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.

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.'

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.'

HMRC has started to send Making Tax Digital for VAT (MTD for VAT) 'nudge' letters to firms it thinks should've signed up to the scheme but have not yet done so.

According to the Institute of Chartered Accountants in England and Wales (ICAEW), HMRC first sent nudge letters to VAT-registered firms in 2019. It is now following up on those letters and contacting businesses which have not yet signed up for MTD for VAT but are required to do so.

The ICAEW stated that HMRC is only writing to firms it is confident should have signed up. HMRC does not intend to write to businesses that previously got in contact to advise that they are not in the mandated group.

A small number of firms which are not required to comply with MTD for VAT may be sent compliance letters: the ICAEW advises such firms to contact HMRC and explain their circumstances 'to avoid further contact when the compliance activity starts'.

On 12 June, HMRC updated its guidance for employers who have furloughed employees under the Coronavirus Job Retention Scheme (CJRS).

From 1 July, employees will no longer have to be furloughed for a minimum period of three weeks. From this date the CJRS will have more flexibility to allow claims on a pro rata basis. Employers will be able to permit employees to work some of the week and be furloughed for the rest.

An employee needs to have been furloughed for at least three consecutive weeks between 1 March and 30 June to be eligible for furlough from 1 July. Additionally, after 1 July, employers will be subject to a cap on the number of CJRS claims they are able to make.

The CJRS changes have effect from 1 July until the closure of the scheme on 31 October.

Parents returning from statutory maternity leave, paternity leave, adoption leave, shared parental leave and bereavement leave are exempt from the CJRS changes. The Treasury recently announced that parents who are returning to work over the coming months will be eligible for the CJRS despite the scheme closing to new entrants on 30 June.

More information on the changes can be found here.

Research carried out by banking group Aldermore has suggested that small and medium-sized enterprises (SMEs) in the UK expect to borrow £48.3 billion once the coronavirus (COVID-19) lockdown ends.

Three in five SMEs stated that they expect to borrow £65,000 in the year following the COVID-19 pandemic. The research also revealed that a third of SMEs believe that good communication with their clients will help get their business back on track after the lockdown.

Meanwhile, 25% of SMEs polled said that receiving ongoing government support will be beneficial to their business.

Commenting on the research, Tim Boag, Group Managing Director of Business Finance at Aldermore, said: 'Helping SMEs recover following the pandemic will be crucial to the economic future of the UK. As our research has shown, SME income has been hit hard by COVID-19, with many having borrowed funds in order to survive, and with some expecting to continue to do so in the year ahead.'

HMRC has updated its guidance regarding the eligibility of businesses for the two Self-employment Income Support Scheme (SEISS) grants.

The tax authority has published a number of examples that show when a business has been 'adversely affected' and meets the criteria for the first and second grants.

Those self-employed individuals (including those trading as a partnership) adversely affected in the period up to 13 July 2020 can claim the first grant. If they are adversely affected in the period from 14 July 2020 they can claim the second grant.

The first taxable grant is worth 80% of average monthly trading profits, paid out in a single instalment covering three months' worth of profits and capped at £7,500.

A second and final grant can be claimed in August 2020. It is worth 70% of average monthly trading profits and will also be paid out in a single instalment covering three months' profits. The grant is capped at £6,570.

HMRC confirmed that those who are self-employed and able to return to work as normal in June will not be eligible for a second grant, although they can claim a grant for the first period. HMRC's guidance of how a business might be adversely affected includes such reasons as shielding and supply chain disruption.

A full list of circumstances can be found here, and details of the SEISS can be found here.

Data published by economic forecasting group EY Item Club has suggested that the UK economy could contract by 8% in 2020.

It estimates a record 15% contraction in the second quarter of 2020. The EY Item Club said that the figures 'reflect a poor economic performance in April due to the coronavirus (COVID-19) lockdown, and deeper than expected contraction' in the first quarter of 2020.

In positive news, EY Item Club now predicts year-on-year GDP growth of 5.6% in 2021, a rise when compared to its previous estimate of 4.5%. However, the data also suggested that the UK economy is not expected to return to its late 2019 size until 2023.

'The impact of COVID-19 on the UK economy will depend on just how long the pandemic lasts, how many people are affected and how long restrictions to activity have to be in place,' said Howard Archer, Chief Economic Adviser to EY Item Club.

'The UK economy had been disappointingly lacklustre over the first two months of 2020, even before COVID-19 started to become a factor. After a challenging first half, our forecast shows that the UK economy is expected to start to recover in quarter three 2020 on the assumption that the government continues to gradually relax lockdown restrictions.'

The Confederation of British Industry (CBI) has called on the government to prioritise jobs and training for young people in order to help boost the UK economy once the coronavirus (COVID-19) lockdown ends.

In a letter to Prime Minister Boris Johnson, the CBI stated that unemployment is the biggest threat to livelihoods. The business group outlined an economic recovery plan that would 'help secure a jobs-rich, fair and sustainable future for the UK economy'.

The CBI has urged the government to make jobs, skills training and opportunities top priorities, especially for young people. It also promotes targeted financial support to help kick-start consumer demand and reinvigorate UK competitiveness.

Investing in the green economy will also help to create new jobs, according to the CBI.

'The last few months have seen a nation rightly and relentlessly focused on health,' said Carolyn Fairbairn, Director General of the CBI.

'That will remain the case for some time. But this must not stop the country from implementing an ambitious economic recovery plan. Time is of the essence. Smart, fast policy is needed now to accelerate the process to minimise the human cost and in particular protect the futures of our young people.'