Business News & Recent developments
Keep yourself up to date with latest business news and recent developments in UK accountancy and taxation affairs.
Table of Contents
30/07/21: Budget delay on cards as Rishi Sunak fails to name day
Speculation that the chancellor will delay his budget until next year is mounting after he instructed the spending watchdog to publish new forecasts without announcing an accompanying fiscal event. In a letter to the Treasury select committee, Rishi Sunak said he had asked the Office for Budget Responsibility to prepare an economic and fiscal forecast to be presented to parliament on October 27.
29/07/21: Facebook cashes in on Covid lockdowns
Facebook has reported a surge in revenue having benefited from a rise in digital advertising as people spend more time and money online during the pandemic. Quarterly revenues for the three months to the end of June rose by 56 per cent to $29.1 billion, beating analysts’ expectations of $27.9 billion.
28/07/21: Self-employed women lost almost double the income of male counterparts during pandemic
Self-employed women surveyed lost almost double the income of their male counterparts during the course of the pandemic, but remain more optimistic about the future of their business. Research of over 2,000 sole-traders, freelancers and micro-business owners showed that women lost 20% of their income, compared to men who only lost 11%. The news comes after academics said that the female self-employed have been ‘overlooked’ by government support schemes, with female take-up of the SEISS grant lower than male take-up.
26/07/21: Tesco Bank to close all its current accounts
Tesco Bank has said it will close all of its current accounts because most customers are no longer using them. The bank has estimated only 12% of its current accounts are being used by customers as their primary account. It said most had “limited activity” and others were being used for “other purposes, such as a savings pot”.
23/07/21: Consumer confidence is higher than it was before Covid
Consumer confidence has edged above pre-Covid levels for the first time, a survey suggests. The GfK consumer confidence barometer has delivered a main reading of -7 for July, up from -9 in June and a two-point improvement on the score in March 2020. The market research organisation’s index measures how households feel about their own financial situations and the wider economy. It surveyed 2,000 people from July 1 to July 14.
22/07/21: UK demand rewrite of Brexit deal for Northern Ireland
Britain and the European Union are at loggerheads over government demands to rewrite the Brexit deal for Northern Ireland and strip EU courts of their right to police the agreement. In a series of proposals published yesterday ministers said Brussels must allow goods that do not meet European standards to continue to be sold in the province and reduce the number of checks on products being sent across the Irish sea.
21/07/21: UK borrows £22.8bn as economy recovers more quickly than forecast
The government borrowed £22.8 billion last month, the second highest June total on record, as a sharp increase in debt interest costs offset falls in spending on emergency support in the pandemic. Official figures from the Office for National Statistics showed that borrowing continues to come in lower than forecast in the March budget as the economy recovers more quickly than expected.
20/07/21: Bill Gates and George Soros buy out UK Covid test company Mologic
George Soros and Bill Gates are part of a consortium acquiring a British developer of rapid-testing technology, including for Covid-19 and tropical diseases, to turn it into a social enterprise. The group, led by the Soros Economic Development Fund, an investment division of the billionaire philanthropist’s Open Society Foundations, is investing at least £30 million in Mologic, which develops lateral flow and fast diagnostic technologies.
19/07/21: Drugs giant GSK’s plan to create up to 5,000 jobs in new UK hub
Drugs giant GlaxoSmithKline (GSK) is launching a development plan that is set to create up to 5,000 new jobs. The company is looking to extend its facility in Stevenage, Hertfordshire, where it currently conducts research and development.
16/07/21: Covid loan debt ‘leaves small retailers fighting to survive’
Thousands of independent high street businesses are at risk of collapse because of soaring debt levels incurred during the pandemic, according to a report by a former boss of Iceland and the DIY chain Wickes. Bill Grimsey said the debt level of high street independents has more than quadrupled in the past year, with firms owing a total of £1.7 billion. The veteran retail boss said this would leave them vulnerable when government support measures are withdrawn and called for a government “forgiveness scheme” to write off taxpayer-backed loans for viable small businesses.
15/07/21: Mortgages refused for self-employed who took Covid grants
Some of Britain’s biggest high street banks are refusing to give mortgages to self-employed people who received government grants during the pandemic. Mortgage brokers say those working in sectors like entertainment, hospitality and travel are the worst affected. Many lenders have said that they are not accepting mortgage applications from people on furlough.
15/07/21: UK house prices rise by 10% amid stamp duty holiday rush
UK house prices rose by 10% in the year to May, the fastest rate since before the 2008 financial crisis, as buyers scrambled to take advantage of the stamp duty holiday in some parts of the country. Data from the Office for National Statistics put the average price of a property at £254,624. The annual growth appears to have been driven by buyers’ desire for larger homes and outdoor space, and the stamp duty savings that were largest on homes in England and Northern Ireland priced at £500,000 and above.
14/07/21: Met police seize nearly £180m of bitcoin in money laundering investigation
Metropolitan police detectives investigating international money laundering have seized nearly £180m of bitcoin. The seizure by the Met’s economic crime command follows a confiscation of £114m of the cryptocurrency in June. The two confiscations were made after intelligence received about the transfer of criminal assets. “While cash still remains king in the criminal word, as digital platforms develop we’re increasingly seeing organised criminals using cryptocurrency to launder their dirty money,” said the Metropolitan police’s deputy assistant commissioner, Graham McNulty.
13/07/21: UK banks emerging from pandemic in good health
UK banks are emerging from the pandemic shock in good health and are able to meet the needs of consumers and companies as the economy recovers, the Bank of England (BoE) has said. In its latest update on the health of Britain’s financial system, the BoE says banks have been “resilient”. But while the economic outlook has improved, risks remain, especially from the spread of Covid, the report says.
12/07/21: Investment boom ‘on the horizon’
Businesses are gearing up for a boom in hiring and investment as economic activity returns to normal, reports say. While companies spent much of last year cutting costs, they are now taking advantage of record low interest rates and tax incentives to unleash investment to help meet rising demand. Hiring and investment will hit their highest level in almost seven years over the coming months, according to a report by Deloitte. At the same time, expansion through acquisition has become a higher priority than at any time in the past 11 years.
10/07/21: UK economic growth slows in May
The UK’s economy grew more slowly than expected in May after a rebound in the hospitality sector was offset by disruptions to car production. The economy expanded by 0.8% in May as coronavirus restrictions eased to allow pubs and restaurants to serve indoors. While that was the fourth consecutive month of growth, it was also a slowdown from the 2% growth seen in April.
09/07/21: 1,000 UK firms receive sales of £1M through Amazon
More than 1,000 UK businesses reached the £1 million sales mark selling through Amazon last year, the marketplace giant has revealed. With increasing numbers of shoppers spending online it also saw a 20 per cent increase in overall seller numbers to 65,000, with average annual sales at the firms rising 50 per cent to £300,000. Amazon said that around 60 per cent of all physical product sales on its store in the UK were from independent sellers, most of whom were small and medium-sized UK businesses. Some 40 per cent of the businesses were based in London and the southeast of England, and the most popular goods included homewares, health, toys and beauty.
08/07/21: UK employers struggle with worst labour shortage since 1997
Britain’s employers are struggling with the worst staff shortages since the late 1990s, amid the rush to reopen from lockdown and a sharp drop in overseas workers due to Covid and Brexit. Sounding the alarm over the risks to economic recovery from acute labour shortages, the Recruitment and Employment Confederation (REC) and the accountancy firm KPMG said the number of available workers plunged in June at the fastest rate since 1997.
06/07/21: Covid restrictions set to be lifted on July 19
Boris Johnson said “if not now then when?” as he declared yesterday that virtually all coronavirus restrictions in England would end this month despite rapidly rising cases. The prime minister said the country must use the “firebreak” of the summer holidays to lift all remaining social-distancing rules despite predictions from scientists that it will cause a new rise in hospital admissions and deaths.
05/07/21: John Lewis plans to build 10,000 rental homes on its land
John Lewis is considering plans to build 10,000 homes over the next decade as the high street store group looks to revive its flagging fortunes by becoming a landlord. The employee-owned group, which comprises the upmarket John Lewis department stores and the Waitrose supermarkets, is understood to have identified enough excess space on the land it owns to build at least 7,000 homes.
02/07/21: Furlough number offers ‘sobering jobs warning’
More workers were on furlough in late May than previously estimated, raising questions about the speed of the jobs recovery, even though the number of those on the Covid-19 support scheme has fallen to a record low. Official figures from HM Revenue & Customs showed that 2.4 million people were on furlough at the end of May, a fall of 1.1 million from 3.5 million in April as restaurants, pubs and retailers fully reopened.
01/07/21L 1.5M workers still on furlough
Employers will have to shoulder more of the costs of furlough from Thursday as the government starts to wind down its flagship job support scheme. With about 1.5 million workers still on furlough, the change will affect thousands of firms across the country. Staff will continue to receive 80% of their wages, but employers will pay part of that for the first time.
30/06/21: Sunak prepares £15bn renewable energy savings scheme
Plans for £15 billion of green savings bonds are expected to be announced by the chancellor this week, allowing people to invest in renewable energy projects such as wind and solar power. Rishi Sunak will use a speech at Mansion House in the City of London to reveal details of the scheme, which is expected to be one of the biggest issues of green bonds in the world. They will be available through NS&I, the Treasury-backed savings organisation that also offers Premium Bonds. Germany and Sweden have similar bonds for retail investors.
29/06/21: HMRC investigates 13,000 possible breaches of Covid aid schemes
Almost 13,000 investigations of suspected fraud and other breaches in the use of coronavirus support schemes have been opened by HM Revenue & Customs. The number of investigations launched by the tax authority was revealed after a freedom of information request by BLM, the law firm. HMRC reported formal compliance interventions related to the coronavirus job retention scheme, the self-employment income support scheme and Eat Out to Help Out. Compliance interventions are investigations expected to recover funds lost to the exchequer through fraud, tax avoidance, evasion and non-compliance.
28/06/21: City watchdog bans Binance crypto exchange
Britain’s financial regulator has blacklisted one of the world’s biggest cryptocurrency marketplaces over its failure to meet money-laundering controls. The Financial Conduct Authority told Binance at the weekend to stop regulated activities in the UK in one of the biggest clampdowns yet by the watchdog on the fast-growing industry. Binance Markets Limited, the UK division of the cryptocurrency exchange, must withdraw all of its advertising by the close of business on Wednesday. The firm was also ordered to post a prominent notice on its website warning consumers that it is barred from conducting regulated business.
25/06/21: Deliveroo riders are not employees, Court of Appeal rules
Deliveroo scored a fresh victory in the legal fight for its riders to be recognised as self-employed yesterday when the Court of Appeal ruled in its favour. An appeal by the IWGB union, which has long challenged the gig economy employer over couriers’ rights, was rejected, backing up an earlier judgment by the central arbitration committee and two in the High Court. Shares in the food delivery business, which have taken a pasting since its initial public offering at the end of March, jumped by 23¼p, or 9.3 per cent, to 274¾p after the latest judgment.
24/06/21: Royal Mail’s launches UKs largest apprenticeship scheme with 1,000 recruits
Royal Mail is launching one of the largest ever apprenticeship schemes in the UK that will recruit 1,000 wannabe posties. Applicants who complete the programme, which is geared around on-the-job training, will be offered permanent roles. Royal Mail said many of its senior employees began their careers through its postal cadet scheme, which was stopped in 1996.
23/06/21: British industry’s output now at record growth levels
British factories enjoyed the strongest growth in output on record in June but warned they expected to raise their prices at the fastest pace in nearly 40 years in response to a shortage of key components and materials. The Confederation of British Industry said its quarterly survey of manufacturing showed that the rebound across the sector was gaining momentum going into the autumn.
22/06/21: Bitcoin falls over 10 per cent as China clamps down on mining
Bitcoin has suffered another volatile drop in value as Beijing intensifies its crackdown on the mining of the world’s largest cryptocurrency. The digital asset fell back by as much as a tenth to a two-week low after Chinese officials said that they had summoned executives from some of the country’s leading banks to reiterate a recent ban on crypto activity. It comes amid reports that local authorities are stepping up efforts to close operations to mine bitcoin across China, which has been widely deemed its biggest producer. Last night the currency was down more than 11 per cent, or $3,969.63, at $31,657.36.
21/06/21: Landlords threaten to sue after eviction ban extended
Commercial property owners are exploring legal action against the government after ministers extended the moratorium on evictions until March, leaving £6 billion of rent arrears unpaid. Last week, Robert Jenrick, the communities secretary, said that binding arbitration would be put in place if landlords and tenants could not come to an agreement over unpaid rent.
18/06/21: Employers can put self-isolating staff on furlough
Employers can claim from the furlough scheme for staff who are self-isolating. The entitlement exists despite government guidance stating it is not what the scheme is intended for. The little-known entitlement was first reported by Politico magazine after emails from civil servants complaining about government guidance were leaked. One email from a civil servant said the Treasury was “reluctant” to say the scheme could be used in such a way.
18/06/21: British food and drink exports to EU fall by £2bn in first quarter of 2021
British food and drink exports to the EU fell by £2bn in the first three months of 2021, with sales of dairy products plummeting by 90%, according to an analysis of HMRC data. Brexit checks, stockpiling and Covid have been blamed for much of the downturn, but the sector has said the figures show structural rather than teething problems with the UK’s departure from the EU.
17/06/21: Landlords feel heat as ban on commercial evictions extended
Fears are growing about the financial health of some of Britain’s biggest landlords after the government extended a ban on commercial evictions to next year. The moratorium, which was first introduced at the start of the pandemic last March, was designed to help businesses survive the crisis and the plan to extend it to next March was welcomed today by the hospitality and retail industries.
16/06/21: Ikea fined €1.1m by French court for spying on staff
The home furnishings group Ikea has been ordered to pay €1.1m (£861,000) in fines and damages by a French court after being found guilty of spying on staff. Two former Ikea France executives were also convicted and fined over an elaborate scheme to gather information on hundreds of employees, job applicants and even customers over several years, using private detectives and police sources.
15/06/21: Johnson and Morrison agree Australia trade deal over dinner
Boris Johnson and the Australian prime minister, Scott Morrison, will today announce Britain’s first bespoke post-Brexit trade deal. With most of the deal already agreed, one final key dispute was left to be resolved by the two prime ministers at a dinner in London. The UK had offered Australia tariff- and quota-free access for beef and lamb exports but demanded a 15-year transition period to give British farmers time to adapt to the increased competition.
14/06/21: Furlough extension rejected by Sunak
Demands from businesses to extend the furlough scheme were rejected by Rishi Sunak last night – despite the expected delay to ending lockdown. The hugely expensive wage support fund is due to start being wound down at the end of this month. As part of the Budget earlier this year, the Chancellor announced he would stop covering 80 per cent of the salaries of those not at work. From July 1, the Government’s share will fall to 70 per cent with employers contributing 10 per cent, as part of a staged withdrawal of the scheme due to finish completely at the end of September.
13/06/21: Sunak urged to help amid delay in lifting Covid restrictions
Rishi Sunak will be presented with more demands to help businesses as Boris Johnson prepares to push back the June 21 lifting of restrictions. The British Chambers of Commerce (BCC) said the chancellor would need to delay the tapering of the furlough scheme; from July 1, businesses are due to contribute 10 per cent of staff wages in a staged withdrawal of the job protection scheme, which is set to finish at the end of September. The BCC also called for cash grants and said that “measures need to be in place until the economy is able to reopen fully”.
10/06/21: British Airways puts thousands of workers back on furlough
British Airways is to put thousands of its staff on full-time furlough and thousands more on reduced hours — what it is calling “flexi-furlough” — in the latest setback in the opening up of aviation markets. BA staff were briefed on the plans today, just hours after Rishi Sunak, the chancellor, was lobbied by British airlines to extend his furlough support for the crippled sector beyond the planned September cut-off date.
09/06/21: British Airways and Ryanair investigated for not offering Covid refunds
Two of Britain’s biggest airlines may have breached consumer law by failing to offer timely refunds for flights cancelled because of the pandemic, the competition watchdog said today. The Competition and Markets Authority (CMA) said that British Airways and Ryanair were under investigation because they “refused to give refunds to people that were lawfully unable to fly”.
08/06/21: G7 deal will actually slash tech giants’ UK tax bill
A deal agreed by the G7 means that US technology giants will pay less tax in the UK than they do under the existing digital services tax, a think tank has warned. Although Facebook, Google and Amazon should end up paying more tax in total, the US Treasury will be the main beneficiary. The UK will recover more revenue from its own large multinational companies but less from the tech giants than it would do otherwise under its own digital services tax.
07/06/21: Pandemic bounce back loan repayments set to begin
Thousands of small businesses are due to start repaying Covid support loans this week, when year-long payment holidays start to tail off. When bounce back loans were launched in May last year, there was a huge rush of applications from companies seeking support as the pandemic escalated. Repayments on loans made in the early days are due from today.
04/06/21: Sunak ‘confident’ of reaching tech tax agreement
Chancellor Rishi Sunak says he is “confident” of reaching a global agreement on digital taxation ahead of a meeting of world finance leaders. Tax on big tech and multi-nationals has been a source of friction between the US and countries including the UK. The US announced sanctions this week but immediately suspended them to give more time for talks. Finance minsters will also discuss climate change at the two day meeting which starts in London on Friday.
03/06/21: Amazon set to take Tesco’s crown as Britain’s biggest retailer in four years
Amazon is predicted to overtake Tesco to become Britain’s biggest retailer within the next four years.
The American technology group, which opened its first Amazon Fresh store on British soil in March, is expected to reach £77.1 billion of UK sales by 2025, according to research from Edge by Ascential. That figure will surpass Tesco’s forecast £76.1 billion of sales. Last year Amazon’s UK total sales were £36.3 billion and Tesco’s were almost double that figure.
02/06/21: Biden corporate tax plan could earn EU and UK billions
A proposal to be tabled by the US president, Joe Biden, at the upcoming G7 meeting for a 15% global corporate tax rate could reap the EU €50bn (£43bn) a year, and earn the UK nearly €200m extra alone from the British multinational BP, according to research. Should the tax rate be set higher at 25%, the lowest current rate within the seven largest world economies, the EU would earn nearly €170bn extra a year – more than 50% of current corporate tax revenue and 12% of total health spending in the bloc.
01/06/21: UK manufacturing growth at 30-year high
UK manufacturing is growing at its fastest rate for almost 30 years as the easing of lockdown unleashes pent-up demand, according to a survey. The IHS Markit/CIPS Manufacturing Purchasing Managers’ Index (PMI) reached a high last month of 65.6, up from 60.9 in April. Any reading above 50 indicates growth, and April’s figure was the highest since the survey began in 1992.
28/05/21: HS2 set go to Leeds and may even arrive early
The HS2 rail project will go all the way to Leeds and could arrive sooner than forecast, the government has said, scotching speculation that mounting costs would prevent from the full scheme proceeding.
Grant Shapps, the transport secretary, told an online event for the Policy Exchange think tank: “We are going to complete HS2 and include HS2 on the eastern leg to Leeds. And the only question that we have is how to better integrate that with plans which were developed a very long way since HS2 was first dreamt up all those decades ago, and that pertains to the Northern Powerhouse Rail.”
27/05/21: Uber agrees historic deal allowing drivers to join GMB union
Uber is to recognise the GMB trade union in the UK for its private hire drivers, marking the first deal between a union and a gig economy ride-hailing service. Under the recognition deal, the GMB will have access to drivers’ meeting hubs to help and support them. It will also be able to represent drivers if they lose access to the Uber app, and it will meet quarterly with management to discuss driver issues and concerns.
26/05/21: Britain’s trade with EU fell by a quarter after Brexit transition
Trade between the UK and the EU fell by almost a quarter in the first three months of the year as Brexit and the Covid-19 crisis disrupted businesses, official figures have revealed. Total trade in goods between the UK and EU fell by 23.1 per cent compared with a year earlier, the Office for National Statistics said yesterday.
25/05/21: Breakthrough in global talks over taxing giant corporations
The G7 nations are moving closer to an agreement on reforming the way in which the world’s multinationals are taxed, but Britain is said to be holding out for a specific clampdown on giant technology companies. An initial deal would set a minimum level of tax on company profits around the world and would help to stamp out “profit shifting”, the practice of declaring profits in lowest-tax jurisdictions.
24/05/21: Bitcoin slides again despite Musk’s supportive tweet
Bitcoin slumped again yesterday to cap a week in which it had lost a quarter of its value.
It fell by 14 per cent, or $5,210.92, to $32,252.88 on the day even after Elon Musk appeared to temper his criticism of the cryptocurrency. On Saturday Musk tweeted: “The true battle is between fiat [money] and crypto. On balance, I support the latter.” The week before last, Musk, 49, said that bitcoin network’s energy usage was “insane” and he stopped Tesla customers buying its cars using digital currencies. He also called the cryptocurrency a “hustle”, prompting prices to tumble.
21/05/21: Britain to get zero-tariff trade deal with Australia within a month
Boris Johnson is pushing for a zero-tariff trade deal with Australia in the next month after over-ruling the concerns of his environment secretary. The prime minister met ministers yesterday to discuss the prospects of a deal. He is understood to have sided with Liz Truss, the trade secretary, over George Eustice.
20/05/21: HMRC spends over a quarter of a million training staff to be hackers
HM Revenue & Customs has spent £262,251 on cyber security training for its staff over the two most recent financial years, according to official figures. The data was obtained and analysed under the Freedom of Information (FOI) act by the Parliament Street think tank.
18/05/21: Uber Eats breaks all records generating almost $5B in revenue in 2020
Food delivery services experienced a significant uptick in 2020 due to the Coronavirus pandemic forcing people indoors. According to data presented by TradingPlatforms.com, Uber Eats generated $4.8B in revenue for 2020 – a 152% YoY increase from 2019. 150% Revenue Increase in 2020; Gross Bookings More Than Doubled To Cross $30B.
17/05/21: A tenth of Britain’s restaurants have been lost during pandemic
Monday sees another milestone in the reopening of the economy: people in most of the UK will be able to go to a bar or restaurant and eat indoors. But some favourite haunts will no longer be there: over the last year, thousands of establishments have closed, latest surveys indicate.
Across Britain, there are 9.7% fewer restaurants to choose from, compared with before the pandemic.
14/05/21: NatWest lets customers set own limit for online transfers
NatWest customers will be able to set their own limit on how much can be transferred from their bank account online in a move designed to protect them from falling victim to scams. The bank is to cut the default limit on online transfers from £20,000 to £5,000 a day for most account holders, but will let them decide if they want to set it higher or lower.
13/05/21: Exports to EU almost back to pre-Brexit levels
Britain’s exports to the European Union have almost recovered after plummeting by 40 per cent at the start of the year, official figures show. Goods exports to the EU rose by 8.6 per cent to £12.7 billion in March, according to the Office for National Statistics. This is close to the £13.7 billion recorded in December, before Britain’s departure from the single market caused exports to collapse by 43.2 per cent in January.
13/05/21: Amazon wins legal battle to have €250m tax bill overturned
The European Union’s crackdown on big American technology companies was dealt a blow yesterday as Amazon won a legal battle over the payment of €250 million in back taxes. The bloc’s General Court ruled that Amazon was not handed an illegal tax deal by Luxembourg, which is home to the company’s European base.
12/05/21: City of London suffers £2.3 trillion loss of trade due to Brexit in a single month
The City of London suffered a loss of £2.3 trillion in a single month in its lucrative derivatives trading market, with Wall Street trading platforms the ones that benefitted. U.S. swap-execution facilities pulled in more trades across euros, pounds and dollars in March while London experienced an exodus compared to last July, while venues in the European Union also gained, according to an estimate by Deloitte and IHS Markit, reported by Bloomberg today.
11/05/21: Time to kiss goodbye to Covid restrictions
Boris Johnson last night signalled an end to “government edicts” on Covid and told people to start using their common sense after England recorded no deaths from the virus for the first time since last summer.
The prime minister confirmed that the biggest easing of restrictions would go ahead as planned on Monday with people allowed to hug friends and family for the first time in more than a year.
07/05/21: Bradford couple arrested over £3.4m job scheme fraud
Two people have been arrested over a suspected £3.4m furlough scheme fraud.
The man, 35, and woman, 36, from Bradford, were also interviewed in relation to a suspected multi-million-pound tax fraud, officials said. More than £6m held in bank accounts controlled by the pair has been frozen by HM Revenue and Customs (HMRC). Both were held on suspicion of cheating the public revenue, VAT evasion and money laundering. They have since been released under investigation.
04/05/21: Amazon criticized for paying no corporation tax on €44bn of European revenue
Fresh questions have been raised over Amazon’s tax planning after its latest corporate filings in Luxembourg revealed that the company collected record sales income of €44bn (£38bn) in Europe last year but did not have to pay any corporation tax to the Grand Duchy. Accounts for Amazon EU Sarl, through which it sells products to hundreds of millions of households in the UK and across Europe, show that despite collecting record income, the Luxembourg unit made a €1.2bn loss and therefore paid no tax.
04/05/21: Lloyds profits soar as Covid loan loss provisions reduced
Earnings at Lloyds Banking Group have rebounded, with a forecast-beating £1.9bn in pre-tax profits for the first quarter, as the lender released cash that had been earmarked for potential loan defaults triggered by the pandemic. The upbeat results came as other European lenders reported strong quarterly trading. Profits at Santander jumped to nearly five times their level last year after the Spanish bank avoided further loan loss charges, while Deutsche Bank recorded its highest quarterly profit since 2014 after a bumper performance by its investment bank.
30/04/21: Company directors split on benefits of working from home
Working from home is here to stay, but businesses are not convinced that it is improving productivity.
In a survey of 600 businesses, the Institute of Directors found that more than 60 per cent planned to adopt hybrid working practices even after restrictions ease. The institute said that 20 per cent of companies were not planning to introduce any form of remote working, while only 10 per cent had moved completely towards working at home.
29/04/21: Bank of England reports UK economy recovering faster than forecast
The Bank of England is likely to upgrade its GDP growth forecast for the UK to 7 per cent next week amid signs that the economy is recovering far more rapidly than expected. Weekly real-time data that Jefferies is tracking shows that economic activity is back at levels last seen when the pandemic started, even surpassing last summer after the economy reopened. More people are using public transport and are on the roads than at any point in the past 13 months. Hiring activity has also picked up.
28/04/21: Business leaders set out plan for Covid recovery
A commission of 10 of the UK’s most powerful executives from firms including Tesco, Vodafone and Astra Zeneca has set out its plan for a post-pandemic economic recovery. It hopes the biggest crisis in over 300 years will reset the relationship between business and government to boost growth and living standards.
27/04/21: Bitcoin recovers value after volatile plunge
The value of bitcoin returned above $50,000 yesterday, drawing a line under a brief rout that highlighted the volatility of the world’s largest cryptocurrency. The digital asset unravelled rapidly after scaling its latest record high earlier in April. Having hit $63,398.46, it fell by 21 per cent in less than a fortnight.
26/04/21: Thomas Cook boss ‘confident’ Med hotspots will be open when schools break up
A top travel boss has said that he is “confident” Britons will be allowed to holiday abroad again from 17 May – while most of the Mediterranean hotspots “will be open” when schools break up for summer. Under prime minister Boris Johnson’s roadmap for lifting lockdown restrictions, international travel without one of the current exemptions – which exclude holidays – won’t be allowed any earlier than 17 May.
23/04/21: NatWest to refuse serving business customers who accept cryptocurrencies
NatWest will refuse to serve business customers who accept payment in cryptocurrencies such as bitcoin, which the UK lender has categorised as “high risk”. Morten Friis, a NatWest board member and head of its risk committee, said the bank was taking a “cautious approach” to cryptocurrencies, and would closely monitor any change in tone from the UK regulator, which has warned that consumers stand to lose all their cash by investing in crypto assets.
23/04/21: Covid costs push government borrowing to highest level since WW2
UK public sector borrowing reached £303.1bn in the year to March, according to the Office for National Statistics (ONS), the highest level since the end of World War Two. The ONS said that the coronavirus pandemic “has had a substantial impact on the economy and subsequently on public sector borrowing and debt”. It added that both tax receipts and National Insurance contributions tumbled as public sector borrowing grew by a further £28bn in March.
22/04/21: Airlines across the globe count the £7bn cost of Covid
A slower than anticipated global vaccine rollout and wider failure to get Covid under control will cost airlines $10bn (£7.2bn) more than previously predicted, according to the organisation that represents global airlines. The warning from the International Air Transport Association came as Ryanair chief executive Michael O’Leary warned on Wednesday there would be “seismic” cut in capacity across the industry due to the pandemic, including up to 25% fewer flights in Europe. O’Leary said travel from the UK to the EU would become more expensive and cumbersome as a result of Brexit, while leisure travel would not return to normal until 2023.
22/04/21: Bank of England to move London staff to new hub in Leeds
The Bank of England has followed the Treasury in announcing that it intends to move staff out of London with the creation of a northern hub in Leeds. Threadneedle Street said its expanded presence in one of the UK’s main financial centres outside London was part of an ambitious plan to increase its staff presence across the UK significantly.
21/04/21: Just Eat to offer 1,500 Liverpool couriers minimum hourly rate and sick pay
Just Eat is to offer 1,500 takeaway couriers in Liverpool minimum pay, sick pay and holiday pay by the end of the year as it shifts away from using independent contractors. The food delivery group, which recently began building its own courier network in the UK alongside putting customers in touch with takeaways that carry out their own delivery, said it would expand a worker model for couriers that it was already operating in London and Birmingham, where 2,000 riders had signed up.
21/04/21: Netflix numbers fall short as pandemic boost starts to fade
Shares in Netflix have plunged by 11% after subscriptions grew by a weaker than expected four million at the start of this year following a record 2020. The first quarter figure compares to 15.8 million net additions in the same period a year ago as the streaming service was boosted by consumers staying at home during the pandemic. Netflix blamed the “big COVID-19 pull forward” it experienced in 2020 as well as production delays caused by the outbreak – resulting in a weaker content offering – for its falling short.
20/04/21: Primark to repay £121 million in furlough cash despite falling sales
Primark’s owner will repay £121 million in furlough money claimed under government job retention schemes and pay out a dividend to shareholders despite a slump in profits. Associated British Foods (ABF) said the decision comes despite stores remaining closed for most of the autumn and winter period, leading to revenues and profits plunging. Sales were down 17% to £6.3 billion and adjusted operating profits fell 50% to £319 million in the six months to February 27.
20/04/21: UK unemployment rate unexpectedly drops below 5%
The rate of unemployment in the UK fell slightly to 4.9 per cent from December 2020 to February 2021, some 0.9 percentage points higher than the same time last year. Economists had predicted that the unemployment rate would edge up to 5.1 per cent as Britain spent the winter months in lockdown. “The latest figures suggest that the jobs market has been broadly stable in recent months after the major shock of last spring,” the Office for National Statistics said. The number of employees on company payrolls fell by 56,000 between February and March, reversing a recent improvement.
19/04/21: Chancellor launches taskforce on Bank of England digital currency
A Bank of England digital currency for the UK has moved a step closer after the chancellor Rishi Sunak announced a top-level taskforce to explore the benefits and risks of the idea. Sunak said a joint Treasury-Bank of England taskforce was being set up as part of a range of measures designed to boost the City following Britain’s departure from the EU. Speaking at a financial industry conference, the chancellor said a taskforce jointly led by the Bank’s deputy governor for financial stability, Jon Cunliffe, and the Treasury’s director general of financial services, Katharine Braddick, would “coordinate exploratory work”.
19/04/21: Bitcoin records biggest one-day drop in almost two months
Bitcoin has posted its biggest one-day drop in almost two months, amid warnings that novice investors could suffer heavy losses from speculating in crypto assets such as “meme coin” dogecoin. Bitcoin tumbled more than 11% on Sunday, dropping from about $62,000 (£45,000) to $55,000 – its lowest level since the end of March. Last week, the cryptocurrency had hit fresh record highs at nearly $65,000.
16/04/21: FTSE 100 rises above 7,000 for first time in over a year
The FTSE 100 rose above 7,000 this morning for the first time since the end of last February, shortly after the pandemic triggered sharp falls in global stock markets. The index rose for the fourth session in a row, adding another 46.02 points, or 0.7 per cent, to reach 7,029.52. It was led higher once again by its travel, banking and mining companies, which have been revitalised over winter in anticipation of a sharp bounceback in the global economy.
16/04/21: M&S take legal action against Aldi over Colin the Caterpillar trademark
Marks and Spencer has launched legal action against Aldi over a claim that the discount supermarket is infringing the trademark of its Colin the Caterpillar cake. M&S has lodged an intellectual property claim with the High Court this week relating to its rival’s Cuthbert the Caterpillar product.
15/04/21: Deliveroo sees orders and sales more than double in first quarter
Orders and sales more than doubled at Deliveroo in the first three months of 2021, the delivery firm said in a trading update. The number of customers using the platform each month also climbed by a record 91% year-on-year to 7.1 million.
14/04/21: Tesco profits fall as Covid costs offset sales surge
Tesco’s profits fell by almost 20% to £825m during the past year, despite growing sales and winning customers from its rivals, because of the increasing cost of operating during the coronavirus pandemic. The retailer’s group sales rose by 8.8% to £53.4bn during the 52 weeks to 27 February, surpassing analysts’ expectations, while its UK sales increased by 7%.
13/04/21: UK economy grew slightly in February official figures show
The UK economy “showed some improvement” in February after growing by 0.4%, according to official figures. However, the Office for National Statistics said the economy was still 7.8% smaller than a year earlier, before the impact of the coronavirus pandemic. Coronavirus restrictions remained in place to varying degrees across all four nations of the UK throughout January and February.
13/04/21: UK and EU edge closer to deal on Brexit checks in Northern Ireland
The UK is edging towards a new deal with the EU on Brexit arrangements for Northern Ireland with the potential for easing border checks on certain goods. Officials in London and Brussels have been involved in intense “technical talks” in the past two weeks over the future checks on food, plants and parcels going from Great Britain to Northern Ireland.
07/04/21: Deliveroo riders to strike over pay and conditions
About 400 Deliveroo riders are expected to strike over pay and conditions as the company faces increasing pressure over its employment practices. The Independent Workers of Great Britain (IWGB) union said it planned to stage socially distanced protests in five towns and cities across England on Wednesday.
06/04/21: Thousands of jobs to go as Peacocks administrator finalises rescue deal
Thousands more high street jobs are to disappear as part of a deal that could nonetheless salvage approximately half of the workforce at the stricken clothing chain Peacocks. It is understood that up to 200 of the chain’s 400-plus stores and 2000 jobs will be saved by an investment consortium which has agreed to back Steve Simpson, the chief operating officer of Peacocks’ sister company, Edinburgh Woollen Mill. The precise number will depend on the outcome of talks with Peacocks’ landlords and suppliers, according to people close to the deal.
01/04/21: UK economy bouncing back stronger that expected amid savings boom
Britain’s recovery during the second half of last year was stronger than first estimated, according to official figures that also showed that households put away more money in savings accounts than previous data suggested. In a series of revisions to its data covering the Covid-19 pandemic, the Office for National Statistics (ONS) said the economy expanded by 16.9% and 1.3% in the third and fourth quarters of 2020 respectively. This marked steep increases on initial estimates of 16.1% and 1%.
30/03/21: 25% tariffs from USA on UK exports following Britain’s tech firm tax
The US is threatening to impose tariffs of up to 25 per cent on some UK exports as it retaliates over Britain’s new ‘unreasonable’ and ‘discriminatory’ tax on big tech firms. The UK introduced a digital services tax last April in a bid to ensure search engines, social media platforms and online marketplaces pay their fair share. But Washington believes the tax unfairly targets US firms and it is now pressing ahead with counter-measures as it applies the pressure to Number 10 to change course.
29/03/21:Regular customers of Deliveroo to be handed slice of company
Customers of Deliveroo seeking a slice of the company’s blockbuster float are set to receive larger portions of shares if they have ordered regularly through the Deliveroo app. The food delivery group’s £50 million “community offering” is on track to be oversubscribed, meaning that applicants will be ranked according to their “loyalty”, with the shares apportioned accordingly, City sources said. The technology company owns an app through which customers order deliveries from restaurants and groceries from shops. Unusually for a big initial public offering, Deliveroo is selling some shares directly to individual investors instead of relying solely on financial institutions. Applications for its community offering close on Tuesday.
27/03/21: Jessops calls in administrators for second time in just over year
Peter Jones Camera retailer Jessops is to appoint administrators for the second time in little more than a year, in a move that puts 120 jobs at risk. The business, controlled by Dragons’ Den panellist Peter Jones, said it had filed a notice to appoint administrators after being hit hard by lockdown restrictions. The filing temporarily shields Jessops from creditors and gives it breathing space to find a way for the business to carry on, the company said. The chain, which Jones’s PJ Investment Group bought out of administration in 2013, has been whittled down to just 17 shops. More than half its stores closed after it hit trouble in 2019.
26/03/21: £180bn of Covid loans since beginning of pandemic
Businesses have taken out £180 billion in government-backed loans since the start of the pandemic, official figures show. Treasury figures suggest that 1.6 million businesses have drawn on support, which was designed to prevent large numbers of company failures during the lockdowns. As of March 21, they had borrowed £179.1 billion, up by £2.2 billion from the previous month. About a quarter of the country’s businesses have drawn on the support, which includes the bounce back loan scheme for small firms. Under the programme, businesses have been able to take out up to £50,000 in loans that are 100 per cent guaranteed by the state.
25/03/21: Competition commission announced deal block on merger of Seedrs and Crowdcube
Seedrs abandons merger plans with Crowdcube after competition watchdog blocked the planned £140m merger between Seedrs and Crowdcube over concerns it would lead to less choice and higher fees. The two crowdfunding platforms announced plans to merge in October, saying the deal would create one of the world’s largest private equity marketplaces. Crowdcube and Seedrs are the 2 largest equity crowdfunding platforms in the UK. These types of platforms connect SMEs looking to raise equity investment with investors willing to provide funding in return for a stake in the business.
24/03/21: HMRC to target second home owners over holiday let dodge
Tens of thousands of second-home owners who falsely register their properties as holiday lets in order to claim tax breaks tax face a clampdown by the taxman. Ministers have also announced plans to increase taxes on ultra-long-haul flights to discourage greenhouse gas emissions. HMRC will tighten rules to force holiday landlords to prove they have made a realistic effort to rent properties out for at least 140 days per year. There are suspicions that many simply declare that they will do this but leave the properties empty.
23/03/21: Brexit: UK food and drink exports collapse
Whisky, cheese and chocolate producers have suffered the biggest post-Brexit export losses in the food and drink sector, new figures from HMRC have shown. Analysis of the figures by the Food and Drink Federation (FDF) shows that cheese exports in January plummeted from £45m to £7m year on year, while whisky exports nosedived from £105m to £40m. Chocolate exports went from £41.4m to just £13m, a decline of 68%. They put the collapse in trade down to a combination of Brexit and weaker demand in Europe, where restaurants, hotels and other hospitality outlets remain closed.
23/03/21: Crackdown on tax avoiders
Promoters of tax avoidance are likely to come under further scrutiny today when the government publishes several consultations and calls for evidence to improve Britain’s tax system. Rishi Sunak will not announce big new revenue-raising measures on what has been called Tax Day, but will try to fill gaps in the present system by closing administrative loopholes and cracking down on avoiders. Significant decisions that could affect the public finances will be left for the budget. Instead, the Treasury will publish two dozen or so reviews and consultations, including user responses to outstanding inquiries.
22/03/21: Travel shares slide following government advice on travel
Shares in travel and aviation businesses including the British Airways owner, IAG, easyJet and the engine maker Rolls-Royce tumbled in early trading after the government warned the public not to book holidays abroad this summer. Investors took fright at the thought that the struggling airline and travel sectors could face another summer of lost bookings, as continental Europe struggles with the rollout of vaccine programmes. Shares in IAG, easyJet, Ryanair, the package holiday company Tui and the Jet2 airline fell as much as 7% in early trading on Monday. Rolls-Royce dipped by 3%.
22/03/21: UK lockdown cost – £251bn
A year of Covid-19 lockdowns has cost the UK economy £251bn – the equivalent of the entire annual output of the south-east of England or nearly twice that of Scotland, according to a new report. Analysis by the Centre for Economics and Business Research found that while the whole of the country had suffered huge damage from restrictions on activity since the first national lockdown began, some poorer regions had suffered the most.
19/03/21: UK borrowing breaks all records for February
The government borrowed £19.1bn last month, marking the highest figure for February since records began amid the spiralling cost of support measures during the pandemic. Figures from the Office for National Statistics (ONS) showed public borrowing ballooned thirteenfold to £19.1bn in February this year – up from £1.5bn in the same month a year earlier. Borrowing for the year so far has reached £278.8bn — marking a first quarter record. Government bodies have spent an estimated £72.6bn on day-to-day activities in February 2021, including £3.9bn on coronavirus job support schemes.
19/03/21: Brexit – British exports to Ireland fell by 65% in January
Trade between Great Britain and the Republic of Ireland in January plunged by 65% following the end of free movement of goods because of Brexit, according to new data. The figures followed Office for National Statistics data last week that showed the UK’s overall export of goods to the EU slumped by 41% during the same period. New customs, export and health certification requirements for goods going from Britain to Ireland have caused major disruption to the flow of cargo, with ferry companies operating on the Holyhead-Dublin Port route reporting a significant drop in traffic in January.
19/03/21: UK economy rebounding ahead of schedule, says BoE
Government borrowing costs hit a one-year high as markets repriced for recovery and inflation after the Bank of England said the economic rebound was ahead of schedule and kept monetary policy on hold yesterday. Ten-year gilt yields rose 0.04 percentage points to 0.9 per cent after the Bank said that the news on near-term economic activity had been positive since last month. The break-even inflation rate, a market proxy for inflation expectations, rose to its highest level since early 2019.
18/03/21: Government to end Electric car grant following surge in sales
Grants for electric cars will be cut by £500 and abolished altogether for more expensive models under plans designed to stretch taxpayer support further. The government will announce that the plug-in car grant will drop from £3,000 to £2,500 from today after a surge in demand for electric vehicles put massive strain on the scheme. EV Powered is reporting that the upper limit of cars eligible for the scheme will be also reduced from £50,000 to £35,000.
18/03/21: Normal travel not to return for 3 years
The passenger numbers will not return to pre-Covid levels until 2024 as per prediction by the airport and railway caterer behind Upper Crust and Caffè Ritazza. The firm tapped its shareholders for £475 million of new funding. SSP Group, which a year ago raised £216 million of equity to bolster its balance sheet, said that it had secured an 18-month extension to its bank borrowings to January 2024 and waivers of the covenants on those facilities.
17/03/21: Uber to pay UK drivers minimum wage, holiday pay and pension
Uber is to guarantee its 70,000 UK drivers a minimum hourly wage, holiday pay and pensions after a landmark supreme court ruling. The ride-hailing app said drivers would start benefiting from the changes from Wednesday while retaining the right to choose when they work, as it accepted they were classed as workers in line with the ruling.
Uber, like many delivery and courier companies, has argued that its drivers are independent self-employed “partners” not entitled to basic rights enjoyed by workers, which include the legally enforceable minimum hourly wage and a workplace pension.
17/03/21: P&O to restart UK cruises this summer – but only for vaccinated passengers
Cruise operator P&O is to restart domestic holidays this summer, but only for UK residents who have been fully vaccinated against Covid-19. After its fleet has been grounded for over a year, P&O is dipping its toes back in the water by offering passengers short sailings on two of its ships around the UK coastline. Coronavirus restrictions mean the ships will not call at any ports, although there will be the usual onboard dining and entertainment programme.
16/03/21: Thorntons closes all 61 shops for good
Thorntons, the high street chocolate retailer, is permanently closing its shops in Britain, putting 603 jobs at risk. The retailer, known for its selection boxes, blamed the changing dynamics of the high street, the shift to online shopping and the impact of coronavirus lockdowns.
Adam Goddard, retail director at Thorntons, said: “The obstacles we have faced, and will continue to face, on the high street are too severe and despite our best efforts we have taken the difficult decision to permanently close our retail estate.”
15/03/21: Bitcoin breaks through $60,000 barrier for first time
The price of bitcoin rose above $60,000 for the first time as its record-breaking run continued.
The cryptocurrency, which unlike stocks and bonds can be traded 24 hours a day, peaked at a record high of $61,680 yesterday morning. By 6pm in London, it had fallen back to $59,744, but this was still a near 5 per cent gain for the day.
It caps a remarkable run for bitcoin, which has quadrupled in value over the past four months. This time a year ago, one bitcoin was worth less than $5,000.
15/03/21: Store closures hit record 48 per day as pandemic decimated retail
A record number of shops closed last year as the pandemic put unprecedented pressure on businesses. More than 17,500 chain stores closed their doors, according to data from PWC and the Local Data Company. This was partially offset by 7,655 new openings, but there was a net fall in the number of shops of 9,877.
This represents the biggest decline in the number of shops in at least a decade and is equivalent to a 4.5 per cent drop during the year, nearly one in 20. An average of 48 chain stores closed every day and the downturn could continue in 2021, the report warns, because many that closed temporarily during lockdown are unlikely to reopen.
12/03/21: UK economy shrank 2.9 per cent in January 2021
Monthly GDP fell by 2.9 per cent in January as a fresh national lockdown took hold of the UK economy, according to new ONS data. The January figure, which was 9 per cent below its February 2020 level, was driven by a decline of 3.5 per cent in services, the Office for National Statistics said.
This was 10.2 per cent below its February 2020 level, representing the heavy impact of government Covid restrictions. Monthly production fell by 1.5 per cent throughout the month, five percent below its pre-pandemic level.
12/03/21: Rolls-Royce reports £4bn loss
Rolls-Royce has reported a loss of £4bn for 2020 as the jet-engine maker’s business was shaken by the coronavirus pandemic. The FTSE 100 manufacturer revealed it burned through £4.2bn in cash during the year as revenues from servicing passenger aircraft collapsed.
It expects to burn through a further £2bn this year, but Warren East, Rolls-Royce’s chief executive, raised hopes that the company would generate cash once more in 2022 as flying recovers.
11/03/21: UK food manufacturers to face millions of pounds of new red tape costs
British food exporters are set to be hit with millions of pounds of new costs due to new EU post-Brexit bureaucracy from next month. From 21 April, Brussels will make some UK food manufacturers fill out new health assessment forms when exporting to the EU that will increase paperwork by around one-third.
The new red tape will concern any UK food that is considered to be a multi-ingredient product, such as chocolate and crisps.
11/03/21: Anger from Landlords as eviction ban is extended
Some of Britain’s biggest property owners accused the government of allowing retailers to “raid the nation’s pensions and savings” after ministers extended a ban on landlords recovering rent debts for at least three months.
The government confirmed that a ban on evicting business tenants or taking action to recover rent arrears introduced as a temporary measure a year ago would continue until the end of June. A “call for evidence” will also be launched to seek responses to proposals including a phased withdrawal of the protections.
11/03/21: M&S will start selling clothes from 11 rival brands on its website this spring in a bid to boost its online sales.
Marks said the move to sell items from Hobbs, Joules, Phase Eight and White Stuff from March was part of its ongoing “transformation programme”. An M&S spokesman said the move came as part of plans to “turbocharge online growth”.
10/03/21: UK to get UK gets trading boost from Biden’s American Rescue Plan
Joe Biden’s $1.9 trillion stimulus package will give the British economy a big boost this year as the effects of his “American Rescue Plan” ripple across the world, the Organisation for Economic Co-operation and Development (OECD) has said.
The 37-member rich nation think tank upgraded its GDP forecasts on the back of the rapid vaccine rollout and the US recovery programme, which it said would not only fire up American growth but provide additional “welcome spill overs for activity in major trading partners”.
10/03/21: New “Right to repair” law to come into force this summer
Appliances such as fridges, washing machines and TVs should last longer and be cheaper to run under new rules. Ministers have confirmed that from the summer consumers will have a right to repair on goods they buy. They are keeping a promise to implement EU rules aimed at cutting energy and bills – and reducing the need for new materials.
Many consumers have complained that goods don’t last long enough, then can’t be fixed in the home. Manufacturers will be legally obliged to make spare parts for products available to consumers for the first time – a new legal right for repairs.
09/03/21: M&S floors to go at largest London store
Marks & Spencer has unveiled plans to downsize its Marble Arch shop and convert upper floors to offices.
The high street retailer has launched a consultation on its plans to redevelop the shop in central London. Lower floors will continue trading as M&S, with in-store digital shopping technology to promote products from M&S.com. A development partner will convert the upper floors into high-quality office space, which M&S believes will attract demand from tenants despite companies such as HSBC, KPMG, Standard Chartered and Lloyds announcing plans to cut office space as they shift to permanent hybrid working models, where staff spend some days in the office and some days working from home.
Marble Arch is M&S’s largest shop, with 160,000 sq ft of trading space. The rise in online shopping, which has accelerated during the pandemic, has reduced demand for bricks and mortar outlets. About 16,000 shops shut for good last year and a further 925 have closed in the first two months of this year.
08/03/21: Deliveroo riders to get £10,000 in UK float
Deliveroo will reward its busiest riders with bonuses of up to £10,000 when the food delivery firm lists its shares on the London Stock Exchange. Riders who have delivered the most orders will share in a £16m fund, the company said.
Deliveroo will also open the flotation to its customers who can buy up to £1,000 worth of shares in the firm.
The company is expected to be valued at around $7bn (£5bn) when it floats but it is yet to make a profit.
In its most recent financial results for the year to 31 December 2019, sales rose by 62% to £771.7m.
However, pre-tax losses also grew from £243.3m to £317.7m.
08/03/21: BP staff to work from home 2 days a week
BP has told at least 25,000 staff around the world that they will be expected to work from home for two days per week after the pandemic in a permanent shift to flexible working. The oil major told its office-based employees to work from home after Covid-19 hit a year ago and in recent weeks told them that most will never return full-time to the office.
The new “hybrid” arrangements will apply to more than 6,000 of its staff in Britain, including more than 2,000 in central London. BP said the change formed part of the modernisation of the company and that the plans would offer staff a “more flexible, engaging and dynamic way of working”.
05/03/21: Amazon could entirely wipe out its tax bill
The super-deduction, announced by Rishi Sunak in the budget on Wednesday, will allow companies such as Amazon to offset 130% of investment spending on plant and machinery against profits for the next two years, starting next month. The chancellor explained that if a company spent £10m on new equipment, its taxable income would be reduced by £13m.
Amazon is spending on increasing its warehousing and logistics to cope with extra demand caused by Covid lockdowns, so it is likely to be able to put in a big claim. At the same time Amazon’s UK tax bill is very small because it officially collects a lot of its UK sales in Luxembourg.
TaxWatch said its examination of Amazon Services UK, the company that provides warehousing and delivery services for the firm’s UK operations, showed that it made profits of £102m in 2019 and had a tax liability of £6.3m. The company also spent £66.8m on plant and machinery, £80.4m on office equipment and £15.3m on computer equipment.
05/03/21: Companies to quit UK over Sunak’s corporation tax rise
To avoid Rishi Sunak’s corporation tax rise, companies will leave Britain experts have warned.
Documents from the Treasury and the Office for Budget Responsibility reveal that officials are concerned the higher rate will encourage tax avoidance as companies shift profits to low-tax jurisdictions. However, experts claimed that a bigger risk was companies moving their headquarters overseas or choosing not to come to the UK.
The Centre for Policy Studies, a centre-right think tank, said that the plan would “give the UK one of the least competitive tax systems” of the 37 leading economies that are members of the Organisation for Economic Cooperation and Development and would have a “chilling effect on investment and growth”.
In his budget, the chancellor said that corporation tax for big businesses would rise from 19 per cent to 25 per cent in 2023, generating £45 billion in the three years to 2026 to help to fix the public finances.
04/03/21: Deliveroo plans for $7bn listing in London
Deliveroo sets out plan for a $7 billion-plus listing on the London Stock Exchange less than a year after it had warned the Competition and Markets Authority that it would go bust without a $500 million investment from Amazon.
Deliveroo’s decision to opt for London over Wall Street came the day after the chancellor backed recommendations for the relaxation of listing rules that are regarded as a barrier to technology companies choosing London over New York, Amsterdam or Asia.
Deliveroo, founded in 2013 by Will Shu, a former Wall Street analyst, and Greg Orlowski, has become well known in Britain for its workers delivering food on bicycles with brightly coloured backpacks adorned with a kangaroo logo. The company works with more than 115,000 restaurants in 12 countries and has 100,000 riders.
04/03/21: 1,150 jobs at risk as Sainsbury’s closes online warehouse
J Sainsbury group makes head office cuts and shuts its online grocery warehouse putting 1150 jobs at risk, to save money and invest in improving its food ranges.
Sainsbury’s would make around 500 head office redundancies by simplifying roles in human resources, the supply chain, technology, commercial operations and general merchandise and clothing divisions. The size of its offices in Holborn in London, Manchester and Milton Keynes will also be reduced.
03/03/21: BUDGET: Business Restart Grant & Recovery Loan Scheme
- New Restart Grant available for businesses in April and to those who open later, with up to £18,000 available
- Bounce Back Loans and CBILS to be replaced by new Recovery Loan Scheme
- Business of any size can apply for recovery loans from £25,000 to £10m through to the end of this year
Chancellor Rishi Sunak has announced a new Restart Grant of up to £6,000 per premises in April and and up to £18,000 for firms that open up later.
The grant is aimed at helping businesses ‘reopen and get going again.’ The Chancellor said non-essential retail will open first, so they will receive grants of up to £6,000 per premises. Hospitality and leisure businesses, including personal care and gyms, will open later or be more impacted by restrictions when they do, and will therefore receive grants of up to £18,000.
“That’s £5bn of new grants on top of the £20bn we have already provided, taking our direct total care and support for businesses to £25bn,” said Sunak.
As the Bounce Back Loans and CBILS program also come to an end, a new Recovery Loan Scheme will take their place. Businesses of any size can apply for loans from £25,000 to £1 Om through to end of this year. The Government will provide an 80% guarantee to lenders.
“As well as supporting people’s jobs, incomes, the lowest paid and most vulnerable – this Budget also protects business.”
The government will also double the incentive payments for businesses to £3,000 to all new apprentice hires of any age, investing £126m to triple new traineeships.
03/03/21: BUDGET: New tech visas
Sunak announced new visa reforms aimed at “highly-skilled” migrants.
Chancellor said, “A new unsponsored points-based visa to attract the best and most promising international talent in science, research and tech, new, improved visa processes for scale-ups and entrepreneurs, and radically simplified bureaucracy for high-skilled visa applications”.
03/03/21: BUDGET: Alcohol duty and fuel duty frozen
Fuel duty is to remain frozen at 57.95p per litre for both petrol and diesel for the 11th year running, the Chancellor of the Exchequer has announced.
This is a tough time for hospitality. So I can confirm that the planned increases in duties for spirits like scotch whisky, wine, cider and beer will all be cancelled. All alcohol duties frozen for the second year in a row — only the third time in two decades. And right now, to keep the cost of living low, I’m not prepared to increase the cost of a tank of fuel. So, the planned increase in fuel duty is also cancelled.”
03/03/21: BUDGET: ‘Super Deduction’ to boost investment
Chancellor announced a new “Super Deduction” that will allow businesses to claim 130 per cent of their new machinery cost as a tax cut.
“For the next two years, when companies invest, they can reduce their tax bill not just by a proportion of the cost of that investment, as they do now or even by 100 per cent of the cost, the so-called full expensing some have called for. With the Super Deduction they can now reduce their tax bill by 130 per cent of the cost.”
HMRC could miss out on as much as £29bn as a result of the policy. Shares in telecoms provider BT, which is in the process of upgrading its infrastructure, rose 6.4 per cent on the back of the announcement.
Under the scheme, companies investing in qualifying new plant and machinery assets will benefit from a 130 per cent first-year capital allowance.
Investing companies will also benefit from a 50 per cent first-year allowance for qualifying special rate (including long life) assets, the Treasury said.
This upfront super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest.
03/03/21: BUDGET: Company losses tax treatment
For the next two years, the tax treatment of company losses will be made significantly more generous by allowing businesses to carry back losses for three years, providing a significant cash flow benefit.
Chancellor said, “This means companies can now claim additional tax refunds of up to £760,000. And because of the current eight per cent bank surcharge, the implied overall tax rate for banks would be too high. So we will review the surcharge, to make sure the combined rate of tax on the UK banking sector doesn’t increase significantly from its current level – and to make sure this important industry remains internationally competitive”.
03/03/21: BUDGET: Corporation tax to rise to 25% from 2023
From 2023, the rate of corporation tax, paid on company profits, will jump from 19 per cent to 25 per cent, but with protection for smaller businesses. Companies with profits of less than £50,000 will still pay 19 per cent, meaning only 10 per cent of firms will pay the higher rate.
Chancellor said, “Even after this change the UK will still have the lowest corporation tax rate in the G7 — lower than the US, Canada, Italy, Japan, Germany and France”.
03/03/21: BUDGET: Personal tax thresholds frozen
As predicted by various experts (£6bn stealth tax), personal tax thresholds have been frozen and annual increase to the tax free personal allowance has been abandoned.
Chancellor Sunak says he “wants to be honest” with the public about how the government will nurse the British economy back to health after the pandemic.
“This government is not going to raise the rates of income tax, national insurance, or VAT. Instead, our first step is to freeze personal tax thresholds,” he says.
The personal tax threshold will rise, as outlined in the Tory manifesto, to £12,570 next year. However, it will then be frozen until April 2026.
03/03/21: BUDGET: Stamp duty holiday extended
Chancellor Sunak extended the stamp duty holiday for a further three months, until end of June 2021, with a tapered end until the end of September.
The stamp duty holiday was first introduced back in July last year to reignite the UK housing market following months of closure during the first coronavirus lockdown. The government raised the stamp duty threshold from £125,000 to £500,000, helping to boost market activity and sending house prices rocketing.
But the pandemic has also slowed the sales process and forced some buyers to wait months for the transaction to complete.
In recent months property experts had warned that many home buyers would be unable to complete their deals before the 31 March deadline due to a backlog.
The new £500,000 nil rate band will end on 30 June, before it is reduced to £250,000 until the end of September.
03/03/21: BUDGET: Business rates holiday extended
Hospitality and leisure businesses pay no business rates for three months, then rates will be discounted for the remaining nine months of the year by two-thirds, in a £6bn tax cut, up to a value of £2m for closed businesses, with a lower cap for those who have been able to stay open. A £6bn tax cut for business.
Chancellor said, “Last year, we provided an unprecedented 100 per cent business rates holiday, in England, for all eligible businesses in the retail, hospitality and leisure sectors — a tax cut worth £10bn. This year, we’ll continue with the 100 per cent business rates holiday for the first three months of the year, in other words, through to the end of June.”
03/03/21: BUDGET: VAT cut extended
The five per cent reduced rate of VAT for the hospitality sector will be extended for six months to 30 September. After that, it will rise to an interim rate of 12.5 per cent for another six months; not returning to the standard 20 per cent rate until April next year.
Chancellor said, “One of the hardest hit sectors has been hospitality and tourism: 150,000 businesses that employ over 2.4m people need our support. In total, we’re cutting VAT next year by almost £5bn”.
03/03/21: BUDGET: National Living Wage increases
From April 2021, the National Living Wage will increase from £8.72 per hour for over-25s to £8.91 per hour.
Chancellor said, “Over the course of this year, as the economy begins to recover, we are shifting our resources and focus towards getting people into decent, well-paid jobs. We reaffirm our commitment to end low pay, increasing the National Living Wage to £8.91 from April — an annual pay rise of almost £350 for someone working full time on the National Living Wage”.
03/03/21: BUDGET: Universal Credits uplift
Universal Credit top-up of £20-per-week will continue for a further six months.
Chancellor said, “We’ll provide Working Tax Credit claimants with equivalent support for the next six months. Because of the way that system works operationally, we’ll need to do so with a one-off payment of £500”.
The Chancellor said the temporary increase, introduced at the start of the coronavirus pandemic, would remain in place for half a year and “well beyond” the end of the current national lockdown in England.
The Government’s temporary Covid-19 support for families on benefits is worth £1,040 a year (£20 per week) and was supposed to only last a year.
03/03/21: BUDGET: Support for 600,000 newly self employed
Some 600,000 self-employed people who were unable to claim government grants will be now be able to do so. The new policy will help hundreds of thousands of newly self-employed who have not been eligible for the income support scheme.
As the tax return deadline has now passed, 600,000 more people, many of whom became self-employed last year, can now claim the 4th and 5th grants.
Grants worth 80 per cent of three months’ average trading profits, up to £7,500, will made available. The self-employed will be able to claim the grants on the basis of their 2019-2020 tax returns.
He says this is “one of the most generous programmes anywhere in the word”.
Meanwhile, the value of the fifth grant will be determined by a turnover test, to ensure that support is targeted at those who need it the most as the economy reopens.
People whose turnover has fallen by less than 30% will receive a 30% grant, capped at £2,850. The final grant can be claimed from late July.
03/03/21: BUDGET: Self-employed Grant extension
Like Furlough scheme, support for the self-employed will also continue in the form of Self Employed Income Support Scheme (SEISS) until September, with another two grants covering the period February to April, and from May onwards.
The fourth grant will provide three months of support at 80 per cent of average trading profits. For the fifth grant, people will continue to receive grants worth three months of average profits.
03/03/21: BUDGET: Furlough extension
Chancellor confirms that Coronavirus Job Retention (Furlough) Scheme will be extended until end of September. He said millions of workers will continue to receive 80% of their wages for the hours they cannot work in the pandemic, until the scheme ends.
“As businesses reopen, we’ll ask them to contribute alongside the taxpayer to the cost of paying their employees. Nothing will change until July, when we will ask for a small contribution of just 10% and 20% in August and September,” Sunak says.
03/03/21: Furlough to be extended until end of September 2021
Millions of workers will continue to receive 80% of their wages for the hours they cannot work in the pandemic, Chancellor Sunak has revealed ahead of the budget, which is due to be announced today.
The Government’s contribution will be reduced from July – with employers then asked to contribute alongside the taxpayer for the cost of furloughed employees.
In July, employers will be expected to contribute 10%, which will rise to 20% in August and September as the economy hopefully reopens.
02/03/21: Zoom’s revenues more than tripled in the last quarter
Zoom’s revenues more than tripled in the last quarter as millions of people continued to use its platform to keep in contact with colleagues, friends and relatives during lockdowns. The online video conferencing company beat Wall Street’s expectations with a 369 per cent jump in sales, which hit $882.5 million in the three months to January 31.
Zoom concluded its financial year with 467,100 business customers with more than 10 employees — up by 470 per cent on the year earlier.
02/03/21: Halfords to repay £10.7m furlough cash grant
Following stronger than expected sales during the latest covid lockdown, Halfords has pledged to repay all of the £10.7m in furlough money it received. Like for like group sales of cycle and car parts retailer jumped 6.2% in the first 7 weeks of the new year and they are set to report annual pre-tax profits between £90m and £100m. The group has 443 stores, 367 garages and a fleet of 121 auto-servicing vans. Cycling revenue jumped 43%, thanks to “exception growth” in their higher end Tredz cycling brand.
01/03/21: Labour to support Corporation tax rise but not now
Labour could back the Conservatives’ plans to raise corporation tax over the course of this parliament, the shadow chancellor has said. Anneliese Dodds said in a speech at Bloomberg that while Labour would rule out any “immediate” rise in corporation tax, it was not opposed to rises in the long term.
She said: “Over the last ten years Conservative governments have pulled the UK farther and farther away from the average corporation tax level of OECD nations. That hasn’t boosted investment in the UK, we’ve not seen it growing at the speed it has in many other countries.
26/02/21: Furlough workers rose by 700,000 to 4.7 million in January
HMRC figures showed a sharp increase in the number of workers furloughed in January 2021 from 4 million at the end of December to 4.7 million workers in January. The cost of the Furlough (CJRS) scheme has risen to £54 billion so far. The highest take-up rate was for those aged 18 to 24 years. As many as 68% of firms in the accommodation and food services sector were furloughing staff, while arts, entertainment and recreation had the second highest rate at 64%.
25/02/21: Fuel duty to be frozen in Budget
Rishi Sunak has ruled out a rise in fuel duty after concluding that reliance on cars as a transport safety measure during the pandemic is still too great, Treasury sources have said.
The chancellor is understood to have seriously considered an increase before his previous budget last March, keen to send a signal about the UK government’s green agenda.
The Treasury also considered a rise of up to 5p a liter from March 2021 on the assumption that the UK would be back to somewhere near normal transport use.
24/02/21: Hotel industry could take 3 years to get back to normal
The FTSE 100 hotel company behind the Holiday Inn and Crowne Plaza brands dropped into the red last year to the tune of $153 million after “the toughest time this company has ever seen”. Intercontinental Hotels Group reported a halving of group revenues to $2.39 billion while revenue per available room (revpar) — a key industry measure — fell by 52.5 per cent, with the UK down 65 per cent, because of hotel closures and travel restrictions. Keith Barr, 50, chief executive of IHG, said Covid-19 had taken a heavy toll on demand across the sector and the return to pre-pandemic levels would be a “multi-year” process, depending on the progress of global vaccine rollouts and the lifting of restrictions.
24/02/21: Online sales tax moves closer
As online businesses mop up the remnants of some of the high street’s biggest names, the retail industry is torn over the potential introduction of an online sales tax. While virtually every shopkeeper in Britain has been a vocal critic of the archaic business rates system, there remains little accord on how to level the playing field with aggressively expanding internet retailers. The acceleration of online shopping during the pandemic combined with the huge hit to public coffers has prompted Treasury officials to host secret meetings this week with business leaders on how an online sales tax could work.
23/02/21: VAT Deferral New Payment Scheme is now open
If you are one of over half a million businesses who deferred their VAT payments last year, you can now join the VAT Deferral New Payment Scheme online to pay in smaller monthly instalments.
To benefit from VAT deferral New payment scheme, you will need to have deferred VAT payments between March and June 2020, under the VAT Payment Deferral Scheme. They will now be given the option to pay their deferred VAT in equal consecutive monthly instalments from March 2021.
Businesses will need to opt-in to the VAT Deferral New Payment Scheme. They can do this via the online service that opens on 23 February and closes on 21 June 2021.
HMRC has updated guidance on how to register for the online service to pay VAT payments deferred between 20 March and 30 June 2020 due to the covid-19 pandemic.
23/02/21: Unemployment rate has risen to its highest level in almost 5 years
The unemployment rate rose to 5.1% in December quarter, with the number of people on company payrolls down 726,000 on pre-pandemic levels. Under 25th were hit the worst as almost three-fifths of these figures were younger than 25 years. The ONS said 1.74 million people were unemployed in December quarter, up 454,000 from the same quarter in 2019.
23/02/21: You can now make February CJRS claims
You can now submit your claims for periods in February. These must be made by Monday 15 March.
You can claim before, during or after your client’s payroll is processed. If you can, it’s best to make a claim once you’re sure of the exact number of hours your client’s employees will work so you don’t have to amend the claim later.
To do list:
- If you haven’t submitted your claim for January but believe that you have a reasonable excuse for missing the deadline, check with HMRC if you can make a late claim.
- Submit any claims for February no later than Monday 15 March.
- Keep records that support the amount of CJRS grants claimed, in case HMRC needs to check them.
22/02/21: HMRC temporarily waives late payment penalties
HMRC has announced that Self-Assessment customers will not be charged the initial 5% late payment penalty if they pay their tax or make a Time to Pay arrangement by 1 April.
The payment deadline for Self-Assessment is 31 January and interest will be charged from 1 February on any amounts outstanding. The deadline has not changed, but this year, because of the impact of COVID 19, HMRC is giving taxpayers more time to pay or set up a payment plan.
Payment plans or payments in full must be in place by midnight on 1 April to avoid a late payment penalty.
HMRC recognizes the pressure affecting customers due to the pandemic, and anyone worried about paying their tax should contact HMRC for help and support on 0300 200 3822.
The self-serve Time to Pay facility allows customers to spread the cost of their tax liabilities into monthly instalments until January 2022. Customers can set up a payment plan online, on GOV.UK.
Self-Assessment customers who have yet to file their tax return should do so by 28 February to avoid a late filing penalty.
22/02/21: VAT deferral new payment scheme – join from 23 February
If businesses deferred paying VAT due in the period from 20 March to 30 June 2020 and cannot afford to pay by 31 March 2021, they can join the VAT deferral new payment scheme and pay their deferred VAT over a longer period. The online service will open on 23 February 2021 and close on 21 June 2021. Businesses can make up to 11 monthly instalments, interest free. The earlier you join, the more months they can spread their payments across.
You can join the scheme online without the need to call. You can go to GOV.UK for more information and to join quickly and simply when the scheme opens. Be advised that HMRC is unable to provide an agent (Accountants) service for this scheme.
Businesses that need more time to pay their deferred VAT should contact HMRC.
19/02/21: Uber drivers to be classified as workers, not independent contractors
Uber must now classify its drivers on its platform as workers, Supreme Court ruled in landmark case today. The ruling could mean thousands of Uber drivers are set to be entitled to minimum wage and holiday pay. Mr Aslam, the president of the App Drivers & Couriers Union (ADCU) said,
“I think it’s a massive achievement in a way that we were able to stand up against a giant. It took us six years to establish what we should have got in 2015. Someone somewhere, in the government or the regulator, massively let down these workers, many of whom are in a precarious position.”
19/02/21: British Pound hits 34 month high against US Dollar at 1.40
The Pound-to-Dollar exchange rate hit the 34 month high psychologically significant round number of 1.40 in the early trading session this morning in London. It last traded at these levels back in April 2018. The Pound has been resilient in the face of weaker than expected retail sales data for January. Overall Sterling sentiment has remained remarkably strong amid expectations that the vaccination program will allow the UK economy to stage a strong recovery from the second quarter of 2021.
17/02/21: Bitcoin hits $50,000 mark for the first time
Bitcoin rallied yesterday to $50k mark smashing all its previous records on the back of tentative acceptance on Wall Street and enthusiasm in Silicon Valley. Having hit an all-time high of $50,487.78, it closed on $48,741.68 in New York last night. The world’s largest cryptocurrency continues to grow as signs of its shift from the fringes of finance to the mainstream finance/payment mode.
16/02/21: London & Leeds to get Green Finance Research Centres
The Government will launch “UK Centre for Greening Finance and Investment” in London and Leeds during April this year. The £10m hubs will “provide world-class data and analytics to financial institutions and services such as banks, lenders, investors and insurers” to “better support their investment and business decisions by considering the impact on the environment and climate change”, according to the Department for Business, Energy and Industrial Strategy.
15/02/21: Government’s Help to Buy scheme extended till May
The deadline for Government’s Help to Buy scheme has been extended till end of May this year. 278,000 households have received advance from government to help pay the deposit to buy a newly built home during last 7 years of Help to Buy Equity Loan Scheme. Data shows that 16,691 sales were still to be completed under the current scheme as of the end of last month.
15/02/21: Chancellor Sunak plotting £6billion ‘stealth’ tax by freezing personal income tax allowances
Chancellor may abandon annual increases to the tax-free personal allowance (presently £12,500) and basic rate band (presently £50,000) in his next month’s budget, as reported by Telegraph. These thresholds determine as to how much can you earn without paying any tax and at what threshold you start paying higher rate tax of 40%. Both these thresholds typically increase in line with inflation every year. Since there will no increase in the income tax rates, these announcements will be dubbed as Stealth Tax.
12/02/21: UK Economy shrank by 9.9% in 2020, the biggest crash in more than 300 years!
The UK GDP fell by 9.9% in year 2020, the largest decline since the Great Frost of 1709, according to the Office for National Statistics (ONS).
Breakdown of 2020:
1st quarter: 2.9% down
2nd quarter: 19% down
3rd quarter: 16.1% up
4th quarter: 1% up
The economy grew 1.2% in December 2020 alone, following a fall of 2.3% in November 2020.
10/02/21: Restaurant boss banned for hiding takings to avoid £266k tax
A Warwickshire restaurateur and the director of Simla Restaurant Ltd (Trading as Simla Tandoori )has been banned for five years after he hid true takings of his business to avoid paying the correct amount of taxes. The company traded as a restaurant bases in Blandford Forum, Dorset. It was established that Mr Chowdhury owed £48,000 in VAT and around £113,000 in corporation tax to HMRC from the period from 2009 to 2017. It was found that Chowdhury had underdeclared sales to avoid paying the correct taxes and, at liquidation, owed the tax authorities more than £266,000. An additional penalty of over £104,000 was levied by the tax authorities for the under declaration of corporation tax.
09/02/21: HMRC’s ‘most wanted’ tax cheat jailed
The ringleader of a plot to smuggle millions of illegal cigarettes has been jailed – three years after he flew to Lithuania to avoid an HMRC investigation. Svajunas Navagruckas, 51, who was one of HMRC’s most wanted tax fugitives, led an organised crime network that was caught with 8.5 million illegal cigarettes in June 2017. He was arrested when HMRC investigators seized the cigarettes, worth £2.8m in evaded duty, at a farm in Lincoln. Navagruckas left the UK while investigations were ongoing. He was charged in March 2019, with conspiracy to evade excise duty and a European Arrest Warrant (EAW) was issued by HMRC. He was returned to the UK on 10 July 2020 after being arrested by Lithuanian authorities.
08/02/21: Top 100 UK companies don’t have any black senior board executives
FTSE100 companies do not have a single black executive with no chairs, CEOs or CFOs according to research compiled by executive recruitment and diversity consultancy agency Green Park. Although, the number of top positions in other minority ethnic groups have increased slightly in past few years. Arnold Donald is a black chief executive of Carnival cruise operator, but the company dropped out of FTSE100 last summer. Another South African businessman Fred Phaswana has retired as the joint chair of the packaging and paper group Mondi.
This compares unfavourably with increased percentages for other minority ethnic board members (Muslim, Hindu and Sikh, and Chinese and East Asian) across the same period.
08/02/21: Garment manufacturer Company director jailed for 6 months
The boss of a Leicester clothing manufacturer has been jailed for six months after failing to provide adequate company accounting records, or to pay £300,000 in tax. He has also been banned from being a company director for a period of five years.
The sole director of Miss Pebbles Clothing Ltd, a Leicester clothing manufacturer, has been jailed for 6 months after failing to provide adequate company accounting records, or to pay £300,000 in tax. The company went into liquidation back in March 2016 when it employed around 50 people, owed tax liabilities of £300,000 to HMRC and a further £44,000 to creditors. Following Insolvency investigations, it was discovered that adequate accounting records were not kept and liquidator could not get the information about unidentified cheques and card withdrawals amounting to £983,000
According to the latest EY ITEM Club for Financial Services Forecast, the UK businesses borrowed £35.5bn (in net terms) last year, with a further £26bn forecast by the end of 2021. Last year, net Bank lending to the business was £35.5bn and £34.7bn of this was lent since beginning of pandemic in March 2020.
05/02/21: Are we heading towards negative interest rates?
The Bank of England (BoE) has indicated that banks, building societies and lenders have 6 months to prepare for negative interest rates, however BoE stressed that “Nobody should take any signal from this” as this does not mean that negative interest rates are “imminent, or indeed in prospect at any time”.
Mr Bailey added: “My message to the markets is you really should not try to read the future behaviour of the MPC from these decisions and these actions we’re taking on the toolbox”
Click here for better understanding on and examples of negative interest rates.
05/02/21: Company director? Get ready for personal responsibility!
Kwasi Kwarteng, the Business Secretary, is due to publish long-awaited major audit reforms in a white paper next week, where Directors will be held personally responsible for the accuracy of company’s financial statements. As part of far-reaching proposals to overhaul UK corporate governance and audit oversight, it is expected that fines and bans will be imposed for major failures.
The reforms will include major amendments in the audit industry in the wake of several accounting scandals and failings at companies such as Carillion and Patisserie Valerie. The UK Busines department is set to issue a 200 plus pages documents containing recommendations, which include regulations similar to strict US Sarbanes-Oxley regulations which came into effect following the fall of Enron.
Presently, the “board of directors” is responsible for the accuracy of the financial statements. However, the recommendations will make it directors’ responsibility in their personal capacity through the sign off of internal controls and risk management.
05/02/21: Additional house hold savings during lockdown: £125 billion
With the economy shut down, medium and high earners have saved considerably more during the lockdown while working from home. The Bank of England said £125bn additional savings were recorded last year. This is 5 times more than any 9 month period prior to lockdown. The savings figure is expected to rise further during first half of 2021, BoE suggests.
04/02/21: UK economy to rebound strongly following vaccine rollout
Bank of England predicts the economy will bounce back in the spring, following an expected 4.2% shrink in the first quarter of 2021. The rapid recovery in 2021 is expected due to successful vaccination program in the country. With Furlough scheme approaching its end, the unemployment rate is still expected to be 7.8% later this year. The BoE said most people are expecting life to return to normal within a year.
04/02/21: Amazon under pressure to pay more tax as sales about to hit £20bn
Amazon is being demanded to contribute more in taxes and business rates as UK sales rose by 51% to $26.48bn (£19.12bn) in 2020. Their sales are now double than M&S and 5 times more than Next. £1 of every £20 spent in Britain’s retail sector is now going to Amazon. Normal bricks and mortar retailers pay around 2.3% of their turnover in business rates, whereas Amazon pays roughly 0.37% only!
03/02/21: Buy Now Pay Later (BNPL) agreements to be regulated by FCA
Coronavirus pandemic has caused a boom in online shopping quadrupling the Buy now pay later agreements in 2020 to £2.7bn with 5 millions people using such products. This un-regulated sector will be brought under strict FCA regulation, following a 4 month review by Chris Woolard, the former FCA Chief Executive. Firms will now to run proper affordability checks prior to approving any agreement.
03/02/21: House prices fall as Stamp Duty holiday end approaches
Nationwide, Britain’s biggest building society, said the average house prices in the UK fell in January (by 0.3% to £229,748) for the first time since June 2020, as the rush in property market following stamp duty announcement begins to settle down. This was also confirmed by annual growth rate ease since June to 6.4% from 7.3%. During an online parliamentary debate on Monday, MPs called for an extension of stamp duty holiday to avoid a collapse in property market.
03/02/21: Chancellor warned to extend furlough or risk mass unemployment
Britain’s most influential business groups and trade unions have warned Chancellor that there is genuine risk of mass unemployment in Britain unless he extends the furlough scheme. Chancellor was updated by industry experts that economy was too fragile to end the furlough scheme as scheduled.
02/02/21: Chancellor set to maintain triple tax lock
Chancellor Rishi Sunak is said to have agreed to maintain the triple tax lock at next month’s Budget, preventing him from raising income, national insurance or VAT. It’s a move that could force him to seek increases in other taxes, including corporation tax and possibly capital gains tax when the budget is delivered on March 3, 2021.
02/02/21: No plan to reduce workers rights
Business Secretary Kwasi Kwarteng has confirmed that the review is no longer happening and there is no plan to reduce workers rights. This has put an end to the fear related to job protection rights like 48-hour week, holiday entitlements and overtime pay. The news of review was reported by FT.
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