NEWS – TUESDAY 8TH DECEMBER 2020
NEWS – TUESDAY 8TH DECEMBER 2020
TAX NEWS – TUESDAY 8TH DECEMBER 2020
ANNUAL PARTIES EXEMPTION
I can’t believe that we are already in the second week of December and Christmas is only a couple of weeks’ away. This time last year I had already attended at least two Christmas celebrations and ordered my fayre for the work’s annual Christmas meal.
This year it is going to be different, with so much of the Country under high “Tier” restrictions you may be able to spend all day working alongside your colleagues but you can’t meet up with them for a drink and/or a meal indoors afterwards.
Rewarding Employees at Christmas
Employers will need to be inventive if they wish to spread some goodwill and cheer amongst their workforce.
Virtual Christmas Parties
That cheery lot at HM Revenue & Customs have risen to the challenge and confirmed that the annual parties exemption will also apply to “virtual functions”. The annual exemption is up to £150.00 per attendee and the qualifying costs are tax deductible for the employer and the benefit to the employees is tax free.
There is a “Cinderella” type caveat to the exemption; in Cinderella’s case it was time limited so that one second past midnight and the spell was broken, in the case of the annual parties exemption one penny over the £150.00 limit per head and the whole lot becomes taxable.
With so many of us now learning the dark arts of virtual conferencing, some employer’s plans for virtual staff parties were already underway before the taxman’s latest announcement.
The exemption of £150.00 per attendee is the VAT inclusive cost, but you do have to be careful that the taxman does not squash your plans. The exemption applies to all costs associated to the virtual party, which would include provision of food and drink, entertainment, prizes, party crackers, equipment and any other costs and incidental expenses of the event. You will also need to keep a record of all attendees including staff family members.
TRIVIAL BENEFITS EXEMPTION
Another way in which employers can provide employees with some tax-free Christmas cheer is through the Trivial Benefits Exemption. Under this exemption a gift up to the value of £50 (VAT inclusive) can be made with no reporting, tax or NICs applicable.
There are always conditions: _
- the benefit cannot be cash or a cash voucher; the benefit is not provided in recognition of particular services performed by the employee as part of their employment duties (or in anticipation of such services);
- the benefit is not provided pursuant to any contractual obligation; and
- the benefit is not provided under a salary sacrifice arrangement.
So, remember to stick to the rules, the best way in which you can ensure that your Christmas goodwill does not turn into a pumpkin, is to speak with Paul Southward.
Oxfam wants higher taxes on private jets and SUVs
A new report by Oxfam and the Stockholm Environment Institute indicates that the richest 1% of people in the UK produce 11 times the amount of carbon emissions as those in the poorest half of society, or 7% of the pollution over a 25-year period. Those in the wealthiest 10%, with income after tax of at least £41,000 per year, have a carbon footprint more than double the national average and four times the poorest half of the population. Oxfam is now calling on the government to curb the emissions of the top earners through higher taxes on private jets and SUVs.
UK businesses face £7.5bn cost in post-Brexit paperwork
Jim Harra, the CEO of HMRC, has said customs paperwork will burden British businesses with an additional £7.5bn in costs next year. Due to the UK leaving the bloc’s customs union and single market, thousands of businesses trading with the EU after the transition period in January will be required to fill in customs declarations for the first time. Harra stressed that the costs will apply regardless of whether a trade deal is agreed or not.
PROPERTY NEWS – TUESDAY 8TH DECEMBER 2020
UK has world’s highest property tax
Britain has the highest property taxes as a percentage of total taxation in the developed world, according to new research. The Organisation for Economic Co-operation and Development (OECD) found that tax receipts generated from property climbed to £91bn in 2019, up from £88bn the previous year. Property tax receipts were worth 4.1% of GDP, ranking top for a second straight year and just ahead of France, a typically high-taxing country. The Government raises 12% of its revenue from taxes hitting homeowners and business premises, such as stamp duty, business rates and council tax, the OECD revealed. That is around double the levels of property taxation seen in the average OECD country.
The Daily Telegraph Daily Mail
UK house prices rising at fastest rate in 16 years
New data has revealed that house prices increased 7.6% in the 12 months to November, with valuations up some 6.5% since the housing market reopened in June. Russell Galley, of Halifax, which provided the figures commented: “The stamp duty saving of £2,500 on a home costing £250,000 is now far outweighed by the average increase in property prices since July.” He went on: “With unemployment predicted to peak around the middle of next year, and the UK’s economy not expected to fully recover the ground lost over 2020 for a number of years, a slowdown in housing market activity is likely over the next 12 months.”
SMEs NEWS – TUESDAY 8TH DECEMBER 2020
PM pledges to help ‘small businesses go global’
Boris Johnson announced a shake-up of Government export finance on Monday as part of efforts to support small businesses looking to enter new markets after Brexit. The new scheme, to be run by UK Export Finance, will see the state provide an 80% guarantee on bank loans of up to £25m to help companies with general exporting costs. In a message to businesses posted on his LinkedIn page, the Prime Minister said: “This will free up crucial working capital to help you scale up your business operations and get exporting.” He added: “Small businesses are the lifeblood of our economy. As businesses bounce back from COVID-19, this new export finance guarantee will help bring new trading opportunities to companies in every part of the country.”
Rishi Sunak under pressure to set out ‘no deal’ Brexit stimulus plan
The Treasury should map out a new wave of stimulus in the event of a no-deal Brexit, the Institute of Directors has said. “A disorderly no deal could hurt British business on a number of fronts,” said Tej Parikh, the business group’s chief economist. “To ease these challenges, the Government should provide financial support to small firms with exposure to the fall-out. Vouchers to access specialist or legal advice on adjustments would be one option, as would making efforts to transition more tax efficient. Leniency on tax deadlines would also give businesses some room to manoeuvre.”
CORPORATE NEWS – TUESDAY 8TH DECEMBER 2020
Retailers do not yet know how to repay rates relief
Despite pledges by major retailers to repay business rates relief provided by the Government during the pandemic, there is as yet no mechanism for repaying it. It is understood that the Treasury is working on ways to process repayments, which could end up going via HMRC rather than the usual business rates channels. The news comes as Kingfisher reveals it expects to return £130m of business rates relief, equivalent to a bill of roughly £110m in the year to January 2021, and £20m for the following 12 months. Separately, MPs are pressuring bookmakers to repay tens of millions of pounds of business rates relief after online betting boomed in lockdown.
PENSIONS NEWS – TUESDAY 8TH DECEMBER 2020
Pension savers turning to ESG, says AJ Bell
Research reveals 47% of AJ Bell Youinvest customers plan to invest more of their pension in companies with a positive environmental impact in 2021. Furthermore, 44% of savers believe their pension savings can be used to protect the environment, while over a third (34%) say they would increase their pension contributions if they thought it would be good for the environment. Tom Selby, senior analyst, AJ Bell, said: “While investing in a pension is, of course, primarily about building a pot of money to fund your lifestyle in retirement, it is clear there is significant appetite to invest this money in a socially responsible way.”
EMPLOYMENT NEWS – TUESDAY 8TH DECEMBER 2020
Companies return over half a billion pounds worth of furlough cash
Officials yesterday revealed that UK companies have returned more than half a billion pounds worth of furlough cash that they should not have claimed or did not need. Penny Ciniewicz of HMRC told the Treasury select committee: “We’ve had around £504m made in terms of voluntary disclosures and corrections, including people who were entitled to the grant and decided to pay it back.”
Daily Mail, Page: 13
WEALTH MANAGEMENT NEWS – TUESDAY 8TH DECEMBER 2020
Next generation behind family offices’ ESG push
The FT examines the growing willingness of family offices to push for ESG investments, with Deloitte’s Jessica Hodges saying the argument in favour is driven by growing evidence that such funds outperform their peers.
ECONOMY NEWS – TUESDAY 8TH DECEMBER 2020
Lloyds calls for tailored regional recovery strategy
A report from Lloyds Banking Group urges a regional approach to supporting business as the UK recovers from the pandemic. António Horta-Osório, the outgoing Lloyds chief executive, said: “We need to build on the government’s levelling-up agenda by introducing regionally-focused strategies, shaped by local voices for local economies.” He added: “The plans we make as a country to promote future economic growth need to work for everyone. Coronavirus has exacerbated the regional, racial and socio-economic inequalities that existed before the crisis but it also gives us an opportunity to address those gaps and tackle the longer-term issues facing the UK.”
Contact Paul Southward