Musings From House Arrest
Firstly, I trust you are all keeping your spirits up, although of course in Scotland, spirits of the liquid kind can only be consumed in your own home – without any friends. However, last week our National Clinical Director used all of his bedside manner to boost morale by telling us we can forget about having a normal Christmas and that it would be digital instead. If the people I have been speaking to are anything to go by this will result in most people giving the Government a different kind of digit in response!
Yes, strange times indeed.
Whilst it is easy to wallow in self pity you have to look forward although the media focus on Covid, Brexit and the Trump v Biden spectacle, means it is sometimes difficult to do so.
We all know the crisis has been devastating to some sectors of the economy, mainly anything that involves human interaction such as hospitality, travel and high street retail. However, as technology will never be able to replace a meal in a restaurant, a holiday abroad (or Christmas with the family, Prof. Leitch) it is not unreasonable to expect these sectors to come back strongly post-Covid. However the high street retail sector is likely to find the effects of Covid more far reaching.
Whilst we can mourn its death the reality is this sector was in decline well before Covid and all that has happened is its demise has been accelerated. The news that John Lewis is considering converting some of its stores into residential property shows that they appreciate the game, as they played it, is up and it will take similar creative thinking amongst the rest if they are to have any business in the future.
However, one businesses disaster is another’s opportunity. Much has been made of the performance of the ferocious sounding FAANG stocks - Facebook, Amazon, Apple, Netflix and Google (as an aside I wonder if we would have used the same acronym if Yahoo rather than Google had become the dominant search engine?). There is no doubt that for these companies the crisis has been no hindrance to performance and on the contrary they have all enjoyed increases in revenue which has been reflected in their share prices. For some of these I doubt this will be reversed once we can get out of our homes.
Another sector that is booming in many parts of the country is estate agency. This has probably been fuelled by a combination of wanting a nicer prison cell, sorry, I mean home, and the reduction in Stamp Duty, which outside of Scotland is nil on the first £500,000 but only £250,000 here. If this has encouraged you to sell any second properties you should be aware that any Capital Gains Tax due on the sale of a second property MUST now be paid within 30 days of the sale being completed.
HMRC planned to bring this in at the start of this tax year but delayed it because of the Covid crisis. I haven’t seen it reported much, but this became law from 1st August which seems five minutes ago, but is nearly three months. This means that had you sold a second home on the 31st July you would have had until January 2022 to pay the tax but if you sold it a day later you would have to pay it 17 months sooner.
I am not sure how good lawyers have been at telling their clients about this but ignorance is not bliss in the eyes of HMRC and fines and interest will accrue on outstanding bills from their due date so please be aware if this applies to you.
Although a lot of our lives are on hiatus, technological advances are powering on and there was a huge announcement from Airbus stating they expect to have us flying in zero emission planes powered by hydrogen within fifteen years which is astonishing and fantastic news. Who knows in the years to come the oil industry may go the way of the high street. Fingers crossed we are able to leave our homes by then to enjoy this guilt free travel.