity. They have 30 days to comply, after which HMRC said they could be removed “from the self-assessment regime”. George Bull at RSM said the letters were often in response to very small claims and that the threats were “disproportionate”. Elaine Clark from Cheap Accounting adds: “The text of the letter is very heavy-handed. Does HMRC have a security problem? How easy is it for someone to hack a self-assessment account? I expect it may be easier than we’d like to think, especially in light of the significant Covid fraud.”

The Sunday Times, Business, Page: 13

Taxpayers have just days to act before penalties imposed

Individuals now have less than a week to sort out their Self-Assessment tax affairs or risk meeting potentially hefty penalties, HMRC has warned. The Revenue previously announced it would delay imposing penalties for the late payment of Self-Assessment by one month – to April 1st. But Graham Boar at UHY Hacker Young explains that interest payments of 2.6% on a delayed payment will have been building up since the January deadline and people who are not in a position to pay their bills now should take action urgently. He adds: “HMRC is actively encouraging taxpayers to make use of Time to Pay arrangements, this could be a lifeline for individuals who know they will struggle to pay their tax bill on time. If they choose to ignore it, they’ll only see the money owed increase even further.”

Sunday Express

Managing IHT as £293bn is ‘earmarked’ for grandchildren

New research from The Openwork Partnership shows more people could be hit by IHT over the coming years as parents and grandparents have “earmarked” more than £293bn for early inheritance payouts to children and grandchildren. Commenting on the results, Mike Morrow, the Chief Commercial Officer at The Openwork Partnership, said: “The size of the gifts underlines the need for trusted advice on how best to use the money whether it is to pay for house deposits or pay off debt or to invest for the future. Parents and grandparents as well as children and grandchildren would benefit from an ongoing relationship with a financial adviser.” The Express goes on to talk with experts about how IHT liabilities can be reduced, including using gifts and well-constructed wills.

Sunday Express

EMPLOYMENT NEWS – WEEKEND TO 28TH MARCH 2021

SATURDAY

Working from home could boost output

Bank of England policymaker Michael Saunders has said remote working could boost productivity by saving companies money on office space, increasing staff satisfaction and providing access to a wider pool of workers. “While a shift to widespread compulsory full working from home probably is not optimal, working from home offers a range of possible advantages for some firms,” he said. Separately, Rishi Sunak, the Chancellor, is urging businesses to open up their offices and end remote working because young people need to convening with colleagues and seek out mentors as they embark on their career development.

The Times Sky News

REGULATION NEWS – WEEKEND TO 28TH MARCH 2021

SATURDAY

UK and EU reach financial regulation deal in breakthrough on co-operation

The United Kingdom and the European Union have reached a deal to create a forum for cooperation on financial services regulation. The memorandum of understanding (MoU) sets the terms of engagement between the two parties but does not yet grant the City of London access to the EU’s Single Market. “Formal steps need to be undertaken on both sides before the MoU can be signed but it is expected that this can be done expeditiously,” the UK said in a statement, adding that the MoU created a “framework for voluntary regulatory co-operation in financial services” rather than any binding system.

Financial Times The Daily Telegraph City AM

CORPORATE NEWS – WEEKEND TO 28TH MARCH 2021

SATURDAY

Jessops files for administration

Jessops has filed a notice to appoint administrators. The camera retailer, bought by Peter Jones’s PJ Investment Group in 2013, has hired insolvency specialists FRP and is considering a Company’s Voluntary Arrangement in a bid to survive after it was severely impacted by lockdown restrictions. Geoff Rowley, partner at FRP, said: “Jessops is a long-established British brand, but like many others, it has faced growing online competition, as well as the challenges faced by all high street retailers in operating through the restrictions imposed during the pandemic. We are working closely with PJ Investment Group and the wider Jessops management team to consider all options to secure a future for the retailer.”

BBC News Daily Mail The Mirror

Gupta asks UK Government for £170m bailout

Sanjeev Gupta, the owner of Liberty Steel has asked the government for £170m in financial support. The collapse of Greensill Capital, the company’s key financial backer, has put Gupta’s GFG Alliance and its 5,000 UK workers in jeopardy.

BBC News The Daily Telegraph Financial Times

BoE warns banks against sudden halt to Covid-related lending

Lenders have been urged by the Bank of England to keep credit flowing to businesses once the state-backed COVID-19 loan schemes come to an end, warning that withdrawing funding would prove self-defeating.

Financial Times

SUNDAY

Landlords fear growing use of “cram down” mechanism

The Sunday Times’ Sam Chambers reports on Virgin Active’s use of a new restructuring tool enabled by changes to the UK’s corporate insolvency regime, designed to ease restructurings. Under the rules, companies can ask a judge to force through restructurings if too few creditors vote to approve it – the so-called “cram down” mechanism. “Landlords are up in arms because this issue will be on the radar of every company sitting on a load of rent arrears,” said Zelf Hussain, restructuring partner at PwC, which is advising British Land and Land Securities in the Virgin Active case. Virgin, which is being advised by Deloitte, is seeking to force landlords to write off or defer rent arrears – and take a haircut on future rent. Will Wright, head of restructuring at KPMG, said the increasing number of legal challenges brought by landlords against CVAs had created uncertainty around the process. Subsequently, he expects cram down restructurings to become more common.

The Sunday Times, Business, Page: 3

Scottish government calls in experts to examine Gupta deal

Ministers in Nicola Sturgeon’s administration have drafted in Deloitte to comb through state guarantees handed to GFG Alliance, the industrials conglomerate owned by Sanjeev Gupta. GFG’s biggest lender, Greensill Capital, recently collapsed leaving Gupta’s businesses in a precarious position. The Sunday Telegraph reports that the Scottish government guaranteed payments worth an estimated £360m to help Mr Gupta buy the Lochaber aluminium smelter and associated hydropower plant at Fort William five years ago. A source said Deloitte had been retained since 2017 to monitor the Lochaber guarantees.

The Sunday Telegraph, Business, Page: 1

Pandemic persuades bosses they should fly less

A year of lockdowns and Zoom meetings has convinced UK corporates they can help limit pollution by restricting business travel after restrictions ease. With ever more companies committing to reach net zero emissions many are revising their corporate travel strategies. PwC’s UK chairman Kevin Ellis tells the Sunday Times that although corporate travel will spike once restrictions are lifted, and this will be “an important signal for business about recovery and the return to normality”, in the long term “there will be more of a pragmatic level of business travel.”

The Sunday Times, Business, Page: 4, 5

Eurostar must restructure debts to stay on track

With financial collapse looming this summer, Eurostar is in emergency talks with lenders to restructure £400m in loans. The channel tunnel operator is in advanced discussions with NatWest, Santander and Credit Agricole to secure funding. Freshfields and financial specialists from KPMG are understood to be advising Eurostar. Linklaters is providing legal advice to the group of banks.

The Sunday Telegraph, Business, Page: 1

NCP plans to force through rent cuts

Car parks operator NCP is utilising a change in insolvency law to push through a controversial restructuring, the Sunday Times reports. Advised by Deloitte, the Japanese-owned company has told landlords that unless it can write off rent and potentially walk away from some sites it will go bust. The plans will save NCP up to £27m over the next two years.

The Sunday Times, Business, Page: 1

INDUSTRY NEWS – WEEKEND TO 28TH MARCH 2021

SATURDAY

Trust in UK corporate sector is low, admits chief of audit watchdog

Interim chair of the Financial Reporting Council, Keith Skeoch, tells the FT the watchdog is preparing for a raft of corporate failures this summer. British boardrooms should also get ready for governance changes.

Financial Times

One small step for man, one giant leap for ESG accounting standards

The FT reports on the World Economic Forum’s plan to mobilise CEOs’ support for the Sustainability Standards Board, which the international accounting standards setters at the IFRS Foundation are developing.

Financial Times

PENSIONS NEWS – WEEKEND TO 28TH MARCH 2021

SATURDAY

Would a flexible pension system really benefit the poor?

The Telegraph’s Sam Brodbeck considers the winners and losers from the state pension system, namely the wealthy who generally live longer. He notes a call from the Trades Union Congress for the pension age to be frozen and says such a flexible system may be fairer – where those who are unable to work or who don’t expect to live long enough to get a decent return can opt to access their pension early. However, it would carry terrible risk for those who misjudge their longevity and would introduce yet more complexity.

The Daily Telegraph, Money, Page: 2

SUNDAY

1,000 people a day trigger pension tax charge

According to figures from Just Group, more than 1,000 people a day have been hit by punitive tax rules that limit what they can pay into their pension by 90%, after having to dip into their pension during the pandemic. Just Group found that more than 600,000 people accessed their pension pot for the first time in 2020, in order to make ends meet. Introduced in 2015, the “pension freedom” rules allow savers to access their cash from 55. However, withdrawing income from some types of pension triggers the “money purchase annual allowance”, which reduces the amount a saver can pay in and earn tax relief by 90%, from £40,000 to £4,000. In 2020, 206,000 workers triggered the new lower limit, bringing the total number of savers affected by the cap to 1.6m. Kate Smith of Aegon said the rules were outdated and called on the Government to increase the money purchase annual allowance from £4,000 to £10,000. She said: “Job insecurity and a volatile stock market have thrown the retirement plans of many over-50s into disarray. The ability to access their pension flexibly has thrown them a lifeline, but it comes with a sting in the tail.”

The Sunday Telegraph, Business, Page: 9

Increased living costs renders triple lock “worthless”

The rising cost of care for pensioners alongside tax hikes has left the Government’s “triple lock” for the state pension “worthless”, Jessica Beard reports in the Sunday Telegraph. One pensioner told the paper an increase in care costs and council tax had wiped out meagre gains in the state pension and income from savings, which had dwindled as interest rates are continually slashed. Ian Browne of Quilter said: “Retirement has never been more challenging financially. This is clear if you simply focus on the rocketing social care costs.” The Telegraph points out that Britain has the worst mandatory pension provision of all 36 countries in the OECD, with retirees’ pension income 28% of their pre-retirement earnings, about half the other countries’ average.

The Sunday Telegraph

ECONOMY NEWS – WEEKEND TO 28TH MARCH 2021

SATURDAY

Retail rebounds from January slump

Data from the Office for National Statistics show a bounce back in sales last month following a sharp fall at the beginning of the year. Sales rose by 2.1% in February, up from an 8.2% fall in January, when the country went into its third lockdown. Non-essential retail in England is expected to reopen on April 12 and retailers “will be hoping that the wave of optimism sweeping consumers as a result of the successful vaccine rollout will translate into increased sales”, said Lisa Hooker, consumer markets leader at the consultancy PwC. Elsewhere, Howard Archer, chief economic adviser at the EY Item Club, said: “The modest rebound in retail sales adds to the evidence that the economy came off its January lows in February.”

The Times Financial Times, Page: 3 The Daily Telegraph Daily Express, Page: 71

INTERNATIONAL NEWS – WEEKEND TO 28TH MARCH 2021

SATURDAY

U.S. trade chief prepares tariffs against countries over digital taxes

The Office of the United States Trade Representative (USTR) has said it will continue to evaluate options to impose tariffs on countries that have introduced taxes targeting in-country revenues of digital services platforms. Such tariff investigations were introduced by the Trump administration and on Friday U.S. Trade Representative Katherine Tai said she was maintaining the threat of tariffs on goods from Austria, Britain, India, Italy, Spain and Turkey in retaliation for their digital services taxes. “Today’s move by USTR is an important affirmation in pushing back on these discriminatory trade barriers as the U.S. continues to work to find a viable solution at the OECD,” the trade group said in a statement.

Daily Mail

SMEs NEWS – WEEKEND TO 28TH MARCH 2021

SUNDAY

Accelerating tax receipts poses risk to cash flow

The Sunday Times considers the impact of Rishi Sunak’s plan to require individuals and small businesses to pay tax as they earn. The changes mean that millions of high earners, investors and self-employed people may have to pay two years’ tax in one year after 2024, the paper explains. George Bull at RSM warns that when “dramatically accelerating the collection of taxes, the Government must take care not to damage small businesses’ cash flow. There’s no sense in killing the goose that lays the golden egg.” Nimesh Shah, the chief executive of Blick Rothenberg, agreed. “The cash flow impact could cause severe pressure and should be phased in over four years. HMRC really needs to start communicating now, so people can plan.”

The Sunday Times, Business, Page: 13

PERSONAL FINANCE NEWS – WEEKEND TO 28TH MARCH 2021

SUNDAY

Parents forced to use their kids’ Isas amid savings boom

A surge in middle-class family savings during the pandemic has led parents to use their children to shelter more wealth from tax. Hargreaves Lansdown said a fifth more of its customers have paid into Junior Isas in 2020-21 than the year before, investing 45% more on average for their children. The firm’s Sarah Coles said: “Around one in six people have seen their finances improve during the pandemic, as the result of a combination of working from home and not being able to go out to do anything fun. At the same time the Government almost doubled the Jisa allowance, opening up a brilliant opportunity to squirrel away money.” Ms Coles added: “This particularly appeals to families where the adults have maxed out their £20,000 Isa allowance and are looking for further tax-efficient opportunities.”

The Sunday Telegraph

OTHER NEWS – WEEKEND TO 28TH MARCH 2021

SUNDAY

Amazon clashes with Elizabeth Warren over taxes and unions

Amazon has become embroiled in a row with U.S. senator Elizabeth Warren over issues including its tax and employment practices. Last week, the Massachusetts senator posted a video accusing Amazon of “exploiting loopholes and tax havens to pay close to nothing in taxes”. In response, Amazon said it was simply following the laws made by Congress, insisting it had paid billions of dollars in corporate taxes in the last few years alone. Warren hit back saying: “I didn’t write the loopholes you exploit, @amazon – your armies of lawyers and lobbyists did. But you bet I’ll fight to make you pay your fair share. And fight your union-busting. And fight to break up Big Tech so you’re not powerful enough to heckle senators with snotty tweets.”

Financial Times Business Insider

Contact Paul Southward

Paul Southward

NEWS – WEDNESDAY 24TH MARCH 2021

NEWS – WEDNESDAY 24TH MARCH 2021

NEWS ROUNDUP

TAX NEWS – WEDNESDAY 24TH MARCH 2021

Second home owners targeted by HMRC

The Treasury has launched a series of proposals as part of the Government’s “Tax Day” consultations. Chief among them is a tightening of rules for second home owners who will now only be able to register for business rates if their properties are genuine holiday let businesses. Currently, second home owners are able to declare they intend to make their property available to let but there is no requirement to verify that it is actually being used commercially. Owners may then also claim small business rates relief. New legislation will mean a second home’s qualification business rates will depend on the actual number of days the property was rented for. Treasury officials also said some owners may have claimed coronavirus support grants of up to £9,000 each to replace lost income. Paul Falvey, tax partner at BDO, said the change “will create clarity and certainty”. Chris Etherington, a partner at RSM, called the measures a “sensible step” and “welcome news for local authorities” while Nimesh Shah at Blick Rothenberg added that a rise in coronavirus grant applications would probably have raised eyebrows at HMRC. A Treasury source said: “We are going to force people to account for the claims they make.” Full details of the crackdown and the penalties home owners will face will be published in the coming weeks.

The Daily Telegraph, Business, Page: 1 The Times Financial Times Daily Mail, Page: 14 The I, Page: 12

Treasury’s “Tax Day” consultations a missed opportunity

After the Treasury failed to deliver proposals for fundamental tax reforms yesterday, campaigners such as Robert Palmer, executive director of Tax Justice UK, said “tax day has turned out to be a bit of a flop”. With many key decisions delayed until the autumn, the announcements amount to a mere tweaking with Tom Selby, senior analyst at AJ Bell, describing the policy papers as “the dampest of squibs”. “While reforms to modernise the way tax is administered in the UK, reduce the inheritance tax rates burden on non-taxpaying estates and deal with tax avoidance are all laudable, this feels like a missed opportunity to tackle some fairly obvious flaws in the system,” he said. Ahead of the Treasury’s announcements there was widespread speculation that higher and additional rate tax relief on pension contributions would be abolished and capital gains would be more closely aligned with income tax, but neither of these materialised.

Financial Times City AM The Sun Daily Express

Inheritance tax paperwork simplified

From January 1 2022, the requirement to complete inheritance tax paperwork will be dropped for estates whose value is significantly under the threshold after probate – a change expected to cover more than 90% of estates. A measure introduced during the pandemic allowing trustees to provide an inheritance tax return without physical signatures of all of those involved will also be made permanent. Commenting on the changes, Sean McCann at NFU Mutual said the Government should simplify the IHT process further by having more concise rules on lifetime gifts and making life insurance pay-outs free of inheritance tax, for example.

City AM The Sun Daily Express, Page: 17

Calls for broader definition of online sales tax

The outcome of a consultation on business rates reform, which campaigners for the high street hoped would result in lower taxes for physical stores coupled with a possible 2% tax on online purchases, has been delayed until the autumn. The Chancellor is reportedly keen on the plan which could raise an initial £2bn extra a year. A number of submissions to the Treasury’s business rates review called for the scope of its proposed online sales tax to be extended, from sales made through internet retailers to any online sales that could have been made on the high street. This would include accommodation, travel and software. The Treasury said that internet retailers account for around £100bn of the total £700bn value of all online sales excluding financial services.

The Times, Page: 40 The Sun

Firms promoting tax avoidance face crackdown

Companies promoting tax avoidance schemes will face tougher measures under Treasury plans, with Kate Ison, tax partner at, BCLP, pointing out that HMRC was seeking “extensive new powers” and would “strike the core of a promoter’s finances at best and entire business at worst”.

Financial Times The Sun

SMEs NEWS – WEDNESDAY 24TH MARCH 2021

MTD to usher in more frequent tax payments

The Treasury has suggested changing the timing of almost all tax payments after 2024 to realise its “vision [for] a tax system that works closer to real time”. Under the “making tax digital” programme, the Treasury will seek to use up-to-date digital tax return data to “bring the calculation and payment of tax closer to the point where the income or profit arises”. The plans will see and small companies and self-employed people pay tax more frequently, and closer to the point at which they make the money. Andy Chamberlain of the freelancer trade body IPSE commented: “We have early concerns that in-year tax payments simply won’t be practical for many self-employed businesses as it is not clear how the system would account for their volatile incomes.”

Financial Times, Page: 2 The Daily Telegraph, Business, Page: 5 The Sun

INDUSTRY NEWS – WEDNESDAY 24TH MARCH 2021

Letter: Listed groups should use mid-tier accountants more

Martin Muirhead vouches for managed shared audit stating the policy would enable a greater number of mid-tier firms to enter the market “providing the pipeline the sector needs.”

Financial Times, Page: 22

UK minister reveals test and trace spending on consultants

The Government’s test and trace programme spent £438m on “professional services” since the start of the pandemic, roughly 2% of the total £23bn of expenditure on the programme so far.

Financial Times, Page: 2

CORPORATE NEWS – WEDNESDAY 24TH MARCH 2021

Former PM ‘lobbied on behalf of failed financial firm’

Opposition MPs have called for a probe after it was revealed that former Prime Minister David Cameron lobbied the Bank of England in a bid to secure assistance for Greensill Capital, which employed him as an adviser. Greensill appointed Grant Thornton as its administrators on Monday, warning it is in “severe financial distress”.

City AM

PENSIONS NEWS – WEDNESDAY 24TH MARCH 2021

Technical updates expected for pension rules

The Treasury has said it will be making a slew of “technical updates” in areas where the state pension system doesn’t work but there was no sign in its “Tax Day” announcements of substantial reform for pensions, something James Jones-Tinsley, pensions expert at Barnett Waddingham. described as “disappointing”. He added: “The Treasury has squandered the opportunity to make real change – and the clock is ticking. If we don’t see action soon, the UK’s looming pensions crisis is only going to get worse.”

The Sun

PERSONAL FINANCE NEWS – WEDNESDAY 24TH MARCH 2021

Dormant assets scheme expanded

The Government’s dormant assets scheme is to be expanded to include insurance, pensions and investments. Currently, the scheme only covers old current and savings accounts. The Treasury claims the expansion could unlock more than £800m in lost funds which would be spent helping vulnerable people and communities across the UK.

The Sun

ECONOMY NEWS – WEDNESDAY 24TH MARCH 2021

ONS reports fall in jobless rate

The Office for National Statistics (ONS) has released data showing that the jobless rate in the UK has decreased for the first time since the onset of the coronavirus pandemic. The rate of unemployment returned to 5% between November and January, from 5.1% in previous months, with Chancellor Rishi Sunak noting: “Coronavirus has caused one of the largest labour market shocks this country has ever faced, which is why protecting, supporting and creating jobs has been my focus throughout this crisis. We have taken decisive action with a £352bn package of support.” Suren Thiru at the British Chambers of Commerce added: “With many firms struggling with the damage done to their cashflow by a year of COVID restrictions, unemployment is likely to remain on an upward trajectory until well beyond a full reopening of the economy.”

Evening Standard City AM

Liz Truss announces four new investment hubs

The UK is creating four regional trade and investment hubs to boost economic growth across the UK. Hubs would be located in Edinburgh, Cardiff, Belfast and Darlington, Secretary of State for International Trade Liz Truss said. The Government explained that the new hubs will provide support and advice to help regional businesses to access major trade markets and boost exports.

BBC News City AM

INTERNATIONAL NEWS – WEDNESDAY 24TH MARCH 2021

Yellen: US wants to stop a “global race” to the bottom

Treasury Secretary Janet Yellen has said the US wants to stop a “global race” to lower taxes on corporations. Speaking at a hearing of the House Financial Services Committee to discuss the country’s recovery from the pandemic, Ms Yellen said her staff were working with the Organisation for Economic Co-operation and Development to coordinate the potential tax changes with other countries. “We’ve had a global race to the bottom in corporate taxation and we hope to put an end to that,” she said. Her comments come as White House prepares to unveil plans to raise taxes on businesses and the wealthy to help pay for $3trn of new spending on infrastructure and green jobs. Separately, Mathias Cormann, the incoming head of the OECD, has told the FT that he is “quietly optimistic” he can secure a global deal on taxing multinationals. Meanwhile, UK Chancellor Rishi Sunak told an event with Bloomberg yesterday that a multilateral solution to taxing global tech giants is “in our grasp” adding that he was “very keen to see a resolution” on the issue reached when G7 finance ministers meet in July.

Financial Times, Page: 6 BBC News Financial Times, Page: 4 City AM

OTHER NEWS – WEDNESDAY 24TH MARCH 2021

Illegal money exchange business owner ordered to pay £1m

A man who set up an illegal Money Service Business (MSB) and bought a £700,000 house with the profits, has been ordered to pay back nearly £1m. Shunjian Jiang, 30, was arrested in August 2016 after HMRC investigators found that he was operating an unregistered and unregulated MSB.

Press Release

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Paul Southward

NEWS – MONDAY 22ND MARCH 2021

NEWS – MONDAY 22ND MARCH 2021

NEWS ROUNDUP

TAX NEWS – MONDAY 22ND MARCH 2021

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

CORPORATE NEWS – MONDAY 22ND MARCH 2021

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 SERVICES NEWS – MONDAY 22ND MARCH 2021

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

EMPLOYMENT NEWS – MONDAY 22ND MARCH 2021

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

PROPERTY NEWS – MONDAY 22ND MARCH 2021

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

INTERNATIONAL NEWS – MONDAY 22ND MARCH 2021

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

ECONOMY NEWS – MONDAY 22ND MARCH 2021

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

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NEWS – FRIDAY 19TH MARCH 2021

NEWS – FRIDAY 19TH MARCH 2021

NEWS ROUNDUP

TAX NEWS – FRIDAY 19TH MARCH 2021

IFS: Budget black hole may mean higher taxes

The Institute for Fiscal Studies (IFS) says a £4bn black hole in Rishi Sunak’s spending plans mean Britain faces tax hikes, with the think-tank saying the shortfall for the 2022/23 financial year went “entirely unmentioned” in the Chancellor’s recent Budget. The IFS says tax rises and borrowing are likely to increase as the Treasury looks to tackle the shortfall, with officials against the idea of another period of austerity. The think-tank said that under current plans, spending on some areas of government would be 3% lower in 2022/23 than a year earlier, and 8% lower than what was planned pre-pandemic.

Daily Mail

EMPLOYMENT NEWS – FRIDAY 19TH MARCH 2021

South-west leads Women in Work Index

PwC ’s Women in Work Index has seen south-west England come out on top in regard to female participation in the workforce. Scotland came second place in the rankings on an index with gauges areas such as the gender pay gap, female full-time employment, female unemployment and labour force participation. PwC has warned that the pandemic is expected to have a disproportionately negative effect on women, setting back their progress in work. “Even if job market growth returned to pre-pandemic rates by 2022, PwC estimates that progress would still be four years behind where it would have been by 2030. To reverse this damage, progress will need to proceed at twice the pre-pandemic rate,” the report said. Laura Hinton, chief people officer at PwC, commented: “There is absolutely no time to lose in addressing the very real impact of the pandemic on women”, urging governments, policymakers and businesses to work together “to empower women and create opportunities for meaningful participation in the workforce.”

The Times The Scotsman

PROPERTY NEWS – FRIDAY 19TH MARCH 2021

Capital’s occupied office space expected to rise

Property agent CBRE has predicted that firms will occupy an extra 13m square feet of office space in central London by 2026, adding to the 232m square feet already used. This come s despite some firms looking to reduce workspace after the pandemic drove a shift toward greater remote working. CBRE’s estimate is based around a forecast that office-based employment in central London could increase by almost 190,000 in the five years to 2025, equivalent to annualised growth of 1.8% per year between 2021 and 2025.

Evening Standard

CORPORATE NEWS – FRIDAY 19TH MARCH 2021

OSB reveals suspected £28.6m fraud

OneSavings Bank has delayed its results after disclosing that it has been the victim of a suspected £28.6m fraud by a corporate customer. The bank has reported the matter to Action Fraud and informed the Financial Conduct Authority and Prudential Regulation Authority. It has also called in Smith & Williamson, which specialises in forensic investigations. The Times reports that it is not clear whether the suspected fraud was discovered internally or by the bank’s auditor Deloitte.

The Times, Page: 44

Premier League set to score less for TV deals

Andy Turner, a partner at Mercer & Hole, says the Premier League and its clubs may be concerned ahead of the auction for TV rights for 2022 to 2025, saying they are likely to go for less than the £5.1bn high seen in 2015 and the £4.5bn secured in 2018. He suggests that a rights auction needs aggressive bidders and new entrants to maximize the price, adding that if Sky and BT are happy with their existing packages and there are no new entrants, this is likely to be reflected in the price.

City AM

Lookers sees profits ahead

Car dealership Lookers has published an update on its 2020 financial results to say it expects to report underlying profit before tax of £10m, compared to analysts’ consensus of a small loss. The firm, which has recently switched auditor from Deloitte to BDO, said it was still working on its full accounts for the last financial year. Lookers had faced a Financial Conduct Authority probe after a £19m hole was discovered in a past set of accounts.

City AM

INTERNATIONAL NEWS – FRIDAY 19TH MARCH 2021

German tax revenues slip 7.2%

German tax revenues slipped to €54.67bn in February, a 7.2% fall compared to the same period last year due to the economic fallout of the coronavirus crisis. The dip marks a slightly slower rate of decline than the 11.1% drop recorded in January. Data from the finance ministry shows that sales tax was down by almost 19% last month due to a lockdown which has kept most shops shut.

Daily Mail

ECONOMY NEWS – FRIDAY 19TH MARCH 2021

BoE keeps rates steady

The Bank of England has held interest rates at 0.1% and its bond-buying programme at £895bn, with its Monetary Policy Committee (MPC) voting unanimously to keep rates at record-low levels. The Bank said the outlook for the economy remained unusually uncertain, adding that it depends on the evolution of the pandemic and how households, businesses and financial markets respond to developments. Noting that plans for the easing of lockdowns suggested restrictions being lifted “somewhat more rapidly” than had been assumed in its February report, the Bank said this “may be consistent with a slightly stronger outlook for consumption growth” in the April-June period than had been previously suggested. Meanwhile, the Bank’s chief economist has said a rapid economic recovery could soon be underway. Andy Haldane said he believes that it is “more likely than not” that a “rapid-fire recovery” is on the cards. “That is coming, and I think that is coming soon,” he told a Women in Business and Finance awards ceremony. Mr Haldane, however, warned that there are risks of more persistent damage to people’s job prospects as a result of the pandemic, saying: “It seems very likely, based on the evidence we have so far, that the deepest and the most damaging of those scars will be felt by those least advantaged in the job market”.

Daily Mail City AM Sky News

Consumer confidence climbs in March

GfK’s monthly consumer confidence index shows British consumer morale has hit a one-year high, rising to -16 in March from -23 in February. GfK client strategy director Joe Staton said: “If this improved mood translates into spending, it might help reverse some of the economic damage the UK has suffered”. Howard Archer, chief economic adviser at the EY Item Club, said the rise in consumer confidence “fuels belief that the consumer can play a leading role in robust recovery”.

Reuters Financial Times

INDUSTRY NEWS – FRIDAY 19TH MARCH 2021

Industry calls for audit reform timetable

The audit industry has urged the Government to set out a timetable detailing when it plans to implement changes outlined in an audit reform consultation that sets out measures to reduce the dominance of the Big Four and deliver an industry regulator with greater powers. John Wood, CEO of the Chartered Institute of Internal Auditors, commented: “It is disappointing that there is no detailed legislative timetable in the white paper and we need to see a clear roadmap for reform without delay or else we risk further corporate collapses.” He added that the reforms “need to be implemented with urgency to protect and enhance the UK’s enviable reputation for good corporate governance.” Mazars’ head of audit David Herbinet highlighted a need to “focus upon establishing clarity on timings and the process of implementation to move forward at pace and seize this generational opportunity”. Meanwhile, PwC chairman Kevin Ellis has welcomed the reform proposals, saying the UK “has an opportunity to lead the world on corporate governance” and describing the consultation as a “crucial step in driving trust and confidence in our reporting and regulatory frameworks.” EY chair Hywel Ball commented: “The introduction of a new regulator alongside tighter accountability for directors as part of a UK equivalent of the US Sarbanes-Oxley framework is essential.” Jon Holt, head of audit at KPMG, said: “It is an ambitious package of strategic reform. Prioritising and clarifying the audit reform agenda is an important step to rebuild trust in the profession.”

City AM BBC News

Reform could cost business more than £430m a year

Analysis suggests that plans to reform the audit sector and crack down on poor practices at large firms could add more than £430m to businesses ’ costs. The analysis of reform set out in a Department for Business, Energy and Industrial Strategy report says the largest cost to business would come from extending the number of companies that fall within the proposed rules, while strengthening internal controls would also deliver another large bill. The calculations made by the FT suggest that the creation of the Audit, Reporting and Governance Authority could cost £39m per year. The Times says bringing 2,000 large private and Aim-listed companies under tougher reporting standards will cost business up to £1.7bn over ten years. It says companies affected would have to appoint an audit committee if they do not have one and undertake a re-tendering exercise and rotate their auditor more frequently. It notes that a Government cost analysis does not take into account a likely increase in audit fees for new public interest entities. Bob Neate of Mazars said extra quality control processes around public interest entity audits “will enhance the cost of delivering the audit and somebody has to pay for that.”

City AM The Times, Page: 47 Financial Times, Page: 2

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NEWS – WEDNESDAY 17TH MARCH 2021

NEWS – WEDNESDAY 17TH MARCH 2021

NEWS ROUNDUP

TAX NEWS – WEDNESDAY 17TH MARCH 2021

Tax claw back extension to boost small firms

The Telegraph’s Harry Brennan says 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. More than 130,000 incorporated businesses and more than 500 sole traders or partnerships should benefit. Chris Etherington of RSM says it is “important for self-employed workers not to overlook” the extension of the relief, which could prove to be very valuable.

The Daily Telegraph

CGT hike could hit homeowners

With the Office of Tax Simplification proposing an increase in capital gains tax, experts have warned that buy-to-let landlords and second homeowners could see the amount they owe increase by as much as £24,000 should they decide to sell. While the CGT rate currently stands at 18% for basic rate taxpayers and 28% for those in the higher rate threshold, the Office of Tax Simplification has called for CGT to increase in line with income tax rates to 20% at the basic rate and 40% at the higher rate. It has also suggested that an exemption on the initial £12,300 could be reduced to £2,000. Marc von Grundherr, director of estate agent Benham and Reeves, said the mooted changes “would act as nothing more than another nail in the coffin of the buy-to-let sector,” adding an increase would be “nothing more than a blatant attack” on landlords and second homeowners, especially those in higher tax thresholds.

Yahoo! Finance

Brexit delivers surprise for shoppers

Harry Wallop in the Mail looks at how shoppers have been hit by unexpected extra charges when buying goods from websites based in Europe since Britain left the EU. Michelle Dale, a VAT specialist at UHY Hacker Young, notes that post-Brexit, certain sales are now treated as exports.

Daily Mail, Page: 38

INSOLVENCY NEWS – WEDNESDAY 17TH MARCH 2021

Support sees insolvencies hit a record low

Figures from the Insolvency Service show business insolvencies fell to a record low last month, with 686 recorded in February. This is down 1,348 from the same month in 2020. The record low has been attributed to restrictions on winding up orders, delays in courts and leniency from creditors, with these helping keep firms afloat despite ongoing pressure brought about by the pandemic. Julie Palmer of Begbies Traynor has warned that insolvencies could surge as Government support for businesses and the wider economy is wound down. She said there will be a “marked increase” in the failure of zombie businesses, adding that there will also be firms “which find it difficult to kick-start themselves”. Margaret Carter of Azets has urged companies to prepare for pressure on their cash flow, telling management teams “who may have become complacent due to ongoing government support”, that “now is the time to review their plans and forecasts to see if they can survive the staged withdrawal of assistance and restrictions”.

The Daily Telegraph, Business, Page: 2 The I, Page: 45

Traynor: End of support will see firms fail

Ric Traynor, one of the founders of Begbies Traynor, says that the end of coronavirus-related support measures later this year could see a number of businesses fail, with a raft of liquidations and restructurings likely to follow when support packages like the furlough scheme are wound down. With the number of insolvencies falling by around 35% in 2020, Mr Traynor says Government support schemes have artificially kept businesses afloat. He told City AM: “Those businesses that have been protected and still have fundamental problems are going to face formal insolvency, and that’s why we expect the number of insolvencies to increase over the course of the next year or two”.

City AM

CORPORATE NEWS – WEDNESDAY 17TH MARCH 2021

MPs call for inquiry into Football Index scandal

MPs have written to Culture Secretary Oliver Dowden calling for a public inquiry into the collapse of gambling website Football Index, saying the matter highlights a need for reform of the gambling sector. Administrators Begbies Traynor were called in last week to assess options for restructuring the business and recouping money for creditors.

The Independent BBC News

ESG aims linked to more chiefs’ pay

The FT looks at moves to link executive payouts to ESG targets, with PwC analysis suggesting nearly half of ESG measures used in judging pay are not deemed “material” to shareholder value.

Financial Times, Page: 14

SMEs NEWS – WEDNESDAY 17TH MARCH 2021

Small Business Commissioner to target late payers

Liz Barclay, the former BBC journalist who will become Small Business Commissioner in June, will lead a Government drive to end the “toxic” blight of late payments to small businesses. She said this will help “take pressure off our phenomenal entrepreneurs”, arguing that small businesses have “to be able to turn their attention to their next client and next order rather than chasing up late payments and worrying about their cash flow”. Small Business Minister Paul Scully commented: “Having run small businesses for most of my professional life I know just how toxic delayed invoices can be.”

Daily Express, Page: 21

PROPERTY NEWS – WEDNESDAY 17TH MARCH 2021

House prices climb 12% in a year

Analysis by Halifax shows that Bury St Edmunds in Suffolk and Banbury in Oxfordshire have seen the biggest house price rises during the pandemic, with average prices up by more than a third. The analysis, which is based on regions with at least 100 house sales between the beginning of March 2020 and the end of February 2021, shows that Bury St Edmunds has seen the biggest jump, with the average sale price up 37% from £267,217 to £367,421. Banbury has seen average house prices rise 36%, from £283,830 to £385,556m, while third-placed King’s Lynn saw values climb 28%. The report shows that the typical value of a home in Britain is up 12% over the past year, climbing from £285,428 to £320,457.

Daily Mail

PERSONAL FINANCE NEWS – WEDNESDAY 17TH MARCH 2021

Savings rates hit record low

Analysis by Moneyfacts.co.uk shows that savings rates have fallen to record lows since the start of UK’s first lockdown, with the average easy access savings rate less than a third of what it was a year ago. The report says the typical easy access rate hit a record low of 0.16% at the start of March, falling from 0.56% on March 1, 2020. Moneyfacts.co.uk also found that there are 383 fewer deals on the market, including cash Isas, than there were last year, with 1,385 products.

Daily Mail

INTERNATIONAL NEWS – WEDNESDAY 17TH MARCH 2021

Poland and Hungary win court fight over turnover taxes

The Court of Justice of the European Union (CJEU) has rejected EU Commission appeals looking to challenge Polish and Hungarian taxes on turnover. The Commission had argued that the rules give unfair advantage to small businesses over their bigger, foreign rivals. Poland and Hungary challenged the Commission’s stance at the General Court of the European Union in 2019, with their success prompting the appeal. CJEU judges have now ruled that a Polish tax on the retail sector and a Hungarian tax on advertisements do not infringe EU law on state aid.

Daily Mail

Germany extends tax deferral

Germany will extend a tax deferral scheme designed to help firms hit by the impact of the coronavirus pandemic by three months. Finance Minister Olaf Scholz said applications for tax deferral can be submitted until June 30, meaning interest-free tax deferrals will be granted until the end of September.

Daily Mail

German regulator starts Greensill Bank insolvency proceedings

Germany’s financial regulator Bafin has submitted a filing to a court to start insolvency proceedings for Greensill Bank. The bank’s owner, Greensill Capital, entered insolvency last week after losing insurance coverage for its debt repackaging business. Greensill’s insolvency administrators Grant Thornton declined to comment.

Daily Mail

ECONOMY NEWS – WEDNESDAY 17TH MARCH 2021

Britons set for £50bn spending spree

A report from the Centre for Economics and Business Research (CEBR) and Isa provider Scottish Friendly suggests Britons will go on a £50bn spending spree once restrictions are lifted, spending money saved over the past year. The analysis says households intend to take more holidays and eat out more, with a quarter of the £192bn in savings accumulated amid the lockdown expected to be spent. While Scottish Friendly and the CEBR estimate that 26% of the savings would be spent, a recent Bank of England report suggested that 5% of the £125bn of excess savings generated between March and November 2020 would be spent.

The Guardian

OTHER NEWS – WEDNESDAY 17TH MARCH 2021

Audit reform to make directors accountable for failings

Reform of audit rules set to be published by Business Secretary Kwasi Kwarteng will see senior executives held responsible for accounting errors, with directors to be made accountable for the accuracy of their company’s financial statements. They will face fines and bans when failings occur. Under existing rules, it is company auditors rather than individual directors who are deemed responsible for the accuracy of financial statements. The overhaul comes in the wake of a number of accounting scandals which have prompted concern over weak internal controls, conflicts of interest and poor audit regulation. The reform will see the Financial Reporting Council replaced by the Audit, Reporting and Governance Authority, a regulator with increased powers that may be given oversight of the UK’s largest private companies as well as those listed on public markets. Other changes set to be rolled out include new rules for accountancy firms, with the Big Four set to be forced to split their audit and consultancy arms. The Mail’s Mark Shapland says that while Government action “stalled” under his predecessors, Mr Kwarteng has said audit reform is “one of his initial priorities”.

Daily Mail, Page: 66

Reform plan is encouraging

The Daily Mail’s Alex Brummer says it is encouraging that Business Secretary Kwasi Kwarteng is set to publish audit reform plans, saying previous business secretaries have “shown no urgency in bringing reforms to fruition.” However, he criticises indications that legislation may not be in place until 2023. Mr Brummer reflects on a need for reform, saying that a “list of audit mishaps … is endless” and “slow, bureaucratic and feeble regulation by the Financial Reporting Council is legendary.” He also highlights reports calling for reform from John Kingman, the Competition and Markets Authority and Donald Brydon.

Daily Mail, Page: 67

People miss sport in lockdown

Research by EY suggests that watching and participating in sport were two of the top nine things people missed doing during the initial lockdown period.

BBC News

I hope this was not government sponsored research!

Contact Paul Southward

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NEWS – TUESDAY 16TH MARCH 2021

NEWS – TUESDAY 16TH MARCH 2021

NEWS ROUNDUP

TAX NEWS – TUESDAY 16TH MARCH 2021

IR35 change to affect 170k contractors

The IR35 reform set to be rolled out next month could see around 170,000 self-employed workers forced to pay more tax. The Government says that the change will only apply to medium and large-sized businesses, meaning genuine freelancers and self-employed workers will not be affected by a shift that sees business take responsibility for deciding on a person’s tax status. The Express highlights research by the Association of Independent Professionals and the Self-Employed which shows that half of freelancers are planning to stop contracting in the UK after IR35 changes come into effect. The proportion is up from nearly a third the same time last year, when the legislation was originally due to come into force.

The Sun Daily Express

Cross-border workers call for tax law rethink

People who live in the Republic of Ireland but work in Northern Ireland are calling for changes to remote-working tax laws, with the current system seeing them have to pay tax in both states. While they can claim relief against tax already paid in Northern Ireland on their salary, the work must be conducted outside the Republic, meaning they cannot work from home.

BBC News

CORPORATE NEWS – TUESDAY 16TH MARCH 2021

IMF: Pandemic increases dominance of big firms

The International Monetary Fund says large companies have increased their dominance over the world’s advanced economies, with their concentration of revenues climbing during the pandemic. It attributed this in part to a rise in bankruptcies, which hit smaller companies hardest, and warned that the increase in dominance by larger firms could stifle growth. The report said: “We know from experience and IMF research that excessive market power in the hands of a few firms can be a drag on medium-term growth, stifling innovation and holding back investment.” It added that such an outcome “could undermine the recovery” and “block the rise of many emerging firms at a time when their dynamism is desperately needed.”

The Times

Business optimism increases

A new Accenture/IHS Markit survey has shown that business optimism in the UK is at a six-year high. The poll of 12,000 manufacturing and service companies saw 68% say they expect activity to increase in 2021, while only 11% foresee a decline. The net balance of +57% represents a steep increase on the +34% reading recorded in October. Rachel Barton, strategy and consulting lead at Accenture, said that it was “encouraging” to see businesses confident about bouncing back, commenting: “Although we are not out of the woods yet, it is important for UK business to take advantage of this confidence in order to build a sustainable recovery”.

The Daily Telegraph Sky News Evening Standard

Boost for manufacturing growth forecast

A survey by Make UK and BDO has shown strong growth plans among Britain’s manufacturers, with the sector expected to see growth of 3.9% in 2021. This marks an increase on a previous estimate of 2.7%. The survey also shows that the industry faced a 10% drop in output in 2020. ?

The Daily Telegraph Sky News

Law firm mergers drop to nine-year low

Law firm mergers have fallen to a nine-year low, as the economic downturn brought about by the coronavirus pandemic has left consolidator firms wary of making acquisitions. Data from Hazlewoods reveals that 107 law firm mergers were completed in 2020, down 25% on the 143 mergers that occurred in 2019 and less than half the 278 mergers that took place in 2011.

City AM

UK start-ups attract record $8bn in dash for growth

Tech Nation data shows UK tech sector attracted record investment of close to $8bn in Q1, with investment in fast-growing companies more than twice that seen in Q1 2020.

Financial Times

EMPLOYMENT NEWS – TUESDAY 16TH MARCH 2021

Bailey expects lower jobless peak

Bank of England governor Andrew Bailey has said unemployment is likely to peak at a lower level than previous estimates, with the Chancellor’s decision to extend furlough until September likely to limit the effect of the pandemic on jobs. Mr Bailey told BBC Radio 4’s Today programme: “I think it’s very helpful that the furlough scheme is now projected to extend beyond the end of the restrictions by a month or two, which should help to smooth that transition.” He warned, however, that “expecting a transition without some rise in unemployment I’m afraid is, is probably unlikely.” While the Bank’s most recent forecasts, which were made before the furlough scheme was extended, put the peak in unemployment at 7.5%, Mr Bailey said: “I would expect the next forecast to show the peak in unemployment will be lower.”

The Daily Telegraph

FINANCIAL SERVICES NEWS – TUESDAY 16TH MARCH 2021

Khan calls for financial services clarity

Mayor of London Sadiq Khan has called for the Government to provide greater clarity for the City of London post-Brexit, urging Chancellor Rishi Sunak to “address the concerns of London’s financial and professional services sector”. Mr Khan has called on ministers to secure equivalence for the financial services sector, saying this will “ensure a fair and level playing field.” He cited research from the Centre for Economics and Business Research which suggests the UK could lose £2bn of GDP each year from a smaller financial services sector post-Brexit. Mr Khan also warned that it is “essential that the Government’s immigration policy maintains and broadens the pool of international talent that industry can access.”

City AM

PERSONAL FINANCE NEWS – TUESDAY 16TH MARCH 2021

Three-quarters of millennials seek advice

A poll of 1,000 people by Prudential found that 74% of millennials and 58% of Generation Z have seen, or are going to see, a financial adviser, with this driven by financial difficulty and a desire to start investing. It also found that 32% of Generation X, 21% of Baby Boomers and 24% of those aged over 75 said the pandemic had specifically driven them to seek advice. The research also found that 53% of adults said the financial crisis caused by the pandemic had prompted them to seek advice from a financial adviser, with 33% of those having already sought financial advice and 20% planning to do so.

FT Adviser

INTERNATIONAL NEWS – TUESDAY 16TH MARCH 2021

Biden plots major tax rise

President Joe Biden is reportedly considering the first federal tax hike since 1993 as he looks to reboot the US economy. Plans said to be under consideration include raising corporation tax from 21% to 28%, increasing income tax on those earning over $400,000, making the estate tax more stringent and increasing capital gains tax on those making more than $1m. The moves would help fund a long-term economic plan focused on infrastructure, climate and education.

The Independent Daily Mail The Daily Telegraph

ECONOMY NEWS – TUESDAY 16TH MARCH 2021

Bailey: recovery may be quicker than forecast

Andrew Bailey, governor of the Bank of England, says the vaccine programme could see the economy outdo expectations in the coming months. However, he added that while he now saw “upside risks” to the Bank’s growth forecasts, new COVID-19 variants may still derail the recovery. Asked what sort of recovery the UK could expect, he told BBC Radio 4’s Today programme: “I’m now more positive, but with a large dose of caution.” His comments came as a monthly Ipsos Mori poll suggested public optimism over the UK’s economic outlook is at its highest since 2015. The survey saw 43% of respondents say they thought the economy would improve over the next 12 months, compared with 41% who thought the opposite. This lifted the economic optimism index to +2, up from -31 in February.

The Guardian

ONS updates inflation shopping basket

The Office for National Statistics’ (ONS) inflation shopping basket has been updated to reflect the impact of the coronavirus pandemic, with the statistics watchdog adding items such as hand sanitiser and home workout equipment to the list. With the pandemic driving an increase in remote working, casual clothing has been added to the basket as demand for formal office wear has declined. While smart watches, internet controlled light bulbs and electric hybrid cars are to join the price index, ground coffee and white chocolate are among items being removed from the list. Overall, the ONS has added 17 items in 2021, removing 10 and leaving 729 unchanged.

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Paul Southward