Huge air tax increases over 20 years

31 Oct 2014

Since its introduction on 1 November 1994, Air Passenger Duty (APD) has increased 870%, according to recent figures.

Willie Walsh, Chief Executive of IAG, the parent company of British Airways, said: ’20 years on, APD has snowballed out of control and become a tax that works against people wanting to visit relatives and friends, go on holiday or grow their business to create jobs.

‘APD is way out of line with both other indirect taxes in the UK and flight taxes in other countries. Globalisation has accelerated enormously in the last 20 years. This tax helps no one in today’ economic environment’.

The original air tax was introduced at £5 for flights with the UK and EU, and £10 for other destinations. In 2009 four geographical bands were established based on the destination country’s distance from London – increasing for every 2000 miles travelled.

APD increased in line with inflation in 2014, however it was announced that the two higher rate bands will be abolished in 2015. This means there will be two APD rates – one for flights less than 2000 miles, and a higher rate for all further distances.

UK now eighth best place for Doing Business

30 Oct 2014

Tax registration changes and corporate income tax reforms have put the UK in eighth place in the World Bank’s yearly Doing Business survey.

Previously in tenth place, the UK now only ranks behind Singapore, New Zealand, Hong Kong, Denmark, Korea, Norway and the US for ease of business operations.

The World Bank said: ‘Over the past decade, as Companies House has increased its data transparency, electronic procedures and free resources for business founders, the number of registered companies in the UK has doubled’.

The report shows that the economies which performed best are those with governments that have created rules to facilitate marketplace transaction, rather than those with no regulation at all.

Augusto Lopez-Claros, director of the World Bank’s global indicators, said European counties dealing with high debt burdens may seek to create more private sector jobs and boost their growth potential through business-friendly reforms.

The full report can be viewed here.

Gender gap ‘widening’ in UK business, claims WEF

29 Oct 2014

The World Economic Forum (WEF) has found that the UK has fallen in the rankings of its Global Gender Gap Report, showing a steady decline since 2006.

The report considers four categories for each country: economy, education, health and politics. Britain failed to make the top 20 in any category, after sliding from 18th to 26th overall, largely due to low ‘economic participation’ which considers women in the workforce and wage equality.

Speaking about economic participation, the WEF said the UK ‘appears to remain some way off, with the country ranking 48th in terms of both labour force participation and wage equality and 66th for estimated earned income’.

It added: ‘Unlike many of its peers, it has still yet to close its educational attainment and health and survival gaps, while it does moderately better in the fourth area we measure, political empowerment, where it ranks 33rd’.

However, overall the ‘global’ gender gap has closed significantly, with 105 of 111 countries becoming more equal since 2005, according to the authors of the report. The top of the list is dominated by northern European countries, with Iceland, Finland, Norway, Sweden and Denmark occupying the first five places.

The UK is one of only six countries to have become ‘less equal’, primarily due to a slip in wage equality. Some critics have attributed this to Britain’s usually fast economic recovery benefitting male workers more than female, while others see the structure and costs of childcare as a main contributing factor.

The full WEF report can be viewed here: reports.weforum.org/global-gender-gap-report-2014

UK banks pass stress test

28 Oct 2014

A ‘health check’ for banks, carried out by the European Banking Authority (EBA), has shown that all UK banks would be able to survive should there be another financial crisis.

Despite this news, shares in all British banks fell. Shares in Lloyds Banking Group, which narrowly passed, dropped 2.4%. In total 123 EU banks were subjected to the stress test, with 24 failing.

Having recently announced the planned closure of 200 branches, Lloyds released a statement about their stress test results, saying; ‘Our strong position reflects the steps taken by the group’s management over the last three years to return its balance sheet to a robust position, and we will continue to use this strong basis to help Britain prosper’.

One notable failure was Italian bank Monte dei Paschi, whose shares fell 17% on Monday after performing worst out of all those tested. Some Austrian and German banks saw their shares rise as much as 5% upon successfully passing.

A similar study carried out by the European Central Bank (ECB), analysed 130 Eurozone banks and reported that 25 failed their stress test, with 12 already having taken action to improve their outlook. No UK banks were included in the ECB study.

ECB Vice President, Vitor Constancio, said: ‘This review of the largest banks’ positions will boost public confidence in the banking sector. It will help repair balance sheets and make the banks more resilient and robust’.

Warm autumn impacts sales

27 Oct 2014

UK high street sales fell in September, causing concern over the state of the economic recovery, according to the Office for National Statistics (ONS).

During a time which has traditionally seen a large rise in shoppers seeking winter clothes and other seasonal purchases, sales volumes fell by 0.3% over the month of September. The ONS said that clothing and footwear sales in particular fell by 7.8% on the previous month, while shop prices fell by 1.4% compared to September 2013 – the steepest fall in five years.

An ONS spokesperson said: ‘Feedback from retailers suggested the fall was a result of unseasonably warm weather meaning consumers have delayed purchases of autumn and winter clothing’.

A preliminary estimate of current gross domestic product (GDP) has been released by the ONS, fulfilling expectations of 0.7% growth between July and September – lower than the 0.9% growth reported in the previous quarter, but overall 3% higher than the same quarter last year.

Their report also indicates increased output in the four main industrial groups: services, production, construction and agriculture.

With an imminent shift in weather, and the clocks having changed, it may well be that sales improve as more people wrap up warm and the dry spell ends.

Foreign lorry levy results in tax windfall

24 Oct 2014

A new levy on foreign HGV vehicles coming into the UK is likely to raise twice as much in tax revenues as initially expected, according to Treasury figures.

Foreign lorry companies have to pay anywhere between £1.70 and £10 a day to use UK roads, and failure to do so could result in a £300 roadside fine.

Since it was introduced in April the levy has made some £23.4m for the Treasury, which is already £3m more than it expected for the whole 2014/15 tax year.

Nearly one million levies have been bought so far, with the countries buying the most levies being Poland, Romania, Spain, Hungary and the Czech Republic.

The Treasury is not publishing details on whether the revenue raised will be spent specifically on road improvement. Nonetheless, the levy was widely welcomed by UK haulage companies, particularly as British lorries often have to pay equivalent taxes to drive on roads abroad, which their competitors can use for free.

Not all businesses are so positive about the tax however, with some commenters complaining that the costs of the levy are being passed on to UK exporters and consumers.

Foreign lorry levy results in tax windfall

Foreign lorry levy results in tax windfall

24 Oct 2014

A new levy on foreign HGV vehicles coming into the UK is likely to raise twice as much in tax revenues as initially expected, according to Treasury figures.

Foreign lorry companies have to pay anywhere between £1.70 and £10 a day to use UK roads, and failure to do so could result in a £300 roadside fine.

Since it was introduced in April the levy has made some £23.4m for the Treasury, which is already £3m more than it expected for the whole 2014/15 tax year.

Nearly one million levies have been bought so far, with the countries buying the most levies being Poland, Romania, Spain, Hungary and the Czech Republic.

The Treasury is not publishing details on whether the revenue raised will be spent specifically on road improvement. Nonetheless, the levy was widely welcomed by UK haulage companies, particularly as British lorries often have to pay equivalent taxes to drive on roads abroad, which their competitors can use for free.

Not all businesses are so positive about the tax however, with some commenters complaining that the costs of the levy are being passed on to UK exporters and consumers.