NEWS – FRIDAY 12TH FEBRUARY 2021
NEWS – FRIDAY 12TH FEBRUARY 2021
TAX NEWS – FRIDAY 12TH FEBRUARY 2021
Treasury mulls freeze on personal allowances
The Treasury is considering scrapping the planned increases in personal income tax allowances in next month’s Budget, according to the Telegraph. The move would keep both the £12,500 and £50,000 thresholds in place and raise £6bn in revenue by 2024-25. Tory MP Andrew Griffith backed the idea while Mike Brewer, the deputy director of the Resolution Foundation, said: “There are good reasons that freezing income tax allowances is tried and tested revenue raiser – it’s a classic stealth tax, a way to improve the fiscal outlook without generating much uproar.”
Chancellor needs to cut working people’s taxes – Habib
The prominent Brexiteer Ben Habib told a meeting of the Bruges Group that Rishi Sunak should cut the tax burden on working and middle-class people in order to stimulate growth in the economy. Mr Habib said: “We need to put more money, money that’s earned not grants, but we need to put more money in the pockets of the working class and middle classes who have actually seen us through this pandemic. You do that by cutting taxes which burden them the most which is VAT, National Insurance, taxes on fuel, council tax. These are taxes which need to be looked at very carefully. The spenders in our economy are the middle and working classes.”
Britain kicks off G7 presidency with call for tax on big tech
Rishi Sunak is expected to call on tech giants to pay more in tax after seeing their profits explode during the pandemic. The Sun reports that the “Amazon and Facebook Tax” will be top of the Chancellor’s agenda when he meets with his G7 counterparts later today.
PERSONAL FINANCE NEWS – FRIDAY 12TH FEBRUARY 2021
FCA report: ‘quarter of Britons struggling financially’
The Financial Conduct Authority’s new Financial Lives Survey reveals that the pandemic has left one in four Britons with “low financial resilience”, with young people and ethnic minorities more likely to have become vulnerable. The watchdog found that the number of people who are over-indebted, have low levels of savings, or low or erratic earnings increased from 10.7m to 14.2m during 2020. The report also suggests there are now 27.7m adults with “characteristics of vulnerability” such as poor health, low financial resilience or recent negative life events, up 15% on February 2020. Nisha Arora, the FCA’s director of consumer and retail policy, called the findings “worrying”, adding: “It is likely the picture will have got worse since we conducted the survey”. AJ Bell analyst Tom Selby warned that “financial vulnerability is like blood in the water to scammers”, and urged consumers to be careful as “there has already been a surge in scam activity since the pandemic started”.
PENSIONS NEWS – FRIDAY 12TH FEBRUARY 2021
Minimum pension age set to rise
The minimum pension age is set to increase to 57 in 2028 under plans unveiled in a government consultation. At present, people aged 55 can access their retirement funds but the Treasury wants to see this age-limit increased by two years from April 2028. Raising the normal minimum pension age to age 57 could encourage individuals to save longer for their retirement, and so help ensure that individuals will have financial security in later life. The rise will maintain a 10-year gap between the point someone can access their private pension and the state pension age.
SMEs NEWS – FRIDAY 12TH FEBRUARY 2021
Small businesses to be offered grants to cope with Brexit disruption
The Government is to create a £20m Brexit support fund to help small businesses handle changes to trade rules with the EU and to prepare for further changes to import controls in April and July.
FINANCIAL SERVICES NEWS – FRIDAY 12TH FEBRUARY 2021
EU’s attacks on the City of London could be self-defeating
The proportion of euro-denominated swap trading done in London fell from about 40% last July to 10% in January, according to IHS Markit. Trading of euro swaps at EU venues rose to 25% of the market from 10% while trading on US marketplaces more than doubled to 20%. The news comes after data showed that Amsterdam overtook London as Europe’s biggest share trading hub in January. Some experts argue that the trading shift is largely symbolic considering the relatively small profits involved and that the EU’s intransigence over passporting for financial services will ultimately damage the EU, cutting itself off from access to one of the world’s deepest capital markets, potentially leaving Europe’s banks more vulnerable. PwC’s global head of Brexit policy Andrew Gray comments: “There is obviously a need in Europe for investment to be more linked to capital markets than it is to bank lending … I’ m not sure that is necessarily supported by effectively ringfencing Europe as a whole, limiting the amount of capital flows and effectively placing further burden on the banking sector to provide funding for investments.”
ECONOMY NEWS – FRIDAY 12TH FEBRUARY 2021
Haldane predicts double-digit growth next year
The Bank of England’s chief economist Andy Haldane believes British households will embark on a massive spending spree once they are liberated from the coronavirus lockdown. With an estimated £250bn saved up due to the restrictions, Mr Haldane is predicting a recovery “to remember”. He believes that a year from now, “annual growth could be in double-digits.” In an article for the Daily Mail, he contends that the public are “desperate to get their lives back” and the rollout of the vaccines means we’re on the cusp of “enormous amounts of pent-up financial energy” being released.
Daily Mail, Page: 1
INTERNATIONAL NEWS – FRIDAY 12TH FEBRUARY 2021
Accounting watchdog told Wirecard it did ‘not want’ to investigate fraud
The FT reports that Wirecard was told in 2016 by Germany’s accounting watchdog that it did “not want” to formally investigate fraud allegations raised by short sellers.
Contact Paul Southward