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.”

The Times, Page: 40 The Daily Telegraph, Business, Page: 5

Ocado chief slams plans for online sales tax

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.

Daily Express


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.”

The Guardian


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.

The Daily Telegraph, Business, Page: 3 BBC News Daily Mail, Page: 23 Daily Mirror

Dune issues CVA proposal

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.

Evening Standard


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.”

City AM


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.

FT Adviser Interactive Investor


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.

Financial Times


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


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 Daily Telegraph, Business, Page: 3 Financial Times, Page: 1 BBC News

Arcadia administrators earning £1,200 an hour

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.

The Independent

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.

Financial Times

Contact Paul Southward

Paul Southward






HMRC Chief executive Jim Harra in line for “Meanie of the year” award!

HMRC will not waive late filing penalties or extend the 31 January deadline, but it will accept pandemic related disruptions and agent delays as a reasonable excuse and will also extend the period to appeal a penalty.  HMRC’s chief executive Jim Harra rejected requests to extend the filing deadline or let up on penalties for late returns.

If you need help filing your self-assessment tax return, contact us.


Individuals sell off assets ahead of expected CGT hike

Experts say that buy to let properties and businesses are being sold off by individuals concerned about future hikes in capital gains tax. The Office for Tax Simplification recently recommended the Chancellor increase CGT rates in line with rates of income tax, as well as making inherited assets subject to both CGT and inheritance tax, City AM notes. CGT receipts have hit £10.1bn, up more than fourfold from £2.5bn ten years ago. Tim Holmes, managing director at Salisbury House Wealth, said: “It’s understandable that people are worried about CGT rates rising but if they rush, it could cost them much more than necessary in tax.” However, he adds that alternatives to selling assets, such as “rolling over” gains into “an EIS investment and making sure you buy an asset inside a pension wrapper are both quite simple steps that may work well for some.”

City AM

Cairn awarded $1.2bn in India tax arbitration

UK oil and gas explorer Cairn Energy has won its tax dispute with India after a tribunal ruled the country had breached its obligations under a UK-India bilateral treaty.

Financial Times, Page: 8


File soon to apply for tax payment plan, HMRC says

Self-assessment tax returns for income earned in the year to April 5th, 2020 are due on January 31st and taxpayers are being urged to file returns soon if they want to take advantage of an offer from HMRC for those suffering financially due to the pandemic to delay this deadline and apply for a payment plan. The deal involves paying HMRC 2.6% interest on any outstanding tax after February 1st, but any late payment penalties will be avoided. HMRC said it was considering a request from industry bodies such as the Association of Accounting Technicians and the Institute of Chartered Accountants in England and Wales to delay the deadline until March or April.

The Sunday Times (27/12)

Facebook closes Irish holding companies

Facebook is winding up three of its Irish holding companies and returning its intellectual property to the US. The company’s main Irish subsidiary paid $101m (£75m) in tax while recording profits of more than $15bn in 2018. The move comes after the US Internal Revenue Service (IRS) took Facebook to court claiming it owed more than $9bn linked to its 2010 decision to shift profits to Ireland. Facebook said: “In preparation for the unlimited company winding up, Facebook Ireland Holdings’ assets were distributed to its US parent company. Intellectual property licences related to our international operations have been repatriated back to the US.”

The Guardian, Page: 35 (28/12)


CBI president: Tax cuts can spark growth

CBI president Lord Bilimoria has urged the Government to cut taxes to help drive the post-pandemic recovery. Saying there is a need to “unleash the economy to be able to grow”, he called on policymakers to look at what makes Britain appeal to investors. “The UK has to be attractive from a tax point of view. If you start putting up corporation tax and capital gains tax you will stamp on inward investment and domestic growth”, he commented. Saying he would reduce taxes to enable growth and incentivise exports, Lord Bilimoria said the Government “could be bold and give tax breaks for exports”, insisting tax incentives, not tax rises are needed. He also warned against the creation of a wealth tax, arguing: “Once you go down that route you are really harming inward investment.” Such a levy would, he suggested, “have a very detrimental effect.”

Daily Mail

Hunt suggests care tax for the over-40s

Former Health Secretary Jeremy Hunt believes a tax on the middle-aged could help boost the care system, suggesting a care levy on the over-40s along the lines of schemes in place in Germany and Japan. He said: “Both of them, interestingly, introduced a tax surcharge to people over 40, which is only a small amount extra, but as you get older you start to pay a little bit more.” He added that neither country has seen “public pushback” for rolling out the charges.

Daily Mail, Page: 2

Brexit brings new opportunities, says Redwood

Sir John Redwood believes leaving the EU offers the UK a range of opportunities, saying he is pleased that the Prime Minister is readying plans to “supercharge” growth in 2021 by using new freedoms. Writing for the Express, he says there is scope for more tax reform and reduction of rates as officials look to drive the post-coronavirus recovery, calling on the Government to “revisit” IR35 and other taxes on the self-employed, and offer continued reductions in business rates. He adds that ministers should “remember that there are many transaction and income taxes where they will collect more money if they charge a lower rate.”

Daily Express

Self-assessment advice

Mike Warburton in the Telegraph says the gap between Christmas and New Year can be the perfect time to do a tax return and offers advice for those completing their self-assessment. Among issues to consider, he notes that coronavirus support payments are treated as trading receipts and are taxable in the normal way, so in most cases this will be something for the return next year. Mr Warburton highlights that a record 10.4m people filed electronically last year, with 700,000 doing so on deadline day itself – while more than a million self-assessments were filed late and incurred a £100 fine.

The Daily Telegraph



City needs to put business creators at the centre of its model

Daniel Pinto, the founder and chief executive of Stanhope Capital Group, writes in the Telegraph that the City is taken for granted by both the Government and those within it who have failed over the last four years to “come up with a single new idea to preserve their own future.” Pinto goes on to recommend a three-pronged strategy to maintaining the City’s leadership: aggressively pursue global business and encourage dual listings; make the UK regulatory framework more flexible and thirdly, turn London into the capital of venture funding for fast-growing businesses. Additionally, tax breaks and simplified administrative procedures could be offered to lure entrepreneurs. Pinto concludes: “The City can be a vector for substantial economic growth and positive change but for this, it needs to undergo a kind of cultural revolution.”

The Daily Telegraph, Business, Page: 30


City gearing up for wave of flotations in 2021

Dealmakers in the City of London are preparing for a wave of flotations in 2021 as companies which have delayed their IPOs due to the pandemic and uncertainty over Brexit decide to press ahead with their plans. Alex Ham, co-chief executive of Numis, said: “We’re seeing a real pick up in both founders and owners starting to explore what IPO options are available.” With the rush to market already happening in the US, the Telegraph states that UK officials are reviewing the existing listing regime with the hope of attracting more big ticket companies to London.

The Sunday Telegraph (27/12)

Financial advice needs a rebrand

Writing in the Times, James Coney argues that financial advice needs rebranding. He says that the value of financial advice only comes years after people start paying for it. Therefore, he suggests, what it needs is a shake-up, and that means advisers need to find a way to show their worth right from the start. Coney adds: “Advisers need to grab people at the moments that they are making key decisions in their life — tying their advice up with the changes that come around births, deaths and marriages. That is the way to make an immediate difference to people’s finances and futures.”

The Times (26/12)


Asset managers boost staffing in EU by 38%

The world’s biggest asset managers have expanded their EU workforces by 38% since 2015, while PwC analysis shows assets under management rose from $84tn to $110tn between 2016 and 2019.

Financial Times



Creditors approve Anne Summers rent plan

A plan that would cut rents at 25 Ann Summers stores has been approved by creditors of the lingerie and adult toy retailer. Ann Summers said that 90% of votes had been cast in favour of its CVA, which switches the stores onto turnover-base rents. The firm had already agreed new rents with the landlords at 91 of its other branches, it confirmed earlier this week when announcing the plan. Following the CVA, Ann Summers has also secured up to £10m of new funding to help with a turnaround plan, and finance the return to growth that the board thinks it can achieve. No jobs will be lost, or stores closed as part of the CVA.

Daily Mail

Covid corporate debt pile threatens economic recovery

Experts say the level of debt built up by companies during the pandemic has reached worrying levels and threatens to undermine the economic recovery. Corporate debts to banks rose from £486bn before the pandemic to a peak of almost £545bn in May. Although the total is down slightly now, it still remains well above pre-Covid levels. George Dibb at the Institute for Public Policy Research says with cashflow down by £180bn this year and companies’ reserves standing at £90bn, it leaves a £90bn black hole which “urgently needs addressing”. “The only way you can do that is through cash injections – it could be through debt which potentially exacerbates the problems. Another potential policy would be cash injections through public equity stakes – the Government taking shares in firms,” added Mr Dibb.

The Daily Telegraph (28/12)

Business leaders urge extension of Covid loan scheme

Some of Britain’s biggest employers are urging the Government to extend the Covid Corporate Financing Facility (CCFF) beyond the end of 2020, when it is set to be closed to new applicants. The scheme has lent more than £84bn to almost 230 companies since it was launched and Flora Hamilton, CBI financial services director, said ministers would need to look afresh in January at how it can support UK businesses through to the spring and beyond. Suren Thiru, head of economics at the British Chambers of Commerce, added that extending the programme would “protect both our largest firms and the extended supply chains of smaller businesses who support them.”

The Sunday Telegraph (27/12)

Sir Philip Green’s family will net £50m from Topshop sale

The Sunday Times reports that Sir Philip Green’s family will receive £50m from the sale of Topshop via a British Virgin Islands entity which lent the cash to the retailer last year. Administrators from Deloitte are auctioning brands under the Arcadia umbrella, which collapsed with an estimated £350m hole in its pension fund.

The Sunday Times (27/12)

FRP due to send first EWM report

Edinburgh Woollen Mill creditors are set to find out just how much they should expect to get back from the collapsed high street retailer with administrator FRP Advisory due to send its first report imminently, according to the Sunday Express.

Sunday Express, Page: 50


Business groups call for transition vouchers

The Institute of Directors (IoD) and Federation of Small Businesses (FSB) have called for financial support for firms as they adjust to new EU rules as the Brexit transition period comes to an end on December 31, proposing a voucher scheme to cover the extra costs that businesses may face. Allie Renison, head of EU and trade policy at the IoD, said ministers need to “step up to the plate to help the effort”, adding that a lack of implementation period means firms face “an enormous task”. She said vouchers and special tax reliefs would help businesses adjust. Craig Beaumont, chief of external affairs at the FSB, said “simple to use Transition Vouchers” would provide up to £3,000 for small businesses to buy-in necessary tech, training or expertise, adding: “We understand that the Cabinet Office has been discussing this intensely with the Treasury.”

The Daily Telegraph, Page: 27

CBI boss in EU trade warning

CBI Director General Tony Danker says firms are unsure on how to implement the post-Brexit trade deal once the transition period ends, calling on ministers to turn the Trade and Co-Operation Agreement document into “practical guidance” for firms. He said that Christmas Day saw “1,200 pages of legal text come down the chimney”, adding that it “really changes the nature of our trading relationship with the EU.”

ITV News

Mayor wants increased business support

West Midlands Mayor Andy Street has urged Chancellor Rishi Sunak to increase the £3,000 monthly grant for businesses forced to shut by the coronavirus to an average £10,000. He also wants the Government to create a devolved approach to retraining for workers left unemployed by the pandemic, giving councils and metro mayors support for locally driven initiatives.

The Independent



Employee ownership or nationalising debt ‘could help save businesses’

The Federation of Small Businesses (FSB) has called on the Treasury to consider launching an employee-ownership revolution to prevent Britain’s multibillion-pound debt burden undermining its economic recovery. A new policy paper from the FSB warns that a surge in borrowing means many companies are taking “unmanageable debt levels” into 2021and that support measures should be immediately introduced, such as an extension of the ability to defer VAT payments and allowing companies to defer paying back debt accrued under the bounce back loan scheme until March 2022. The FSB also suggested that emergency Covid debt could be used to help more companies into employee ownership while another proposal is the conversion of debt to a tax liability, to be paid off over a longer period from profits – a move that would require the Government to “step in and nationalise a portion of small business debt, perhaps through the creation of a bad bank”. Martin McTague, the FSB’s national vice-chairman, said: “We need the Government to intervene swiftly to avoid a small business credit crunch in the spring. Debt levels are spiralling among viable firms, hampering their ability to provide the investment, hiring and innovation needed to bounce back from this year’s severe recession.”

The Times (26/12)


SMEs adapt to survive

Samuel Osborne in the Independent looks at the ways SMEs have adapted in order to survive the coronavirus crisis. He notes analysis by Yell Business showing that 76% of small businesses have introduced new services, with 52% of those who rolled out new services saying doing so was crucial for them to survive and 88% planning to continue the new service post-pandemic.

The Independent, Page: 38



Union leaders warned of a ‘stampede’ away from self-employment

Just a third of self-employed and freelance workers want to continue working as they are as the pandemic wipes out their pay. An inquiry by independent experts, politicians, union and industry leaders warned of a “stampede” away from self-employment with half saying they had lost between 60% and 100% of their household income this year and two out of three were less likely or unsure if they wanted to continue to be self-employed. Prospect general secretary Mike Clancy, who commissioned the inquiry, said: “The news […] should be a massive wake-up call to the Government.” He added: “These workers have powered our economy in recent years and this flexible workforce were lauded by ministers as key to our prosperity, but the way they have been treated in this pandemic is disgraceful and will have consequences for our ability to recover in 2021 in beyond.”

Daily Mail

Figures suggest furlough extension keeping redundancy rise low

New figures suggest that the extension of the furlough scheme until the end of April 2021 appears to have slowed the rate of redundancies across the UK. The Insolvency Service said 36,700 redundancies were proposed in November, the lowest monthly figure since lockdown restrictions were introduced in March. The November total is around a fifth of the peak, with 156,000 redundancies in June. December’s total however will likely include up to 25,000 job losses resulting from the collapse of Debenhams and Arcadia – if either of the stricken retailers are unable to find buyers.

City AM


Median salary among workers over 50 is 23% less for women

Analysis of official data by Rest Less, a company that offers help and advice to people over 50, shows that women over 50 in the UK are paid almost £8,000 a year less than men in the same age group. The study shows that a woman in a full-time job earned on average just under £28,000 this year, compared with nearly £34,000 for men. But the gap was wider for those over 50 – £26,230 for women and £34,325 for men. Women aged over 60 are paid £23,903 on average, while men receive £31,667. Stuart Lewis, the founder of Rest Less, said: “Women in their 50s and 60s face the double discrimination of age bias, combined with the widest gender pay gap of all ages.” Mr Lewis went on to warn that “decades of a gender pay gap and the resulting wide gulf in private pension savings mean that the future retirement incomes of men and women remain far from equal.”

The Guardian (28/12)



Goldman Sachs to offer digital wealth management to US investors

Goldman Sachs has begun internal testing of a digital wealth management service for the masses, as it continues its push into the mainstream consumer market. Employees who sign on to the digital service, called Marcus Invest, will pay an annual management fee of 0.15%, according to reports.




Haldane: Bank must have ‘laser focus’ on inflation

The BoE’s chief economist Andy Haldane has said that the central bank must have a “laser focus” on keeping inflation expectations in check once the COVID-19 crisis eases. Mr Haldane said: “The last thing the world needs right now is a nasty inflation surprise,” echoing comments he made on November 28. The BoE said on December 17 it is prepared to let inflation overshoot its 2% target temporarily. Mr Haldane told warned any overshoot could not become entrenched otherwise bond yields would rise, pushing up the cost of repayments on Britain’s £2trn debt mountain and jeopardising any recovery. He also said he was much more confident about the economy in the second half of 2021 than in the first quarter of the year because of the prospects for rolling out COVID-19 vaccines.

The Times City AM

Brexit deal will boost UK economy

With a Brexit deal reportedly on the brink of being finalised, economists say an agreement will spur a surge of investment and lead to a bounceback for the economy. Sterling is expected to rise 6% if a deal is confirmed while fund managers are predicting a rally in equities, which have long been devalued by Brexit uncertainty.

The Daily Telegraph Financial Times Daily Mail, Page; 6


Hopes for household spending boom following Brexit deal

Economists are optimistic that the Brexit deal will unlock pent-up household savings helping to drive an economic recovery in 2021. The latest available Bank of England data indicates that household deposits surged by £113bn between the start of the year and October – almost double the £59bn growth in deposits over the same period of 2019. Consumer debt has fallen in the meantime, by about £20bn to £205.5bn. “Many people should be in a decent position to spend when restrictions are relaxed, non-essential retailers open and the hospitality and leisure sector increasingly opens up,” said Howard Archer, chief economic adviser to the EY Item Club. “There are grounds to hope that consumers can play a leading role in a healthy recovery once Covid restrictions ease, with the high household savings ratio certainly supportive.” The Sunday Times speaks with economists who broadly do not expect the BoE to drop rates below zero, but if QE fails after further lockdowns, it could use the tool to force household spending.

The Sunday Telegraph (27/12) The Sunday Times (27/12)

Britain overtakes India to become the world’s fifth-largest economy again

According to the annual league table produced by the Centre for Economic and Business Research (CEBR), the UK has become the world’s fifth-largest economy once again, leapfrogging India despite a cumulative fall in GDP of 21.2% in the first half of 2020. The CEBR predicts annual growth of 4% for the UK until 2025 after which it will fall to 1.8% annually until 2030. By 2035, UK GDP is forecast to be 23% more than France. However, over the course of 2024, India will again have overtaken the UK, pushing it back to sixth place overall. Meanwhile, the CEBR also predicts that China will overtake the US to world’s largest economy by 2028 – five years earlier than expected.

The Daily Telegraph (26/12) The Guardian (26/12) The Mail on Sunday (27/12)


Think-tank: Coronavirus restrictions set to hit growth

The Resolution Foundation has warned that the latest round of coronavirus restrictions could see the economy 6% smaller by Easter than the Office for Budget Responsibility (OBR) forecast a month ago. The think-tank said Tier 4 restrictions imposed in much of England and nationwide lockdowns across Scotland and Wales are set to result in depressed growth until Easter. The report adds that this will result in growth of 4.3% in 2021 – down on the 5.5% forecast by the OBR. Resolution Foundation CEO Torsten Bell said that tougher lockdowns may be required to contain the new strain of COVID-19 in early 2021, adding: “By Easter that could mean the economy being 6% smaller than what was hoped just a month ago.” Mr Bell said that while 2021 “offers light at the end of the tunnel … it’s going to be a bumpy ride getting there.” While he believes vaccines are likely to deliver a “gradual return to normality” and could prompt a “roaring 20s” style spending boom, Mr Bell warned: “Rising unemployment means household incomes may actually fall even as GDP recovers.”

The Independent The Guardian



Islington leads on price growth

Figures from Halifax show that London’s Islington has seen the fastest house price growth over 2020, with the value of the average property climbing 13.4% to £727,922. Across London, average prices rose by 6%, with the capital seeing nine regions in the top twenty for price growth. Outside London, Leeds was in second place overall, recording a 11.3% rise, followed by Wolverhampton, with a 9.5% increase. At the opposite end of the scale, Paisley in Scotland saw the typical house price decline by 1.7% to £138,036. The Halifax figures show that the average rise across the UK was 10.6%.

The Guardian, Page: 25 Daily Mirror, Page: 17 Daily Express, Page: 20



OECD warns against using pension assets for ‘pet projects’

Governments have been warned by the OECD to avoid using private pension assets on frivolous projects as states increasingly encourage providers to invest in projects that can fuel a recovery.

Financial Times


135,000 women could win extra £100m from state

The Times reports that widows who missed out on state pension payments while their husbands were alive could get thousands of pounds in back payments after the Government confirmed that it was exploring ways to put things right. The pensions minister Guy Opperman said that the DWP was checking state pension records held on a legacy IT system to identify women who might be being underpaid state pension. Opperman said the DWP was exploring how it could “most effectively analyse state pension accounts to identify other instances where those widowed or over age 80 are being underpaid”. Sir Steve Webb, a former pensions minister and a partner at LCP, said that if the DWP did add widows and the over-80s to the ranks of the married women who were being underpaid and refunded them all, repayments could equate to more than £100m.

The Times (26/12)



No laughing matter

Jimmy Carr has revealed that he feared his involvement in a K2 tax avoidance scheme, which was exposed in 2012, would end his career. The stand-up comedian and television presenter said: “It did feel that I was going to lose it all. It felt like maybe I was going to get cancelled. Maybe that’s it, maybe I won’t be able to work or tour again. It was scary,” he told Sky One’s Peeping Behind The Curtain.

Daily Mirror (26/12) The Sun (26/12)


Storm helps deliver wind power first

Boxing Day saw more than half of Great Britain’s daily electricity come from wind turbines for the first time. With Storm Bella bringing gusts of up to 100mph, wind provided 50.7% of Great Britain’s electricity. With the UK increasingly utilising green energy in 2020, PwC’s Steve Jennings comments that the “key challenge on our pathway to net zero” is what the electricity system does “when the wind doesn’t blow or the sun doesn’t shine”.

The Guardian, Page: 2

Accountant stole $1m from vodka box

Accountant Natalya Agaltsova has been charged with stealing more than $1m in cash from an empty case of vodka at the Russian foreign ministry in Moscow. The money had come from Russia’s embassy in Iran as part of a $1.5m payment for consular services.

The Times, Page: 37

Contact Paul Southward [Tax Consultant]

Paul Southward






I can’t believe that we are already in the second week of December and Christmas is only a couple of weeks’ away.  This time last year I had already attended at least two Christmas celebrations and ordered my fayre for the work’s annual Christmas meal.

This year it is going to be different, with so much of the Country under high “Tier” restrictions you may be able to spend all day working alongside your colleagues but you can’t meet up with them for a drink and/or a meal indoors afterwards.

Rewarding Employees at Christmas

Employers will need to be inventive if they wish to spread some goodwill and cheer amongst their workforce.

Virtual Christmas Parties

That cheery lot at HM Revenue & Customs have risen to the challenge and confirmed that the annual parties exemption will also apply to “virtual functions”.  The annual exemption is up to £150.00 per attendee and the qualifying costs are tax deductible for the employer and the benefit to the employees is tax free.

There is a “Cinderella” type caveat to the exemption; in Cinderella’s case it was time limited so that one second past midnight and the spell was broken, in the case of the annual parties exemption one penny over the £150.00 limit per head and the whole lot becomes taxable.

With so many of us now learning the dark arts of virtual conferencing, some employer’s plans for virtual staff parties were already underway before the taxman’s latest announcement.

The exemption of £150.00 per attendee is the VAT inclusive cost, but you do have to be careful that the taxman does not squash your plans.  The exemption applies to all costs associated to the virtual party, which would include provision of food and drink, entertainment, prizes, party crackers, equipment and any other costs and incidental expenses of the event.  You will also need to keep a record of all attendees including staff family members.


Another way in which employers can provide employees with some tax-free Christmas cheer is through the Trivial Benefits Exemption.  Under this exemption a gift up to the value of £50 (VAT inclusive) can be made with no reporting, tax or NICs applicable.

There are always conditions: _

  • the benefit cannot be cash or a cash voucher; the benefit is not provided in recognition of particular services performed by the employee as part of their employment duties (or in anticipation of such services);
  • the benefit is not provided pursuant to any contractual obligation; and
  • the benefit is not provided under a salary sacrifice arrangement.

So, remember to stick to the rules, the best way in which you can ensure that your Christmas goodwill does not turn into a pumpkin, is to speak with Paul Southward.

Oxfam wants higher taxes on private jets and SUVs

A new report by Oxfam and the Stockholm Environment Institute indicates that the richest 1% of people in the UK produce 11 times the amount of carbon emissions as those in the poorest half of society, or 7% of the pollution over a 25-year period. Those in the wealthiest 10%, with income after tax of at least £41,000 per year, have a carbon footprint more than double the national average and four times the poorest half of the population. Oxfam is now calling on the government to curb the emissions of the top earners through higher taxes on private jets and SUVs.

The Independent

UK businesses face £7.5bn cost in post-Brexit paperwork

Jim Harra, the CEO of HMRC, has said customs paperwork will burden British businesses with an additional £7.5bn in costs next year. Due to the UK leaving the bloc’s customs union and single market, thousands of businesses trading with the EU after the transition period in January will be required to fill in customs declarations for the first time. Harra stressed that the costs will apply regardless of whether a trade deal is agreed or not.

The Independent


UK has world’s highest property tax

Britain has the highest property taxes as a percentage of total taxation in the developed world, according to new research. The Organisation for Economic Co-operation and Development (OECD) found that tax receipts generated from property climbed to £91bn in 2019, up from £88bn the previous year. Property tax receipts were worth 4.1% of GDP, ranking top for a second straight year and just ahead of France, a typically high-taxing country. The Government raises 12% of its revenue from taxes hitting homeowners and business premises, such as stamp duty, business rates and council tax, the OECD revealed. That is around double the levels of property taxation seen in the average OECD country.

The Daily Telegraph Daily Mail

UK house prices rising at fastest rate in 16 years

New data has revealed that house prices increased 7.6% in the 12 months to November, with valuations up some 6.5% since the housing market reopened in June. Russell Galley, of Halifax, which provided the figures commented: “The stamp duty saving of £2,500 on a home costing £250,000 is now far outweighed by the average increase in property prices since July.” He went on: “With unemployment predicted to peak around the middle of next year, and the UK’s economy not expected to fully recover the ground lost over 2020 for a number of years, a slowdown in housing market activity is likely over the next 12 months.”

The Daily Telegraph The Times


PM pledges to help ‘small businesses go global’

Boris Johnson announced a shake-up of Government export finance on Monday as part of efforts to support small businesses looking to enter new markets after Brexit. The new scheme, to be run by UK Export Finance, will see the state provide an 80% guarantee on bank loans of up to £25m to help companies with general exporting costs. In a message to businesses posted on his LinkedIn page, the Prime Minister said: “This will free up crucial working capital to help you scale up your business operations and get exporting.” He added: “Small businesses are the lifeblood of our economy. As businesses bounce back from COVID-19, this new export finance guarantee will help bring new trading opportunities to companies in every part of the country.”

The Daily Telegraph

Rishi Sunak under pressure to set out ‘no deal’ Brexit stimulus plan

The Treasury should map out a new wave of stimulus in the event of a no-deal Brexit, the Institute of Directors has said. “A disorderly no deal could hurt British business on a number of fronts,” said Tej Parikh, the business group’s chief economist. “To ease these challenges, the Government should provide financial support to small firms with exposure to the fall-out. Vouchers to access specialist or legal advice on adjustments would be one option, as would making efforts to transition more tax efficient. Leniency on tax deadlines would also give businesses some room to manoeuvre.”

The Daily Telegraph


Retailers do not yet know how to repay rates relief

Despite pledges by major retailers to repay business rates relief provided by the Government during the pandemic, there is as yet no mechanism for repaying it. It is understood that the Treasury is working on ways to process repayments, which could end up going via HMRC rather than the usual business rates channels. The news comes as Kingfisher reveals it expects to return £130m of business rates relief, equivalent to a bill of roughly £110m in the year to January 2021, and £20m for the following 12 months. Separately, MPs are pressuring bookmakers to repay tens of millions of pounds of business rates relief after online betting boomed in lockdown.

The Daily Telegraph Financial Times The Independent Daily Mail, Page: 75


Pension savers turning to ESG, says AJ Bell

Research reveals 47% of AJ Bell Youinvest customers plan to invest more of their pension in companies with a positive environmental impact in 2021. Furthermore, 44% of savers believe their pension savings can be used to protect the environment, while over a third (34%) say they would increase their pension contributions if they thought it would be good for the environment. Tom Selby, senior analyst, AJ Bell, said: “While investing in a pension is, of course, primarily about building a pot of money to fund your lifestyle in retirement, it is clear there is significant appetite to invest this money in a socially responsible way.”

Professional Paraplanner


Companies return over half a billion pounds worth of furlough cash

Officials yesterday revealed that UK companies have returned more than half a billion pounds worth of furlough cash that they should not have claimed or did not need. Penny Ciniewicz of HMRC told the Treasury select committee: “We’ve had around £504m made in terms of voluntary disclosures and corrections, including people who were entitled to the grant and decided to pay it back.”

Daily Mail, Page: 13


Next generation behind family offices’ ESG push

The FT examines the growing willingness of family offices to push for ESG investments, with Deloitte’s Jessica Hodges saying the argument in favour is driven by growing evidence that such funds outperform their peers.

Financial Times


Lloyds calls for tailored regional recovery strategy

A report from Lloyds Banking Group urges a regional approach to supporting business as the UK recovers from the pandemic. António Horta-Osório, the outgoing Lloyds chief executive, said: “We need to build on the government’s levelling-up agenda by introducing regionally-focused strategies, shaped by local voices for local economies.” He added: “The plans we make as a country to promote future economic growth need to work for everyone. Coronavirus has exacerbated the regional, racial and socio-economic inequalities that existed before the crisis but it also gives us an opportunity to address those gaps and tackle the longer-term issues facing the UK.”

The Times

Contact Paul Southward

Paul Southward





Businesses profiting from Covid could be taxed more in Scotland

The Scottish Human Rights Commission (SHRC) has suggested that industries making “extra profits” as a result of COVID 19 – such as the digital economy and pharmaceuticals – should be considered for tax hikes as a means of maximising revenues and addressing social inequalities which have been exacerbated by the pandemic.

The Scotsman, Page: 9

Will the UK axe private equity tax break worth millions?

The FT considers whether the UK will tax payouts for private equity dealmakers as income rather than capital gains and how this could change the way the financial sector is taxed post-pandemic.

Financial Times, Page: 23


Sunak announces post-Brexit financial services regime

The Chancellor yesterday made a statement in the Commons on financial services in post-Brexit Britain, telling MPs that the UK would unilaterally grant equivalence to EU and EEA states on financial services, despite the failure of the EU to provide “clarity about their intentions.” Rishi Sunak outlined a vision for how the UK could renew the country’s position as the “world’s pre-eminent financial centre” following Brexit, with a focus on green finance and digital currencies. The UK would launch its first green government bonds next year to raise money for low-carbon infrastructure projects and would require large listed and private companies disclose the threats to their business from climate change by 2025, including banks, insurance companies and pension schemes. A consultation would also be held on how digital currencies could be regulated. Listing requirements would also be reviewed with the aim of attracting fast-growing tech firms to London.

Daily Mail Financial Times Sky News City AM


Covid rescue funds propping up unviable businesses

Figures from the Government’s Insolvency Service show the number of companies going bust in the third quarter of 2020 was 39% down on the same period in 2019, leading Sir Desmond Swayne, a former Tory minister, to suggest the natural failures of businesses were being prevented by the government “at huge expense.” He said: “If they are not viable, and many businesses will not have been viable, that is an enormous bill that we are all going to have to repay over a long period of time. Best we get on with it.”

Daily Mail

Johnson launches UK investment office

Boris Johnson has announced the creation of a new office for investment to encourage foreign direct investment in the UK post-Brexit. Mr Johnson said the unit will be established in Downing Street as part of the Department for International Trade and will be led by innovation minister Gerry Grimstone. He said the office was being launched “to make sure everyone knows global Britain is not just open for business but the best place in the world to conduct it”.

Financial News Financial Times, Page: 3


Self-employed seek more secure employment

A survey by the London School of Economics has found that one in five self-employed workers plans to switch to other forms of employment because of the pandemic, which saw a significant proportion taking a hit to income. Almost 60% of those aged under 25 saying that they no longer wished to be self-employed.

The Times, Page: 42


Businesses profiting from Covid could be taxed more in Scotland

The Scottish Human Rights Commission (SHRC) has suggested that industries making “extra profits” as a result of COVID 19 – such as the digital economy and pharmaceuticals – should be considered for tax hikes as a means of maximising revenues and addressing social inequalities which have been exacerbated by the pandemic.

The Scotsman, Page: 9

Will the UK axe private equity tax break worth millions?

The FT considers whether the UK will tax payouts for private equity dealmakers as income rather than capital gains and how this could change the way the financial sector is taxed post-pandemic.

Financial Times, Page: 23


New Experian service could boost credit scores

The Open Banking regime will enable Experian to launch a service in the UK through which personal borrowers can opt into a system that will allow it to take into account factors not used at present when assessing creditworthiness. Experian says people signing up could lift their credit scores by up to 66 points.

The Times

Consumers’ credit complaints jump over summer

There was a surge in complaints to the Financial Ombudsman Service about credit services in the three months to September, with claims management companies said to have driven a big rise in complaints upheld.

Financial Times


Spike in personal pension cases at ombudsman

The Financial Ombudsman Service logged 825 new personal pension cases between July and September this year, an increase of 136% on the 349 cases between April and June. The FOS said the number of complaints relating to suitability and administration of personal pensions had both more than doubled to around 130 and 380 respectively over the period. Other areas of complaint which increased related to charges, fund management and delays.

FT Adviser


EFL clubs given green light for non-payment of PAYE

English Football League (EFL) clubs are preparing a mass deferral of tax payments after the EFL board ruled that non-payment of PAYE will not be punished with a transfer embargo until February at the earliest. The introduction of a new “Covid PAYE liability rule” will enable clubs to default on their tax arrangements if they are unable to pay due to the impact of the virus or have agreed a new repayment schedule with HMRC. The Government are yet to respond to an official request sent by the EFL last month for a tax holiday for their 72 clubs.

Daily Mail, Page: 82


Chris Jelf and Paul Jackson lead new wealth management firm

Beavis Morgan Chairman, Paul Jackson, has co-founded Integrity365 Ltd, a new wealth management firm which has over £320m funds under management. Chris Jelf, founder of Jelf Group, who takes on the role of Client Relationship Director, comments: “Building client trust and fostering long-term relationships with my clients has always been a priority for me. I am passionate about this and consider my partnership approach to working with clients a key differentiator.”

Press Release


Vaccine roll-out will spur double digit growth

The Centre for Economics and Business Research (CEBR) has said GDP growth could reach double digits next year after Pfizer announced its COVID-19 vaccine was 90% effective. Douglas McWilliams, an economist at CEBR, said: “We’re now at the top end of the range of possibilities.” He said the “game changer” could allow GDP to recover to 2019 levels by next summer and reduce the peak in unemployment, adding: “We’ll have to see exactly how fast the vaccine gets rolled out but I think GDP will recover pretty quick. “We could have double digit growth next year. It depends how much gets shoved into the tail end of this year.”

The Daily Telegraph, Business, Page: 3

Second lockdown will trash retail progress

A report by KPMG and the British Retail Consortium suggests the second lockdown will reverse progress by the retail sector, which saw sales up 4.9% last month. Helen Dickinson, chief executive of the consortium, said: “During an incredibly challenging year for the industry, many retailers had finally thought that they were finding their footing. The new lockdown in England will throw away this progress as we enter the crucial Christmas trading period and we estimate that £2bn of sales a week will be lost this month.”

The Times, Page: 42 Financial Times, Page: 3 Yorkshire Post, Page: 4


FRC calls for global climate disclosures rules

The Financial Reporting Council (FRC) has called for global rules to improve how companies inform investors about how their activities relate to climate change and cutting carbon emissions. The regulator published a review of how companies and their auditors consider climate-change in their activities. It found that although minimum legal reporting requirements are often met, investors are calling for additional disclosure to inform their decision making. The FRC said it was the company board’s responsibility to consider climate-related issues, but there is “little evidence” that business models and company strategy are influenced by integrating climate considerations into governance. “Auditors need to test and, where necessary, challenge the board and management’s assessment of the financial statement implications of climate change,” it said.

Yahoo! Finance MSN Investing Nasdaq Reuters


Connery’s widow faces jail over an alleged tax fraud in Spain

Sean Connery’s widow, Micheline Roquebrune, 91, faces jail and a £21m fine over an alleged tax fraud in Spain. The case relates to the sale of the couple’s Marbella home which was demolished to make way for 70 flats despite rules saying only five could be built.

The Sun, Page: 16

Contact Paul Southward

Paul Southward





Death of the chairman of Samsung leaves heirs with £6.8bn tax bill

The death of the chairman of Samsung has left his family with an inheritance tax bill of £6.8bn, the Times reports, leading investors to bet on a major restructuring of the South Korean electronics group. Shares in several of Samsung’s businesses rose yesterday amid speculation his heirs could be forced to sell assets to cover the tax bill on the late chairman’s £16bn fortune.

The Times, Page: 38


Government accused of being opaque over Covid loans

Labour MP Darren Jones, the chair of the Business, Energy and Industrial Strategy (BEIS) committee, has criticised the Government’s decision not to publish the names of companies receiving money through schemes such as the Coronavirus Businesses Interruption Loan Scheme (CBILS), the Bounce Back Loan Scheme (BBLS) and the Future Fund. “I am still not satisfied by the Government’s explanation as to why it isn’t publishing the data of which companies have received what funding, including through the Future Fund, given taxpayers could end up as shareholders of a whole portfolio of start-up businesses”, he wrote. Jones also accused the Government of letting private equity groups “cash in” on state-backed coronavirus loans, by allowing the companies they own to use the funding to cover the costs of the large debts used to buy them.

Financial Times, Page: 2 The Times, Page: 42 City AM

Peer-to-peer investors told loans are gone

Over 3,500 people who invested through the peer-to-peer lending platform Funding Secure have been told the prospect of recovering many of the loans is zero and that administrators may lack the resources to pursue errant borrowers for shortfalls. Securing a return on these loans was “highly unlikely, if not impossible”, insolvency practitioners at Manchester-based CG & Co said. Funding Secure was founded in 2012 and arranged more than £175m of loans. At the point of its collapse about £80m was outstanding.

The Times, Page: 37


Hut forecasts rapid rise in sales forecasts

The Hut Group has issued its first update since going public last month increasing its full-year revenue guidance to between about £1.48bn and about £1.52bn. The company also sought to address governance concerns by announcing the appointment of independent special advisers to its board committees, including Damian Sanders, a former senior audit partner at Deloitte, Adam Waller, a tax partner for PwC, and Alan McGill, another partner at PwC. An additional independent non-executive director would be hired within a year of its listing. The Telegraph’s Ben Marlow says the appointment of three accountants as advisers “hardly feels like a watershed moment” in the Hut Group’s governance journey.

The Times, Page: 40 Daily Mail, Page: 70 The Daily Telegraph, Business, Page: 2 The i, Page: 45


Campaign launched to recruit 10,000 black interns in British companies

Credit Suisse, PwC, Zurich Insurance and Linklaters are among the first groups to sign up to a campaign offering paid work experience to 10,000 black graduate interns.

Financial Times, Page: 3


Half of house purchases at risk of collapse

Property market analysts Twentyci predict that as many as 325,000 homebuyers who agree to purchase a property before the end of the year are expected to miss out on the stamp duty holiday, which comes to an end on March 31. Conveyancing, surveying, mortgage and search services have been overwhelmed after the stamp duty cut and an end to lockdown led to a boom in house sales. Twentyci calculates that if one in five buyers decides to pull out of their purchase it could lead to 53% of sales collapsing by March. Zena Hanks, a partner with Saffery Champness, suggested that the government could consider introducing “a transition period” to avoid the March 31 cliff edge.

The Times, Page: 6 Daily Mail, Page: 2


Millennials misguided over retirement age

Research by Hargreaves Lansdown has found the average age at which millennials expect to retire is 63. Around one in eight 18- to 34-year-olds expect to retire by the age of 55. This is despite the state pension age being at least 66 and possibly as high as 68 for this age group. Hargreaves Lansdown’s Sarah Coles said some savers may be “in for a nasty surprise”. She commented: “The vast majority of people paying into pensions today will have far less generous defined contribution pensions, which means we’ll retire on smaller, non-guaranteed incomes. If we retire too early, there’s a risk we could run low on funds as we go through retirement.” The survey found older people were more likely to be realistic about their retirement prospects with those over the age of 55 expecting to retire at 67 and 11 months on average.

The Daily Telegraph Metro


Coutts partners with Blackrock for exclusive fund launches

Coutts has teamed up with BlackRock to launch six funds for clients of the wider NatWest Group. The range will consist of three actively managed portfolios — US equities, UK equities and global investment grade credit — and three index funds, investing in US, UK and European equities.

FT Adviser


Footfall falls again across the UK

The number of people shopping at UK retail destinations – including high streets, shopping centres and retail parks – dropped by 1.2% last week, according to the latest data from Springboard. The annual decline in footfall across the UK reached a 32.9% last week, with the biggest annual fall in Wales at 40.3%.

Daily Mail

Hotels unlikely to recover for four years

Forecasts published today by PwC indicate the UK hotel industry could take four years to return to 2019 levels of business. Occupancy rates are expected to average 45% next year, up from between a third and two-fifths in 2020 but still an unprecedentedly bleak outlook.

The Guardian, Page: 28 The Times, Page: 44 The Scotsman, Page: 41 The Press and Journal, Page: 35


Chappell says he was lied to ahead of BHS deal

Dominic Chappell told Southwark crown court yesterday that he was “lied to” by financial advisers and by Sir Philip Green, the retail tycoon who sold him BHS for £1 in 2015. Chappell told the court: “We were given forged and misleading documents by PwC. I was lied to by Sir Philip Green, as were my board. This catastrophe has cost me my marriage, my money and my reputation.” He also denied evading tax on £2.2m of income he received from the deal.

The Times, Page: 14 Daily Express, Page: 29 The i, Page: 15

Contact Paul Southward






Complex tax system leaves one in five overpaying

Data collected by the online accountant Coconut indicate that nearly a fifth of Britain’s 5.3m sole traders and microbusiness owners face paying on average £722 too much each year, to the tune of £650m, by incorrectly calculating their taxes. More than half of sole traders admitted they failed to claim reliefs or deduct expenses from their tax bills, even if they suspected they were eligible. Experts blame an overly complex tax system for workers missing out on reliefs. Bill Dodwell, of the Office of Tax Simplification, said the huge number of breaks on offer meant taxpayers were not claiming the reliefs they were entitled to. He said of particular concern was claims for employee expenses and higher rate taxpayers failing to claim tax relief on pension contributions.

The Daily Telegraph, Money, Page: 3

If you want to check your tax liability, talk to me: Paul Southward.

Self-employed fear unaffordable tax bills in wake of virus

The FT reports on fears that as many as 1m self-employed people could face tax bills bigger than their annual earnings following dramatic drops in their income compared to 2019-20. Andy Chamberlain, Director of Policy at IPSE commented: “Most years, payment on account is not a problem, but this year so many people and their business have been so badly impacted – particularly those groups who haven’t been able to access the Self Employment Income Support Scheme.” Elsewhere, the Independent reports on analysis by Labour’s Ed Miliband who estimates that, in areas under the most severe restrictions, the average self-employed worker in the arts or hospitality sectors will receive just £450 a month following revisions to the Chancellor’s job support scheme. Meanwhile, those with working partners, without children or owning their own home may not receive enough universal credit to plug the gap left by the reduction in financial support. And those with savings over £16,000 – often kept aside by the self-employed in anticipation of future tax bills – will be ineligible for the benefit. The Treasury hit back pointing to grants, tax write-offs, deferrals and other support measures put in place for the self-employed.

Financial Times, Money, Page: 3 The Independent, Page: 15

Wealth tax options

The Times runs through some possible ways the Government could tax people’s wealth as the Treasury looks to replenish its coffers. The Institute for Fiscal Studies said that the chancellor will need to raise £40bn extra each year from taxes to pay for the deficit caused by the coronavirus. Nimesh Shah, the chief executive of Blick Rothenberg, helps the paper outline the options along with Tim Stovold, a partner at Moore Kingston Smith.

The Times, Page: 68


Scrap 45p tax rate and abolish stamp duty to boost UK competitiveness

A report by the Centre for Policy Studies think tank advocates scrapping the 45p income tax rate and abolishing stamp duty, arguing that doing so would boost economic growth and see the UK rise from 22nd to ninth in the International Tax Competitiveness Index. The report, written jointly with the Tax Foundation, suggests tax cuts could be funded by extending VAT to cover far more goods and services, including scrapping food’s zero-rating. The Institute for Fiscal Studies previously claimed increasing the threshold at which people start to pay the 40p higher tax rate from £50,000 to £80,000 would cost billions and only benefit the wealthy. But the report questions whether abolishing it would cost any revenue, based on previous analysis. Daniel Bunn of the Tax Foundation warned: “The British tax system performs poorly due to policies that distort work and investment decisions.”

The Sunday Telegraph, Page: 4 The Sun, Page: 10

HMRC accused of backing off white-collar tax dodgers

The number of arrests made by HMRC fell by a third to 511 in the 12 months to April, compared with 782 over the previous tax year, according to analysis by RPC. The law firm said that the resources spent fighting such claims and the negative publicity has made HMRC less trigger happy in making arrests, something HMRC denies. The Sunday Times implies that with HMRC’s income from wealthy taxpayers going up it has taken its foot off the gas when it comes to white-collar tax dodgers. HMRC said it takes its responsibilities as a law enforcement agency very seriously and will only make arrests when absolutely necessary. It said that its investigators launched more than 12,600 civil and 600 criminal investigations in the past tax year. “We’re doing all this while tackling increasingly complex investigations and ever more sophisticated opponents,” it said.

The Sunday Times, Business, Page: 14

Ready, steady, file: 100 days left to Self-Assess

HMRC is reminding Self-Assessment customers that there are just 100 days left to complete their tax return ahead of the deadline on 31 January 2021. HMRC’s Interim Director General of Customer Services Karl Khan said: “The vast majority of Self-Assessment customers complete their tax return by the 31 January deadline, but you don’t need to wait until January; you can send it back now and get it out of the way.”

Press Release



Suspicions raised about Asda takeover

The Independent’s Chris Blackhurst worries about Deloitte’s decision to step away from EG Group, the outfit run by Zuber and Mohsin Issa, who are buying Asda with TDR Capital. Blackhurst says the move may have been driven by corporate governance concerns but with no proper explanation coming from the auditor one could speculate that there is a more serious problem waiting to be revealed. He goes on to assert that the Issa brothers “ought to have got their ducks in a row beforehand” and that the City is starting to get twitchy. Deloitte, Blackhurst concludes, “should be telling us why they were prepared to go no further with this particular fairy story.”

The Independent, Page: 40

Edinburgh Woollen Mill granted more time to find buyer

Philip Day’s Edinburgh Woollen Mill has been given permission to extend its notice of intent to appoint administrators giving it two more weeks to find buyers or new investors. The company has lined up FRP Advisory.

Financial Times, Page: 18


EG denies finance director intends to quit

The Sunday Times’ Sam Chambers reports on rumours that EG Group’s finance director, Michael Hughes, recently considered resigning amid governance concerns at the company, which has bought Asda in partnership with private equity group TDR. Chambers points to Deloitte’s decision to quit as auditor allegedly due to worries internal controls had not kept pace with EG’s rapid expansion. “When an auditor resigns, it causes real collywobbles,” a senior City source said. “The cornerstone of any investment is having confidence in the numbers presented to you. This isn’t going to help.” EG denies Hughes has resigned or intends to resign.

The Sunday Times, Business, Page: 2 The Sunday Times, Business, Page: 1

Ashley considers swoop on EWM brands

Frasers boss Mike Ashley is considering bidding for Austin Reed, Jacques Vert and Jaeger – brands held by Philip Day’s troubled Edinburgh Woollen Mill (EWM) Group. Buyers have been given the option of bidding for the brands together or separately.

The Sunday Times, Business, Page: 1



Freelancers receive a third less support than employees

Research by Blick Rothenberg reveals that freelancers have been given almost a third less in state support than employees, who have received almost £5,000 more in salary subsidies during the pandemic. An employee earning the national average of £30,000 a year would have received £16,200 in wage subsidies if they had been furloughed for the full eight months that the Job Retention Scheme has been running – some 85% of the total £19,060 of support available. By contrast, a freelancer with the same earnings would have only been able to claim a maximum of £11,250 from the first two self-employed grants, Blick Rothenberg found. Chloe Jepps of the freelance trade body IPSE said the growing disparity in support was alarming. “There is a glaring disparity between support for employees and the self-employed in Britain and it looks like a growing societal divide. To stop the gap widening, the state must urgently fill the gaps and do the right thing by levelling up self-employed support,” she said.

The Daily Telegraph, Page: 37



MPs to probe Government’s use of consultants

The Mail reports on a probe by Parliament’s public accounts committee into how the Coronavirus Act allowed government departments to award highly lucrative contracts to consultants without putting them out to competitive tender. The paper cites research from Tussell detailing how the Big Four and others have benefited from contracts supporting Government efforts to tackle the coronavirus.

Daily Mail, Page: 12



Renewed restrictions put recovery in peril

Business growth slowed in October with services suffering a sharp slowdown due to coronavirus restrictions, according to IHS Markit’s purchasing managers’ index (PMI) survey, which slipped to 52.9 from September’s 56.5. Demand for manufactured goods remains strong while property-related services were boosted by strong sales. The survey also showed that employment continued to fall for the eighth consecutive month. Paul Dales at Capital Economics said the findings support “our view that GDP will stagnate, if not contract, in the last three months of the year.” He added: “If the economy is heading for a double-dip, at least the second leg down will be smaller than the first.” Jacob Nell at Morgan Stanley suggests the UK could be heading for a “more volatile and complex W-shaped recovery, rather than the (relatively) V-shaped recovery we had previously expected.”

The Daily Telegraph Financial Times, Page: 2 Daily Mail, Page: 109

Sales are up, but consumers may now hold back

New figures from the Office for National Statistics show retail sales were up 1.5% between August and September, a 4.7% rise year on year and the fifth month running that sales have climbed. Third quarter sales climbed 17.4% compared to the three months before, a record quarterly rise, with internet orders accounting for 27.5% of sales, up from 20.1% in February. However, with consumer sentiment down this month, analysts expect spending to be subdued in the months ahead as the furlough scheme ends and unemployment rises. Howard Archer, chief economic adviser to the EY Item Club added: “Consumers may very well adopt a cautious approach to making major discretionary purchases given the uncertain economic environment.”

The Daily Telegraph, Business, Page: 39


Sunak orders officials to publish economic cost of lockdown

The Chancellor has ordered Treasury officials to find a way to put COVID-19 data into context with the economic cost of local lockdowns. Rishi Sunak has asked civil servants to find ways to illustrate the “other trade-offs” amid concerns over the deaths and harm caused by coronavirus restrictions. Using economic data to contextualise the death and infection figures could mean illustrating the hit on GDP of taking a region from Tier 2 into Tier 3 or introducing a national circuit-breaker lockdown, for example. A source close to Mr Sunak said: “We have spent more than £200bn already over the past months. We have to be sensible.”

The Mail on Sunday



SMEs fear second wave most

A poll by Nucleus Commercial Finance reveals 48% of SMEs are most concerned by the prospect of a second coronavirus wave. Some 28% fear consumers will rein in spending while a quarter fear they will not be able to recover from the pandemic’s impact on the economy. Chief executive Chirag Shah added: “SMEs are demonstrating considerable resilience, and we expect they will continue to do so.”

Sunday Express, Page: 45

Banks look to debt collectors to recover bounce back loans

UK Finance is working on creating a centralised debt collection body to recover of tens of billions of pounds of government-backed small business loans as banks prepare for wave of defaults and fraud cases.

Financial Times



Commercial property deals backfire for councils as rents dry up

The Observer considers the lost income from commercial property investments councils have suffered since the pandemic began. Some councils have been accused of reckless behaviour after having borrowed heavily from the public purse to pursue returns on property to offset budget cuts. However, concerns have been raised that authorities dependent on rents from largely empty office blocks and struggling shopping centres may find it increasingly difficult to service the huge debts they have built up. Don Peebles, the head of policy at the Chartered Institute of Public Finance and Accountancy, said public money is being misused: “It is like somebody going to a building society to borrow money to buy a house, but instead of buying the house they put it on a horse.”

The Observer, Page: 25

Retailers insist on pandemic clauses for new leases

Retailers are demanding new leases include “pandemic clauses” that stipulate rent payments will be reduced should the shop be forced to close in a local lockdown. The clauses are typically structured so that the rent is halved during a period of enforced closure. In instances where a lease is based on turnover, the base rent will typically fall by half.

The Sunday Times



Fewer pay into pensions since onset of pandemic

Figures from Hargreaves Lansdown show 14% of people have lowered the amount of money they are paying into their pension since the COVID-19 pandemic struck, while 11% have cut contributions entirely. However, experts have warned that not saving enough now is a mistake that can be hard to correct later. Helen Morrissey, pension specialist at Royal London, comments: “The concern is that once contributions are stopped or reduced the employee may forget to resume them.”

Sunday Mirror



Pandemic makes world’s billionaires – and their advisers – richer

Private banks have enjoyed a pandemic-driven boom with the assets of the world’s super rich soaring after wild market moves and a sharp increase in the value of tech and healthcare stocks.

Financial Times


Gabelli resists investors’ attempt to wind up trust

Smith & Williamson , Investec, Rathbones and C G Asset Management are pushing for the Gabelli Value Plus Trust to be wound up amid claims of a poor performance. However, Associated Capital Group, whose executive chairman is billionaire financial analyst Mario Gabelli, is the trust’s biggest investor with a 27% stake and has voted against proposals to have the fund liquidated. James Burns, a fund manager at Smith & Williamson, said: “Shareholders have voted and we want our clients to get their cash back.”

The Sunday Telegraph, Business, Page: 3



Treasury scraps VAT exemption on PPE

The cost of disposable face masks is set to rise by a fifth from next week after the Treasury decided to scrap the VAT exemption on Personal Protective Equipment (PPE). The 20% VAT levy, usually charged on items of PPE, was temporarily waived at the beginning of May. The Treasury confirmed that VAT would apply to PPE from 1 November but advised firms to reclaim it as a business expense. An official said the cut was only ever intended to ensure the flow of supply to healthcare.

The Daily Telegraph, Page: 7 The Guardian, Page: 2


Bim Afolami: Why do liberals have such low expectations for black people?

Conservative MP Bim Afolami asks in the Mail on Sunday why successful black people such as himself get abused by liberals who claim to be anti-racist. Afolami was accused by a Liberal Democrat activist in his constituency of not being an authentic black man because he went to Oxford and lives in a nice village. Citing a project he initiated to introduce disadvantaged young people from all ethnicities to the world of work and government, which included a trip to a KPMG office, Mr Afolami says: “People of any background or colour should aspire to achieve whatever they set their minds to.” Mr Afolami goes on to add that he is not complacent, conceding that more black faces are needed in boardrooms, but “quotas and shortlists say to young people of colour that they cannot succeed unless white candidates are taken out of the way.” He continues: “When I see my black Conservative colleagues […] I see people who are not just politicians of great ability but people who were all very successful in their careers before politics.” Mr Afolami goes on: “We are Conservatives because we believe in opportunity for everybody. We do not believe that you should be kept in your place because you are black, Asian or, indeed, white from a working-class background. The bigotry of many in the Left is insidious and hidden.”

The Mail on Sunday

Johnson’s obduracy driving the reasoned to despair

In his column in the Mail on Sunday, Peter Hitchens rails at Boris Johnson’s management of the Covid crisis, describing the PM as a “mad giant” stamping across the landscape destroying small businesses and obliterating jobs as he goes. With the “funny money” he’s flinging about soon to run out, Hitchens fears that “anger is the only force that will bring this misery to an end […] Can nobody reach him, while there is still time?”

The Mail on Sunday, Page: 25

Contact Paul Southward





A deterrent to corona-fraud would improve public finances

The Times’ Patrick Hosking says public tolerance of furlough fraud is likely to be zero and there will no doubt be plenty of whistleblowers willing to spill the beans on employers in the coming months. Mr Hosking talks to Sarah Wallace, a partner at Constantine Law, who believes this has the makings of a real headache for some companies if HMRC decides to get heavy. The successful prosecution of a high-profile employer would be the best way for HMRC to maximise revenues from companies that have wrongly claimed money, Hosking suggests.

The Times, Page: 39

Majority favour tax hikes for the wealthy

A report compiled by Tax Justice UK found that 74% of Brits want to see wealth taxed more with supporters of the move including 64% of Tory voters and 88% of Labour. Robert Palmer, executive director of Tax Justice UK, said: “Brits want fair tax rises to support better public services, tackle inequality and deal with the climate emergency.”

Daily Mirror, Page: 13


New Look faces administration risk if restructuring blocked

New Look warns it will have to consider “less favourable alternatives” if unsecured creditors do not support its latest restructuring plan, potentially putting around 11,000 jobs at risk. Last month, the group launched a second major restructuring of its store estate in three years, asking landlords to agree new turnover-based leases at 402 stores to help it through the COVID crisis. A recapitalisation that would reduce senior debt from about £550m to £100m can only be delivered if the firm secures the support of its landlords for a CVA at a vote on September 15th. New Look has been criticised by the British Property Federation (BPF) over alleged inaccuracies in how it has presented the restructuring plan. “New Look and Deloitte have launched this CVA with reference in their communications that the BPF’s views are reflected in the proposal – this is not true,” chief executive Melanie Leech said.

The Daily Telegraph, Business, Page: 3 The Times, Page: 42 City AM


Bank branch staff stopped £19m of fraud in first half of 2020

The Banking Protocol that enables bank branch staff to alert their local police force when they suspect a customer is being scammed has prevented victims from losing £116m from fraud and led to 744 arrests since it was introduced three years ago. Just in the first six months of 2020, £19.3m of fraud was prevented and more than 100 arrests were made through the scheme, according to figures from UK Finance. A range of scams that trick elderly and vulnerable customers into withdrawing cash from their branch were prevented, including courier scams, romance fraud and rogue traders. Katy Worobec, managing director of economic crime at UK Finance, said: “It is sickening that criminals are preying on elderly and vulnerable victims during this difficult time. Bank branch staff on the frontline are doing a heroic job in stopping these cruel scams and helping bring those responsible to justice.

BBC News Your Money


Businesses forced to close to be eligible for grants

The Chief Secretary to the Treasury Stephen Barclay has announced a new scheme to help businesses survive closures due to coronavirus lockdowns. Large businesses in England which are forced to close as a result of a local lockdown will now be able to claim a £1,500 grant per property for every three weeks they are not able to open their doors. Smaller businesses will receive £1,000. The British Chambers of Commerce welcomed the payments but warned they would not be enough for many firms. Mike Cherry, the national chairman of the Federation of Small Businesses, described the intervention as “a much needed additional financial lifeline” while Annie Gascoyne, of the Confederation of British Industry, warned that more targeted support would be needed in the autumn.

Financial Times, Page: 2 The Times, Page: 4 Daily Mail The Guardian, Page: 6

State loans should be repaid only when businesses return to profit

A study by the centre-right think tank Onward has found that around 20% of British businesses are only making enough profit to cover their debt interest payments. High levels of corporate debt built up by companies during the COVID-19 pandemic has pushed 4.3% of firms into technical insolvency, the report estimates. Angus Groom, Onward fellow and report author, said: “The Government’s loans schemes have been highly effective at helping firms through the worst of the crisis, but they represent a double-edged sword in that they have weighed down firms with debt just as we need them to invest.” About £53bn has been loaned to SMEs and The City UK has estimated that £35bn may not be repaid. Researchers at Onward are calling on the Government to convert the debt into “income-contingent loans” that do not need to be repaid until companies become profitable.

The Times, Page: 40 The I, Page: 9


St James’s Place reopens frozen UK property funds

St James’s Place has become the first investment manager to reopen its £3.2bn property fund range, saying that its portfolio manager was confident the products were liquid enough to allow investors to trade in and out.

Financial Times


£2tn ‘at risk from pension tricksters’

More than £2tn of pension cash is at risk of scams, according to a report from The Police Foundation think-tank, which calls for urgent action to better protect investors.

Financial Times


Forecasters say no-deal Brexit now more likely

City analysts have said the probability of a no-deal Brexit has increased following the publication of the UK Government’s Internal Market Bill. Fitch now expects the UK and the EU to trade on WTO terms from January 1st and has taken 2% of forecast for next year. Mujtaba Rahman of the Eurasia Group consultancy now puts the likelihood of no-deal at 60%, up from his previous 40% prediction while Kallum Pickering, senior economist at Berenberg, commented: “It suggests the UK is trying to increase the pressure to get a deal more to its liking rather than going for a hard exit. Either way, the strategy does not raise the chance of a good outcome.”

The Daily Telegraph


Government sets out plans for new approach to subsidy control

UK Business Secretary Alok Sharma yesterday confirmed that the UK would follow World Trade Organisation (WTO) rules on subsidies and other international commitments after the end of the transition period. In a press release, the BEIS said: “The WTO rules are an internationally recognised common standard covering financial assistance granted by governments and public authorities to companies. Unlike EU member states, most advanced economies do not have substantive rules regulating subsidies beyond those set by the WTO.” In a statement to MPs, Mr Sharma insisted the change would not mean a return to the 1970’s policy of picking winners or bailing out losers. Rather the UK needed “a modern system for supporting businesses to grow” and to “maintain the flexibility to support the UK’s strategic interests”. Sharma added that a detailed plan for a post-Brexit state aid regime would not be published until next year, prompting anger in Brussels.

GOV The Times Financial Times, Page: 3 The I, Page: 6

Contact Paul Southward

Paul Southward