25thJun
News article

FSB outlines recommendations to Chancellor ahead of expected fiscal event

In a letter to Chancellor Rishi Sunak, the Federation of Small Businesses (FSB) has outlined a series of recommendations designed to support small businesses once the COVID-19 lockdown ends.

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In a letter to Chancellor Rishi Sunak, the Federation of Small Businesses (FSB) has outlined a series of recommendations designed to support small businesses once the COVID-19 lockdown ends.

The Chancellor is expected to deliver an economic statement early next month.

The FSB stated that the majority of businesses will face 'significant costs' when they reopen. 86% of businesses polled by the FSB said they'll need to make changes to their premises to allow for social distancing measures. 60% said it will cost up to £1,000 to reopen in line with government guidance, whilst 28% believe it will cost more than £1,000.

Additionally, in order to protect livelihoods as the government's Coronavirus Job Retention Scheme (CJRS) comes to an end, the FSB recommends that the Chancellor consider reducing employers' national insurance contributions (NICs) or uprating the Employment Allowance.

The business group has also called for a full statutory sick pay (SSP) rebate for those who need to self-isolate over the coming weeks.

Commenting on the letter, Mike Cherry, National Chairman of the FSB, said: 'The fundamental question facing small businesses today is: can I open in a way that's both commercially viable and safe?

'Among those for whom the answer is yes, the majority will face additional costs as they adjust their operations. The government should step in with back to work vouchers so firms doing the right thing can recover this expenditure.'

The FSB's list of recommendations can be found here.

24thJun
News article

ABI calls for overhaul of pensions tax relief system

The Association of British Insurers (ABI) has called for an overhaul of the UK pensions tax relief system following the publication of research which suggested that basic rate taxpayers are missing out on vital tax relief.

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The Association of British Insurers (ABI) has called for an overhaul of the UK pensions tax relief system following the publication of research which suggested that basic rate taxpayers are missing out on vital tax relief.

The ABI's research showed that the lower paid and the young are missing out on pensions tax relief despite more saving for retirement. A Defined Contribution (DC) pension scheme provides retirement income that is based on the amount paid in and the investment growth of the money.

Individuals receive tax relief from the government when contributions to a DC pension scheme are made. The research found that, in 2018, DC contributions represented 17.5% of the total amount spent on tax relief. This was despite an increase in the number of people contributing to workplace pensions, which rose from 55% in 2012 to 87% in 2018.

The ABI revealed that basic rate taxpayers make up 83.4% of all taxpayers, but they only receive 26% of the pensions tax relief related to DC pension contributions.

It also highlighted that more young people are paying into their pension, but the tax system benefits older people.

Commenting on the issue, Yvonne Braun, Director of Long-term Savings and Protection at the ABI, said: 'Pensions tax relief plays a vital role in encouraging people to save, but also supporting the adequacy of that saving. However, the distribution of pensions tax relief under the current system exacerbates existing inequalities, particularly between men and women.'

24thJun
News article

Government-backed coronavirus lending now over £40 billion

Over £40 billion has now been borrowed through government-backed schemes designed to help businesses get through the coronavirus (COVID-19) crisis, according to the latest figures from the Treasury.

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Over £40 billion has now been borrowed through government-backed schemes designed to help businesses get through the coronavirus (COVID-19) crisis, according to the latest figures from the Treasury.

More than 304,000 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).

Almost threequarters of the lending has been through the BBLS, which has now reached £28 billion. 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 £10.5 billion to over 50,000 businesses through the CBILS, while loans of £2.1 billion have been approved to 315 mid-sized and large UK businesses through the CLBILS.

Commenting on the figures, Stephen Pegge, Managing Director of Commercial Finance at UK Finance, said: 'Three months on from the launch of the first support measure, the CBIL scheme has helped 50,000 UK businesses to get access to the finance they need.

'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.'

23rdJun
News article

Report finds young people most likely to lose job as result of coronavirus lockdown

A report published by think tank the Resolution Foundation has suggested that young people are most likely to lose their jobs as a result of the coronavirus (COVID-19) lockdown.

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A report published by think tank the Resolution Foundation has suggested that young people are most likely to lose their jobs as a result of the coronavirus (COVID-19) lockdown.

Many 18 to 24-year-olds are earning less than they did before the lockdown, according to the Resolution Foundation. Younger workers' pay could be affected for years and older workers could find themselves involuntarily retired, the report stated.

A quarter of young workers have been furloughed, the report found. 9% have lost their jobs – this represents the highest figure of all age groups analysed. Workers aged between 35 and 44 were least likely to have been furloughed or made redundant, the report revealed.

Figures from the government show that around eight million people have been furloughed as a result of the COVID-19 pandemic, at a cost of almost £11 billion.

23rdJun
News article

Government urged to consider emergency VAT reduction

The government has again been urged to consider an emergency VAT reduction in order to help businesses once the coronavirus (COVID-19) lockdown ends.

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The government has again been urged to consider an emergency VAT reduction in order to help businesses once the coronavirus (COVID-19) lockdown ends.

A new report published by think tank Policy Exchange has suggested that reducing the rate of VAT to 15% could help boost consumer spending in the short-term. The current standard rate of VAT is 20%.

The publication of Policy Exchange's report comes following rumours that Chancellor Rishi Sunak is reportedly considering reducing the standard rate of VAT to help tackle the economic fallout caused by the COVID-19 lockdown.

According to reports, the Chancellor is preparing to deliver a 'Summer Statement' in early July, in which he is likely to outline new initiatives on skills and apprenticeships, alongside measures to help boost the UK economy.

Experts have also recommended cutting employer national insurance contributions (NICs) and extending the business rates relief scheme in England and Wales.

22ndJun
News article

UK public calls for greater transparency on tax avoidance and evasion

According to an annual survey carried out by Fair Tax Mark, the UK public is using the coronavirus (COVID-19) lockdown to take 'decisive action' against tax avoidance practices.

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According to an annual survey carried out by Fair Tax Mark, the UK public is using the coronavirus (COVID-19) lockdown to take 'decisive action' against tax avoidance practices.

79% of people polled would rather shop with a business that can prove it's paying its fair share of tax, according to the survey.

78% of individuals believe that all businesses should have to publicly disclose the amount of tax they pay in the UK. Additionally, 77% of people think the UK should take the lead and require multinational businesses to disclose how much income, profit and tax they pay in each country they do business.

'For many, lockdown has provided an opportunity to reflect more on societal values – whether it's supporting our vulnerable, shopping locally or gaining a greater understanding of how employers act at a time of crisis,' said Paul Monaghan, Chief Executive of Fair Tax Mark.

'The vast majority of people want to support and celebrate the businesses that reject the use of tax havens and tax avoidance.

'That's why during the coronavirus crisis we have been calling on the UK government to ensure that any bailouts are conditional on recipients committing to responsible tax conduct and transparency.'

22ndJun
News article

Lenders grant 1.9 million mortgage deferrals

The UK's mortgage lenders have granted 1.9 million payment deferrals to customers impacted by the coronavirus (COVID-19), according to the latest figures from UK Finance.

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The UK's mortgage lenders have granted 1.9 million payment deferrals to customers impacted by the coronavirus (COVID-19), according to the latest figures from UK Finance.

One in six mortgages are now subject to a payment deferral, and for the average mortgage holder that amounts to £755 per month of suspended payments.

The deferral scheme proved most popular in its first three weeks when 1.2 million deferrals were approved.

UK Finance said many homeowners will soon be coming to the end of the deferral period and lenders are now focused on helping customers to consider their next steps.

Customers who have not yet applied for a payment deferral and those requiring further support after an initial payment deferral have until 31 October 2020 to apply.

Commenting on the deferrals, Eric Leenders, Managing Director of Personal Finance at UK Finance, said: 'Lenders understand that many households will continue to see their finances squeezed as the pandemic continues, and we are working hard to ensure everyone gets the support suited to their needs.

'The industry has a clear plan to help homeowners get through these tough times, and whilst it is best for customers to restart their payments if they can, where this is not possible lenders are keen to help, whatever a customer's financial situation.'

19thJun
News article

UK pushing for global digital tax despite US reservations

The UK is pushing for the introduction of a global digital tax despite the departure of the United States from international negotiations.

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The UK is pushing for the introduction of a global digital tax despite the departure of the United States from international negotiations.

The Treasury confirmed that the UK will push for a solution to taxing international digital companies despite US Treasury Secretary Steven Mnuchin recently pulling out of talks with Europe on the matter.

The Organisation for Economic Co-operation and Development (OECD) has so far failed to find a solution that suits the interests of all countries concerned.

A spokesperson for the Treasury said: 'We have always been clear that our preference is for a global solution to the tax challenges posed by digitalisation, and we'll continue to work with our international partners to achieve that objective.'

The UK and France have forged a path forward in regard to taxing digital companies: both already have their own Digital Services Taxes (DSTs). The UK's DST took effect from 1 April 2020, and applies a 2% tax to the revenues of certain digital businesses. A double threshold exists, meaning that businesses have to generate revenues from in-scope business models of at least £500 million globally to become taxable under the DST.

19thJun
News article

Bank of England announces £100 billion stimulus package for UK economy

The Bank of England has unveiled a £100 billion stimulus package to help boost the UK economy following the coronavirus (COVID-19) pandemic.

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The Bank of England has unveiled a £100 billion stimulus package to help boost the UK economy following the coronavirus (COVID-19) pandemic.

The Bank's Monetary Policy Committee (MPC) voted to step up its quantitative easing programme, through which the Bank purchases bonds. The £100 billion in additional quantitative easing funds takes the total to £745 billion.

The MPC also voted to cut the cost of borrowing to a record low of 0.1%. The Committee admitted it is 'hard to draw conclusions about the UK's recovery prospects' and stated that extra stimulus is needed to help boost the UK economy and push inflation.

The MPC said: 'The unprecedented situation means that the outlook for the UK and global economies is unusually uncertain.

'It will depend critically on the evolution of the pandemic, measures taken to protect public health, and how governments, households and businesses respond to these factors.

'Inflation is well below the 2% target and is expected to fall further below it in coming quarters, largely reflecting the weakness of demand.'

18thJun
News article

Businesses urged to reinstate VAT direct debits

Business have been reminded to reinstate their direct debit mandates before the deferral of VAT payments due to the coronavirus (COVID-19) comes to an end on 30 June.

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Business have been reminded to reinstate their direct debit mandates before the deferral of VAT payments due to the coronavirus (COVID-19) comes to an end on 30 June.

The VAT payment deferral means that all UK VAT-registered businesses have the option to defer VAT payments due between 20 March and 30 June 2020 until 31 March 2021.

However, businesses need to take steps to reinstate their direct debit mandates so that they are in place in time for payments due from July 2020 onwards. Any outstanding returns should be filed and three working days should be allowed to elapse before reinstating the direct debit mandate.

The Tax Faculty at the Institute of Chartered Accountants in England and Wales (ICAEW) said: 'HMRC has confirmed to the Tax Faculty that it will not collect the outstanding balance of deferred VAT when the direct debit mandate is reinstated. HMRC has made the necessary systems change to avoid this happening for businesses in Making Tax Digital for VAT (MTD for VAT).

'Arrangements will also need to be made to pay the deferred VAT by 31 March 2021; further guidance is awaited from HMRC on the mechanism.'