• GROUND LAID FOR 2021 BUDGET
• SCOTTISH CUSTOMERS CAN ACCESS SHOWROOMS
• GROUP 1 BATTLE TO TURN FOOTBALL CLUB INTO PDI CENTRE
• FREE COVID TESTS FOR HOUSEHOLDS WITH CHILDREN
• VOLKSWAGEN: 2020 ‘STRONGER THAN EXPECTED’
• FORD FOCUS PLANT TO SHUT FOR FIVE WEEKS
• STOCKWATCH – Lookers ‘undervalued’
• COMING UP – 2021 Budget
• BUSINESS CONFIDENCE RISES
• COMPANIES HOUSE TO RESUME STRIKE-OFFS

Ground laid for 2021 Budget

Chancellor Rishi Sunak will present the 2021 budget this week and spent the weekend laying the ground for tax rises. The £12,500 basic and £50k 40p income tax thresholds is expected to be frozen for three years, which will push 1.6 million people into a higher tax bracket by 2024, raising £6bn.

It has also been reported corporation tax could rise from 19% to 23% or even 25% by 2024. The CBI has warned Mr Sunak that a rise in corporation tax could derail the economic recovery by impeding private sector investment. “Now is not the time to raise taxes,” said CBI chief economist Rain Newton-Smith, who urged the Chancellor to wait until the recovery is well established.

The Institute for Fiscal Studies has indicated there is currently a £43bn shortfall in the nation’s finances, which Mr Sunak must find to convince the Office for Budget Responsibility and the financial markets.

The Chancellor is understood to be concerned over the “enormous strains” on the public finances: UK borrowing leaves the nation “exposed” to interest rate rises. National debt currently stands at £2.13 trillion and Mr Sunak wanted to “level” with the public about the economic cost of the pandemic.

The 2021 Budget will also contain more measures to tackle the pandemic. The furlough scheme, currently scheduled to expire at the end of April, may be extended. During a round of Sunday interviews, the Chancellor said “there’s more to come” and that it is right furlough “aligns” with the road map out of lockdown. Furlough currently supports around 4.7 million people. Extending it to June would cost £15bn.

Mr Sunak also announced a £5bn council grants scheme called ‘Restart’ over the weekend, for 700k businesses during the phased reopening. Non-essential retailers will be able to claim £6k per site, distributed directly by local authorities from April.

 

Scottish customers can access showrooms

The Scottish government has confirmed amendments to click and collect rules allowing customers to access showrooms to “conclude purchasing of a vehicle”. A letter to the NFDA said an appointment system should be used and numbers should be limited to “ideally only one customer at a time”. Browsing by potential customers, however, is still not permissible.

http://bit.ly/3dUi4ZW

 

Group 1 battle to turn football club into PDI centre

Group 1 Automotive has had a planning application to turn part of a disused Essex football stadium into a PDI centre turned down. Thurrock stadium has been disused for several years and Group 1 plans 1,237 vehicle spaces and a 1,200 square metre building. The existing stadium itself would be retained and gifted to Grays Athletic Football Club.

Grays Athletic chairman Steve Skinner now plans to write a formal letter of complaint to Thurrock Council, believing councillors made “mis-informed comments” over the club’s bid to find a new home.

http://bit.ly/3bPXk2K

 

Free Covid tests for households with children

Housesholds with children in primary school, secondary school or college will be eligible for two Covid-19 rapid tests each week from 8 March, when children return to the classroom. Rapid test kits will be available to collect from more than 500 locations. Public Health England says they will stop outbreaks before they occur and is encouraging all eligible households to take up the offer.

Businesses such as retailers have already significantly scaled up workplace testing, says the government, and all local authorities in England have enrolled in the community testing programme, offering community testing for services including small businesses.

 

 

 

WORLD NEWS

Volkswagen: 2020 ‘stronger than expected’

Volkswagen Group posted a 4.8% return on sales and operating profit of €10.6m before special items in the 2020 fiscal year, despite the Covid-19 pandemic. The results were “far better than originally expected”. Sales revenue declined 11.8% but outperformed a 16.4% decline in sales. Effective crisis management, a fast recovery in China and robust premium and financial services business were all cited as key to the performance.

The company is forecasting a return on sales of 5.0-6.5% in 2021 and a “significant year-on-year increase in sales revenue”.

 

Ford Focus plant to shut for five weeks

Ford is extending production shutdowns in Europe due to the global semiconductor shortage. Production at its Saarlouis, Germany factory, which builds the Focus, will halt for five weeks. Ford of Europe boss Stuart Rowley forecast a “huge impact on our operations”. Ford’s Valencia, Spain plant, which builds the Kuga, has also been hit, and short-time working in its Romanian Puma plant has been extended. However, its Cologne, Germany factory, which builds the Fiesta, has suffered a “relatively minor” impact.

Mr Rowley forecasts a return to normality by the second quarter.

http://bit.ly/37WQLKN

 

STOCKWATCH

Closing prices on 26 February 2021 and weekly change

Lookers shares ‘undervalued’ says Zeus Capital; gives blue-sky scenario target of 100p

Auto Trader Group 550.2p (-57.4p / -9.9%)

Cambria 62.5p (+1.0p / +1.6%)

Caffyns 415.0p (n/c)

Halfords 289.5p (+21.0p / +7.5%)

Inchcape 709.0p (-2.5p / -0.2%)

Lookers 41.1p (-0.9p / -2.1%)

Marshall Motor Holdings 145.5p (+0.5p / +0.3%)

Motorpoint 268.0p (-7.0p / -2.5%)

Pendragon 14.12p (-0.48p / -3.3%)

Vertu 39.3p (+1.2p / +3.1%)

 

 

COMING UP

Monday, UK consumer credit

Wednesday, 2021 Budget

Wednesday, BRC shop price index

 

MONEY MATTERS

Business confidence rises

Business confidence has risen to its highest level since the start of the coronavirus pandemic – with the first positive reading since March 2020. The Lloyds Bank Business Barometer cites optimism about Britain’s vaccination programme and confidence about the gradual reopening of the economy. The survey was taken before the prime minister’s roadmap out of lockdown on 22 February; business confidence may now be higher still, say experts.

https://bit.ly/3b1fWOb

 

Companies House to resume strike-offs

Companies House will resume its strike off process from 8 March 2021 after a temporary pause. They were halted from 21 January so companies and creditors would not be affected by processing delays at Companies House. The organisation warns it still has very limited numbers in the office following government guidance about working during coronavirus.