NEWS THURSDAY 28TH JANUARY 2021
NEWS THURSDAY 28TH JANUARY 2021
TAX NEWS THURSDAY 28TH JANUARY 2021
Singapore style Britain dismissed as fantasy
The idea that Britain could be transformed into a deregulated low tax Singapore-style country is a fantasy, experts have told the Times. The phrase “Singapore-on-Thames” was coined by former chancellor Philip Hammond and has been resurrected as the “Singapore of Europe” by Boris Johnson. But the CBI, the Institute of Directors and the British Chambers of Commerce all told the paper there is no desire from business for mass deregulation while Richard Asquith, vice-president of global tax at Avalara, said the UK’s balance sheet was shot and that it would be 20 years before Britain could contemplate the idea. Asquith went on to say that Brexit will not result in big changes to the UK’s tax regime. The UK already had “huge freedoms to create a low-tax jurisdiction” and the UK is unlikely to cut VAT – the primary tax the EU could directly influence – as it accounts for almost a third of revenues.
Big Tech tax debate threatens trade war
The Independent talks to experts about international talks on taxing Big Tech and the challenge the debate might post to the new US administration. The paper says the pandemic has only highlighted the issue of digital taxation with the outbreak accelerating digitalization through remote work and contactless activities, and in some cases bringing strong profits for digital companies; meanwhile, government budgets have been put under strain through added spending and less tax revenue. Manal Corwin, a tax principal at KPMG and a former Obama administration Treasury official, said that digital taxes multiplying outside the OECD process “are threatening to trigger a trade war.” Barbara Angus, global tax policy leader for EY, adds that the question of exactly whom the new digital tax applies to was “the single biggest political issue to be resolved” in the talks.
Sunak prepares Tory MPs for tax rises
The Chancellor has told Conservative MPs that if taxes are raised in the near future then the Government will be in a better position to reduce them ahead of the next election. Speaking with the 1922 committee of backbench Conservatives on Wednesday, Rishi Sunak signalled that difficult decisions lie ahead on raising revenue and reducing the deficit. MPs told the Telegraph they now expect Mr Sunak to set out a detailed roadmap on his strategy for spending, tax rises, the deficit and other economic levers at the budget.
Some £1.2bn paid in unnecessary inheritance tax
Official figures suggest more than £1bn in IHT could have saved by tax-paying estates worth £1m or more by funnelling cash or shares into legitimate tax-saving schemes or gifted away tax-free. Weatherbys Private Bank says many married couples with personal wealth above £1m are voluntarily paying over the odds by failing to make the most of their “liquid wealth” and the tax breaks on offer. With a fifth more people than before expected to pay the 40% levy this year, the Telegraph lists some ways people can legally reduce the amount they have to pay.
SMEs NEWS THURSDAY 28TH JANUARY 2021
Sunak warned over withdrawing Covid support
A London School of Economics-led study warns that some 900,000 small businesses, employing 2.5m workers, are at risk of going bust if COVID-19 rescue schemes are wound up. “Without further policy action, businesses face a cruel spring of bankruptcy,” said Professor John Van Reenen, of the LSE’s Centre for Economic Performance.
CORPORATE NEWS THURSDAY 28TH JANUARY 2021
Number of empty shops soars
The Royal Institution of Chartered Surveyors’ quarterly survey reveals that the number of empty shops and offices in Britain increased at the fastest pace since the survey began 30 years ago during Q4 last year. Industrial property, which has been boosted by the demand for storage space from online retailers, was the only sector to record positive results.
PENSIONS NEWS THURSDAY 28TH JANUARY 2021
UK pension schemes face new climate risk reporting rules
The Department for Work and Pensions has said that the UK’s largest workplace pension schemes must comply with new mandatory requirements to take action on climate change.
ECONOMY NEWS THURSDAY 28TH JANUARY 2021
UK car production slumps to lowest level since 1984
Figures from the Society of Motor Manufacturers and Traders have revealed that output from UK car plants fell by 29% last year to 920,908, the first time the industry has dropped below the 1m mark since 2009. Mike Hawes, chief executive of the SMMT, said the drop in car output meant the industry lost about £10.5bn in revenues compared with 2019. The drop also had a major effect on workers, with at least 10,000 car industry jobs lost during the year. Hawes added that the headline total may be an “iceberg”, with a significant number of redundancies hidden from view in supply chains where smaller companies have had little choice but to cut back. He also said that since Brexit, sourcing parts from outside the EU, moving staff across the Channel, and gaining safety approvals for different models have all become more difficult.
The Guardian Financial Times
OTHER NEWS THURSDAY 28TH JANUARY 2021
FCA considers raising contactless payments limit again
New proposals being considered by the Financial Conduct Authority could see the limit for contactless payments raised still further to £100. A consultation on the move is to be launched, forming part of a more general consumer credit update. Consumers will have until the 31 January before firms are legally able to begin repossessing goods and vehicles, under the regulator’s rules.
The Guardian, Page: 19 City AM
Contact Paul Southward