NEWS – WEDNESDAY 23RD DECEMBER 2020
NEWS – WEDNESDAY 23RD DECEMBER 2020
TAX NEWS – WEDNESDAY 23RD DECEMBER 2020
Opinion: It will never be the right time for a wealth tax
Former Grant Thornton tax director Mike Warburton dissects the proposals recently put forward by the Wealth Tax Commission which it predicted would raise £260bn through a one-off 5% tax on net wealth above £500,000, with a married couple enjoying a £1m allowance. Mr Warburton fears such a tax would become permanent as so many do despite starting as a one-off. He goes on to highlight the chief flaws in the WTC’s arguments and states that ultimately the plans fail Adam Smith’s four basic principles on tax: fairness, certainty, convenience, and efficiency. Warburton concludes with the hope that the Chancellor and his successors stick with the belief, as put forward by Rishi Sunak in July, that it will never be the right time for a wealth tax.
Britons urged to utilise ISA and pension allowances ahead of tax hikes
Experts are warning UK savers to make the most of their investments ahead of likely tax hikes next year as the Government seeks to rebuild public finances following the pandemic. AJ Bell analysts Tom Selby and Laith Khalaf suggest ISAs and pension allowances are utilised fully before current tax breaks are withdrawn.
PROPERTY NEWS – WEDNESDAY 23RD DECEMBER 2020
Wales hikes tax on second home sales
Wales has increased the rates of land transaction tax (LTT) on property sales with the change coming into immediate effect. Property investors will pay 4% on sales of second homes and buy-to-let properties up to £180,000, up from 3%, to rise in increments of 1% to 16% on homes worth £1.6m or more. Sean Randall, a partner at Blick Rothenberg, said: “The measures are a proportionate response to the effect of the pandemic in Wales. Pressure will now be on the UK government to pass similar measures.”
Landlords cash in on Rishi tax break
The Hamptons Monthly Lettings Index shows 15% of property sales in November went to landlords amid concern that the stamp duty holiday is turning into a “tax break for the rich”, as young buyers, furloughed workers and the self-employed struggle to take advantage. Aneisha Beveridge, head of research at Hamptons, said buyers are disproportionately larger landlords expanding portfolios: “In many cases, they are buying up homes from smaller landlords.” Separately, HMRC figures show 115,190 transactions took place in November 2020, marking an 8.6% increase compared with October and 19.3% higher than in November 2019.
Daily Express, Page: 31, 45
VOA writes off office business rates
Almost £500m-worth of offices’ business rates are to be written off by the Valuation Office Agency following weeks of negotiations. Robert Hayton, head of property tax at ratings advisory Altus Group, said the Agency had been “brilliant.” He said we “must now focus on full reductions and other property types, especially retail hospitality and leisure where the current rates exemption ends on March 31.”
REGULATION NEWS – WEDNESDAY 23RD DECEMBER 2020
Report criticises FCA over LCF failings
An investigation into the collapse of minibond firm London Capital & Finance (LCF) led by Dame Elizabeth Gloster is highly critical of both the Financial Conduct Authority (FCA) and its former chief executive, Andrew Bailey. The report stated: “Bondholders, whatever their individual personal circumstances, were entitled to expect, and receive, more protection from the regulatory regime in relation to an FCA-authorised firm (such as LCF) than that which, in fact, was delivered.” Accountancy Daily notes that the Serious Fraud Office has an ongoing investigation related to individuals associated with LCF, while the Financial Reporting Council has opened an investigation into the auditing of LCF by three firms – PwC, EY and Oliver Clive & Co.
ICAS surrenders RSB status for local audit
In a statement, the Financial Reporting Council (FRC) said this week that on November 2020, the Board of the regulator approved a request by ICAS to surrender their status as a Recognised Supervisory Body (RSB) under the Local Audit and Accountability Act 2014 (the 2014 Act). As a consequence, ICAS will cease to hold RSB status for Local Audit in England from 1 January 2021. ICAS remains a RSB for statutory company audit in accordance with the Companies Act 2006.
EMPLOYMENT NEWS – WEDNESDAY 23RD DECEMBER 2020
Confidence rises among employers
Employers’ confidence in hiring and investment decisions rose by six percentage points in the three months to November, compared with the previous three months, according to the latest jobs outlook from the Recruitment & Employment Confederation. The reading of +1 was the first in positive territory since the three months to March. Demand for permanent workers increased both in the short term and the medium term, the survey found. However, confidence in the economy was down two points to -51. Neil Carberry, chief executive of the REC, said: “Our report points to a more hopeful future for the UK jobs market, if we can begin to get through the crisis as the vaccine rolls out.”
SMEs NEWS – WEDNESDAY 23RD DECEMBER 2020
Start-up overtakes national fusion labs
Oxford-based nuclear fusion technology start-up First Light Fusion has raised $25m (£19m) to speed up the development of its fusion plant which it hopes to have completed in the 2030s, ten years earlier than the Government has been anticipating. Chief executive Dr Nick Hawker said he was certain that start-ups would be the one to solve nuclear fusion. “It’s not going to be someone in their basement. An individual cannot solve this problem. And the national labs are going too slow.”
ECONOMY NEWS – WEDNESDAY 23RD DECEMBER 2020
Government borrowing reached record high in November
Figures from the ONS show government borrowing reached £31.6bn last month, the highest November figure since records began. That is also the third highest monthly figure ever. Since the start of the financial year, the UK has borrowed almost £241bn. The total national debt has hit £2.1trn. Meanwhile, official figures show the economy bounced back in the third quarter more strongly than previously thought. In those three months the economy was up 16%, while remaining down 8.6% across the year. However, those figures came before the latest virus fears and there is now a growing expectation that the economy will slump again post-Christmas, leading to a dreaded “double-dip” recession.
Contact Paul Southward