5thJun
News article

CIOT calls for property sales tax change

The government should consider delaying changes to capital gains tax (CGT) rules in relation to residential property sales to take account of the impact of COVID-19 on the property market, according to the Chartered Institute of Taxation (CIOT).

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The government should consider delaying changes to capital gains tax (CGT) rules in relation to residential property sales to take account of the impact of COVID-19 on the property market, according to the Chartered Institute of Taxation (CIOT).

The measure is included in the current Finance Bill, which began its committee stage in the House of Commons on 4 June.

Private Residence Relief (PRR) enables most owner occupiers to sell their properties without being liable for CGT on any gains made.

Final period exemption means that, under the law currently in place, people do not pay capital gains tax on gains made in the final 18 months of ownership, even if it was not their main residence during that period.

The Finance Bill aims to reduce that period to the final nine months of ownership for most people.

Commenting on the changes, Marc Selby, Chair of CIOT's Property Taxes Committee, said: 'We are concerned that the original assumption of an average time of four and a half months for selling a property is out of touch with the reality of the property market today because of the impact of COVID-19.

'We strongly suggest that the original evidence base needs review and that consideration should be given to delaying the squeeze in the final period exemption until the impact of COVID-19 on the property market is better understood.'

4thJun
News article

Strong economic recovery likely, but not certain

A strong economic recovery following the coronavirus pandemic is likely although many risks and uncertainties remain, according to a report from Oxford Economics.

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A strong economic recovery following the coronavirus pandemic is likely although many risks and uncertainties remain, according to a report from Oxford Economics.

The report, which was commissioned by the ICAEW, predicts that the economy should return to growth in the second half of the year if the lockdown continues to be relaxed over the summer.

It says the unusual nature of this recession could prove to be a silver lining for the recovery. Because GDP has fallen due to a planned, partial economic shutdown, so in theory activity and demand should rebound as restrictions lift.

The fiscal and monetary support from government and the Bank of England since the crisis began should also aid the recovery.

However, the risks remain high as a second wave of infections, an extension to the lockdown, the early withdrawal of government support or the collapse of UK-EU trade talks could all hamper a recovery.

Commenting on the report, Martin Beck, Oxford Economics Lead UK Economist, said: 'Coronavirus and the restrictions on daily life imposed in response are inflicting a once-in-a-century downturn on the economy.

'But the nature of the shock and the massive support put in place by policymakers mean a strong bounce back is achievable. However, with no precedents to draw on, the outlook is clouded by multiple risks.'

4thJun
News article

Cash payments continued to fall in 2019

The use of cash continued to fall in the UK last year as card payments accounted for over half of transactions for the first time ever, according to figures from UK Finance.

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The use of cash continued to fall in the UK last year as card payments accounted for over half of transactions for the first time ever, according to figures from UK Finance.

Cash payments decreased by 15% to 9.3 billion payments, but cash was still the second most frequently used method, representing a quarter of all payments in 2019.

Changing retail trends, including the increasing use of online shopping and the increase in card acceptance by retailers, have been a factor in both the declining use of cash. In addition, consumer preferences are changing in favour of using cards to make payments.

Payments made by card and contactless methods accounted for 51% of all UK payments last year.

Debit cards were the most used payment method in the UK with 17 billion payments, of which seven billion were contactless.

Commenting on the figures, Natalie Ceeney, Independent Chair of the Access to Cash Review, said: 'In 2019 we saw a further decline although many people still depend on it.

'This UK Finance data was taken before the impact of COVID-19, which has accelerated the shift to digital payments and further challenged the viability of the cash infrastructure.

'It's essential that we ensure that everyone is included in our economy, and until digital payments work for everyone, we need to maintain people's ability to access and pay with cash.'

3rdJun
News article

Over £31 billion borrowed through coronavirus schemes

Over £31 billion has been borrowed through the government-backed schemes that are providing business support during the coronavirus (COVID-19) crisis, according to the latest figures from the Treasury.

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Over £31 billion has been borrowed through the government-backed schemes that are providing business support during the coronavirus (COVID-19) crisis, according to the latest figures from the Treasury.

More than 745,000 businesses have now accessed support through either the Bounce Back Loan Scheme (BBLS), the Coronavirus Business Interruption Loan Scheme (CBILS) or the Coronavirus Large Business Interruption Loan Scheme (CLBILS).

The BBLS is the most popular scheme, with over £21.3 billion lent through it since it was launched on 4 May. The BBLS allows small businesses adversely affected by the pandemic to apply for up to £50,000, with the government guaranteeing 100% of the advance.

Lenders have provided £8.9 billion to 46,000 businesses through the CBILS, while loans of £1.1 billion have been approved to 191 mid-sized and larger UK businesses through the CLBILS.

Commenting on the figures, Stephen Jones, Chief Executive of UK Finance, said: 'The amount of support available to firms affected by the COVID-19 crisis is unparalleled. Over £31 billion has been approved in government-backed lending schemes so far to almost 750,000 businesses, with a further £19 billion drawn under bank-arranged commercial paper facilities.

'But government-backed loans are not the only support the banking and finance sector has made available. Over the last few months, lenders have put in place a clear plan to support businesses in every region of the country, including through offering extended overdrafts, capital repayment holidays and asset-based finance to businesses that need support.

'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.'

3rdJun
News article

Women 'more likely to be on low pay', TUC research suggests

Research carried out by the Trades Union Congress (TUC) has suggested that women are more likely than men to be on low pay.

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Research carried out by the Trades Union Congress (TUC) has suggested that women are more likely than men to be on low pay.

The research showed that of an estimated 9.8 million key workers, almost two thirds are women. There are 2.6 million female key workers earning less than £10 an hour, according to the TUC.

Data published recently by the business group revealed that, at the current rate of progress, it will take until 2067 to achieve pay parity between men and women.

Frances O'Grady, General Secretary of the TUC, said: '50 years after brave women won the legal right to equal pay, coronavirus has confirmed that pay inequality is still rife in Britain today.

'Working women have led the fight against coronavirus, but millions of them are stuck in low paid and insecure jobs. That is not right.

'As we emerge from this crisis, we need a reckoning on how we value and reward women's work. Without proper change it will take decades to close the gender pay gap.'

2ndJun
News article

MPs open inquiry into £155 billion of tax reliefs

The Public Accounts Committee (PAC) has opened an inquiry into the UK's management of £155 billion of tax relief.

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The Public Accounts Committee (PAC) has opened an inquiry into the UK's management of £155 billion of tax relief.

The inquiry follows the February publication of a National Audit Office (NAO) report that identified over 300 such tax interventions, totalling £155 billion per year.

The NAO raised concerns about the effectiveness of management of tax expenditures by the Treasury and HMRC.

It found that there is no formal framework governing the administration or oversight of tax expenditures.

The NAO said that although the Treasury and HMRC have begun steps to increase their oversight of tax expenditures and more actively consider their value for money, these will not be enough on their own to address concerns.

Commenting on the inquiry, John Cullinane, Tax Policy Director at the Chartered Institute of Taxation, said: 'We greatly welcome the PAC taking up this important issue.

'Governance of tax reliefs in the UK is not systematic or proportionate to their value or the risks they carry. There is a mismatch between the significant effort in government and to an extent Parliament that rightly goes into new tax measures, and the relative lack of attention to how effective those measures prove over time. This is particularly the case with tax expenditures.

'Unless HMRC and the Treasury actively monitor the use and impact of tax reliefs, and act promptly to analyse increases in their costs, we cannot assume that these reliefs will be value for money.'

2ndJun
News article

Manufacturers call for coronavirus support

The coronavirus crisis has left many manufacturers on a cliff edge and in need of government intervention, Make UK has warned.

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The coronavirus crisis has left many manufacturers on a cliff edge and in need of government intervention, Make UK has warned.

The industry body says that as COVID-19 is putting a growing number of firms on the brink of collapse as production levels continue to fall.

In response, Make UK is asking the government to step in with direct state support to ensure the short-term survival of firms.

It said support should especially be targeted at the aerospace, car making and steel sectors.

The latest figures show that manufacturing continued to decline in May, although it was recovering from April's record low.

The IHS Markit/CIPS Purchasing Managers' Index (PMI) for the sector gave a reading of 40.7 for May.

This is up from 32.6 a month earlier, when the COVID-19 lockdown brought Britain's economy to an effective standstill.

Stephen Phipson, Make UK's Chief Executive, said: 'We are now in such uncharted territory that what would until recently been thought of as unthinkable is now very much the reality.

'While the support schemes in operation are providing significant support to the economy, there are some sectors and companies who are fundamentally sound businesses and were trading positively before the pandemic.

'Instead, however, they have now been driven to the cliff edge by the nature of this crisis and may not survive without direct government intervention.'

1stJun
News article

IPSE gives cautious welcome to extension of self-employed scheme

The government's decision to extend COVID-19 support for self-employed workers has met with a cautious welcome from the Association of Independent Professionals and the Self-Employed (IPSE).

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The government's decision to extend COVID-19 support for self-employed workers has met with a cautious welcome from the Association of Independent Professionals and the Self-Employed (IPSE).

Chancellor Rishi Sunak has announced that the Self-Employment Income Support Scheme (SEISS) will run again in August.

In August, those eligible under the SEISS will be able to claim a second and final grant.

The grant will be worth 70% of their average monthly trading profits, paid out in a single instalment covering three months' worth of profits, and capped at £6,570 in total.

Commenting on the extension, Andy Chamberlain, Director of Policy at IPSE, said: 'It will be an overwhelming relief for many self-employed people that the government has heeded our calls and extended SEISS. The scheme is a vital lifeline for millions of people and it is absolutely right that the government keeps it running.

'However, it is disappointing that there will still be two months when employees can access support and the self-employed cannot. The government should watch the situation carefully and be ready to step in if the UK's self-employed need more support.

'It is also vital that the government does not ignore the self-employed who cannot access this scheme. At the moment, groups like freelancers working through limited companies and the newly self-employed have patently been forgotten. We urge the government to consider these groups and also help them through the coming months.'

1stJun
News article

Chancellor announces changes to Job Retention Scheme

Chancellor Rishi Sunak has announced changes to the government's Job Retention Scheme (JRS), which will be slowly wound down over the next few months.

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Chancellor Rishi Sunak has announced changes to the government's Job Retention Scheme (JRS), which will be slowly wound down over the next few months.

The changes mean businesses will be able to bring furloughed employees back on a part-time basis from 1 July.

Furloughed staff will continue to get 80% of their salary throughout until the scheme finishes at the end of October. However, employers will be expected to gradually contribute more towards furloughed employees' salaries.

In August, the taxpayer contribution will stay at 80% but employers will have to pay national insurance and employer pension contributions.

In September, employers will be asked to start paying 10% towards people's wages, which will rise to 20% in October.

The cut-off for JRS applications is 30 June, after which new firms will not be able to join and others unable to furlough additional employees.

Commenting on the scheme, Dame Carolyn Fairbairn, Director-General at the Confederation of British Industry, said: 'Introducing part-time furloughing as more stores and factories start to open will help employees to return to work gradually and safely. Many more businesses will feel supported during this vital restart phase.

'Firms understand the scheme must close to new entrants at some point and that those using it in future will need to make a contribution to help manage the costs. However, previously viable firms not able to open until later, particularly in leisure, hospitality and the creative industries, may need further assistance in the coming months.'

Further guidance on the JRS can be found here.

29thMay
News article

Data shows 5.2 million people have fallen victim to scams during coronavirus crisis

Research carried out by insurer Canada Life has revealed that 5.2 million people in the UK have fallen victim to scams during the coronavirus (COVID-19) pandemic.

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Research carried out by insurer Canada Life has revealed that 5.2 million people in the UK have fallen victim to scams during the coronavirus (COVID-19) pandemic.

Canada Life's research showed that the most common financial scams are banking scams, followed by insurance scams and pensions scams.

Victims lost an average of £566 per scam, the research found. 48% of people surveyed said that the scams are so convincing they are difficult to spot. 55% stated that falling victim to a scam has taken a toll on their mental health.

Commenting on the research, Andrew Tully, Technical Director at Canada Life, said: 'Falling prey to a scam can be devastating, not only for the individual involved but also for their family and friends.

'The COVID-19 pandemic has provided a fertile opportunity for 'lowlifes' to prey on not only the vulnerable but also people who are worried and anxious about both their health and their wealth.

'We all need to be on our guard for any signs of fraudulent activity as scammers continue to evolve and adopt ever more sophisticated and ingenious ways of encouraging people to part with their hard-earned money.'