10thJul
News article

IFS warns taxes will rise as result of coronavirus lockdown

The Institute for Fiscal Studies (IFS) has warned that the government will need to raise taxes in order to pay for the economic support measures announced by Chancellor Rishi Sunak in the Summer Economic Update.

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The Institute for Fiscal Studies (IFS) has warned that the government will need to raise taxes in order to pay for the economic support measures announced by Chancellor Rishi Sunak in the Summer Economic Update.

The cost of the Chancellor's economic support measures has risen to £190 billion, according to recent data. The Summer Economic Update included another £30 billion in measures to boost the UK economy following the coronavirus (COVID-19) lockdown.

The IFS has predicted that government borrowing will rise to £350 billion in 2020.

The business group recently published an analysis of the Summer Economic Update, in which it stated that further spending support will most likely be needed in the Autumn Budget. This could take the form of targeted tax cuts.

However, the IFS also warned of tax rises in the near future.

Commenting on the issue, Paul Johnson, Director of the IFS, said: 'Let's hold in the back of our minds that a reckoning, in the form of higher taxes, will come eventually.

'This is no normal recession. It's the deepest in history.'

10thJul
News article

HMRC scraps benefit-in-kind charge on coronavirus tests

The government has scrapped plans to get workers to pay income tax on coronavirus (COVID-19) testing kits purchased by their employer.

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The government has scrapped plans to get workers to pay income tax on coronavirus (COVID-19) testing kits purchased by their employer.

HMRC issued guidance on 6 July which outlined that COVID-19 testing kits were to be classified as a taxable benefit-in-kind.

However, the Treasury Select Committee criticised this decision and highlighted that tax bills could build up as employers purchase large numbers of tests.

Mel Stride, Chair of the Treasury Select Committee, said: 'Many employees, especially healthcare and hospitality workers, are required to undergo regular coronavirus testing.

'Many of our key workers could be faced with the perverse incentive of avoiding employer-sponsored tests in order to reduce their tax bill. This cannot be right.'

A spokesperson for the Treasury said: 'Given the importance of widespread testing, we want to ensure that all employers who wish to provide third-party testing to their employees can do so without increasing their tax liability.

'So we will introduce a new income tax exemption for COVID-19 antigen tests provided by employers. HMRC will amend its guidance as soon as possible to reflect this change.'

9thJul
News article

More than one million businesses access Bounce Back loans

Over one million UK businesses have now accessed government-backed borrowing through the Bounce Back Loan Scheme (BBLS), according to the latest figures from the Treasury.

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Over one million UK businesses have now accessed government-backed borrowing through the Bounce Back Loan Scheme (BBLS), according to the latest figures from the Treasury.

The BBLS allows small businesses adversely affected by the coronavirus (COVID-19) pandemic to apply for up to £50,000, with the government guaranteeing 100% of the advance.

Lending through the BBLS has now reached £30.9 billion, with 1,013,410 businesses having loans approved.

The Coronavirus Business Interruption Loan Scheme (CBILS) has now provided £11.5 billion worth of loans to 53,500 small and medium-sized businesses. The Coronavirus Large Business Interruption Loan Scheme (CLBILS), which is aimed at larger UK enterprises, has now provided £2.6 billion in loans to 394 businesses.

Commenting on the figures, Stephen Pegge, Managing Director of Commercial Finance at UK Finance, said: 'Just over two months since it was launched, the BBLS has now backed over one million businesses with £30.9 billion worth of lending. Across all the COVID-19 schemes, £45 billion has now gone towards supporting businesses thanks to the tireless efforts of staff working on the ground.

'It's important to remember that any lending provided under government-backed schemes is a debt not a grant, and so firms should carefully consider their ability to repay before applying.'

9thJul
News article

Business groups react to Summer Economic Update

Business groups, including the Confederation of British Industry (CBI), the Federation of Small Businesses (FSB) and the British Chambers of Commerce (BCC) have reacted to Chancellor Rishi Sunak's Summer Economic Update.

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Business groups, including the Confederation of British Industry (CBI), the Federation of Small Businesses (FSB) and the British Chambers of Commerce (BCC) have reacted to Chancellor Rishi Sunak's Summer Economic Update.

In the Update, the Chancellor announced a range of measures designed to protect and create jobs and boost the UK economy following the coronavirus (COVID-19) lockdown. A new Job Retention Bonus was announced, alongside a six-month VAT reduction for businesses in the hospitality and tourism sector and a temporary increase to the nil-rate band of residential Stamp Duty Land Tax (SDLT) in England and Northern Ireland.

The CBI welcomed the Chancellor's measures. Carolyn Fairbairn, Director General of the CBI, said: 'The Chancellor's jobs plan will be a much-needed down payment in young people's futures. By investing in skills, the government can lessen the potential scarring impact of the pandemic for the next generation.'

The FSB stated that the UK economy may need an additional boost in the short-term. Commenting on the Update, Mike Cherry, National Chairman of the FSB, said: 'The Chancellor is absolutely right to stress that the job of getting the economy back on its feet has only just begun.

'Will this set of measures be enough to spur activity over the coming weeks? That's something that will need to be kept under close review – we may need further action before the autumn.'

The BCC gave a decidedly cautious response. Dr Adam Marshall, Director General of the BCC, said: 'Businesses will celebrate many of the Chancellor's announcements . . . although it is likely that the scale of the stimulus needed to help the UK economy restart, rebuild and renew will need to be greater still over the coming months.'

8thJul
News article

Chancellor announces Job Retention Bonus in Summer Economic Update

On 8 July Chancellor Rishi Sunak delivered a Summer Economic Update, which outlined measures designed to boost the UK economy following the coronavirus (COVID-19) lockdown.

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On 8 July Chancellor Rishi Sunak delivered a Summer Economic Update, which outlined measures designed to boost the UK economy following the coronavirus (COVID-19) lockdown.

A new Job Retention Bonus was announced, which will provide employers with a one-off £1,000 bonus for each furloughed employee who is still employed as of 31 January 2021. The government hopes the Job Retention Bonus will incentivise firms to retain furloughed workers rather than making redundancies.

VAT will be reduced from 20% to 5% for the next six months for businesses in the hospitality and tourism sector. The VAT reduction will take effect from 15 July, and will apply to eat-in or hot takeaway food from restaurants, accommodation, cinemas, theme parks and zoos.

The Chancellor also announced a temporary increase to the nil-rate band of residential Stamp Duty Land Tax (SDLT) from £125,000 to £500,000 until 31 March 2021. This takes effect immediately and will be in place until 31 March 2021. Please note this only applies in England and Northern Ireland.

Meanwhile, a new Eat Out to Help Out discount scheme will provide a 50% reduction for sit-down meals in cafes, restaurants and pubs across the UK from Monday to Wednesday every week throughout August 2020.

Announcing the measures, the Chancellor said: 'Our plan has a clear goal: to protect, support and create jobs. It will give businesses the confidence to retain and hire. To create jobs in every part of our country. To give young people a better start. To give people everywhere the opportunity of a fresh start.'

8thJul
News article

Accounting bodies join launch of green finance charter

The government and the Green Finance Institute have been joined by 12 leading financial professional bodies in launching the first Green Finance Education Charter.

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The government and the Green Finance Institute have been joined by 12 leading financial professional bodies in launching the first Green Finance Education Charter.

The charter is designed to embed green finance and sustainability into the core curricula, create new qualifications and support the continued professional development of accountants.

Under the charter, by the end of the year, financial services professional bodies must commit to engaging members on issues related to climate change and environmental issues.

The professional bodies, which include the Association of Chartered Certified Accountants (ACCA) and the Institute of Chartered Accountants in England and Wales (ICAEW), are required to curate, develop and promote relevant resources to members on green and sustainable finance, and to encourage the adoption of relevant global and national standards, frameworks and guidance.

On an ongoing basis they are asked to commit to identifying and promoting impactful and effective best practices in green and sustainable finance, alongside supporting national strategies.

Charter signatories will report annually on progress in mainstreaming the principles and practice of green and sustainable finance.

Commenting on the launch, John Glen, Economic Secretary to the Treasury, said: 'The finance sector has a vitally important role to play in combating climate change, and by ensuring those working in the industry get the right training, we can ensure green finance and sustainability is central to our work now and in the future.'

8thJul
News article

Chancellor to deliver Summer Economic Update

Chancellor Rishi Sunak will deliver the Summer Economic Update today, in which he will announce measures to help boost the UK economy following the coronavirus (COVID-19) lockdown.

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Chancellor Rishi Sunak will deliver the Summer Economic Update today, in which he will announce measures to help boost the UK economy following the coronavirus (COVID-19) lockdown.

The Chancellor is expected to cut taxes in order to help the UK economy recover following the COVID-19 lockdown.

Experts predict that the Chancellor will reduce VAT for businesses in the hospitality sector and outline further plans to increase investment in training and apprenticeship schemes.

Many also anticipate a six-month stamp duty holiday which would see the stamp duty threshold raised temporarily from £125,000 to between £300,000 and £500,000.

Additionally, the government recently announced a £1.6 billion bespoke package of loans and grants to help the UK's arts and heritage sector recover from the lockdown. The Chancellor is expected to provide funds to other sectors in order to support growing industries.

Some also believe that a so-called 'wealth tax' could be announced by the Chancellor. This would take the form of a levy on individuals' personal wealth.

The Summer Economic Update will be delivered at midday today. We will keep you up to date on the key announcements.

7thJul
News article

Government to give £111 million to businesses to fund traineeships

The government plans to give UK businesses £111 million in order to fund new traineeships and get young people in England into work.

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The government plans to give UK businesses £111 million in order to fund new traineeships and get young people in England into work.

30,000 new traineeships will be created by the government to help get more young people into work. As part of the scheme, businesses in England will be given £1,000 for each work experience place they offer.

The government intends for the scheme to be introduced in England in September. Wales, Scotland and Northern Ireland are set to receive £21 million under similar schemes.

In a statement, a spokesperson for the Treasury said: 'Young people's employment prospects are expected to be disproportionately affected by the economic fallout of the coronavirus.

'Expanding traineeships will be part of a wider package to support young people and to ensure they have the skills and training to go on to high quality, secure and fulfilling employment.'

Additional details on the scheme are set to be announced by Chancellor Rishi Sunak during the government's Financial Statement on 8 July.

7thJul
News article

VAT cut on PPE extended

The Treasury has extended the temporary scrapping of VAT on personal protective equipment (PPE) until the end of October.

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The Treasury has extended the temporary scrapping of VAT on personal protective equipment (PPE) until the end of October.

The decision comes after a temporary zero-rate of VAT was applied to PPE sales for an initial three months from 1 May to 31 July.

The government previously removed import duties from PPE and medical supplies intended to assist the NHS with the response to the coronavirus (COVID-19) pandemic.

EU law governing VAT – which the UK is bound to until the end of the Brexit transitional period – requires the UK to charge VAT on the equipment.

However, the government has acted under an exceptional basis allowed by EU rules during health emergencies. The European Commission recently indicated support for member states to introduce temporary VAT reliefs to mitigate the impact of the COVID-19 pandemic.

The latest move will particularly benefit care providers, who are often unable to reclaim the 20% VAT they incur on their purchases. According to the government, the extension of the zero-rate will save care homes and related businesses an additional £155 million.

Commenting on the VAT cut, Jesse Norman, Financial Secretary to the Treasury, said: 'Extending the zero VAT rate on PPE will provide the relief needed by care homes in particular, so that as many people as possible continue to be protected against the coronavirus.'

6thJul
News article

Private sector off-payroll reforms given go ahead for April 2021

The introduction of off-payroll rules to the private sector will go ahead as planned next April after an attempt to delay them again failed in the House of Commons.

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The introduction of off-payroll rules to the private sector will go ahead as planned next April after an attempt to delay them again failed in the House of Commons.

The reforms of the off-payroll rules to the private sector, which are known as IR35 and have applied to the public sector since 2017, were reviewed earlier this year.

They will shift the responsibility for assessing employment status to the organisations employing individuals. The rules would have applied to contractors working for medium and large organisations in the private sector and were due to come into effect on 6 April this year.

Due to the disruption caused by the outbreak of the coronavirus (COVID-19), the decision was taken in March to delay the introduction until 6 April 2021. 

An amendment to the Finance Bill brought by a cross-party group of MPs was designed to delay the introduction of the IR35 changes until 2023, but was defeated by 317 votes to 254.

The move to introduce new IR35 rules to the private sector has proved highly controversial, with many claiming that the regulations are too complex and that HMRC's online tool Check Employment Status for Tax (CEST) used to determine whether they apply is flawed.