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NEWS – WEDNESDAY 28TH APRIL 2021

NEWS – WEDNESDAY 28TH APRIL 2021

NEWS ROUNDUP

TAX NEWS – WEDNESDAY 28TH APRIL 2021

Family businesses lobby group calls for £150bn of tax cuts

The International Business Network has called for the abolition of corporation tax and cuts to income tax and VAT to drive a post-pandemic recovery. The group, which represents family businesses, urges the Government to make £150bn of tax cuts, £70bn of which should be permanent while quantitative easing should be abandoned and perpetual “Covid recovery bonds” issued in its place to finance the recovery. “The UK is at an economic crossroads between prosperity and long-term relative decline. It is vital it chooses the right path,” John Longworth, chairman of the network, said. “This package sets out a clear agenda to allow family owned and run businesses . . . the cover they need to drive us out of this economic Armageddon.”

The Times, Page: 35

Republicans call Biden’s tax plans “economic sabotage”

The US president is expected to use his first speech to a joint session of Congress on Wednesday to outline his proposals for increases in capital gains tax, corporation tax and income tax. The tax raid on America’s wealthy is supposed to fund multi-trillion dollar spending programmes, but Republicans have called the plans “economic sabotage” while business figures said it threatened to “kill the golden goose that is America.” Chris Christie, the former Republican presidential candidate, said it showed Mr Biden was a “far-left president”. He said: “It is nothing more than income redistribution. It’s socialism.” Those earning more than $1m will see CGT rates almost double and when local and state capital tax rates are combined with the new federal level investors will pay up to 58% in some localities, such as New York City. Meanwhile, Mr Biden also plans to give the IRS an extra $80bn to crack down on wealthy individuals and powerful corporations who try to evade his proposed new tax hikes. UK analysts are watching the Chancellor closely to detect signs that he may follow suit with his own CGT rate increase later this year.

The Daily Telegraph, Page: 13 Daily Mail Daily Express The Guardian, Page: 27

PAC issues stinging report on tax and UK’s net-zero vision

A report from the Public Accounts Committee has said that the Treasury and HMRC have no “clear vision” of how taxes could help the UK meet its legal target of net-zero emissions by 2050. Committee chair Meg Hillier said the Government needed to release a clearer plan ahead of Cop26: “The economic revolution required to abandon fossil fuels and reach net zero must be the greatest coordinated ask of governments around the globe in history,” she said. “But the UK Government has been blithely issuing ever more ambitious climate targets for years now, with no sign of a roadmap to reach any of them. The departments in charge seem stuck in a bygone era, with little sign of the innovative thinking needed to achieve all this.”

The Independent Daily Express, Page: 4

French and German finance ministers back US global tax plan

France and Germany have backed the US Government’s idea of a global minimum corporate tax rate of 21% to be negotiated at the OECD. Germany’s finance minister Olaf Scholz said that personally, he had nothing against the US proposal. France’s Bruno Le Maire said: “If that is the result of negotiations, we would also be agreed.” Austrian Finance Minister Gernot Bluemel said the U.S. proposal was constructive. “This tax fairness must also apply above all between digital and analogue business models,” he said.

Financial Times, Page: 6 The I, Page: 25 Daily Mail

Danish tax authority loses High Court ‘cum-ex’ case

A judge has ruled that the Danish state could not enforce its own tax laws in an English court, collapsing an attempt to pursue more than 100 financial institutions for £1.5bn in tax payments.

Financial Times, Page: 11

FINANCE NEWS – WEDNESDAY 28TH APRIL 2021

Investment in UK tech set for record year

Venture capital investment into technology start-ups in the UK and Ireland is on track to set a record in 2021, according to data business PitchBook. Technology companies in the UK and Ireland raised £5.3bn in the first quarter of 2021, placing the sector on track to surpass last year’s funding record of £13.4bn. “In this post-Brexit era, UK-based companies have generally been able to attract capital and conduct business as usual,” PitchBook wrote in its new European Venture Report. “In the long run, prominent UK-based start-ups could play a key role in retaining talent and attracting new overseas investment,” the report added.

The Daily Telegraph

SMEs NEWS – WEDNESDAY 28TH APRIL 2021

KPMG Venture Pulse survey released

The latest KPMG Venture Pulse survey reveals that venture capital investment in Scottish businesses cooled in the opening months of the year, with the combined value of deals falling to £64.3m, from £97.6m previously. Amy Burnett, senior manager with KPMG private enterprise in Scotland, commented: “The figures for Q1 are relatively subdued and disappointing, but it’s clear investors still have an appetite for Scottish scale-ups. To some extent, we bucked the global trend towards the end of 2020, with significant deal volume and value, and we’re now seeing that steady off and balance itself out.” Bina Mehta, chair of KPMG UK and head of the firm’s ‘emerging giants’ practice, added: “The fact that the amount of VC investment coming into the UK from overseas increased in this post-Brexit environment is encouraging, as was the continued strength of corporate VC investment”;

The Scotsman BBC News

BBRS has cost £23m so far with no cases addressed

The Business Banking Resolution Service finally went live in February after a series of delays, the Times reports, but since its inception in 2019 the body has cost more than £23m without having compensated a single business. The BBRS was set up to give small and mid-sized businesses an independent view on banking disputes. Craig Beaumont, chief of external affairs at the Federation of Small Businesses, said: “Small businesses seeking redress will be looking at these big sums and expecting big results.”

The Times, Page: 35

CORPORATE NEWS – WEDNESDAY 28TH APRIL 2021

PKF supports Bloom & Wild’s first acquisition

Bloom & Wild has acquired Netherlands-based competitor Bloomon for an undisclosed sum – its first acquisition which quadruples the size of the online flower and gifting platform’s European footprint. PKF advised Bloom & Wild on the deal. Sophia Meadows, finance director at Bloom & Wild, said: “PKF were an invaluable support throughout the entire process. They were flexible with ever moving timelines, totally understood our business and what mattered to us and we relied on their technical expertise heavily to guide us through the process.”

Insider Media

PERSONAL FINANCE NEWS – WEDNESDAY 28TH APRIL 2021

Muted interest in advice during pandemic

Research from Netwealth suggests the pandemic has made people more engaged with their personal finances, although just one in seven Britons have increased their reliance on financial advice. A February survey of 2,000 adults aged 35-plus found two in five (41%) said they were more engaged with their personal finances throughout the pandemic than in previous years. But the research also found only 15% said they relied more on a financial adviser or wealth manager during the pandemic compared with previous years.

FT Adviser

ECONOMY NEWS – WEDNESDAY 28TH APRIL 2021

New Investment Council will advise on post-Brexit reform

The Department of International Trade has announced the creation of a new Investment Council to help advise ministers on how to make the most of Britain’s post-Brexit freedoms. The body, which is made up of private sector businesspeople, will meet at least twice a year to provide strategic advice on how to make regulatory changes to improve the attractiveness of the UK for foreign investors. International Trade Secretary Liz Truss said: “Alongside the Office for Investment, this Investment Council led by Minister Grimstone is a major leap towards ensuring foreign investors are heard and fostering a business environment that is fair and drives innovation and economic growth across the UK.”

Daily Express

UK manufacturers’ profitability drops to decade low

Figure from the ONS show UK manufacturers’ profitability fell sharply for a second consecutive year in 2020, dropping to 8.8%, the lowest since 2010.

Financial Times

REPORTING NEWS – WEDNESDAY 28TH APRIL 2021

Opinion: Investors should consider doing a little goodwill hunting

The Telegraph’s Ben Wright considers the treatment of goodwill and warns that a high proportion of listed companies entered the pandemic with the value of the goodwill on their balance sheet exceeding their retained earnings. “The worry is that the pandemic will have profoundly altered some of the assumptions about the future upon which companies were valuing their goodwill.” Adam Leaver, a professor of accounting and society at the University of Sheffield, says: “The big question is how difficult it’s going to be for some companies to sustain the cash flow expectations that underpin the assumptions on which that goodwill is valued in this new world.” He adds: “For acquisitive companies with levered balance sheets, [it] could get very messy if all of a sudden, observers begin to question the cash flow expectations that underlie their goodwill valuations.”

The Daily Telegraph, Business, Page: 4

Contact Paul Southward

Paul Southward

NEWS – TUESDAY 27TH APRIL 2021

NEWS – TUESDAY 27TH APRIL 2021

NEWS ROUNDUP

TAX NEWS – TUESDAY 27TH APRIL 2021

White House says capital gains tax rise will hit only richest 0.3%

Following heavy criticism of new tax plans coming out of the White House, a Biden administration official has said only the richest 0.3% of Americans would have to pay the new levy on capital gains. The Mail reports that wealth advisers in the US are seeing a flood of inquiries as clients rush to sell assets, shift gains into retirement accounts or tax-deferred opportunity zone funds.

Financial Times, Page: 6 Daily Mail

Brussels targets tax rules in EU recovery plans

The European Commission is using the Covid recovery fund to leverage certain rule changes from nation states, with Ireland among those facing demands to clamp down on sweetheart corporate tax deals.

Financial Times, Page: 4

SMEs NEWS – TUESDAY 27TH APRIL 2021

SMEs looking to spend £97,000 on business growth

New research from Aldermore Bank indicates signs of recovery for small and medium-sized enterprises (SMEs), as they reveal plans to invest in their businesses in the next year, coinciding with the easing of lockdown restrictions. SMEs plan to spend an average of £97,000 to grow their business in 2021 and help kickstart their recovery from the COVID-19 pandemic. Over the next 12 months, one in four (25%) SMEs will invest in their online presence, with one in five (21%) advancing their digital marketing. A further one in four (21%) will spend on new equipment and 20% will invest in their staff through training. “It’s encouraging to see that SMEs are investing in their recovery from the COVID-19 pandemic”, said Tim Boag, group managing director, business finance at Aldermore. “Recent data reveals a vastly improved near term outlook for businesses, with the easing of restrictions. Confidence from SMEs is growing, and this is reflected in plans to invest in the growth of their businesses in order to recover effectively from the pandemic”.

Business Money The Scotsman

FINANCE NEWS – TUESDAY 27TH APRIL 2021

Ethnic minorities excluded from VC funding

Research by angel network Cornerstone Partners shows that entrepreneurs from black and ethnic minority backgrounds are being excluded from venture capital funding. Just 1% of founders who receive seed funding identify as black, according to the study. Only 3% of VC-funded founders identified as black and only 2.9% were Asian. The report also says that three quarters of founders come from advantaged socio-economic backgrounds and hardly any founders come from families living on welfare entitlements. Cornerstone Partners has made a number of recommendations, including the establishment of schemes that support angel groups and accelerators which invest in businesses led by minority founders. It also called for the introduction of early career development.

The Times

PROPERTY NEWS – TUESDAY 27TH APRIL 2021

One in six homes sell for more than asking price

Figures from NAEA Propertymark show one in six homes sold in March went for more than the asking price – a seven year high – with just a third selling for below the original price. Mark Hayward, chief policy adviser at Propertymark, said: “The imbalance of supply and demand means it’s an extremely strong sellers’ market; properties are selling quickly and for over the asking price, and this is something we expect will continue in the coming months.” Homeowners reconsidering their lifestyle and the stamp duty holiday are seen as the main drivers of the increased demand.

The Daily Telegraph

PENSIONS NEWS – TUESDAY 27TH APRIL 2021

Retired workers’ income set to fall dramatically

A new report from LCP warns that it will take too long to save into defined contribution (DC) pensions to keep retirement savings steady and offset the loss of defined benefit (DB) income. The report, titled ‘The ski slope of doom – is this the most worrying chart in pensions?’, claims that the incomes of newly retired workers are set to fall at a much more dramatic rate in the coming decades than had previously been thought. The report found that for those working in the private sector, the decline of traditional “final salary” type pensions is more rapid than expected and that the rise of new-style workplace pensions will take longer to make a real impact than previously assumed.

Daily Express FT Adviser IPE Money Marketing Professional Pensions

PERSONAL FINANCE NEWS – TUESDAY 27TH APRIL 2021

Advice firm encourages inheritance discussions

Research from the Institute for Fiscal Studies shows that inheritances are likely to be larger compared with lifetime incomes for younger generations than was the case for their predecessors. For those born in the 1980s, average inheritances compared to lifetime income are projected to be almost twice as large as those born in the 1960s.

Daily Express

ECONOMY NEWS – TUESDAY 27TH APRIL 2021

UK growth forecasts boosted by vaccines rollout and extended state support

Analysis by Consensus Economics puts UK growth at 5.4% this year, up from 4.2% predicted in February. Others believe this remains pessimistic, however, with Oxford Economics going as high as 7.2%. The EY ITEM Club has predicted growth of 6.8% while Goldman Sachs goes as high as 7.8%. A bounce-back is not unexpected considering the UK suffered a 9.8% slump in 2020 – the worst performance among the G7 group of major advanced nations but forecasters are upgrading predictions following the “innovative and flexible” response of UK businesses and consumers to the pandemic.

Financial Times, Page: 2 Sky News The Times, Page: 34

Investors may have to wait until 2025 for dividend recovery

According to Link Group’s Dividend Monitor, British companies paid out £12.7bn in dividends in the first quarter of 2021, down 27% on the same period last year. Reduced payouts from oil giants Shell and BP were responsible for most of the drop. Link said dividends were down 42% over the last 12 months and its “best-case” forecast for this year was a rise of just 5.6% on last year’s total. Ian Stokes of Link Group said there were signs of recovery but “2025 still looks like the most realistic moment for dividends to match their 2019 high point.”

The Daily Telegraph The Times

REGULATION NEWS – TUESDAY 27TH APRIL 2021

City bosses want payback after being left on Brexit sidelines

The Telegraph’s Lucy Barton looks ahead to what’s in store for the City post-Brexit as organisations including the Investment Association submit ideas to the Treasury for reform. The lobby group told ministers to consider a fully exempt tax regime for UK funds to keep them competitive with EU rivals. One banking executive who is in regular talks with ministers told the paper: “There will definitely be changes. Banking is completely exposed to politics and political changes – that’s always a huge risk – but I’ve never seen such commitment to change.” But although Rishi Sunak has told the City to brace itself for a “Big Bang 2.0” post-Brexit, TheCityUK’s CEO Miles Celic argues the sector is not chasing a “deregulatory agenda”. He says: “Competitiveness is about much more than regulation – it’s got to look at issues such as access to talent and a stable, predictable, simplified tax regime.” Finally, Barnabas Reynolds at Shearman and Sterling believes big changes are on the way, but it could take three to five years for the rule book to look significantly different.

The Daily Telegraph, Business, Page: 2

OTHER NEWS – TUESDAY 27TH APRIL 2021

Johnson hopeful restrictions will lift on 21st June

Boris Johnson has said Britain had built “some pretty robust fortifications” against another wave of Covid and there is now a “very good chance” of completely ending coronavirus restrictions in England on June 21st, as planned. The prime minister said lockdown had helped get the number of cases down considerably but that did not mean Covid was over.

The Times

Contact Paul Southward

Paul Southward

NEWS – WEEKEND TO 25TH APRIL 2021

NEWS – WEEKEND TO 25TH APRIL 2021

NEWS ROUNDUP

OTHER NEWS – WEEKEND TO 25TH APRIL 2021

SUNDAY

Time for citizens to take back control, scientists say

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

The Sunday Telegraph, Page: 1 Sunday Express, Page: 1 The Mail on Sunday

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

TAX NEWS – WEEKEND TO 25TH APRIL 2021

SATURDAY

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

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

Financial Times, Page: 8 The Daily Telegraph, Page: 39 The Times, Page: 51 Daily Mail The Independent The Guardian, Page: 44

EU plans creeping tax harmonisation

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

Daily Express

HMRC deadline extension creates state pension headache

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

Financial Times, Page: 2

SUNDAY

Conservatives should fight an international tax stitch-up

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

The Observer, Page: 56 The Mail on Sunday, Page: 122 The Sunday Telegraph, Page: 20

HMRC sends 18,500 fines to wrong address

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

The Sunday Times, Business, Page: 12

CORPORATE NEWS – WEEKEND TO 25TH APRIL 2021

SUNDAY

Stanlow refinery reaches with HMRC

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

The Sunday Telegraph

Charities ration services as pandemic bites

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

The Sunday Telegraph

Tate & Lyle auctions off primary products division

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

The Sunday Telegraph, Business, Page: 1

SMEs NEWS – WEEKEND TO 25TH APRIL 2021

SUNDAY

Small firms suffer cashflow woes just as support is withdrawn

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

The Sunday Times, Business, Page: 3

PERSONAL FINANCE NEWS – WEEKEND TO 25TH APRIL 2021

SUNDAY

Families increasingly using deed of variation

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

The Mail on Sunday

PENSIONS NEWS – WEEKEND TO 25TH APRIL 2021

SATURDAY

Drop in pension income more startling than expected

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

The Times

SUNDAY

PENSIONS

More action needed to close pensions gap

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

The Sunday Times

PROPERTY NEWS – WEEKEND TO 25TH APRIL 2021

SUNDAY

Tax deadline leads to frenzied market

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

The Sunday Times, Page: 6

LEGAL NEWS – WEEKEND TO 25TH APRIL 2021

SATURDAY

Former subpostmasters cleared over accounting scandal

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

The Daily Telegraph, Page: 11 BBC News The Times Daily Mail Evening Standard Daily Express, Page: 6

EMPLOYMENT NEWS – WEEKEND TO 25TH APRIL 2021

SATURDAY

Talent hunt kicks off as London firms launch hiring sprees

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

Evening Standard

FINANCIAL SERVICES NEWS – WEEKEND TO 25TH APRIL 2021

SATURDAY

Equivalence or no equivalence, London will stay financial services leader

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

City AM Daily Express

ECONOMY NEWS – WEEKEND TO 25TH APRIL 2021

SATURDAY

UK economy rebounds with demand surging

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

Financial Times The Daily Telegraph The Times The Guardian

UK retail sales jump

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

Financial Times BBC News The Daily Telegraph The Guardian Daily Mail

Covid response pushes UK borrowing to highest since second world war

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

Financial Times, Page: 2 The Daily Telegraph The Times The Times City AM The Guardian Daily Mail Daily Express, Page: 5

SUNDAY

Broadbent forecasts speedy recovery

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

The Sunday Telegraph

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 – THURSDAY 25TH MARCH 2021

NEWS – THURSDAY 25TH MARCH 2021

NEWS ROUNDUP

TAX NEWS – THURSDAY 25TH MARCH 2021

Self-employed face increased stresses with tax changes

IR35 tax changes will be introduced from April 6th meaning off-payroll workers will be treated as full-time employees with companies responsible for setting the tax status of contractors they hire. Experts warn that many freelancers are unprepared for the changes while interest in IR35 fell 71% since the Chancellor announcement last year that the tax change would be delayed due to the pandemic. Meanwhile, changes announced by Rishi Sunak on Tax Day could add further pressure to contractors with the Treasury saying they will review the feasibility of introducing a modern “pay-as-you-go” tax system. The Association of Taxation Technicians said that although some taxpayers may welcome the opportunity to pay their tax closer to real time, “a widespread move to more frequent, in-year calculation of income tax and corporation tax is very tricky to achieve.”

Daily Express

CORPORATE NEWS – THURSDAY 25TH MARCH 2021

Report force retailers to take ‘decisive action’ on diversity

A study of over 200 retailers by the British Retail Consortium, PwC and MBS Group reveals that 69% have only men in their top three leadership positions. More than one in five retailers have no women on their boards, and 15% have no women on their executive committees. This is despite women making up 58% of the retail workforce. Black or ethnic minority executives make only 4.5% of retail boards, compared with 12.5% of the general UK population. The report has prompted over 50 retailers, including John Lewis, Asda and Sainsbury’s to pledge “decisive action” to improve diversity. Alongside Morrison’s, WHSmith and Boots, they have signed up to the Diversity and Inclusion charter drawn up by the BRC to pledge their commitment to address the issue. Katy Bennett, director for inclusion and diversity consulting at PwC UK, said: “It’s very encouraging to see so many retail companies com-mitted to improving their diversity and inclusion at a time when issues surrounding gender, race and ethnicity in the workplace are in sharp focus.”

The Times, Page: 44 The I, Page: 43

SMEs NEWS – THURSDAY 25TH MARCH 2021

More resilient businesses will be the great hope for the next decade

Writing in City AM, Michelle Ovens, the founder of Small Business Britain, considers the lessons small businesses will have learnt over this past year. Although the Covid crisis was painful to go through, “it will be the bedrock of recovery and future growth,” she says. Business became more flexible as they adapted to lock downs and then restrictions lifting, supply chains became more localised while marketing and finance functions were automated and social media was utilised to the maximum. “COVID-19 has managed to do what years of intervention from government, business organisations, business schools and more could not: create a more productive business landscape,” Owens contends, adding: “More resilient businesses with greater digital skills and the knowledge that they have come through the fight of their lives will form the basis of economic recovery in the UK.”

City AM

PROPERTY NEWS – THURSDAY 25TH MARCH 2021

House prices climb 7.5% in England

Official figures from the Office for National Statistics (ONS) reveal that the average house price fell by £1,000 in January, from a record high the previous month. The average property value across the country in January stood at £249,000. Mark Harris, CEO of mortgage broker SPF Private Clients, commented: “The housing market continued to be buoyant in January, although annual growth slipped slightly to 7.5%, down from 8% in December. This was before the Chancellor announced the extension to the stamp duty holiday so there may have been buyers who took their foot off the gas in the belief that they were too late to take advantage.” House prices in the capital rose 0.1% in January to reach £501,320, representing an annual rate of increase of 5.3%.

City AM

INDUSTRY NEWS – THURSDAY 25TH MARCH 2021

City of London bosses warn against ‘gold plating’ new governance rules

A forum of senior financial services figures has welcomed new moves to improve corporate governance and audits, but sounded a note of caution about possible unintended consequences of the measures.

Financial Times, Page: 12

PERSONAL FINANCE NEWS – THURSDAY 25TH MARCH 2021

Young investors can only learn about risk by taking risks

Responding to a warning from the FCA about young people engaging in high-risk investments, Moira O’Neill says investing boldly can provide valuable lessons, adding: “The sooner young people start the better.”

Financial Times

PENSIONS NEWS – THURSDAY 25TH MARCH 2021

Pension ‘dippers’ unaware of tax trap

Some 260,000 over-55s triggered steep cuts to their annual allowance after dipping into their retirement savings during the pandemic, spurring calls for the Financial Conduct Authority to provide better information about the risks of accessing pensions early.

Financial Times Daily Express

ECONOMY NEWS – THURSDAY 25TH MARCH 2021

IHS Markit/CIPS report shows signs of growth

The IHS Markit/CIPS Flash UK Composite PMI report for March was 56.6, as the economy showed strong signs of growth amid increasing consumer confidence and more demand for residential property services. Chris Williamson, chief business economist at IHS Markit, said the strong sentiment “hints at only a modest contraction of GDP during the first quarter, adding to evidence that the economy has shown far greater resilience in the third lockdown compared to the first.”

Evening Standard City AM The Daily Telegraph

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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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!

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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.

The Times Daily Mail BBC News Sky News City AM Evening Standard

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NEWS – MONDAY 15TH MARCH 2021

NEWS – MONDAY 15TH MARCH 2021

NEWS ROUNDUP[

TAX NEWS – MONDAY 15TH MARCH 2021

Chancellor may rue corporation tax hike

Paul Johnson, the director of the Institute for Fiscal Studies, writes in the Times that Rishi Sunak’s hike in corporation tax is unlikely to raise the additional £17bn a year that the chancellor is banking on. Indeed, the proposed increase could reduce foreign direct investment by 5% from 2023, says Professor Michael Devereux of the Oxford University, with a considerably bigger negative effect on investment overall. This, asserts Johnson, will push down wages and living standards over the long run.

The Times, Page: 37

Bootle: Let’s prove forecasters wrong and aim for tax cuts

Chairman of Capital Economics Roger Bootle says in the Telegraph that figures for the economy so far this year are better than expected and if forecasts from the OBR prove over pessimistic (and the Government should make sure they are just that) then the Budget’s raft of tax increases may yet turn out to be unnecessary. “In that case, the Chancellor would be in a good position to rescind them and even to introduce some judicious cuts before the next election.”

The Daily Telegraph, Business, Page: 4

Higher taxes urged for Scots earning more than £40,000

The think tank IPPR Scotland has called on the next Scottish government to hike taxes for anyone earning more than £40,000 a year to avoid having to make spending cuts. IPPR is proposing to add about £260 a year to the income tax bill for higher rate taxpayers and reduce the threshold at which that rate becomes payable to £40,000. If those changes are carried out, it estimates that by 2024/25 they would be bringing in an additional £700m annually for Holyrood.

The Times

REGULATION NEWS – MONDAY 15TH MARCH 2021

Government under pressure to strike EU deal for the City

The Telegraph’s Lucy Burton reports on bankers’ expectations ahead of an outline memorandum of understanding set to be drawn up between the UK and the EU on financial services at the end of this month. Whatever the outcome, EY‘s financial services head Omar Ali says, the risk of fragmentation in the sector is high, which is “bad for all users of financial services, not just in the UK.” Although the City has not yet experienced the predicted exodus of banking talent, if there is not some sort of equivalence without the threat of it being removed after only 30 days, bankers earmarked to relocate are unlikely to stay put, one bank executive said.

The Daily Telegraph, Business, Page: 2

SMEs NEWS – MONDAY 15TH MARCH 2021

Lockdown drives up number of new breweries

The number of breweries in the UK increased by more than 200 last year despite the impact of the virus crisis on pubs and bars, according to a new report. UHY Hacker Young said there were now more than 3,000 breweries across the country. The firm’s James Simmonds said: “Growth in breweries during a very difficult period for the drinks industry is a positive sign. Entrepreneurs clearly feel confident in the prospects for a bounce back once pubs and bars can open again. People’s appetite for trying new beers from different breweries has contributed to the long-term rise in new breweries being set up. The sector hasn’t fallen into the trap of discounting. With the closure of pubs and bars, smaller breweries have had to adapt to direct-to-consumer models.”

The Times, Page: 11 The I, Page: 40 Daily Express, Page: 46

EMPLOYMENT NEWS – MONDAY 15TH MARCH 2021

Graduates jostle in an overcrowded jobs market

University leavers in 2021 are facing a really tough jobs market, says EY’s Hywel Ball, who adds that applications for the firm’s graduate trainee programmes are up by 50% compared to February 2020.

Financial Times, Page: 21

REPORTING NEWS – MONDAY 15TH MARCH 2021

Climate plans of big companies need substance

Andrew Edgecliffe-Johnson says PwC data showing climate change as a low-level threat for CEOs illustrates the need for more consistent ESG reporting and for directors to be held accountable for progress on ESG goals.

Financial Times

PERSONAL FINANCE NEWS – MONDAY 15TH MARCH 2021

Lifetime ISA could serve young high earners well

Jessica Beard details in the Telegraph how young high earners could start targeting Lifetime Isas as they attempt to skirt restrictions on the pensions lifetime allowance, which the Chancellor has just frozen. Tom Selby of AJ Bell said: “For those who qualify, the Lifetime Isa will be an obvious starting point as it benefits from a 25% bonus and tax-free withdrawals for a first home worth £450,000 or less, or from age 60.” Anyone in their 30s who thinks they may breach the lifetime allowance should consider opening a Lisa with a small contribution while they can, Mr Selby added.

The Daily Telegraph

ECONOMY NEWS – MONDAY 15TH MARCH 2021

Domestic demand brings cheer to manufacturers

A report from Make UK and BDO has revealed that domestic orders have risen in the first quarter of the year, helping to offset the impact of the COVID-19 crisis and Britain’s departure from the EU single market. A net balance of 9% of respondents said that they had increased output during the period, up from -5% in the previous quarter. The outlook for the coming months is even brighter, with a positive balance of 15% of respondents expecting output to grow. Stephen Phipson, chief executive at Make UK, said: “After the seismic shock to the sector last year, manufacturers are now beginning to move through the gears and accelerate into recovery as demand at home increases and major markets begin to pick up.”

The Times, Page: 36 Daily Express, Page: 46

Post-pandemic QE carries inflationary risks

Liam Halligan considers the effect on inflation of the UK Government’s ongoing quantitative easing programme, In his Telegraph column he differentiates between post-financial crisis QE which mostly circulated between the Bank of England and the banks; although it later served to keep asset prices up, it wasn’t inflationary in the way QE from the past year has the potential to be, says Halligan, with vast sums having been pumped out to businesses and households. Although lockdown means they aren’t spending much for now, they will, he contends. With the Chancellor and Bank of England Governor failing to outline an exit plan from QE, we must assume they intend for it to go on indefinitely, concludes Halligan.

The Daily Telegraph

OTHER NEWS – MONDAY 15TH MARCH 2021

Janet Yellen says Biden has yet to decide on a wealth tax

US Treasury Secretary Janet Yellen told ABC’s “This Week” program on Sunday that the Biden administration had yet to decide on whether to impose a new wealth tax. The comments follow a recent study by Oxfam showing billionaires such as Jeff Bezos, Mark Zuckerberg and Elon Musk had seen their fortunes spiral since the beginning of the pandemic. Ms Yellen said Biden “hasn’t proposed a wealth tax, but he has proposed that corporations and wealthy individuals should pay more in order to meet the needs of the economy, the spending we need to do.” She went on to forecast only a small risk of inflation as a result of stimulus spending.

Daily Mail

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