The Scottish government has further delayed its plans to replace Air Passenger Duty (APD) with its own Air Departure Tax (ADT).
It has confirmed that the ADT plans have been delayed until ‘at least’ 2020.
In 2016, as part of the Scotland Act, the Scottish Parliament was given devolved powers to charge tax on travellers leaving Scottish airports. Proposals were put forward to replace the UK-wide APD with an ADT, which would be set at half the current rate.
The ADT was set to take effect in April 2018, but the plans experienced problems with EU state aid rules, which give an exemption to airports in the Highlands and Islands.
Commenting on the delay, Kate Forbes MSP, Minister for Public Finance and Digital Economy, said: ‘The Scottish government has been clear that it cannot take on ADT until a solution to these issues has been found, because to do so would compromise the devolved powers and risk damage to the Highlands and Islands economy.
‘While we work towards a resolution to the Highlands and Islands exemption, we continue to call on the UK government to reduce APD rates to support connectivity and economic growth in Scotland and across the UK.’
HMRC has warned young people in the UK to ‘stay vigilant’ in order to avoid falling victim to tax refund scams.
According to HMRC, criminals often target young individuals or the elderly as these groups of people are ‘more likely to be less familiar with the UK tax system’.
HMRC has warned taxpayers to be especially vigilant about so-called ‘Springtime refund scams’. In the Spring of 2018, 250,000 reports of tax scams were received by HMRC.
Criminals often bombard taxpayers with tax refund scams during the months of April and May – the time when HMRC processes legitimate rebates.
Individuals have been warned to be wary of text messages, calls and voicemails purporting to be from HMRC. These are often designed to extract personal or financial information from the taxpayer.
Commenting on the issue, Angela MacDonald, Head of Customer Services at HMRC, said: ‘We are determined to protect honest people from these fraudsters who will stop at nothing to make their phishing scams appear legitimate.
‘HMRC is currently shutting down hundreds of phishing sites a month. If you receive one of these emails or texts, don’t respond and report it to HMRC so that more online criminals are stopped in their tracks.’
According to research published by the British Chambers of Commerce (BCC), businesses believe that the UK tax system is ‘fundamentally unfair’.
The BCC polled more than 1,000 businesses, and found that 58% of firms believe that the tax system is ‘unfair to businesses like theirs’.
67% of firms ‘don’t believe HMRC applies tax rules fairly across all sizes of business’, the research revealed. Additionally, 64% of respondents stated that they disagree that HMRC applies tax rules fairly, regardless of where the business is domiciled.
The BCC has urged the government to ‘improve HMRC’s service to business’.
‘These results reflect a strong impression among businesses that the current UK tax regime isn’t a level playing field,’ said Suren Thiru, Head of Economics at the BCC.
‘HMRC must step up efforts to provide better support to smaller businesses to get their tax right, rather than simply pursuing and enforcing penalties. This should include matching investment in frontline HMRC help towards small and medium-sized enterprises (SMEs) with their work on non-compliance and tax evasion.
‘More also needs to be done to address the escalating burden of upfront costs and taxes to provide firms with much-needed headroom to get on and invest, train their staff, and compete on the global stage.’
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Research carried out by American Express has found that, as access to finance becomes ‘increasingly difficult to secure’, UK small and medium-sized enterprises (SMEs) are ‘exploring new sources of finance’ instead.
According to the research, almost one third of UK SMEs find it ‘difficult’ to access finance. As a result, many are shunning traditional finance options, such as bank loans, and are turning to non-traditional forms of finance.
The research also suggested that SMEs prioritise ease of access and flexibility when it comes to choosing finance.
Paul Abbott, Chief Commercial Officer at American Express, said: ‘UK SMEs are confident they can continue to prosper, despite political and regulatory change, economic uncertainty and data security concerns, and they are prioritising several initiatives to insulate themselves from external pressures and accelerate their growth.
‘SMEs are the lifeblood of the UK economy – and it is vital that they have access to the finance they need to survive and thrive.
‘By exploring more flexible forms of finance that will allow them to remain nimble in the face of uncertainty, SMEs will stand the best chance of weathering the current climate.’
A study carried out by the Trades Union Congress (TUC) has suggested that UK employees ‘work the longest hours in the EU’.
According to the study, full-time employees in the UK worked an average of 42 hours per week in 2018. Employees in countries such as Ireland, Italy, France and Belgium worked an average of 39 hours a week, the study revealed.
The TUC also suggested that employees in other EU countries are ‘more productive’ than UK workers, despite EU employees working fewer hours.
Commenting on the study, Frances O’Grady, General Secretary of the TUC, said: ‘Britain’s long hours culture is nothing to be proud of. It’s robbing workers of a decent home life and time with their loved ones. Overwork, stress and exhaustion have become the new normal.
‘Other countries have shown that reducing working hours isn’t only good for workers, it can boost productivity.
‘As new technology changes our economy, the benefits should be shared by working people. That means shorter hours, more time with family and friends, and decent pay for everyone.’
A survey carried out by Thomson Reuters has revealed that businesses are investing significant amounts in new tax technology, such as Making Tax Digital (MTD) software.
The survey, which was put to 438 tax teams, revealed that 98% of respondents intend to invest in tax technology in the next 12 months. 28% intend to increase their spending on technology, whilst 38% expect spending to remain at its 2018 level.
Many firms reported that their decision to increase spending on tax technology was driven by the introduction of such initiatives as the automatic exchange of tax data, and Making Tax Digital for VAT (MTD for VAT).
‘This interest in new technologies indicates that tax departments are recognising that the deployment of tax technology can help increase efficiencies, reduce human error and deliver a consistent and manageable way of addressing . . . new tax regulations,’ said Steve Smith, Proposition Lead for Corporates at Thomson Reuters.
‘Compliance is in the midst of a revolution, and looking forward we can expect to see more regulatory attention to the process and governance, rather than the end number. In a digital world, the tax authorities will easily be able to validate the output. Tax teams need to prepare for this shift now.’
Experts have called for the government to ‘simplify’ the Apprenticeship Levy amidst claims that it has ‘complicated learning and development’.
A survey of UK firms conducted by the Managing Partners’ Forum suggested that the number of apprentices ‘would be boosted’ if the Apprenticeship Levy rules were simplified.
32% of businesses polled stated that the Apprenticeship Levy has ‘displaced budget away from the most needed learning and development’, whilst an additional 24% said that the Levy has ‘increased the cost of training’.
‘It is perhaps unsurprising that the Levy is viewed by many as an extra tax that complicates learning and development,’ said Richard Chaplin, Chief Executive of the Managing Partners’ Forum.
‘There is clearly support for the concept of apprenticeships, not least because of their important potential role in helping to address persistent issues around diversity and social mobility within the professions. However, simplification of the rules around apprenticeships – and particularly the Levy – must be considered for the real potential impact to be realised.’