HMRC reveals 700,000 couples are ‘missing out’ on Marriage Allowance

HMRC has estimated that around 700,000 couples are ‘missing out’ on the Marriage Allowance, which could save them up to £238 in tax.

Image result for HMRC reveals 700,000 couples are 'missing out' on Marriage Allowance

Introduced in April 2015, the Marriage Allowance enables spouses to transfer a fixed amount of their personal allowance (PA) to their partner. The option is available to couples where neither pays tax at the higher or additional rate. If eligible, one partner will be able to transfer 10% of their PA to the other partner (£1,190 for the 2018/19 tax year).

For those couples where one person does not use all of their PA, the benefit will be up to £238 (20% of £1,190).

Commenting on the allowance, Mel Stride, Financial Secretary to the Treasury, said: ‘For more than 3.5 million married couples and those in a civil partnership, we are putting up to £238 this year back into their wallets, and it is encouraging to see so many people taking advantage of the tax relief.

‘Married couples who are yet to sign up for this great scheme – you too can benefit – it is quick to register, and any backdated allowances will be paid as a lump sum.’

The Marriage Allowance is available in Scotland: to qualify, the higher earning partner must pay tax at the starter, basic or intermediate rate.

Advertisements

2018 Autumn Budget: Chancellor unveils Digital Services Tax

In his 2018 Autumn Budget speech, Chancellor Philip Hammond unveiled a so-called ‘Digital Services Tax’, which will require certain digital businesses to pay tax on sales generated in the UK.

Image result for Chancellor unveils Digital Services Tax

Over the past few years, a handful of large international companies have been subject to criticism for paying only small amounts of tax on their UK profits. The Chancellor previously stated that international agreements ‘need to be put into place’ to help tackle the issue; however, the Organisation for Economic Co-operation and Development (OECD), the body responsible for co-ordinating economic policy, has reportedly struggled to come to a decision on the matter.

The European Commission (EC) separately proposed an EU-wide 3% digital tax, but has so far failed to convince some EU member states.

The Digital Services Tax will take effect from April 2020, and will target ‘established technology giants’ with global revenues from in-scope business activities in excess of £500 million per annum, as opposed to tech start-ups.

Commenting on the tax in his Budget speech, Mr Hammond said: ‘It’s clearly not sustainable, or fair, that digital platform businesses can generate substantial value in the UK without paying tax here in respect of that business.’

Business group proposes overhaul of tax regime for financial services sector

The Confederation of British Industry (CBI) has proposed an overhaul of the tax and regulatory regime for the financial services sector so that the industry can effectively deal with the ‘challenges and opportunities presented by a rapidly changing technological landscape’.

Image result for financial services sector

In a new report, the CBI stated that the financial services sector is ‘grappling’ with the challenges of technological change, as well as dealing with ‘shifting tax and regulatory expectations’.

The business group argued that the financial services sector requires regulations that are ‘fit-for-purpose in a new technological age’.

Some of the proposals put forward by the CBI include creating a new Treasury Select Committee sub-committee for financial services, in order to ‘scrutinise regulations and taxes’; strengthening engagement with the Financial Stability Board; and establishing a cross-sector financial services technology ‘hub’, supported by both the Treasury and the Financial Conduct Authority (FCA), to share best practice, knowledge and the latest technologies.

Commenting on the report, the CBI’s Head of Financial Services, Flora Hamilton, said: ‘The challenges and opportunities presented by the rapid pace and tremendous scale of technological change come in equal measures for financial services firms. To fully embrace this change, firms are clear that they need the right regulatory and tax framework in which to operate, so they can innovate and grow.’

New laws aim to help small businesses to secure funding

Small businesses struggling to access invoice finance could be helped by the introduction of proposed new laws. The plans form part of the government’s ‘modern Industrial Strategy’.

Image result for New laws aim to help small businesses to secure funding

Invoice financing is an advance against a future payment, under which businesses can approach a finance provider and assign them their right to be paid in exchange for around an initial 80% of the value of the invoices. This initial advance is received within a few days while the balancing 20% (less fees and charges) is paid when the customer settles the invoice.

Currently, small suppliers which are in a contract with a larger company may not be able to secure invoice finance, due to the terms of the contract. Small suppliers often find themselves in a situation where they do not have sufficient power to renegotiate their terms and conditions.

Under the plans, after 31 December 2018 such restrictions will have no effect (with certain exceptions), and small businesses will be able to go to their lending partner to secure the finance they need.

Commenting on the news, Small Business Minister Kelly Tolhurst said: ‘These new laws will give small businesses more access to the finance they need to succeed and will help ensure they have a level playing field from which to set fair contracts with the businesses they supply.’

Government launches new trade taskforce

The government has launched a new trade taskforce, with the stated aim of helping UK businesses to ‘develop trade links around the world’.

The new taskforce, which will form part of the Board of Trade, will serve to promote the government’s ‘global Britain’ trade agenda.

Image result for Government new trade taskforce

Alongside the taskforce, a newly-appointed HM Trade Commissioner network will provide UK businesses with ‘support and local market knowledge’ from countries around the world. The taskforce aims to allow the UK to partner with developing countries, and to help support development and deliver jobs, growth and prosperity.

Announcing the new trade taskforce, International Trade Secretary Dr Liam Fox said: ‘Championing free trade and supporting developing nations through trade is in the UK’s interest. The prosperity created by free trade is the basis for social stability, which in turn provides the political stability which underpins our global security.

‘Prosperity, stability and global security are the prizes for a strong, rules-based international trading system, and that is what the UK needs to create.’

Government scraps national insurance tax cut for the self-employed

The government has scrapped a planned national insurance tax cut for self-employed workers.

Class 2 national insurance contributions (NICs) were due to be abolished in April 2018, but the plans were delayed for a year in 2017. The government has now announced that Class 2 NICs will not be abolished during this Parliament.

Image result for self employed

Former Chancellor George Osborne announced the tax cut during the 2016 Budget, stating that abolishing Class 2 NICs would benefit an estimated 3.4 million self-employed workers. Class 2 NICs are currently paid at a rate of £2.95 per week by self-employed individuals with profits of £6,205 or more per year.

In a written statement to MPs, Robert Jenrick, Exchequer Secretary to the Treasury, stated that eliminating Class 2 NICs would have introduced ‘greater complexity’ to the UK tax system.

He added: ‘The government remains committed to simplifying the tax system for the self-employed, and will keep this issue under review in the context of the wider tax system and the sustainability of the public finances.’

Responding to the government’s decision to scrap the tax cut, Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), said: ‘The move is extremely disappointing and flies in the face of tax simplification.

‘Rather than hitting more than three million self-employed people with this levy, the Treasury should have worked harder to develop more effective ways to protect around 300,000 low-earners and maintain their contributions for the state pension.’

IPPR calls for ‘fundamental reform’ of UK economy

Think tank the Institute for Public Policy Research (IPPR) has called for a radical overhaul of the UK economy, stating that it ‘does not work well’ for most people.

A poll conducted by Sky Data on behalf of the IPPR revealed that 49% of respondents would describe the way that Britain’s economy operates as ‘unfair to some degree’. Just 22% believe that the way the economy works is fair.

Image result for reform of UK economy

The poll also revealed that 80% of those surveyed support ‘greater regulation’ of major digital companies; would welcome the introduction of a new corporation tax on multinational companies; and would like to see the National Living Wage (NLW) rise from its current level of £7.83 per hour to £8.75 an hour, to bring the NLW in line with the current Real Living Wage.

An additional 50% of individuals would support asking the Bank of England to ‘control house price inflation’, and advocate raising taxes on income from wealth to match taxes on income from work.

Commenting on the findings, Frances O’Grady, General Secretary of the Trades Union Congress (TUC), said: ‘It’s time for a once-in-a-generation rethink of our approach to the economy. Working people have had enough of stagnating living standards and massive inequality.

‘A better deal for working people is possible, and will allow us to build a stronger, fairer economy.’