The coronavirus pandemic is a “devastating blow” for the world economy, according to World Bank President David Malpass.
Mr Malpass warned that billions of people would have their livelihoods affected by the pandemic.
He said that the economic fallout could last for a decade.
In May, Mr Malpass warned that 60 million people could be pushed into “extreme poverty” by the effects of coronavirus.
The World Bank defines “extreme poverty” as living on less than $1.90 (£1.55) per person per day.
However, in an interview on Friday Mr Malpass said that more than 60 million people could find themselves with less than £1 per day to live on.
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Mr Malpass told BBC Radio 4’s The World This Weekend: “It [coronavirus] has been a devastating blow for the economy.
“The combination of the pandemic itself, and the shutdowns, has meant billions of people whose livelihoods have been disrupted. That’s concerning.
“Both the direct consequences, meaning lost income, but also then the health consequences, the social consequences, are really harsh.”
Image copyright Getty Images
Image caption
David Malpass has described coronavirus as a “devastating blow for the world economy”
Mr Malpass warned it’s been those who can least afford it who’ve suffered the most.
“We can see that with the stock market in the US being relatively high, and yet people in the poor countries being not only unemployed, but unable to get any work even in the informal sector. And that’s going to have consequences for a decade.”
The World Bank, along with its counterparts, has been providing support to the worst affected countries, but says much more is needed.
It is calling on commercial lenders such as banks and pension funds to offer debt relief to poor countries.
He would also like them to make the terms of their loans clearer, so other investors are more confident about putting money into those economies.
Targeted government support and measures to shore up the private sector are also vital to rebuild economies, the World Bank argues.
Investment and support would create jobs in areas like manufacturing, to replace those in the worst affected sectors, such as tourism, which may have been permanently lost.
‘Tensions and inequality’
Mr Malpass admits the damage to global trade, and inclinations to bring supply chains closer to home or erect trade barriers, are a challenge.
“When trade is reduced, that creates its own set of tensions and inequality… I’m sure [the global economy] will be interconnected in the future, maybe less than it was pre-COVID.”
But ultimately, Mr Malpass said the “catastrophe” could be overcome, and that people were “flexible, they’re resilient” .
“I think it’s possible to find paths, it’s hard work for countries and governments to do that.
“But we can encourage that effort… I’m an optimist, over the long run, that human nature is strong, and innovation is real. The world is moving fast and connectivity… has never been higher. And so that gives hope for the future.”
However, he admits the challenge is getting the right plans in place at the right time – and in the meantime, the pain could be considerable.
For years, black deaths in the hands of police have gone unremarked in corporate America. But this time, as protesters pour into streets across the country set off by the killing of George Floyd, businesses are speaking out.
Sportswear giant Nike was one of the first to leap into the fray with a social media post that twisted its “Just Do It” slogan to say: “For once, don’t do it. Don’t pretend there’s not a problem in America”.
“We stand in solidarity against racism and violence,” YouTube posted a few hours later.
By 31 May, the internet was flooded.
“We see you and are with you” cosmetic brand Glossier posted to Twitter. “I am appalled,” the head of investment giant BlackRock shared on LinkedIn. The chief of carmaker General Motors said she was “impatient and disgusted”.
Even businesses hit by the looting that has occurred in the chaos of the demonstrations have stood firm.
“Property can be replaced, human lives cannot”, fashion designer Marc Jacobs posted on Instagram.
Activists say the corporate outpouring is a welcome change from earlier eras.
“It is quite momentous,” says Jade Magnus Ogunnaike, a deputy senior campaign director at Color of Change, a racial justice organisation founded in 2005. “There was a time five years ago when corporations… wouldn’t say black lives matter for a billion dollars.”
‘Hollow and disingenuous’
The show of support has raised plenty of eyebrows – especially when the company in question has a chequered record when it comes to its own treatment of black employees.
L’Oreal’s post saying “speaking out is worth it” drew a scathing response from British model Munroe Bergdorf, whom the beauty giant dropped from a campaign in 2017 after she wrote about white supremacy on social media.
“I am SO angry” the transgender activist wrote on Instagram. “Where was my support when I spoke out? I’m disgusted and writing this in floods of tears”.
After the National Football League called for “action”, filmmaker Ava DuVernay hit back that the statement was “beyond hollow + disingenuous”, noting that the league just two years ago barred kneeling during the national anthem at games, after athlete Colin Kaepernick did so to protest against police brutality.
It later backed away from the policy. And on Friday, Commissioner Roger Goodell commented again.
“We, the NFL, admit we were wrong for not listening to NFL players earlier and encourage all to speak out and peacefully protest,” he said.
What’s driving the change?
The different tone is a sign that years of activism following deaths of black men such as Trayvon Martin and Philando Castile is paying off.
Recent polling by CBS found that 57% of Americans believe police are more likely to use deadly force against a black person than a white person, up from 43% in 2016.
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While companies remain as reluctant as ever to wade into controversy, the scale of the demonstrations – which started in Minneapolis on 26 May and have since spread internationally – has made speaking up a “business imperative” says Dwayna Hayley, senior vice president at Porter Novelli, a communications firm that has advised companies such as McDonald’s and Pepsi.
“What is driving this is the understanding that if we don’t cater to the people that we serve, we could lose market share,” she says. “It is a strategic business move.”
Firms are also moving to preserve reputations among staff and potential recruits, says Brayden King, a professor at Northwestern University’s Kellogg School of Management, who says internal work groups often play critical roles in getting corporate cultures to change.
As more and more companies come forward, it increases the danger of remaining silent, he adds.
“There are a lot of corporate leaders who are genuinely sympathetic. There’s also a wariness of being on the wrong side of the issue and having their reputation damaged,” he says.
“At this point there’s more risk in not speaking out than in speaking out.”
‘Normal stuff’
In an effort to show there is action behind the statements, some firms, including Walmart, Disney, Facebook and Glossier, have pledged donations to black organisations, such as the NAACP or launched new diversity efforts.
Lego paused advertising for toys that feature police and the White House, while the co-founder of social media site Reddit resigned from its board, saying he should be replaced by a black candidate.
Even with those commitments, most firms are still playing it safe, says Steve Callander, professor of management at Stanford Graduate School of Business.
Few executives have directly criticised the police or the White House, despite diverging markedly in tone with President Donald Trump, who has focused his remarks on ending the demonstrations. On social media, many of the posts even look the same, with white script on a black background.
“This is pretty much normal stuff,” says Prof Callander, adding that the non-controversial nature of the support is likely to limit how much brand loyalty it will generate.
“What you’re trying to do is create an authentic connection with your customer and your public and for that to be authentic it has to be costly,” he says. “The big gain in speaking out on social issues is precisely because there’s a downside.”
‘Beyond a statement’
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Media captionMinneapolis voices: ‘As a black American I am terrified’
Ms Ogunnaike is now working on a campaign to push firms to back up their words with concrete actions.
She thinks a next step would be for companies to support funding cuts to police departments. This echoes the demands of many protesters, who have urged local governments to reduce spending on programmes that have supplied police with military equipment and other weapons.
Companies also need to improve pay and working conditions for black workers, who make up a disproportionate share of the low-wage workforce, she adds.
“We’ve never seen so many corporations make statements before,” she says. “But what’s most important as these protests continue is that corporations go beyond the statements.”
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The hospitality industry has been badly affected, with restaurants bars and cafes required to close for all but takeaways and deliveries
The boss of the UK’s largest recruitment firm, Reed, has said he fears current trends suggest far more people are going to lose their jobs because of the coronavirus crisis.
James Reed predicted the unemployment rate could reach 15%, meaning five million people could be out of work.
He said recent job cuts by firms were “perhaps just the tip of the iceberg”.
Reed has seen job advertisements drop by two-thirds, while applications per job are rising.
This week Bentley, Aston Martin, car dealership Lookers and engineering giant Rolls-Royce have all announced job cuts.
Speaking to the BBC’s Today programme, Mr Reed said more losses could be on the way since small businesses do not have to give advance notice of lay offs, as big companies do.
“My concern is that the data that we’re seeing, which is that the number of jobs advertised is down two-thirds and has been consistently for two months now, suggests that there could be a lot more job losses to come,” he said.
He predicts unemployment will rise sharply in the autumn, when the government’s furlough scheme comes to an end.
Mr Read said some people had predicted unemployment could reach levels not seen since the 1980s, when the jobless rate reached 11.9%.
“I fear it could be a lot worse than that, it might be more like the 1930s,” he said.
Currently, 8.7 million UK workers are receiving payments on the Job Retention Scheme.
The government has confirmed the scheme will run to the end of October, but by then employers will be paying a fifth of workers’ salaries.
“It’s very difficult for those businesses to re-employ all the people they’ve got furloughed,” Mr Reed said. “So I’m dreading this day of reckoning where they decide they’re not going to do that and a lot more people will become unemployed.”
Mr Reed said some industries were seeing a rise in recruitment, particularly in health and logistics, but huge sectors of the economy, such as leisure and tourism, remained completely shut down.
He added it was important for the economy to get going again in the next two or three months, or it would be hard for some firms to recover, and he called for clarity soon on how businesses can reopen.
In the early weeks of lockdown, claims for universal credit, the benefit for working-age people, hit a record monthly level of 1.5 million claims.
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Airlines across the world grounded aircraft after passenger numbers collapsed
British Airways owner IAG is considering mounting a legal challenge to quarantine rules which are due to come into effect on Monday.
The dramatic move marks another sign of a breakdown in relations between the airline and the UK government.
IAG boss Willie Walsh told Sky News that airlines had not been consulted on the 14-day quarantine period for people arriving in the UK.
He said he expected other airlines to also mount legal challenges.
“We think it’s irrational, we think it’s disproportionate and we are giving consideration to a legal challenge to this legislation, so we’re reviewing that with the lawyers later on today,” Mr Walsh told Sky News.
“I suspect there are other airlines who are doing so, because it’s important to point out there was no consultation with the industry prior to enacting this legislation and we do believe it is an irrational piece of legislation.”
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Airlines and holiday firms have been arguing against a two-week quarantine period for anyone arriving in the UK that will be enforced from 8 June. Travellers to the UK will be required to isolate for 14 days or face a £1,000 fine.
The government has said that the period is needed to “keep the transmission rate down and prevent a devastating second wave” of coronavirus.
However, industry body Airlines UK has said quarantine “would effectively kill off air travel”.
The plans have caused friction between the government and British Airways. On Thursday the airline refused to attend a meeting with Home Secretary Priti Patel to discuss the quarantine rules.
British Airways is under huge financial strain due to the pandemic, and has said it is currently burning through its cash reserves at a rate of around £1m per hour.
Mr Walsh told Sky News that the Bank of England has loaned it £300m, which is the “maximum amount” available to it.
“We have done everything that is within our power to boost the cash balance of British Airways. We’re exhausting every single opportunity we can,” he said.
BA has faced heavy criticism from some MPs over a plan to slash jobs while accessing the government’s furlough scheme.
The airline has been under fire for plans to cut 12,000 jobs and weaken terms and conditions for its remaining staff.
It announced the redundancies just weeks after putting 30,000 workers on the job retention scheme which pays workers’ wages.
Image copyright Getty Images
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Home Secretary Priti Patel insists quarantine will help stop the virus’ spread
On Monday, a group of 200 travel companies wrote to Home Secretary Priti Patel asking for the plans to be scrapped.
The letter said travel could be possible for people – without quarantine – between destinations “deemed safe from coronavirus”.
The so-called “air bridges” would allow visitors from countries where coronavirus infection rates are low into the UK, without having to self-isolate.
It is understood that the government is working on a list of countries it is hoping to secure air bridge agreements with, which include all major European tourist destinations such as Portugal, Spain and France as well as Australia and Singapore.
However, the government’s official position is that the idea is “under consideration”, and not established policy.
The US labour market improved unexpectedly in May raising hopes that economic damage tied to the pandemic will be less harmful than feared.
The unemployment rate fell to 13.3%, down from 14.7% in April, as businesses started hiring again.
Firms in the food, construction and health care sectors took on staff.
In total, employers added 2.5 million jobs, with the education and retail sectors also recruiting.
It came as US states started rolling back some of the tough measures put in place to control the spread of the coronavirus.
As businesses start reopening, firms are beginning to rehire their employees.
The job gains surprised economists, many of whom had warned the country could see the unemployment rate rise past 20% to a post-World War Two high.
Economist Justin Wolfers, a professor at the University of Michigan, tweeted: “It’s hard to escape the conclusion that the economy bottomed in early/mid May,” he said. “We’re in a massive and deep hole, and it’ll take a while to climb out, but at least the hole isn’t getting any deeper.”
President Donald Trump, who has maintained the economic rebound will be swift, immediately took to Twitter to celebrate the numbers and claim credit.
“Really Big Jobs Report. Great going President Trump (kidding but true)!” he wrote.
‘Worst is behind’
The gains go only a small way towards making up for the more than 21 million jobs US employers cut in March and April, as lockdowns forced many businesses to shut their doors. In April, the unemployment rate hit 14.7%, the highest level since the Great Depression in the 1930s.
But Labor Secretary Eugene Scalia said the report showed that the economic re-opening has been more robust than thought.
“It appears that the worst of the coronavirus’s impact on the nation’s job markets is behind us,” he said.
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The news cheered investors, sending the Dow Jones Industrial Average and S&P 500 up more than 2%, continuing a recovery in share prices from their March lows.
The job gains were not limited to the US.
In Canada, employers added 290,000 jobs – far more than expected. However, the unemployment rate shot to 13.7% – the highest level on record in data back to 1976.
‘Easy part of the recovery’?
As recently as February, the jobless rate in the US was hovering at 50-year lows of 3.5%.
On Friday, economists warned the path of the economic recovery still remained uncertain. They pointed out that the hiring in May came as the government released billions of dollars in emergency aid to businesses to cover wages for employees, encouraging recipients to recall staff.
Hiring by restaurants and bars accounted for roughly half of the jobs created last month. Dentist offices accounted for another 10%.
Many of the gains also came from individuals who had told surveyors that their layoffs were temporary.
“This means this was all the easy part of the recovery,” said economist Jason Furman, a top economic advisor to President Barack Obama.
The losses have hit minority and low-wage workers hardest, a trend that continued in May.
Among white workers, the unemployment rate fell to 12.4% from 14.2% in April. Unemployment also declined among Hispanic workers, from 18.9% to 17.6%.
For black workers, however, the unemployment rate ticked up from 16.7% to 16.8%.
Image copyright Getty Images
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As businesses start reopening, firms are beginning to rehire employees
The US Labor Department has warned that the headline figures in recent months may underestimate the true jobless rate, due to discrepancies in how people describe their out-of-work status.
Economists say the unemployment rate is likely to still be about 10% at the end of the year – still quite high, and comparable to the peak following the financial crisis.
“We still think it will be a long time before the labour market is anywhere near back to its pre-virus state,” said Michael Pearce, senior US economist at Capital Economics.
But at a press conference on Friday, Mr Trump rejected those forecasts.
“We’ll go back to having the greatest economy anywhere in the world,” he said. “This is a rocket ship.”
Housing Secretary Robert Jenrick has announced a two-month extension to the government’s ban on evicting renters amid the Covid-19 pandemic.
New evictions in England and Wales of tenants in both social and privately-rented accommodation will be suspended until 23 August.
“No-one will be evicted from their home this summer due to coronavirus,” Mr Jenrick tweeted.
But housing charity Shelter said the announcement was “only a stop-gap”.
The extension will run from 25 June, the end of the the three-month period originally announced as part of emergency coronavirus legislation in March.
The Ministry of Housing, Communities and Local Government (MHCLG) said it would benefit “millions of renters”. Government support for renters during the pandemic was “unprecedented”, Mr Jenrick said.
‘Sticking plaster’
Polly Neate, chief executive of Shelter, said: “The government has reset the clock on the evictions ban, buying the families who were only weeks away from losing their homes a vital stay of execution.
But she said: “The ban hasn’t stopped people who’ve lost their jobs during this pandemic from racking up rent arrears. Even if they have a plan to pay them back, these debts will throw struggling renters straight back into the firing line of an automatic eviction as soon as the ban does lift.
“It’s critical that Robert Jenrick uses this extension wisely to change the law and properly protect renters,” she added.
Image copyright Getty Images
Dame Gillian Guy, chief executive of Citizens Advice, said: “Simply extending the pause of repossession is a sticking plaster not a cure. People who have fallen behind on rent arrears and those who have been furloughed or lost their jobs will need the security of proper reform to the rules governing evictions.
“We look forward to working with the government in the coming weeks on changes to make sure they keep their promise, that no renter should lose their home because of coronavirus.”
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Recent research by the District Councils Network suggests more than 486,242 households are spending more than half of their income on private rented housing, which could be at risk when the evictions ban is lifted.
The network, which represents 187 local authorities in England, says single parents with children, young people and households on low incomes are particularly in danger of being tipped “over the edge” into homelessness.
It called for a permanent boost to housing benefits for those in private rented homes and more funding for councils to fight homelessness, build homes and create jobs.
Landlord confidence
The MHCLG said it was working on new rules “to ensure vulnerable renters can be protected appropriately” when the halt on evictions ended.
But the National Residential Landlords Association called for the government “to set out its plans for the market at the end of this one-time extension.”
Chief executive Ben Beadle said: “A failure to do so will cause serious damage to the private rented sector as a whole.”
He added: “It will ultimately be tenants who suffer as they will find it increasingly difficult to find affordable housing if landlords do not have the confidence that they will get their properties back swiftly in legitimate circumstances.”
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As the store closed stock was wrapped in tissue paper to protect it from dust
One of Britain’s biggest independent stores is facing a “huge challenge” as it prepares to reopen after being shut for 12 weeks due to the Covid-19 lockdown.
Jarrold, which has a five-floor department store in the centre of Norwich, is celebrating 250 years of trade this year.
But soon after it started marking the anniversary, it was instructed to close and its 390 staff were furloughed.
Chief executive of Jarrold Retail Minnie Moll said: “Lockdown has certainly been a huge challenge and now we face the new challenge of trading in a very different environment while keeping our brand experience strong.”
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Jarrold, which is marking it’s 250th anniversary, has its flagship store in the centre of Norwich
British retail sales plummeted by record levels in April as many stores closed amid the coronavirus outbreak.
The Office for National Statistics figures showed the amount of goods sold fell by 18.1% last month.
Family-run High Street shop to get freedom of city
Ms Moll said 100 staff would be working when it reopens on 15 June.
Despite an upturn in online trade, the business has seen a “significant loss” overall.
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Jarrold fashion accessories have been wrapped in tissue paper to protect them
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Staff pick online orders from the shop floor and they then await for dispatch – Jarrold has seen a 600% growth in its online sales during lockdown
Preparations have now stepped up with about 30 workers taken off the government furlough scheme to prepare the store.
“We had thought we might be open sometime around 11 June, so when we heard it would be 15 June we were already putting in Perspex screens at tills and floor stickers to mark out social distancing are shortly arriving,” she said.
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The store is also providing face masks for staff who wish to wear them
Image copyright Jarrold
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Perspex shields have been installed at till points to help protect staff and customers
Image copyright Jarrold
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Chief executive of Jarrold Retail Minnie Moll said she was excited to be reopening the store
While no retail firm is ruling out possible future redundancies in the current climate, Jarrold is hoping customer loyalty will help it succeed.
Ms Moll said a trading recovery would be “long and slow”.
“That’s the reality and there’s no room for complacency,” she said.
Jarrold: The history of a family-run firm
Image copyright Jarrold
1770: John Jarrold I opens his grocers and drapers in the Market Place, Woodbridge, Suffolk
1811: John Jarrold II buys a farm at Dallinghoo, Suffolk and, aside from mixed agriculture, he establishes a printing press there
1823: Sets up as a bookseller, publisher and printer in Norwich, at 3 Cockley Lane (now London Street)
Early 1900s: Printing works in Norwich employ about 1,500 workers
2005: Sale of printing and publishing arms, with focus now solely on retail and property
Source: Jarrold website
Photos: Martin Barber
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Image caption
Sellers are being told to show off gardens of any size
Landlords and owners putting their homes on the market are being told to show off gardens in marketing photos as house-hunters search for space.
Pictures of the kitchen had previously been considered key to attracting the attention of browsers.
Lockdown has changed the priorities of buyers and renters, many of whom have been working from home, research by property portal Rightmove suggests.
Flats are the big losers, as indoor and outdoor space becomes a bigger draw.
Rightmove said that a studio flat was the most sought-after property type among renters in January, but by May – after the coronavirus lockdown – it had dropped out of the top five. A two-bedroom house is now the biggest attraction.
Moving further out of town
Flats have also dropped out of the top five wanted list among buyers, calculated from the number of enquiries per property of each type.
Many people would usually have been priced out of larger homes with big gardens, but indications suggest they are willing to accept a longer commute in order to cast the net wider for an affordable property.
The property market was effectively shut down for weeks owing to the coronavirus pandemic.
Since the easing of restrictions in England in mid-May, property portals and estate agents have reported a surge in interest. Some believe the rebound will be short-lived owing to inevitable economic pain which will follow the outbreak.
Coastal demand
At present, interest in property is high in some areas. Lockdown break-ups, job losses and urgent relocations are thought to have led to a surge in the rental sector.
This is dependent on the area. Coastal towns, and some urban areas have seen significantly higher rental demand, topped by a 51% increase compared with last year in Wolverhampton, Rightmove data shows.
However, London and the commuter belt of south-east England have seen demand fall, with the biggest drop of nearly 14% compared with last year seen in Croydon.
Property sales plunged during lockdown, but at the same time renters and buyers appear to have reassessed what they want in a home.
Estate agent Savills, which deals with high-end property, has noted higher interest in countryside living.
Now the Rightmove research for the BBC, based on the website’s data and a survey of 4,000 potential movers, has suggested 49% of renters and 39% of buyers have changed what they are looking for as a response to living in lockdown.
Among buyers, four and six bedroom houses have become more sought-after.
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As half of those asked wanted to work from home with only occasional trips to work, a third of movers wanted a better domestic workspace.
Good internet and a spare room are now higher up on wish-lists, but commuting times and transport links are less important, the survey found.
Image copyright Rightmove
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The most-viewed property on Rightmove during lockdown has no problem with space
The good Spring weather seems to have made one of the biggest impacts on intentions.
“Both buyers and renters are craving a home with its own outside space rather than a flat,” said Miles Shipside, Rightmove’s housing market analyst.
Searches by buyers for homes with gardens on Rightmove were up 42% in May compared with the same month a year ago, and increased by 84% over the same period among renters.
“Usually home-movers tell us the kitchen photographs are the most important when they’re looking at a property advert, but now agents should consider giving greater prominence to pictures of gardens and outdoor spaces to attract the attention of prospective renters and buyers,” Mr Shipside said.
He said sellers should consider painting the fence and clearing out the shed to make a property more attractive and landlords should ensure a communal garden has been included in any rental listing.
The demand for outdoor space has been seen before, but could fizzle out as sellers with gardens raise their asking prices accordingly.
“Unscrupulous” firms are promising NHS workers big savings through tax dodging schemes that could leave them out of pocket.
The firms, which operate at the fringes of the law, target key workers drafted in to help with the coronavirus crisis, a BBC Money Box investigation found.
Social media adverts push workers toward some umbrella companies that take a hefty cut of their salaries.
In return, these companies hide a portion of their pay from the taxman.
But Her Majesty’s Revenue and Customs (HMRC) has said signing up with these firms, which it described as “unscrupulous”, could leave key workers facing large, unexpected tax bills.
One advert on Twitter says: “If you’ve been drafted in to reinforce the NHS response to the #coronavirus pandemic, we want to assist you.”
When operating legitimately, working through an umbrella company can make it easier to take on jobs for multiple employers at once.
The worker has their salary paid to the umbrella company, which then pays tax, National Insurance and other deductions on their behalf. After taking a fee, the umbrella company will then pay the worker what is left.
But one company told Money Box that it was possible to save thousands of pounds a year legally by hiding a large chunk of a worker’s salary from the taxman.
Posing as a healthcare worker on a salary of £145 a day, our reporter was told by Dark Blue Professional, a UK-registered umbrella company, that they could take home 78% of their salary, which is more than they would have made through a standard umbrella company.
Kay from Dark Blue Professional explained how the scheme works: “You receive one payment which is a PAYE [pay as you earn] salary payment, that’s taxed and you receive a payslip – and the residual balance is then paid as an investment payment.”
“You receive your second amount into your account…and because it’s done that way there is no tax liability on the second proportion,” she told us.
As a result, a healthcare worker earning £725 per week would be able to pocket £60 more than if they used a standard umbrella company.
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But what Kay did not say is that Dark Blue Professional would take £80 a week in fees, four times the industry standard, and that the government would be cheated out of up to half the tax that it should have received.
Kay insisted the scheme is tax compliant. But similar types of scheme have been challenged by HMRC in the past, which has left thousands of workers with crippling tax bills.
Some even faced losing their homes, leaving their finances in tatters.
Responding to the findings of Money Box investigation, Judith Freedman – professor of taxation law and policy at Oxford University – said: “There’s a strong likelihood that HMRC will challenge them [the schemes] successfully.””Not only could the individual taxpayers be left with a big tax bill and a lot of hassle, but they have already paid relatively large fees to the promoters, so they are much worse off than they would have been doing things in a straightforward way,” she said.”It is distressing that people are trying to sell these schemes with…minimal explanation of the risks. Everything possible needs to be done to stop the firms doing this before ordinary taxpayers get caught up in it.”
‘Government doesn’t like it’
Money Box also spoke to a broker from Contracting Scout, which actively targets key workers with adverts on Twitter and LinkedIn.
“Tim”, from Contracting Scout, offered to sign us up with an umbrella company also offering 78% take home pay.
He explained that the umbrella companies he works with “are taking advantage of a few tax loopholes” and admitted that “the government doesn’t like it”.
“They [the government] do try and legislate against it, but legislation is extremely slow, so once the new legislation moves in there’s a hundred different umbrellas that pop up next week with a different type of payment structure which doesn’t get captivated by the law.
“So the goal posts are always moving and the providers are always trying to cater to that,” he said.
Neither of the two companies responded to the findings of our investigation.
An HMRC spokesperson told Money Box “it is shocking that unscrupulous promoters of tax avoidance schemes are targeting returning NHS workers during this difficult time. HMRC published [advice] on 30 March warning returning workers about this very issue.
“Our advice has always been to steer well clear of such schemes, and to report them to us in confidence for investigation”.
There are more details of this story on Money Box and you can follow Anna and Money Box on Twitter.
My Money is a series looking at how people spend their money – and the sometimes tough decisions they have to make. Here Alex Wright from Leicester takes us through a week in his life during the coronavirus pandemic.
Alex, 29, is a venue manager of a gaming arcade and earns £25,000 a year. However, he has been placed on furlough since March. His partner Rebekah is an NHS nurse and has recently started maternity leave following the birth of their twin daughters, Eden and Indie, last week. They have two older boys, Rory, five and Casper, four.
Over to Alex….
The day starts at 7:00 with the newborn twins needing a feed. They came home yesterday after being at the hospital for the past few days and are on a feeding plan to help them gain weight as they were born nearly five weeks early, which means they will need formula in addition to breast milk. We never intended to use formula as breast milk is a lot cheaper! But when it comes to health, there is no discussion needed.
We’ve had a new Tesco open close by so I take a walk to see if the formula is in stock and how much it costs, whilst also taking the opportunity to use their coffee machine! They have the formula but it’s slightly more expensive than our usual shop so I do not purchase it. I do pick up a coffee, a Red Bull, a couple of croissants for our other two children and some bacon for £7.85.
12:30. We have a visit from the community midwife to see the twins. Everything is ok and both gained some weight! Going to come back again in two days to make sure all ok.
Rest of the day is spent tidying. Our house with six in has suddenly gotten a whole lot messier! The twins are settling in and getting used to the new noisier surroundings generated by their older brothers. I purchase the formula from Sainsbury’s where it is £10.50.
Total spend: £18.35
Image copyright Alex Wright
7:00. I check my bank account and see the direct debit for the gas and electricity has been taken today (£42.84). We’re using slightly less than this so the account is now £5.86 in credit.
Usually I would be at work now but being on furlough is a strange situation, I’ve never not been at work since turning 18. The time at home is great, even more so since the twins’ arrival, but it does feel like something is missing, let alone £200 less in my pay. To help with this, we have taken the option of a mortgage holiday which is saving us £627 a month.
11:30. We take a walk to the park for a picnic with a detour to the shop for supplies (£19.95). I always make sure I scan my Nectar card app as my points balance is worth over £55. Hoping to have this close to £100 in time for Christmas.
16:00. I plan to laminate the hallway but when I start I realise I’ve lost my hammer. I rip out the old skirting board and clean up before going to buy a new one. It’s Casper’s birthday on Friday and Rebekah asks me to pick up some things for his party so with these, a new hammer, some other bits and a couple of new t-shirts, I’ve spent £54.81. When I return I tell her to never send me shopping again on my own, I always seem to buy more than intended!
Total spend: £117.60
Image copyright Alex Wright
11:00. The community midwife arrives and Indie has gained a lot of weight but Eden is still the same. We’re advised to keep to the feeding plan and she will return to check again on Friday.
13:30. During lockdown, we decluttered and listed a few items on eBay. A Nintendo Wii sells for £36, so Rory and I take a walk to the post office. We nip into the shop first for a drink and a sneaky chocolate bar (£2.10). I tell him that he’s not to tell his brother or mum! Postage and packaging costs £14.49 and it’s on its way to its new owners.
17:00. I’m informed I will be returning to work on 8 June. This is a surprise as I wasn’t expecting to be back till July but the arcade I manage is being classed as a non-essential shop. I have mixed emotions, probably more so because of the surprise at being allowed to open. I pass the message on to my team who, reassuringly, respond with excitement.
17:30. I don’t usually drink alcohol at home but seeing friends having drinks tempts me. £18.80 and a case of beers later and drinks for Rebekah and the boys, we’re out in the garden.
Total spend: £35.39
Total made: £36.00
10:00. I have a busy day planned today. I agreed to help my mum’s partner by moving a load of mixed concrete for him from a wagon. When I finish, there’s a KFC close by which doesn’t look busy so I pop by and have a fillet stacker meal which is £6.59.
16:00. On to the next job finishing the laminate flooring at home. Some difficult cuts to do round the stairs, doorway and piping but the job is complete and I’m happy with how it has turned out.
18:00. Need to pick up party food for Casper’s birthday tomorrow. I can’t remember the last time I filled the car up and it comes to £58.14, usually this would cost close to £70 every couple of weeks so love the low oil prices! Then to the supermarket where I spend £161.53 on food, tableware, party supplies and some tiny baby clothes as the girls are not fitting their up to one-month outfits.
I spend the rest of the evening building a go-kart whilst my partner wraps the presents we’ve been hiding in the wardrobe.
Total spend: £226.26
Image copyright Alex Wright
It’s party day! Casper is turning four today and what a strange time to be in! It would have been his first real party with pre-school friends but sadly, not going to be the case. To try and make the day special, we found a bouncy castle company still operating and ordered one for the garden.
7:00. No surprise with the early start, the birthday boy jumps on to our bed super excited. Whilst this blog is about money, there is nothing quite as valuable as seeing that excited smile on your child’s face.
8:00. The bouncy castle arrives and is inflated. They disinfect the castle prior to leaving and we pay them £55 for the day. The boys waste no time in jumping on!
Image copyright Alex Wright
11:00. The community midwife arrives to weigh the twins again. Both have put on weight, enough for no further additional visits, with the next being at 21 days.
11:30. So throughout the day, lots of text messages and phone calls arranging times for visitors to bring presents for Casper whilst complying with social distancing measures. Certainly a different type of party than we’re used to. However all is worth it, especially when the birthday boy says it’s the best birthday ever.
20:00. After a tiring day, a Chinese has been ordered (21.80). No way either of us are cooking tonight.
Total spend: £76.80
Image copyright Alex Wright
My Money
More blogs from the BBC’s My Money Series:
12:15. As I am soon returning to work, I draft up some rotas ready for the reopening. It will be strange going back after so long and still so many questions. Will we be busy? How will customers react to the changes? And most importantly, will my team and myself stay safe?
13:30. A further DIY task, today the glamorous job of sealing a toilet base. Two young boys tend to “miss”. However, all doesn’t go to plan as one of the screws is damaged. After an hour of trying to remove, I begrudgingly order a screw extractor and some screws for click and collect which comes to £11.57. Get home but still no luck. I clean as much of the area and scrub underneath as much as I can then seal the base. Disappointed at a job half done and wasted money.
18:30. The day is wrapped up with a conference call to discuss fundraising ideas for Lutterworth Town FC, who I am the club secretary for, and a night on the sofa in front of the telly.
Total spend: £11.57
Image copyright Alex Wright
A quick look at today’s forecast, another hot day on the cards so we decide to have a barbecue.
12:30. Off to the supermarket to pick up some coal, drinks and food to cook and prepare. £43.60 spent and plenty to enjoy.
14:00. The BBQ is going well, sun is shining and the boys are playing nicely together and the girls have been sleeping most of the time.
20:00. So after a relaxing chilled out day, me and Rebekah talk about the crazy week we’ve had. This coming week we need to decide what to do as we have the option of sending Rory back to school from 8 June. It seems like everything is going back to normal.
Total spend: £43.60
Total spent this week: £493.57
Image copyright Alex Wright
How does Alex feel about his week?
This week was by no means a normal week! Normally we would have done a weekly shop, maybe filled the car with fuel, made another couple of trips to the shop and spent around £150-£200. Being on furlough, and I’m sure others can relate, has left me a lot of newfound free time. I feel this has assisted in making the weekly spend creep up to help the days go by.
I don’t know how I would class myself with spending. On the one hand, I always look for the cheapest deals and have no problem in not buying something there and then because it’s the easy option. But on the other hand, I do tend to put a few non-essential items in the basket. This My Money exercise has certainly opened my eyes to what I actually do spend.
However, despite spending almost double on our usual week, this week has created memories to last a lifetime and you just can’t put a price on that!
We’re looking for more people to share what they spend their money on. If you’re interested, please email or get in touch via our My Money (World) Facebook group, or if you live in the UK, please join our My Money (UK) Facebook group and we’ll aim to contact you.
