Weekly News Round-Up


Amazon provokes fury as it dodges new online tax  

Amazon’s decision to pass on the cost of the UK’s digital services tax to small businesses selling on its platform has led to dismay from vendors. The tech giant will raise the price British firms pay to sell on its website by 2% next month. Federation of Small Businesses chairman, Mike Cherry, said: “Government and Amazon should work together to find a way to resolve this impasse and prevent millions of pounds of extra costs being imposed on the small firms who are only just starting to recover from the biggest crisis for generations. The tax is aimed at the profits of multinationals with large revenues. Passing the tax on to their small business customers will hurt them at the worst possible time.” Derek Cribb, chief executive of the Association of Independent Professionals and the Self-Employed, said: “Amazon could easily have absorbed the cost of the digital sales tax.” Following Amazon’s decision, eBay has announced that it will not be passing on the tax to sellers.

Source:   The Times (06/08/2020)    The Daily Telegraph (06/08/2020)    Daily Mail (06/08/2020)   The Times (12/08/2020)


Greater scrutiny of devolved taxation essential for Scotland’s recovery

A piece in the Times by Joanne Walker argues that with Scotland’s devolved tax system likely to come under closer scrutiny as ministers attempt to deal with the costs of COVID-19, now is a good time to ensure Holyrood’s tax powers remain fit for purpose. She cites a poll commissioned by the Chartered Institute of Taxation which suggested a decline in awareness and understanding of Holyrood’s tax responsibilities among Scots. This is why the CIOT has argued for an annual Scottish Finance Bill, says Walker, which, along with a dedicated parliamentary committee to oversee Scottish taxes “could help ensure increased accountability while giving taxpayers a chance to know more about the tax changes that are being made in their name.” Walker concludes that a “tax system that expedites change, enables scrutiny and empowers public participation will be crucial to Scotland’s recovery” from the pandemic.

Source:   The Times (08/08/2020)


HMRC investigating 246 players in image rights probe

HMRC is investigating as many as 246 football players over the use of image rights to avoid paying tax – three times the number being probed last year. A new report shows the number of players under investigation has risen with the taxman concerned that a slew of lesser-known players are avoiding tax by getting paid huge sums for image rights that are overpriced. Elliot Buss, partner at the firm, said: “The image rights of the likes of Paul Pogba and Mohamed Salah are undoubtedly worth millions. But if you are second-choice left back in the Championship getting paid a great deal in image rights payments, that is likely to trigger an investigation.” Fifty-five football agents are also being probed over their financial arrangements as part of a wider clampdown.

Source:   Financial Times (10/08/2020)    Daily Star (10/08/2020)    Daily Mirror (10/08/2020)    The Sun (10/08/2020)    Daily Express (10/08/2020)    The Guardian (10/08/2020)     


Residential landlords cheating taxman out of £1.7bn

Research by Tax Watch has found that tax evasion by residential landlords could be costing the Treasury up to £1.7bn a year – three times higher than the £540m reported by HMRC for 2010. The think tank claims the revenue is being lost because many landlords fail to declare their income on self-assessment forms. The group cites research by the University of Warwick that found a quarter of landlords who filed self-assessment tax returns failed to report 60% of their property revenue. Tax Watch recommends the establishment of a UK-wide landlord database to stem the losses.

Source:   The Mail on Sunday (09/08/2020)


HMRC miscalculates coronavirus grants for self-employed

HMRC has admitted that over 16,000 grants given to the self-employed to help them through the coronavirus crisis were either too high or should not have been paid out at all. Integrated Dispute Resolutions, a legal services firm which highlighted the error, called on HMRC to be transparent about how much the errors have cost. A spokesman for HMRC said: “The Self Employment Income Support Scheme has been delivered at unprecedented pace and has protected the livelihoods of 2.7m self-employed people in the UK. The vast majority of grants were paid correctly but in a very small number of cases not all the information held on a tax return was taken into account when calculating eligibility and grants.”

Source:   Daily Mirror (12/08/2020)


FSB urges councils to release £1.5bn in small business grants

Local councils in England are being urged to distribute an estimated £1.5bn in unspent small business grants by the Federation of Small Businesses (FSB), whose research reveals only 7% of all councils have issued 100% of the cash earmarked for the discretionary grant fund or the small business grants fund. “Every local authority will know that long before this crisis struck, small firms were already facing huge difficulties with major chains leaving high streets, rising business rates and soaring employment costs,” said the FSB’s national chair Mike Cherry. “This is why councils simply cannot afford to delay in getting these funds out to businesses. Many councils have already handed out more than 90% of their small business grants which is good to see, but that means that more money remains which needs to be handed out.”

Source:   Peer2Peer Finance News (08/08/2020)    BBC News (08/08/2020)


Small shops have shed over 50,000 staff

A survey by the Federation of Small Businesses (FSB) reveals that Britain’s independent retailers have been forced to lay-off more than 53,000 staff since the pandemic began. Mike Cherry, national chairman of the FSB said: “Thousands of small retail businesses were left with some very tough decisions to make last quarter following months of little or no revenue coming in. As high streets reopen, it’s critical that all of us shop local and support our favourite small businesses wherever possible.”

Source:   Daily Mail (11/08/2020)


One tenth of small businesses will have to cut jobs

Almost half of small businesses say they will have to cut wages or jobs to help them survive the coronavirus crisis, according to employee benefits group WorkLife. Some 10% said they will have to cut jobs, while 12% said they will cut salaries. The survey also found 23% had ruled out wage increases for at least six months.

Source:   Sunday Express (09/08/2020)


Two-in-five businesses expect to cut jobs  

A survey by the ICAEW of 800 senior finance executives at UK companies found 40% expect to cut jobs in the next six months as a result of the coronavirus slowdown. One third had already cut jobs, with two-thirds of these saying the reason was due to a drop in demand and 59% said it was to increase efficiencies. Some 54% said their organisation had furloughed staff. Just over a quarter (28%) of respondents said their organisations were hiring, while 27% said their firms had a recruitment freeze. The measures taken by the Government to protect jobs were approved by 76% of respondents. Iain Wright, ICAEW director for business and industrial strategy, commented: “Our members give government credit for preserving jobs so far, but they believe that a hard landing for the economy is only months away, and that employment will be badly hit. Some of this will be because market demand is weaker, but the crisis is also driving companies to become more efficient. This may improve productivity, but it will cost jobs.”

Source:   City AM (12/08/2020)


UK is officially in recession for first time in 11 years

The Office for National Statistics (ONS) has reported this morning that the UK economy contracted by 20.4% in the second quarter of 2020, putting the UK into recession for the first time since the financial crisis. The ONS said that while the economy began to bounce back in June as lockdown eased, GDP in June was a sixth of the level recorded in February before the virus hit. In its update on the economy, the ONS also pointed to a record fall in productivity during the second quarter of the year as more than nine million workers were placed on furlough. The data showed that the UK economy suffered more than any other advanced nation because it is so heavily dominated by the service sector. Spain recorded an 18.5% fall in the second quarter, Germany declined 10.1% and the US lost 9.6%.

Sky News   The Daily Telegraph   BBC News




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