Britain's city centres could lose billions next year as long-term behavioural changes caused by the coronavirus pandemic continue to hit the hospitality and retail industries.
Research by the University of Sheffield found that businesses could lose £3 billion ($4bn) as people work from home and stop going to coffee shops, buying lunch, or going shopping near their workplaces.
Dr Jesse Matheson, who led the study, said that employees will be working roughly one day a week more at home than they were before the pandemic, with the shift in working habits expected to be permanent.
The phenomenon, which Dr Matheson labelled “zoomshock”, is mainly likely to affect businesses in the most densely populated areas of Britain.
London is expected to be worst hit, with the City financial district expected to suffer a 31 per cent drop in spending, followed by central Birmingham, which could to see an 8 per cent decline.
The study also found that roughly 77,000 people who work in the hospitality and retail industries will be forced to either relocate to jobs in the suburbs or lose their jobs completely.
On Wednesday, England introduced Plan B Covid-19 measures, with workers asked to work from home if they can, leading to fears of further losses for struggling inner-city retailers.
Analysis also found a significant inequality between rich and poor neighbourhoods. Those from more affluent boroughs are likely to continue to work from home, meaning that money being lost in city centres is more likely to be recuperated in higher income suburbs.
“Some of this spending will be realised in the residential areas where these workers live, but some may be lost altogether,” Dr Jesse Matheson said. “As suburban neighbourhoods lack the density of city centres, many retail and hospitality businesses will find it is not profitable to relocate.”
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“Workers in retail and hospitality may also find that demand has shifted to locations to which commuting is too difficult, which means that supply may not be able to keep up with demand.”
Dr Matheson says there is work to do in finding out if all of the lost £3 billion will be spent elsewhere or lost altogether.
“This money may be recuperated in the higher income suburbs, but in a lot of places working from home means people are more spread out, which isn’t good business for retail business like coffee shops, who require high density areas for business.
“So there is a risk this revenue could be lost from the hospitality and retail sectors forever.”
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November 1-3: Abu Dhabi Grand Prix (Formula One)
November 28-30: Dubai International Rally
January 9-11: 24Hrs of Dubai (Touring Cars / Endurance)
March 21: Round 11 of Rotax Max Challenge, Muscat, Oman (karting)
April 4-10: Abu Dhabi Desert Challenge (Endurance)
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Director: Hasan Hadi
Starring: Baneen Ahmad Nayyef, Waheed Thabet Khreibat, Sajad Mohamad Qasem
Rating: 4/5
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Teams:
Punjabi Legends Owners: Inzamam-ul-Haq and Intizar-ul-Haq; Key player: Misbah-ul-Haq
Pakhtoons Owners: Habib Khan and Tajuddin Khan; Key player: Shahid Afridi
Maratha Arabians Owners: Sohail Khan, Ali Tumbi, Parvez Khan; Key player: Virender Sehwag
Bangla Tigers Owners: Shirajuddin Alam, Yasin Choudhary, Neelesh Bhatnager, Anis and Rizwan Sajan; Key player: TBC
Colombo Lions Owners: Sri Lanka Cricket; Key player: TBC
Kerala Kings Owners: Hussain Adam Ali and Shafi Ul Mulk; Key player: Eoin Morgan
Venue Sharjah Cricket Stadium
Format 10 overs per side, matches last for 90 minutes
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If a business does not apply for the refund on time, they lose their credit.
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Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
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4. More beneficial VAT and excise tax penalty regime
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5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
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8. Pillar 2 implementation
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9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
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Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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