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 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.
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.
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 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 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.”
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.”
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.
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.”
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.
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
NEWS – MONDAY 15TH MARCH 2021
NEWS – MONDAY 15TH MARCH 2021
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.
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.”
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.
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.
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.
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.
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.”
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.
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.
Contact Paul Southward
NEWS – TUESDAY 9TH MARCH 2021
NEWS – TUESDAY 9TH MARCH 2021
TAX NEWS – TUESDAY 9TH MARCH 2021
Slow recovery could see need for more tax hikes
If the economy does not make a swift recovery from the pandemic the Chancellor may have to raise taxes further to balance the books, according to Professor Sir Charlie Bean. The Office for Budget Responsibility expert told MPs that if the “scarring” from Covid is wider than expected then more consolidation would be required. However, if the UK returned to its pre-pandemic trajectory the tax hikes announced last week “would, in theory, no longer be necessary to restore sustainability.”
The tax implications from buying and selling crypto-assets
David Britton, a tax partner at BDO, answers some of the key questions regarding crypto-assets in light of the recent trading activity in Bitcoin. He says there is a popular misconception that the profit or gains arising from crypto-assets transactions are tax-free. Individuals buying and selling Bitcoin could be subject to CGT while those considered to be trading cryptocurrencies may need to pay tax on the profits as trading income. Additionally, income tax and NIC will apply to crypto-assets received from an employer as a payment for services performed in the UK.
IHT reclaims could be on the horizon
Sean McCann, Chartered Financial Planner at NFU Mutual, provides some tips on how to counter the Chancellor’s freeze to the nil-rate band and the residence nil-rate band – a move that will bring more people into the inheritance tax net over the next five years. Mr McCann also points out that with house prices predicted to increase by 5.7% this year before falling back 1.7% next year, there could be a wave of families reclaiming overpaid inheritance tax on property.
CORPORATE NEWS – TUESDAY 9TH MARCH 2021
Greensill files for administration
Greensill Capital has collapsed into insolvency after admitting it could not meet a $140m repayment demand from its Swiss bank backer. The supply-chain finance specialist was thrown into crisis last week after its main insurer refused to renew a $4.6bn contract and Credit Suisse froze $10bn of funds linked to the firm. A lawyer for the company said yesterday that Greensill had about $5bn of exposure to metals magnate Sanjeev Gupta’s GFG Alliance, which had started to default on its obligations. GFG said its operations were continuing as normal. Its UK business, Liberty Steel, employs about 5,000 workers at plants including Rotherham and Hartlepool. Worldwide, GFG employs 35,000 people. GFG’s situation could now see Apollo Global Management buy parts of the business with the US private equity group offering $59.5m for Greensill’s intellectual property and IT systems. A spokesperson for Greensill’s administrators, Grant Thornton, said: “The joint administrators are in continued discussion with an interested party in relation to the purchase of certain Greensill Capital assets.”
Terry Boot has been named as Shoe Zone’s new FD. Mr Boot, who will take on the role from Peter Foot, will take the position after four years working with The Company of Master Jewellers, following roles at Brantano and Jones Bootmaker. It came as the retailer said it is unlikely to pay a dividend out to shareholders until 2025 as it swung to a loss following the impact of store closures during the pandemic.
REPORTING NEWS – TUESDAY 9TH MARCH 2021
Treasurers unlikely to risk balance sheet with bitcoin
The Mail talks to accountants about how likely investment by corporates into bitcoin will be. “When I did my treasury exams, the thing we were told as number one objective is to guarantee security and liquidity of the balance sheet,” said Graham Robinson, a partner in international tax and treasury at PwC and adviser to the UK’s Association for Corporate Treasurers. “That is the fundamental problem with bitcoin, if those are the objectives for treasurers, then breaking them could get them in trouble.” In the US, the Financial Accounting Standards Board does not have guidance specific to the accounting for cryptocurrencies but companies do treat them as “intangible assets” and account for them accordingly. Former FASB chairman Robert Hertz said he hopes the regulator will soon review its treatment if more mainstream companies get into bitcoin.
PENSIONS NEWS – TUESDAY 9TH MARCH 2021
Lifetime allowance freeze could impact Britons in their 40s and 50s
Tom Selby, senior analyst at AJ Bell, comments on the Chancellor’s decision to freeze the lifetime allowance for five years until 2026. Selby says the move was billed as an attack on pensioners but it could affect savers of all ages. He explains: “People in their 20s and 30s might understandably have never considered the lifetime limit, but decent-sized contributions coupled with strong investment returns could pull young people into its orbit. Those in the later stages of their savings journey – and even people who have already started taking a retirement income – may also be at risk and need to factor in the lower lifetime allowance into their planning.”
SMEs NEWS – TUESDAY 9TH MARCH 2021
Over 1m small firms at risk of collapse due to cyber attacks
Research commissioned by Vodafone has found that the equivalent of 1.3m small businesses would go bust if they were targeted by hackers, leading to calls for the Government to put more money into cyber defences. The report urged the Government to expand a dedicated business cybersecurity within the National Cyber Security Centre and introduce a 5% VAT cut on cybersecurity products for small companies.
EMPLOYMENT NEWS – TUESDAY 9TH MARCH 2021
One in eight recent UK graduates hit by unemployment
ONS data show 12% of recent graduates were unemployed in the third quarter of 2020. This compares with an unemployment rate of 4.6% for the wider graduate workforce and 5.1% for the working age population overall.
Hospitality firms ‘optimistic’ about bounce back in trading
Leisure and hospitality firms are feeling optimistic about the future, a survey by Haysmacintyre has found. Hotel businesses had the most positive outlook, with 83% saying they were confident about future prospects; 53% of restaurants said the same but 59% of pubs were uncertain or lacking in confidence for their prospects looking forward. Overall, 69% believe that trading levels will return to normal either by the end of this year or the first half of 2022. Gareth Ogden, partner in the hospitality team at Haysmacintyre, said: “The hospitality industry has undeniably been hard hit by the COVID-19 crisis. However, despite the challenges, this Survey reveals that many in the sector remain positive.”
Pandemic effects ‘not as severe as other recessions’ – BoE
Bank of England governor Andrew Bailey has predicted that the coronavirus pandemic’s economic effect will not be as severe as those seen under previous recessions. Stating that government spending had been a “a necessary and sensible response,” he noted: “It means that the economic impact of COVID will be spread over time – how long we don’t know because it is too early to predict. But that cost has to be managed, and it will be easier to do that with a higher trend rate of growth, boosted by stronger investment.” The Bank’s outlook was cautious, Bailey added, noting that a planned further £150bn of quantitative easing was expected to be completed by around the end of 2021.
Retail sales in the UK grew 1% last month compared with the same period last year, according to KPMG and the BRC, a sharp reverse of a 1.3% year-on-year contraction in January. But Paul Martin, UK head of retail at KPMG, said Rishi Sunak’s budget last week offered only short-term help for retailers. “Conditions will continue to be incredibly challenging as they face subdued demand, thinner margins and rising logistics costs, alongside the accelerated structural changes to the sector,” Martin said.
HMRC is to probe England’s elite rugby clubs to see how payments to players and agents are accounted for. The move follows a similar investigation into football, which resulted in players and agents being forced to hand over millions in unpaid taxes.
The I, Page: 5
Contact Paul Southward
NEWS – WEEKEND TO 28TH FEBRUARY 2021
NEWS – WEEKEND TO 28TH FEBRUARY 2021
TAX NEWS – WEEKEND TO 28TH FEBRUARY 2021
Sunak warns of bill to be paid to tackle UK’s ‘exposed’ finances
In an interview with the FT, the Chancellor has said Britain’s finances are “exposed” to rising interest rates and the public need to be told the truth about the challenges facing the country. Meanwhile, a Treasury decision to hold a “tax day” three weeks after the Budget will be a bellwether for long-term changes in government policy, experts have said. Separately, Conservative party doners have warned Rishi Sunak that raising taxes in his Budget would be “utterly wrong” and risk sending Britain into another recession. Property developer Steve Morgan said: “One of the advantages of leaving the EU is that we can become a low-tax, dynamic society which can become Europe’s go-to country for investment. Increasing corporation tax and CGT flies in the face of this.” Banker Sir Henry Angest was particularly blunt, adding: “I suspect there is a mindset at the Treasury that just doesn’t believe in the capitalist economic model.”
The Times talks to accountants about the effect freezing tax thresholds would have on workers following speculation the Chancellor could use the tool in his Budget. PwC said that a 2% increase in wages would push the income of 1% of the working population over the £50,000 threshold. With 32m people in work, this would mean an extra 320,000 paying 40% tax on some income. If income tax thresholds were frozen until the next election, the average family would be £250 a year worse off by 2024-25. Pay rises for those who earn close to the £12,500 personal allowance could tip some of their earnings into the 20% tax zone – another blow for those who have suffered the most from the pandemic. Zena Hanks, an analyst from Saffery Champness, said: “The less that you earn, the more a frozen allowance will influence your take-home pay, so some may consider this a highly inequitable way of increasing tax revenue.”
The Times, Page: 60
Higher business taxes cost us all
The Telegraph’s Matthew Lynn reminds readers that a hike in corporation tax will ultimately mean higher prices and pay cuts for workers. He states: “Sure, the crisis needs to be paid for, but we need to do that with long-term restructuring of the national debt, by rethinking the role of the state and with faster growth – not with panicky tax rises on the one part of the economy that might lead us out of this mess.” Meanwhile, a poll for the paper reveals that nearly 60% of Tory voters polled said they supported an increase in corporation tax to help pay for the Government’s pandemic and recovery spending. Half said CGT should remain the same, 34% stated it should increase and just 16% think it should decrease. Elsewhere, the i suggests the Chancellor will leave tax rises for the autumn and focus on job support instead in his Budget on Wednesday.
Pandemic losers could cut future tax bills while Covid boomers pay more
Treasury officials have reportedly considered increasing corporation taxes on businesses that profited during the pandemic while expanding the so-called loss carry-back rules, which allow firms which previously made a loss to cut their tax bills when they return to profit. Chris Sanger, head of tax at EY, said: “If you’re incurring losses and you’ve got the history of taxable profits, then the banks can be pretty assured that you’re going to be able to get relief for those losses as you incur them. This would be quite an attractive move in order to help those kind of businesses move forward.” Ministers are also considering a shake-up of research and development (R&D) tax credits to help spur investment by firms after the pandemic.
Corbyn loyalists warn of Budget tax trap for Labour
Allies of Jeremy Corbyn have warned his successor that failure to back an increase in corporation tax in next week’s Budget would cost the Labour party dearly. Sir Keir Starmer has faced anger on the Labour left after he told MPs it was not the right time for tax rises on families and businesses.
The I, Page: 8
Chancellor considers tax raid on parcels and freelance workers
The Sunday Telegraph reports that the Chancellor will launch a series of consultations later in the month on tax increases to pay for the cost of the pandemic, including new levies on online retail including for internet deliveries and an increase in National Insurance Contributions paid by the self-employed. Treasury sources said Mr Sunak’s concerns about the different tax treatment of the employed and self-employed have not changed since his first Budget last March. The consultations will be launched on March 23rd – dubbed “tax day” in Whitehall. The Sunday Times runs over some of Rishi Sunak’s fundraising plans, including freezing income tax thresholds and hiking corporation tax rises, both of which are approved of by Mike Brewer, chief economist at the Resolution Foundation, who says the measures “would have the triple benefit of raising about £16bn a year by 2025, while also protecting families that have been hit hardest by the crisis, and not holding back the recovery.” The CBI is less than impressed with proposals to increase taxes on businesses, however, with its chief economist Rain Newton-Smith stating that any rise should wait until after the economy has recovered.
Tories to blame for 1,000 tax rises in the last ten years
Research by the TaxPayers’ Alliance shows Conservative prime ministers have pushed through more than 1,034 tax rises over the past decade. A total of 1,651 tax changes were made since 2010 with VAT, vehicle excise duty and Income Tax seeing the most adjustment. Income Tax was changed 180 times, going up 61 times while cuts were made 119 times. The Alliance is calling for a recovery budget on Wednesday, giving taxpayers a respite from rises. John O’Connell, chief executive of the Alliance, said: “The tax burden is at a 70-year high, and it’s not hard to see why after a decade of tax increases. All too often we’ve seen Conservative chancellors give with one hand but take back a good deal more with the other, meaning every aspect of every-day life comes with a sizeable tax bill.” Meanwhile, former Tory Chancellor Lord Ken Clark has said Rishi Sunak should not be afraid to raise income tax, VAT or national insurance because people would understand that when the Tory manifesto was written the pandemic could not have been predicted.
The Sunday Telegraph, Page: 2 The Sunday Express The Independent
Return deadline tonight
Self-assessment taxpayers have until midnight tonight, February 28th, to file their return and avoid a £100 fine. The deadline to submit tax returns for 2019/20 was January 31 but HMRC waived the late filing fine as long as they are submitted by February 28.
The Sun on Sunday
CORPORATE NEWS – WEEKEND TO 28TH FEBRUARY 2021
New ‘shareholder spring’ looms for companies tapping furlough scheme
Fidelity International has joined the Investment Association in calling for companies that used schemes such as furlough without repaying the money to show restraint when it comes to executive pay this year. “We are communicating that this is a red-line policy,” said Jenn-Hui Tan, Fidelity’s global head of stewardship. The Sunday Times notes that rows over taxpayer funds have already led to Tesco paying back £585m in business rates relief and BDO giving back £4.1m of furlough cash. In a letter to FTSE 350 companies the pension fund manager says it expects “companies that have participated in taxpayer-supported staff furlough schemes not to pay bonuses (cash or otherwise) to executive directors and senior management”. Stock-based long-term incentive plans should be scaled back, Fidelity says, and salaries for senior management should be frozen or increased only modestly.
The Sunday Telegraph reports on the challenges ahead for Britain’s automotive sector, with Covid and Brexit stunting production to 1984 levels the industry faces tough decisions regarding the investments required for the transition to electric vehicles. Andrew Burn, head of automotive at KPMG says CEOs of carmakers are likely to put off investments in the near term, adding: “Manufacturing in the UK is down to government’s appetite for it. Does it support it or not?”
The Sunday Telegraph, Business, Page: 7
SMEs NEWS – WEEKEND TO 28TH FEBRUARY 2021
Business leaders alert to task force transition
The Sunday Times speaks to businesses about the Brexit transition, with some expressing concern about Lord Frost replacing Michael Gove as chair of the Brexit business task force, suggesting his “sovereignty-first” ethos may put business second. Mike Cherry, the national chairman of the Federation of Small Businesses, comments: “Against a backdrop of continued trading restrictions, we need to see policy-makers pulling out all the stops to both introduce additional easements for small firms where the EU-UK deal is concerned and strike fresh deals with nations outside the bloc.”
Laura Miller in the Sunday Times looks at how the pandemic has widened the pension gap, with women more likely to have lost their jobs in the first lockdown. Kate Smith, the head of pensions at Aegon, comments: “There’s no escaping that Covid is widening an already extensive gender pension and savings gap.” Miller also touches on how maternity leave has affected pensions, with analysis from Aegon showing that women who had paused their pension saving for two years while on maternity leave and then reduced their hours had up to £50,000 less in their pot when it came to retirement.
Tom Knowles considers the threat to jobs from automation in the Times and reviews the book Futureproof: 9 Rules for Humans in the Age of Automation by Kevin Roose. The New York Times journalist argues that all types of AI are advancing so fast and appearing in so many fields that the only way humans will thrive and hold on to their jobs is to become more human rather than trying to compete directly with machines. “Most of the promising applications of AI and machine learning are in fields like accounting, law, finance and medicine, which involve lots of tasks like planning, prediction and process optimisation.” the book states. Knowles notes a study showing that accountants have a 99% chance of being automated, while solicitors and financial analysts are also in trouble. The less exciting AI is largely overlooked, Roose says, but we “underestimate boring bots at our peril”.
Downing Street hesitates over audit reform after bosses’ backlash
Proposals to hold directors responsible for inaccurate accounts have led to a backlash from business leaders who argue the move would stifle innovation and harm inward investment. The proposals form part of a series of reforms designed to improve audit standards that were recommended following three independent reviews. Legislation is needed to implement many of the proposals, including replacing the Financial Reporting Council with a tougher watchdog called the Audit, Reporting and Governance Authority and having the Big Four ensure their audit and consulting arms are independent. Delays in passing the law are frustrating the accounting sector with ICAEW chief Michael Izza saying: “We seem to be mired in treacle.” Now, the business community is hitting back at the crackdown on directors, rattling Downing Street and as a result, the audit reforms are said to be still awaiting the prime minister’s sign-off.
The Times carries news that Ron Kalifa is urging the Government to establish a high-profile taskforce to lead innovation in financial technology as part of the UK’s growth plans after Brexit. Mr Kalifa, the former boss of the payments processor Worldpay, was asked by the Treasury to review the sector in July. The Chancellor said yesterday that the review “will make an important contribution to our plan to retain the UK’s fintech crown, create more skilled jobs and deliver better financial services for people and businesses.” Rachel Kent, a partner at Hogan Lovells Financial, who led some of the work for the report, said: “While the UK’s position is well established its future is not assured. Being outside the EU has created an opportunity to re-examine and reshape our regulatory framework to ensure it remains attractive and enabling to fintechs.”
Carney’s green boasts highlight need for ESG audits
The former Bank of England governor has been accused of using an unrecognised and widely discredited definition of “net zero” to promote the green credentials of Brookfield Asset Management, the Canadian investment company he joined last year. The Times’ Patrick Hosking suggests Mark Carney has inadvertently drawn attention to the problem of ESG auditing: “Auditors pore over claims made for companies’ finances and there is still fraud and rule-bending. Why would unaudited environmental boasts be more reliable or honest?”
The Chancellor is set to funnel a further £126m into training and apprenticeship schemes in his Budget on Wednesday. Rishi Sunak said it was “vital” support continued to get people back into work. Currently, firms in England are given £2,000 for every new apprentice they take on under the age of 25, and £1,500 for those over 25, in addition to a £1,000 grant they are already getting under another project. The Government’s planned investment could therefore enable a further 40,000 traineeships.
Boris Johnson: Remote working won’t be the new normal
The Prime Minister has said in only a few months people will be commuting back into the cities and returning to their offices to work. Boris Johnson dismissed fears that Britain is facing a new age of remote working claiming in a video message that, as the economy reopens, “the British people will be consumed once again with their desire for the genuine face-to-face meeting.” The PM’s comments come after Goldman Sachs boss David Soloman rejected remote working as the new normal and labelled it an “aberration”.
PERSONAL FINANCE NEWS – WEEKEND TO 28TH FEBRUARY 2021
264,800 Help to Save accounts opened
More than 264,000 individuals have opened a Help to Save account and could be earning money on their savings, statistics from HMRC have revealed. Help to Save is the Government backed savings scheme that allows individuals to earn a 50 pence bonus for every £1 saved over four years. The 50% bonus is payable at the end of the second and fourth year and is based on how much account holders have saved.
PROPERTY NEWS – WEEKEND TO 28TH FEBRUARY 2021
Treasury to introduce mortgage guarantee scheme
The Chancellor will outline a new scheme on Wednesday that will see the Government guarantee part of a 95% mortgage for first-time buyers, up to a property value of £600,000. Banks are expected to have capacity to lend to about 3,000 individuals a month under the scheme. First-time buyers accounted for just 31% of all sales last year – the lowest proportion since 2016.
The Chancellor is to launch a £100m taskforce to crack down on Covid fraud. Based in HMRC, the new Taxpayer Protection Taskforce will focus on tracking down the criminal gangs thought to have stolen billions of pounds by posing as legitimate businesses.
Daily Mail, Page: 2
ECONOMY NEWS – WEEKEND TO 28TH FEBRUARY 2021
Government borrowing costs rise as inflation fears grow
Yields on US and UK government bonds rose yesterday hitting one year highs and driving further the worldwide equities sell-off. The FTSE 100 dropped 2.5% while the Cac 40 and the Dax were also off by 1.5% and 0.8% respectively as concerns about inflation grow. “In the short term, volatility is likely to persist, and yields may rise further still,” said Salman Ahmed, global chief investment officer at Fidelity International. “However, while further rises in real rates and tightening of financial conditions may be needed before any real action is taken by central banks, we are closer to a turning point than a week ago.”
Hospitality firms have warned that one in five businesses in the sector could run out of cash in the next week unless more emergency support is confirmed. In a letter to the Government, signed by companies including Carlsberg, Intercontinental Hotels, pub chain Wetherspoons and Legoland owner Merlin Entertainment, they warned they faced a “truly perilous” situation with months of continued restrictions ahead. The letter said: “There is a significant gap between the current support provided by the government and the fixed outgoings associated with a closed hospitality business.”
Sunak to pledge £5bn in grants for the high street
In his Budget on Wednesday, the Chancellor will announce a £5bn fund to help high street pubs, restaurants and non-essential shops that have remained closed as a result of the Covid lockdown. Nearly 700,000 companies will be eligible for new direct cash grants of up to £18,000. Rishi Sunak said on Saturday night: “Our local businesses have been hit hard by the pandemic, which is why we went big and went early with a multi-billion pound package of support. There’s now light at the end of the tunnel, and this £5bn of extra cash grants will ensure our high streets can open their doors with optimism.” Craig Beaumont, chief of external affairs at the Federation of Small Businesses, heralded the “significant cash injection”, which he said would “help thousands of businesses survive through these final restrictions, and then help drive the vaccine-enabled recovery”.
INTERNATIONAL NEWS – WEEKEND TO 28TH FEBRUARY 2021
US removes stumbling block to global deal on digital tax
Janet Yellen, the US Treasury secretary, has told G20 finance ministers the US will remove the “safe harbour” requirement from proposals for global digital taxation reforms, potentially unlocking long-stalled multilateral negotiations at the OECD. The measure, which Donald Trump’s administration insisted on in 2019, would permit US tech companies to opt out of having to pay such taxes abroad. The German finance minister Olaf Scholz said Ms Yellen’s statement was a major breakthrough.
The former King of Spain, Juan Carlos, has made a payment of close to €4.4m (£3.8m) in unpaid taxes to Spain’s authorities in a move designed to avoid an embarrassing lawsuit. It is the second settlement Juan Carlos has paid in less than three months. Under Spanish law, someone cannot be prosecuted for tax offences if they settle an outstanding debt before formal charges are brought.
Chancellor can raise funds without disrupting economy
The Times’ Philip Aldrick contends that Rishi Sunak can still raise taxes in his Budget but this does not mean he has to take money out of the economy, which most analysts agree is not the right thing to do at this point. Aldrick suggests offsetting a rise in corporation tax or a new online sales tax with investment inducements or a reduction in rates for high street retailers, arguing that such measures would support growth and do not constitute fiscal tightening. Additionally, prudence calls for the country’s debt to be acknowledged, and paying that down while rates are so low is not a bad idea.
HMRC is urging self-assessment taxpayers to submit their late tax returns by 28th February of face a £100 late filing penalty. While 10.7m taxpayers filed their return by 31 January, more than 1.5m taxpayers missed this deadline and are still to file their tax return. They are accruing interest on any unpaid tax liabilities but still have time to file and pay without incurring penalty charges. Those who owe tax have until midnight on 1st April to pay any outstanding tax or set up a payment plan to prevent a 5% late payment penalty.
Press Release Daily Express
London’s super-rich gain more than all of north of England
Campaign group Tax Justice UK says figures from HMRC show a group of 1,600 ultra-wealthy Londoners made £9bn from assets in 2019, more than the entire population of the north of England, which made £8bn. Tax Justice said that the figures underscored the need for the government to equalise capital gains and income tax rates.
A Cabinet Office spokeswoman has denied claims reported by the Times that the honours committee has created a “Ratcliffe clause” allowing for knighthoods to be withdrawn if the recipient moves abroad to avoid taxation. The rule allegedly refers to Sir Jim Ratcliffe, the billionaire Ineos boss who moved to Monaco after receiving a knighthood for services to business.
The rise in ESG-based investing is funnelling money into companies that pay much less tax and employ fewer people than their lower-rated peers, experts say, with ESG funds unconsciously “worsening inequality and monopolistic concentration”.
Companies given six-month reprieve on gender pay gap reporting
The Equality and Human Rights Commission (EHRC) has given UK companies a six month grace period to report their gender pay gap. The EHRC confirmed it would not begin enforcement proceedings until 4th October. Kishwer Falkner, the EHRC chair, said the approach was designed to strike “the right balance between supporting businesses still impacted by the pandemic and making sure employers comply with the law”. Felicia Willow, the chief executive of the Fawcett Society, welcomed the news that companies would have to report their gender pay gaps for 2020-21. She said: “We recognise that the pandemic has affected many employers, but gender pay gap reporting is good for business. We therefore hope that there will be no further delays in enforcement after this year.”
UK companies face greater scrutiny on climate risks at upcoming AGMs
The Investment Association will start flagging companies in high-risk sectors which fail to report on climate-related risks. The IA’s Andrew Ninian states that clear reporting is vital to achieve a more sustainable future.
Firms urged to consider “psychological safety” of staff
The Financial Conduct Authority has warned that workers in the financial services sector are suffering from “lockdown fatigue”, with high performers given huge workloads. Bosses are being urged to consider “psychological safety”, or ensuring that all employees feel confident about speaking out and challenging opinions. David Blunt, the FCA’s head of conduct specialists, said at an online conference: “During this third lockdown, there has been a greater impact on mental wellbeing, with many people struggling with job security, caring responsibilities, home schooling, bereavements and lockdown fatigue.” He added: “The impact of COVID-19 is creating a huge workload for those considered to be high performers, while the remote environment potentially makes it much more challenging for those who were previously considered low performers to change that perception.”
Gig economy workers to capture 20% of financial services jobs
According to research from PwC, gig economy workers will soon make up between 15 and 20% of the workforce at financial services firms, with the change driven by cost pressure and the need to access digitally skilled talent. John Garvey, PwC global financial services leader at PwC US, said: “Leaders in the industry are looking seriously at their workforces to evaluate which roles need to be performed by permanent employees and which can be performed by gig-economy workers, contractors or even crowd-sourced on a case-by-case basis.” Garvey added that remote working has enabled firms to assess outside of a firm’s physical location, including outside the country.
Doubts staff will flood back to offices post-lockdown
With Boris Johnson outlining his plans to ease Britain out of the pandemic lockdown the Telegraph notes that people working from home will not be back in the office before June 21st. A KPMG survey reveals that a quarter of financial services staff would like to remain working from home full-time even after restrictions are lifted. KPMG is one of a swathe of firms redesigning its offices to prioritise meeting spaces and video technology over the banks of desks that traditionally dominated City offices, the paper adds, while PwC is investing in virtual reality headsets to make video meetings more enjoyable.
The Daily Telegraph, Business, Page: 3
REGULATION NEWS – TUESDAY 23RD FEBRUARY 2021
Changes to solvency rules could free up £9bn
A report written by KPMG and commissioned by the Association of British Insurers argues that loosening the EU’s Solvency II regulations post-Brexit and giving them more freedom over how they invest their assets could free up £95bn for City insurance firms to reinvest into the economy. KPMG said the formula that determines the cap on how much capital insurance firms must hold at any one time to stave off insolvency “is overly-sensitive to very low interest rates” and that it forces “insurers to hold billions of excess capital for no purpose”.
Letter: SMEs deserve the tax relief, not private equity
Phillip Oppenheim says tax reliefs for investors should not be stripped away from entrepreneurs who take great risks. He suggests the tax treatment of carried interest for private equity should be targeted instead.
Research by Halifax shows the stamp duty holiday has saved the average house mover £11,566 in tax as well as boosting property prices by 15.5%. Movers in England and Wales spent an average £431,000 per property in the six months to December last year, a rise of nearly £58,000.
The Daily Telegraph, Business, Page: 1
ECONOMY NEWS – TUESDAY 23RD FEBRUARY 2021
Economists voice concern over rise in inflation
The Times reports on concerns among investors that as countries emerge from the pandemic lockdowns economies will overheat and inflation will run rampant, causing central banks to turn off the taps and tighten monetary policy. George Lagarias, chief economist at Mazars, said: “We know that market performance is still driven by exceptional monetary stimulus. Accommodation will most probably remain elevated for the year, but 2021 will challenge the iron resolve of central bankers, as inflation figures are expected to materially climb. While we believe that this inflation will probably be transitory, a result of supply chain pressures, stimulus and mere year-on-year consumer price comparison (against the horrid second quarter of 2020), we need to remain vigilant in case it overshoots or overextends its welcome.”
US Supreme Court allows prosecutor to obtain Trump tax records
The US supreme court has ordered Donald Trump to hand over his tax returns to Manhattan District Attorney Cyrus Vance Jr., who has been seeking Mr Trump’s tax records since 2019. The ruling could mean a grand jury investigation into alleged hush money payments and other transactions. The former President’s accounting firm, Mazars, said it would comply with the subpoena, but Mr Trump sued to block the records’ release. Mr Trump claims the DA’s efforts to obtain his tax returns is the “greatest political Witch Hunt in the history of our Country.”
IoD: Tax rises ‘will be disaster for entrepreneurs’
The Chancellor has been warned off increasing taxes on entrepreneurs with Jonathan Geldart, director-general of the Institute of Directors, saying they need to be put “at the heart of the recovery” instead of being burdened with higher taxes. Mr Geldart said: “Tax hikes risk choking off the economic recovery before it has even got started. It is paramount the existing package of grants, loans and reliefs is extended. A cliff-edge in support would be disastrous for business.” The IoD’s proposals for Rishi Sunak’s budget include a temporary cut in employers’ national insurance contributions, targeted business rates relief for the hardest-hit companies and extending the present measures such as furlough “as long as restrictions continue”. Investment reliefs should be enhanced and Brexit adjustment vouchers issued to help businesses with the disruptions and costs of trading with the EU. Commenting on the Government’s current agenda, Matt Kilcoyne, deputy director of the Adam Smith Institute, said: “The Government has shuttered the shops, the Chancellor is threatening to put up taxes on firms that survive this bleak winter, the Business Secretary is lining up to make directors liable and prosecutable for actions that they knew nothing about. It is economically unsound.”
Tim Steiner, the co-founder and chief executive of Ocado, has described plans for a sales tax on online retailers as “inappropriate”. His remarks come after it emerged that the Treasury is considering a new online sales tax as part of a business rates review as well as a windfall tax on firms that have seen profits surge due to COVID-19. Mr Steiner said: “We already have sales tax in the UK, it’s called VAT. It’s applied equally to whoever sells the product based on the products. I don’t think it’s appropriate for anyone to put a sales tax on a retailer because they operate from a different type of premises or they’re a more efficient operator.”
The Daily Telegraph, Business, Page: 5 The Independent Daily Mirror, Page: 39 Daily Express, Page: 51
Chancellor could target IHT to raise funds
In a piece considering the possible tax changes Rishi Sunak could make to pay for the pandemic spending, Finn Houlihan, the Managing Director at ATC Tax, told the Express he believes that inheritance tax could be targeted, suggesting the rate could be raised from 40% to 80%. His comments echo the views of other experts, but Paul Johnson, director of the Institute for Fiscal Studies (IFS) suggested earlier this month that pensions tax, council tax, inheritance tax and capital gains tax should all be reformed before extra levies are imposed.
REPORTING NEWS – WEDNESDAY 10TH FEBRUARY 2021
Government told to urgently reinstate gender pay gap reporting
Work undertaken over decades to close the gender pay gap in the UK could be undone if the Government fails to commit to gender pay gap reporting, campaigners have warned. Britain’s flagship gender pay gap reporting service has been placed “under review” for the second time since its inception in 2017, the Guardian reports. Gender pay gap enforcement was suspended on 24 March 2020 due to the pressures on business from the pandemic and the women and equalities select committee recently called for gender pay gap reporting to be urgently reinstated or the Government would risk further entrenching existing gender inequality in the economy. Ann Francke, chief executive of the Chartered Management Institute said: “If the government doesn’t act, things quickly disappear back down the rabbit hole. The excuse is likely to be that businesses are badly hit right now but actually, it is employees, especially women and minorities, who have been badly hit.”
CORPORATE NEWS – WEDNESDAY 10TH FEBRUARY 2021
Brexit red tape drives JD Sport to open warehouse in EU
The executive chairman of JD Sport has said the company will set up a new warehouse in Europe, employing about 1,000 people, because the costs of exporting to the EU have soared due to Brexit red tape. Peter Cowgill also warned that an overhaul of business rates and rents are needed for UK high streets to recover.
Footwear and accessories firm Dune has launched a Company Voluntary Arrangement (CVA) proposal which includes a number of shops moving to a turnover-based rent model. Will Wright and Chris Pole from KPMG‘s restructuring practice are the proposed nominees of the CVA.
WEALTH MANAGEMENT NEWS – WEDNESDAY 10TH FEBRUARY 2021
Nucleus to be acquired by James Hay
Investment platform business Nucleus is to be acquired by James Hay for £144.62m, with a financial planning and retirement adviser platform with AUA of £45bn to be formed from the merger. James Hay CEO Richard Rowney remarked: “We admire much about Nucleus and the skills within its team and look forward to working with them to better serve the growing needs of advisers. By joining forces, we can combine Nucleus’ reputation for great digital user-experience and James Hay’s pension specialism, creating greater strength and a platform with the scale to invest and deliver real value for advisers and their clients.”
PENSIONS NEWS – WEDNESDAY 10TH FEBRUARY 2021
UK Government liabilities surge £1.3trn in three years
According to figures from the ONS, the UK Government’s pension liabilities have risen 22% in three years, raising questions about the profitability of public pension schemes. The data showed that the Government’s liabilities had grown by 22% between 2015 and 2018 to reach £6.4trn. State pension liabilities amounted to £4.8tn, or 224% of gross domestic product. Former pensions minister and LCP partner Sir Steve Webb said not too much had changed with regard to private sector DB and DC schemes. The total figure has grown roughly in line with growth in the economy.
Sharp fall in global migration threatens economic recovery
The global collapse in skilled migration resulting from pandemic-driven border controls will hamper the economic recovery, particularly in countries whose growth was fuelled by high levels of net immigration.
Auditors, not directors should be liable for accounts
Among possible reforms to the audit sector is a new liability for directors who could be fined or banned if their companies publish inaccurate information in their accounts. In a letter to the Telegraph, retired director David Hutchinson says, “the pressure should be put on auditors who fail to carry out their duties competently”. He explains: “I and other board members relied on an experienced, qualified finance director to accurately state the financial position, with an annual audit to provide a check. As a chartered engineer, I had neither the expertise nor qualifications to identify anything other than blatant accounting errors.”
The Daily Telegraph, Page; 19
OTHER NEWS – WEDNESDAY 10TH FEBRUARY 2021
KPMG chairman: ‘Stop moaning’ about Covid workplace regime
The chairman of KPMG UK has apologised after telling staff on a conference call to “stop moaning” about the impact of the coronavirus. Later in the call he apologised and in a follow-up email, said: “I know that words matter and I regret the ones I chose to use today. I think lockdown is proving difficult for all of us. I am very sorry for what I said and the way that I said it.” Staff had been voicing their concerns about potential pay cuts as well as a performance system that ranks individuals within a team.
The Mirror reports on documents detailing how accountants handling collapse of Sir Philip Green’s Arcadia are earning up to £1,200 an hour. Deloitte was appointed as administrators for more than two dozen Arcadia-linked businesses at the end of November and is thought to be in line for £25m in fees once the fashion retailer is would down. A spokesperson for Deloitte said: “This is one of the largest and most complex retail administrations in UK history, which spans eight brands and 27 separate companies.” Separately, two legal firms say they have already gathered almost 200 potential claimants who they say may not have been properly consulted before losing their jobs at Arcadia.
Daily Mirror Daily Express, Page: 12 The Guardian, Page: 32
Washington State wealth tax would see billionaires flee
A new 1% tax on wealth of more than $1bn proposed by legislators in Washington State could see Amazon founder Jeff Bezos levied around $2bn a year. Other billionaires in the state include Microsoft co-founder Bill Gates and Microsoft CEO Steve Ballmer. But Jared Walczak, the vice president of state projects for state tax policy at the Tax Foundation, said the tax would simply drive the billionaires out, depriving the state of other revenue as well.
Eli Lilly CFO steps down after ‘inappropriate’ communications
Josh Smiley, the CFO of Elli Lily, has stepped down amid allegations he had “consensual though inappropriate personal communications” with some employees.
With Government departments told to put a “price” on greenhouse gas emissions across all areas of the economy, a move that it is believed could result in new taxes as part of a drive towards net zero emissions by 2050, Labour has urged ministers not to impose carbon taxes on meat, cheese or heating. Shadow Chancellor Anneliese Dodds said that with the UK “in the middle of the worst economic crisis of any major economy … Now is not the time to be hiking taxes on families”. John O’Connell, chief executive of the Taxpayers’ Alliance, said: “New eco taxes would leave slim pickings for struggling families”, insisting ministers “must ease the burden on Brits before any green tax hikes.” The Times says environmentalists fear that if handled poorly, carbon taxes could decrease support for Britain’s climate goals. The Mail cites a Government source who insists ministers “have absolutely no intention” of putting a carbon tax on food products.
The Times, Page: 2 Daily Mail, Page: 31 The Sun, Page: 4 Daily Express, Page: 2
Stamp duty holiday sees tax-free sales jump 127%
HMRC data for England and Northern Ireland show that almost a quarter of a million homebuyers paid no property tax in Q4, while the stamp duty holiday saw a surge in sales. Figures show that home sales rose by 16% in the October-December quarter when compared to the same period in 2019. On a quarter-by-quarter basis, transactions were up 44% on Q3. Of the sales recorded in Q4, 218,300 were entirely tax-free – a 127% jump on Q4 2019’s tax free transactions. Year-on-year, residential stamp duty receipts fell 22% in Q4, with a 33% increase on Q3’s total. Richard Donnell of property website Zoopla said: “More people have saved on stamp duty, but more sales of high value property have reduced the hit on tax revenues.”
The Guardian’s Gwyn Topham looks at the free ports initiative, with businesses and local authorities this week submitting their bids to establish zones exempt from normal tax and regulation. He says that while those in support of free ports say they can bring investment, jobs and prosperity to deprived regions, critics suggest they are little more than tax havens. Paul Monaghan, chief executive of the Fair Tax Mark scheme, says free ports “are very much mini-tax havens domiciled within the UK.” He adds: “It’s going to leak out into the wider economy – it will result in a massively reduced contribution from business to the Treasury.” A Treasury spokesperson commented: “The Government is committed to combating abusive tax practices, such as avoidance and evasion – these have been a consideration throughout the design of the free ports tax offer.”
The Guardian, Page: 32
EMPLOYMENT NEWS – FRIDAY 5TH FEBRUARY 2021
Labour calls for furlough extension and overhaul
Labour is calling for an indefinite extension and radical reform of the Government’s furlough scheme, saying that action is needed to avert an unemployment crisis. Shadow Chancellor Anneliese Dodds will today urge Chancellor Rishi Sunak to extend the furlough scheme, which is due to stop up at the end of April, until coronavirus-related restrictions are lifted. She will also call for reform, pointing to initiatives in Germany, France and the Netherlands where furlough schemes include incentives and conditions to encourage job retention and training so as to prevent abuse. Business groups including the British Chambers of Commerce have called for the furlough scheme to be extended until the summer, while the TUC has said it should remain in place through 2021.
Remote working could cost economy £95bn a year
Research commissioned by commercial landlord Landsec suggests remote working could cost the UK economy up to £95bn a year. The report found that face-to-face working boosts productivity and innovation, as well as driving investment in residential and commercial property, business events, meetings and travel. It calculates that the direct economic contribution of in-person working typically stands at about £95bn a year.
CORPORATE NEWS – FRIDAY 5TH FEBRUARY 2021
Dune review could see CVA
Shoe retailer Dune has appointed advisers from KPMG to help it review strategic options, specifically in relation to its property portfolio, a move that could see it opt for a CVA as it looks to trim costs. With lockdown measures hitting business for much of the past year, founder and CEO Daniel Rubin said: “We’ve had constructive dialogue with our landlords since the start of the pandemic, but we now need to engage with them further if we are to safeguard our future.”
The Times’ Melissa York looks at whether London’s population could be set to fall for the first time since 1988 as people opt to relocate, with PwC’s latest economic outlook paper suggesting 300,000 residents could move out of the city. An August survey by the London Assembly saw 4.5% of Londoners, or 416,000 people, say they intend to move out of the city within the next 12 months. Data from Hamptons International shows the number of homeowners buying outside of London hit a four-year high in December.
David Thomas, chief executive of Barratt Developments, says he would support a tax on developers to help cover the cost of the cladding scandal and ensure that buildings meet changes to regulations since the Grenfell Tower fire. Saying that there is a “collective responsibility” to address the issue of buildings covered in flammable cladding, Mr Thomas said: “There’s been talk about how it can be funded and, from our perspective, we would support a prospective levy on the wider industry.”
Savers have overpaid a collective £125m in pension tax over the course of 2020 after withdrawing money under the pension freedom rules. Close to £26m was reclaimed from HMRC in the last three months of 2020. Over-55s have reclaimed £693m in overpaid pension tax since pension freedoms were introduced in April 2015.
The Bank of England (BoE) expects the UK’s coronavirus vaccination programme to drive a rapid rebound of the economy later this year, with Bank economists predicting a 4.2% dip in Q1 before an upturn in economic activity. Governor Andrew Bailey said the Bank thinks the inoculation drive will “support a sustained recovery throughout the rest of the year”. The BoE also said it expects GDP to recover to pre-pandemic levels by the first quarter of 2022. It lowered its growth forecast for 2021 as a whole to 5% from November’s 7.25%, but raised its forecast for 2022 to 7.25% from 6.25%. Despite optimism that a recovery is on the horizon, the Bank said it could introduce negative interest rates if the recovery falters, with Mr Bailey saying that while the Monetary Policy Committee could utilise the measure in the event of a downturn, negative rates are not imminent. MPC members voted unanimously to keep the official interest rate at a record low of 0.1%, with the Bank also opting to leave its quantitative easing bond-buying programme unchanged at £895bn. Howard Archer of the EY Item Club said the Bank kept rates on hold as it “chose to look to the brighter longer-term prospects for the economy which will stem from the progressive rollout of the COVID-19 vaccines”.
With Greek authorities reportedly planning to waive quarantine restrictions by as early as May for UK holidaymakers who have had a coronavirus vaccine, the Times notes EY analysis showing that the Greek economy shrank by an additional 10% last year because of an 80% slide in tourism revenue.
The Times, Page: 8
REGULATION NEWS – FRIDAY 5TH FEBRUARY 2021
Directors face fines over accounting failures in overhaul of audit rules
A proposed overhaul of the audit industry could see directors banned or hit with large fines for errors in their companies’ accounts. Plans to make directors personally liable for the accuracy of financial statements are set to be included in a Government consultation and follow independent reviews of audit and regulation, as well as a number of financial scandals. The consultation, which is set to focus on reform of corporate governance, audit firms and regulation, is expected to expand the definition of “public interest entities” whose audits are regulated by the Financial Reporting Council (FRC). It is also reported that the reforms will grant the Audit, Reporting and Governance Authority, which will replace the FRC, powers to enforce a formal split between the audit and consulting arms of big accountancy firms. A Government spokesperson last night said: “Strengthening our corporate governance and audit regime will help to ensure that the UK remains a world leader in corporate transparency and advance its status as a place of the highest standards in audit”. They added that new Business Secretary Kwasi Kwarteng “has been clear that audit reform is a priority for the department.”
A study from ClientEarth suggests many top listed UK firms are failing to disclose how climate change will affect their business. Analysis of financial accounts and associated audit reports at the 250 largest LSE-listed companies shows that more than 90% make no reference to climate-change related factors. This comes despite UK law saying large firms must disclose material information about their climate risks. The Government last year announced intentions to make recommendations of the Task Force for Climate-Related Financial Disclosures mandatory across the economy by 2025. The Financial Reporting Council (FRC) and Financial Conduct Authority have powers to sanction companies and auditors, as well as call for new statements. The FRC told City AM companies and their auditors need to consider the impact of climate change and assess whether the financial statements and related disclosures reflect it. “This encompasses a number of accounting standards, such as those relating to asset carrying values and useful lives, decommissioning and other provisions or expected credit losses”, it added.
Measuring climate change is audit’s vital task
PwC ’s Hemione Hudson says companies’ climate strategies must be reflected in financial statements. She suggests cooperation between all parties involved in corporate reporting is required to deliver a common approach to measurement.
The Chancellor has been urged to scrap council tax and stamp duty and replace them with a single new property tax, with campaigners claiming the move would save households an average of £435 a year. The Fairer Share pressure group suggests the levy could involve a flat rate of 0.48% on the current value of a property. While it acknowledged this could hit households in London, with those in the capital paying more due to the “extreme” rises in house prices, it said people in the north and Midlands would see savings, with this helping the Government’s “levelling up” efforts. Kevin Hollinrake, chairman of the Property Research Group – which campaigns for reform of the property tax system – welcomed the proposal, saying: “The time is right to put fairness back at the heart of how we tax property. It would also boost transactions throughout the market, creating huge economic output at a time when we most need it.”
Banks fear tax raid as Chancellor balances the books
Analysts at UBS believe Rishi Sunak could launch a tax raid on banks as he looks to tackle the UK’s record deficit. With the Chancellor looking to balance the books after public finances took a hit from the coronavirus crisis, there is speculation he could look to readjust corporation tax. With a Conservative manifesto pledge preventing Mr Sunak from increasing income tax, national insurance and VAT, UBS analyst Jason Napier said there is concern that “as governments come to balance budgets” in the wake of the pandemic, the banking sector “could appear an attractive source of funds.” Mr Napier says banks’ administration of Bounce Bank Loans that are 100% guaranteed by taxpayers are an area of concern, saying that if lenders are considered to have been deficient in applying controls to funds advanced under cover of government guarantees, “we see the risk of increased taxation or levie s applied.”
Chote: Tax increase needed to cover health and care costs
Sir Robert Chote, the former chairman of the Office for Budget Responsibility, says permanent tax increases equivalent to 1% or 2% of GDP could be needed to fund health and social care services. Such increases would equate to around £25-£50bn a year – or approximately 5p-10p on income tax. Sir Robert said it would be “a surprise” if Chancellor Rishi Sunak felt that he could permanently support inevitable increases in health and care spending on the back of borrowing and not roll out permanent tax increases.
Chancellor told pensions should be a tax target
With the Chancellor believed to be considering raising taxes in his March 3 budget, Professor Judith Freedman, a tax expert at the University of Oxford, has suggested pensioners should be targeted. While Rishi Sunak is reportedly contemplating increases for capital gains and inheritance tax, Prof Freedman has said: “If you are looking at broadening the base, people in receipt of pensions should be within your purview because they are not paying national insurance on those pensions.” However, Mr Sunak is said to have agreed to maintain the triple-tax lock on pensions.
Late-filers offered enhanced TTP arrangement
With HMRC data showing that 1.8m people missed the January 31 deadline for submitting their self-assessment tax return, the Revenue is offering enhanced Time to Pay arrangements. Those wishing to set up a payment plan to spread their tax bill into 12 monthly instalments must still submit their tax return and pay any outstanding balance. They must also arrange the payment plan by March 3 or face a 5% late payment penalty.
Daily Mail, Page: 38 Daily Express, Page: 29
Landlords the losers if Sunak raises CGT
Tom Selby, senior analyst at AJ Bell, says landlords, those with holiday homes and pensioners could be the big losers if Rishi Sunak opts to raise capital gains tax in order to pay for the pandemic.
PROPERTY NEWS WEDNESDAY 3RD FEBRUARY 2021
House prices fall in January
Nationwide data shows UK house prices fell last month, with demand declining as the end of the stamp duty holiday nears. Figures from the building society show that the average price of a house was down 0.3% to £229,748 between December and January, while the annual growth rate eased to 6.4% from 7.3% – the first time it has slowed since June. Nationwide’s Robert Gardner has warned that housing activity could drop “sharply” as the tax break ends on March 31, saying: “The slowdown probably reflects a tapering of demand ahead of the end of the stamp duty holiday, which prompted many people considering a house move to bring forward their purchase.” Considering the climate for the property market, Howard Archer, chief economic advisor to the EY Item Club, said: “Support in the first quarter will likely come from buyers looking to take final advantage of the stamp duty threshold increase before it ends on March 31.”
Tour operator Tucan Travel has collapsed into administration after business was hit by the coronavirus pandemic. Administrators at Begbies Traynor will contact the 850 customers with bookings to inform them how they can get their money back.
The I, Page: 44
Asos’ colourful cast
With Asos having snapped up Arcadia brands including Topshop in a £295m deal, the Mail looks at the “cast of colourful City characters” who have backed the online retailer. These include Quentin Griffiths, with it noted that he has sued BDO over advice offered on how to avoid tax on the sale of shares in Asos.
Daily Mail, Page: 70
REPORTING NEWS WEDNESDAY 3RD FEBRUARY 2021
Time to clean up climate reporting standards
An FT editorial calls for companies to back up their rhetoric on climate reporting standards with accounts that make clear the potential impact on their earnings.
The Independent examines the consequences of the pandemic for people’s pensions. In the last three months of 2020, 360,000 savers accessed their pension early, an increase of 10% in the same period of 2019. Between them, they took out £2.4bn early, up from £2.2bn in the same three months the previous year. However, the amounts of money being accessed has been falling. The average amount withdrawn in the last quarter of 2020 was £6,600, down slightly from £6,800 the year before.
INTERNATIONAL NEWS WEDNESDAY 3RD FEBRUARY 2021
Germany to beef up financial regulator in wake of Wirecard scandal
Reform of Germany’s financial regulator following the Wirecard scandal will see the creation of a financial task force that will be able to conduct forensic audits of companies suspected of fraud.
Washington is considering a wealth tax on certain financial assets, with a proposed bill mooting a 1% state-wide tax on “extraordinary” intangible financial assets including cash, publicly traded options, futures contracts, and stocks and bonds — but not income. The first $1bn in value would be exempt from the tax that would apply to taxable worldwide wealth.
ECONOMY NEWS WEDNESDAY 3RD FEBRUARY 2021
Brits add £50 to grocery bills
Analysis suggests that the average British family spent £50 more on groceries in January, with £1bn in extra spending on food and drink in supermarkets recorded in the four weeks to 24 January when compared with the same period in 2020. This was driven by the latest coronavirus lockdown which has seen restaurants and cafes – as well as schools – shut. It was also shown that the closure of pubs helped drive alcohol sales in supermarkets up by 29%, or £234m. The analysis also shows an increase in online grocery shopping, with online sales accounting for 14% of total grocery takings, up from just under 13% in December. Across all retailers, grocery sales rose by 12.2% year-on-year during the 12 weeks to January 24, up from the 11.4% reported the previous month.
OTHER NEWS WEDNESDAY 3RD FEBRUARY 2021
January transfer spend lowest since 2012
Premier League clubs spent £70m during the January transfer window, the lowest total in a winter window since 2012 and far below the £230m spent in January 2020. Tim Bridge of Deloitte believes the market faces a period of uncertainty amid the impact of the pandemic, saying now is “probably the toughest time ever to predict what the transfer market will look like in 12 or 18 months.”
The I, Page: 52
HMRC overpays staff
HMRC accidentally overpaid its own staff more than £1.25m last year, with 255 workers seeing more than £1,000 extra paid into their accounts. The tax office says it has recouped the overpayments.
Daily Star, Page: 22
Contact Paul Southward
NEWS – MONDAY 11TH JANUARY 2021
NEWS – MONDAY 11TH JANUARY 2021
TAX NEWS – MONDAY 11TH JANUARY 2021
HMRC reviews more phone & internet records in light of furlough fraud
The Express looks at how HMRC increased its requests to communications data like phone records and web browsing histories to aid its criminal investigations over 2020. Inquiries picked up as a result of increased concerns over furlough fraud, says RPC, which explained: “HMRC could examine the phone records of an employer to determine whether or not they have been making phone calls to an employee during the period when they were supposedly on furlough. A high number of calls might indicate the employee was actually working and the furlough claims were fraudulent.” Adam Craggs, a Partner and Head of Tax at RPC, commented: “As HMRC shifts its focus to furlough fraud, phone and web browsing data is likely to be a hugely valuable source in identifying those who may be defrauding the public purse.” However, he added: “HMRC must not misuse its investigatory powers and ensure that only lawful, necessary and proportionate applications for communications data are made to the OCDA.”
Upcoming tax hikes considered
Experts tell the Express which tax rules are most likely to change as the Treasury looks for ways to pay for the pandemic. CGT, IHT and pensions relief along with a wealth tax are likely to be easy targets. Debbie Wilson, a director at Hillier Hopkins, said the Treasury could end relief on gifts, suggesting it “would be an easy change to make, face limited opposition and be quickly introduced.” Ending higher-rate relief on pensions contributions could save around £10bn, a move Steven Cameron, Pensions Director at Aegon, said, “would create a big dent in the future pension pots of higher and additional rate taxpayers unless they increased their contributions.” On a possible wealth tax, Rachael Griffin at Quilter said that while unlikely, Rishi Sunak, the Chancellor, might find it more appealing than implementing a range of small tax hikes. Jo Bateson, at KPMG, added: “The Chancellor may decide this is his least worst option, particularly given its apparent popularity with the general public.”
Daily Express, Page: 18
HMRC probes cross-border profit flow
The FT details admissions from HMRC that it has opened criminal investigations into transfer pricing by large corporates, a move John Cullinane at the Chartered Institute of Taxation described as “quite a big deal”
A poll by the Federation of Small Businesses has found that more than 250,000 small firms expect to fold without further government financial support as they look to grapple with the twin threats of COVID-19 and weaker post-Brexit trade with the EU. Just under 5% of the 1,400 companies surveyed by the FSB said they were expecting to close this year. If the same degree of pessimism applies across the UK’s 5.9m small businesses, that would suggest as many as 295,000 fear they will go under. Most firms said they did not expect their prospects to improve over the next three months. Separately, a survey conducted jointly by Make UK and PwC found that a third of companies believed investment prospects would decrease having left the EU. Customs delays, cited by 47% of firms, are seen as the biggest risk to companies.
The Institute of Directors has warned that almost two in five business had faced an increase in late payment during the pandemic, while nearly one in ten had said that overdue commercial debt problems had become significantly worse. The third national lockdown would likely exacerbate the problem, the IoD added. Many directors are eager for the small business commissioner to be given more powers – to issue binding awards, for example – a move that could make companies think twice before delaying payment.
Superfunds face first test with deals expected this year
Pension superfunds are expected to do their first deals later this year as an expected wave of pandemic-induced insolvencies pushes many businesses to the brink. Superfunds combine multiple employers’ schemes under one roof with advocates saying they improve efficiency by sharing administrative and investment costs, as well as ensuring strong governance. Marc Hommel, senior pension adviser at EY, says transfers are likely to happen “where the employer is stressed or distressed and in the trustees’ view there’s a very real chance that the pension scheme is going to end up in the Pension Protection Fund.” Two existing superfunds are currently seeking regulatory approval – the Pension SuperFund and Clara – and if they’re given the go-ahead, schemes on the verge of insolvency are likely to be targeted first. A warning, however, comes from Tracy Blackwell, chief executive of Pension Insurance Corp oration, who says superfunds could encourage companies to avoid their liabilities and favour paying out dividends rather than protecting pensioners.
Accountants prepare for difficult audits of struggling firms
The Telegraph picks up on news that regulators are in talks with listed companies and their auditors about delays to filing accounts due to the difficulties posed by lockdowns. The accounting watchdog will meet the audit heads of the Big Four firms and their main challengers this week to find out how severely their operations have been affected by the latest restrictions, said one source. City regulators could agree to extend deadlines for companies with a December year end while companies with a June year end could also be given more time to report interim numbers. Deadlines for filing accounts at Companies House could be pushed back, as they were last year. The Telegraph suggests audits of retailers’ accounts are expected to involve particularly tough judgments. “It’s going to be a bloodbath,” a senior auditor to several retailers said, adding that accountants will be extremely careful before giving an opinion that clients are able to continue as a going concern: “If [a retail client] goes bust, everyone’s going to look at us and say, ‘how could you not know that it was going to fail?’”
The insolvency profession is being investigated by MPs following criticism from businesses about their objectivity standards. The relationship between insolvency practitioners and lenders is of particular concern. Kevin Hollinrake, the Conservative co-chairman of the group, said: “In recent years there have been a number of high-profile failures in the insolvency industry. The APPG has also received its fair share of complaints about the system.” The Times notes that partners at both KPMG and Deloitte have been accused recently of losing objectivity during administration. The MPs are working with the City law firm Humphries Kerstetter to identify any failures and suggest how to address them. James Russell, partner at the firm, said: “What we are interested in exploring is whether such behaviour is indicative of a wider systemic problem. If these problems are endemic, we look forward to working with the APPG to find ways to address them for the benefit of the insolvency industry and the wider economy.”
Opinion: Best not to judge a retailer’s performance with like-for-like
The Times’ Graham Ruddick discusses the use of the like-for-like sales measure in retailers’ trading reports, describing it as “an unstandardised measure of performance that companies are free to interpret in the way that they see fit.” Ruddick notes a report published five years ago by the ICAEW warning that like-for-like sales are “not the best guide to retail success”. He goes on to give examples of where the like-for-like sales figure is inadequate, concluding with the following advice for readers: “This January look for the old-fashioned metric of total sales and pre-tax profits to judge the performance of Britain’s leading retailers, not like-for-likes.”
UK business output fell to its lowest ever levels in 2020 according to BDO with the firm’s output index averaging 73.62 last year, the lowest figure since the measure was introduced in 2005. Previously, the lowest annual average had been 83.28, which was recorded during 2009’s financial crisis. Commenting on the results, Kaley Crossthwaite, partner at BDO, said: “These figures reinforce just how stark the economic impact of the pandemic has been. As we enter a third national lockdown, crippling challenges will continue to plague businesses in the weeks and months ahead. Successful and rapid roll-out of COVID-19 vaccines will be the single biggest driver of business recovery.”
The Daily Telegraph, Business, Page: 1 City A.M.
Contact Paul Southward
NEWS – TUESDAY 15TH DECEMBER 2020
NEWS – TUESDAY 15TH DECEMBER 2020
TAX NEWS – TUESDAY 15TH DECEMBER 2020
Letter: Tax land, not wealth
In a letter to the Times, former MP Michael Meadowcroft says a wealth tax is “fraught with problems of logistics and political fairness.” He argues that while the “filthy rich” may make the headlines, “there are not enough of them to produce a significant income.” Suggesting that while the wealthy “invariably manage to put their assets beyond the reach of the taxman”, land is an asset that cannot be hidden, adding that taxing it annually on the basis of its maximum development value is “entirely defendable and lucrative for public funds”.
Bank of Mum and Dad risks landing children with tax bill
Legal experts are warning that growing reliance on the Bank of Mum and Dad is leaving their children in danger of landing with a hefty tax bill. Cash gifts could leave the recipients with a large bill because of inheritance tax, which is payable for up to seven years after the money changes hands. Law firm Lindsays has seen a rise in the number of cases it is dealing with where people risk being stung with an unexpected inheritance tax bill because they and their parents were unaware of the implications of what they thought was a gift.
EMPLOYMENT NEWS – TUESDAY 15TH DECEMBER 2020
London to lead on jobs growth amid lopsided recovery
Analysis by EY suggests that London and the South East are the only regions in England expected to see jobs growth by 2023. The capital is expected to add almost 80,000 jobs by 2023, with the South East adding 28,000 jobs over the period. Employment is set to fall in all other regions, led by Yorkshire and the Humber, which is predicted to lose 49,000 jobs. Rohan Malik, EY’s government and infrastructure partner, said: “The economy faces a lopsided recovery which risks setting back the UK’s levelling up agenda unless concerted action is taken.” The firm’s chief economist Mark Gregory said manufacturing “will be key to the levelling up agenda”, noting that an estimated 86% of manufacturing activity is located in towns or smaller cities outside the South East.
The Times, Page: 47 The Daily Telegraph, Business, Page: 5
Peer says UK is ‘sleepwalking into unemployment crisis’
Lord Forsyth, chair of the House of Lords economic affairs committee, has warned that the UK is “sleepwalking into an unemployment crisis”, arguing that efforts to support the labour market amid the coronavirus crisis are falling short. This comes as the committee releases its Time for a New Deal report which calls on the Government to invest in job creation and move away from wage subsidies. Lord Forsyth, who said the report seeks to “save the prospects of a generation of young people”, says that the coronavirus vaccine does not mean the economy will no longer need support. “Sectors with jobs that historically lead labour market recoveries – hospitality, retail and leisure – have been flattened”, he noted. Adding that these sectors are “likely to be in a worse state” when wage support ends, he warned that unemployment will spike.
Daily Mail City AM
SMEs NEWS – TUESDAY 15TH DECEMBER 2020
Businesses sitting on half of coronavirus loans
As much as £21bn of taxpayer-backed coronavirus loan cash is sitting unused in firms’ bank accounts, bankers have revealed, with senior executives telling MPs that around half of the £42bn handed out under the Government’s Bounce Back Loan scheme for small companies is being held onto. Paul Thwaite, commercial banking chief at NatWest, told the Treasury Select Committee: “I think that demonstrates … that some customers have exercised caution, drawn down on the lending and kept it for future spending.” Amanda Murphy, HSBC’s head of commercial banking, said that for many SMEs, “these loans provided a very important lifeline, enabled them to pay their bills… and prevented them from going into financial difficulty.” Suggesting that further support will be needed when loan applications close in January, Starling Bank CEO Anne Boden said: “The pandemic doesn’t end when these schemes finish.”
Figures from Rightmove show that asking prices for UK homes have fallen for the second month in a row, slipping by an average of £2,080 since last month. In December the average asking price was £319,945, down 0.6% on November. This follows a 0.5% dip recorded between October and November. The decline has been attributed in part to sellers dropping prices as they seek to entice buyers looking to take advantage of the stamp duty holiday before it ends on March 31. Scotland and Wales have seen the biggest dip in asking prices since last month. In Scotland the average asking price is £162,116, down 2.1% on last month, while in Wales it’s £210,943, a drop of 1.9%. The analysis shows that homes at the top end of the market have seen asking prices decline 1.4% since November, while first-time buyer homes are down 0.1%. Year-on-year, the average asking price is up 6.6% on December 2019.
Ralf Bose has been suspended from his role as head of German audit watchdog Apas after admitting to trading shares in Wirecard weeks before its collapse in June and while conducting a probe into its auditor. Mr Bose told a parliamentary committee that he bought Wirecard stock at the end of April before selling at a loss on May 20. During that period, Apas had upgraded its preliminary review of EY’s audits for Wirecard to a fully-fledged inquiry.
South Korea’s listed companies are under growing pressure to overhaul their external audit system in time for shareholder meeting season, with a new set of corporate regulations restricting the combined voting power of ownership families in the appointment of auditors.
The I, Page: 45
France seizes Ghosn’s assets
French tax authorities have seized €13m of property and other assets from Carlos Ghosn, with the fugitive former Renault-Nissan chief suspected of having evaded French taxes by claiming that he was domiciled in Amsterdam from 2012 until his 2018 arrest in Japan on charges of tax fraud.
Finance bosses have urged the Bank of England (BoE) to move with caution as it considers taking interest rates negative for the first time, with Amanda Murphy, head of commercial banking at HSBC, telling the Commons Treasury Select Committee that the Bank “does have to carefully consider whether negative interest rates have the desired outcomes”. Pointing to countries that have made the move, she added that they “haven’t seen inflation rise and the growth hasn’t come back as strongly as one might have hoped.”
Daily Mail, Page: 74
Industrialist warns Brexit will be like a ‘slow puncture’
Juergen Maier, the former CEO of electronics firm Siemens, has warned that Brexit will hit the British economy like a “slow puncture”, with disruption to business to last well into 2021 even if a trade deal is agreed. He believes it is “going to be a pretty tough for the first six months”, adding that “those who think a deal is going to miraculously resolve the situation” are wrong. Mr Maier said the impact on the economy will be like “a slow puncture” and there will be “a slow burn” as firms gradually move bits of their production or parts of their research and development abroad. He has urged ministers to offer an “adjustment period” to allow businesses to get accustomed to new customs and standards red tape that Brexit will bring.