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25/11/2024

Care home operator seeks judicial review over NICs hike
A leading care home operator is seeking a judicial review over Labour’s decision to increase the rate of employer National Insurance contributions (NICs). Robert Kilgour says the move, along with lowering the threshold at which they start to be paid, was a “killer blow” to the industry. He explains that care home closures will only lead to more strain on the NHS, the antithesis of Labour’s stated aims for health provision.
The Sunday Telegraph

22/11/2024

Farmers unite for historic strike
The Enough is Enough campaign is spearheading the UK's first farming strike, set to commence on Sunday, in response to government changes to inheritance tax. The group stated: "British farmers have simply had enough," highlighting the severe impact of the proposed 20% tax on farms valued over £1m, effective from April 2026. The National Farmers' Union (NFU) warns that up to two-thirds of farms could face significant tax bills, jeopardising their viability. The campaign reflects widespread frustration among farmers, with competing protests planned, including a mass lobby event in Westminster. Meanwhile, one of Britain's biggest food producers, Ranjit Singh Boparan, has warned that Labour’s “ Budget was a disaster for business and will deliver a final fatal blow to the thousands of small, family-owned farms we in the food manufacturing sector rely upon day in, day out.” The strike comes as the Country and Land Business Association reports that a typical family farm would have to put 159% of annual profits into paying the new inheritance tax every year for a decade and could have to sell 20% of their land due to Labour’s tax changes.
Sky News The Daily Telegraph The Times Daily Mail

21/11/2024

Budget cuts threaten business growth
According to a recent poll by the Institute of Directors, two thirds of business leaders believe the Budget will impede their growth ambitions due to necessary cuts in pay rises, recruitment, and investment. Business confidence has plummeted further since Rachel Reeves's speech, with Roger Barker, director of policy at the IoD, stating: "By imposing significant new tax burdens on business, the Government has taken a major risk with the economic recovery." The Chancellor's £40bn tax increase package, primarily affecting employers' National Insurance contributions, is expected to raise hiring costs significantly.
The Times

19/11/2024

Apache pulls out of North Sea
Apache, a US oil firm, has announced it will cease all operations in the North Sea by the end of 2029, citing the impact of the windfall tax. The company stated that the recent increase in the Energy Profits Levy (EPL) to 38% has rendered production uneconomic. An Apache spokesperson remarked: "The onerous financial impact of the EPL... makes production of hydrocarbons beyond 2029 uneconomic." The EPL was introduced in May 2022 to tax profits from UK oil and gas extraction, initially set at 25% and later raised to 35% and now 38%.
BBC News

19/11/2024

JLR's chief warns of tax troubles
Adrian Mardell, chief executive of Jaguar Land Rover (JLR), has expressed concerns regarding the potential impact of Donald Trump's tariff plans and Rachel Reeves's tax policies on the automotive giant. He stated: "Everybody hates taxes and tariffs. It's not anything that we would wish for. But it's the environment we are in." JLR, which relies heavily on the US market, is preparing for tariffs that could increase the price of non-US goods by 10%. Additionally, Mardell highlighted the challenges posed by rising taxes in the UK, stating: "The Budget in the UK raised taxes a little bit and there are possibly even more serious issues coming at us." JLR's pre-tax profit fell 10% to £398m in the last quarter, but the company remains optimistic about production recovery in the second half of the year.
The Daily Telegraph

18/11/2024

Insurance stealth tax set to soar
The insurance premium tax (IPT) is projected to generate £46bn for the UK Government over the next five years, surpassing road tax revenues. Currently, 67% of adults are unaware of IPT, which adds 12% to car, home, and pet insurance, and 20% on travel insurance. The Office for Budget Responsibility (OBR) has revised its forecast, increasing the expected IPT revenue from £42.4bn to £46bn. Brett Hill, head of health & protection at Broadstone, remarked: "Rising premiums are having a serious impact on the affordability of essential insurance products." As car insurance premiums rise, so does IPT, which has seen a significant increase from £6.2bn in 2018/19 to £8.4bn in 2023/24. Unlike other taxes, IPT is levied on responsible behaviour, making it a unique financial burden for consumers.
Daily Mail

18/11/2024

Labour considers options to save hospices from tax hit
Whitehall sources have told the Guardian that the Labour Government is looking into a range of options to help out the hospice sector amid fears tax hikes have put end-of-life care providers at risk of closure. The rise in employer’s National Insurance will cost the sector an estimated £30m a year while the increase in the minimum wage will add an additional shortfall of about £60m. Toby Porter, the chief executive of Hospice UK, said the need for solutions was urgent as charities would be setting their budgets for the next financial year in the next month or two. Elsewhere, the Times reports on warnings from the care home sector which has been put at risk for the same reasons with representatives calling for contributions from councils to rise accordingly.
The Times The Guardian

17/11/2024

NICs rise will cause 'life-changing' cuts to charity services
Charities are sounding the alarm over "life-changing consequences" for 1m vulnerable individuals due to cuts in state-funded disability services, exacerbated by recent tax changes and wage increases. The Voluntary Organisations Disability Group (VODG), representing 100 charities, says Rachel Reeves's decision to raise national insurance contributions (NICs) threatens local charity services. Reports indicate that hospice charities could face £30m in annual costs, risking essential end-of-life services. The charity sector, employing 1m people and delivering £17bn in services annually, estimates an additional £1.4bn burden from these changes. Over 100 homelessness charities have also warned that NICs increases could strip £60m from frontline services.
The Guardian

17/11/2024

NICs bill for Tesco will rise by £250m a year, raising price rise fears
The Sunday Times reports that Tesco is facing a £1bn bill for the Chancellor’s increase in national insurance over the course of this parliament. Sainsbury’s, Asda and Morrisons detailed last week that their combined bill would be £1.3bn over the period, leading to increased food prices. The Co-op also raised concerns, as have hundreds of hospitality businesses with the sector estimating nearly £14bn of extra costs will be incurred. Although Tesco may be able to absorb most of the £250m a year increase, its suppliers are less able to cope and will likely increase prices, sending up costs. Mel Stride, the shadow chancellor, has criticised Rachel Reeves for failing to publish a tax impact assessment for the rise in NICs, stating: “It is unacceptable that Labour are withholding this critical analysis.”
The Sunday Times

14/11/2024

Over 200 hospitality bosses issue tax hike warning
More than 200 hospitality bosses have written to the Chancellor warning of drastic job cuts and closures in the wake of her increase in National Insurance contributions. Rachel Reeves last month announced an increase in NICs paid by employers from 13.8% to 15%. The threshold at which employers become liable to pay the tax also dropped from £9,100 to £5,000 per year. Among the signatories to the letter, organised by trade body UKHospitality, are JD Wetherspoon, Wagamama owner The Restaurant Group, Young’s, and Whitbread, which owns Premier Inn, the UK’s largest hotel chain. They said the changes would cost the sector an estimated £3.4bn annually and would prove regressive in their impact on lower earners and flexible working practices. Meanwhile, the Chief Secretary to the Treasury, Darren Jones, has suggested big businesses hit by the tax raid should “suck it up” for the sake of the NHS. He explained: “I think the public would recognise that bigger businesses are more able to burden some of the contributions that we need to make to the state.”
Financial Times The Daily Telegraph The Daily Telegraph The Guardian

12/11/2024

Erosion of tax relief may hinder entrepreneurs
Concerns have been raised over the future of Business Asset Disposal Relief, previously known as Entrepreneurs' Relief. Currently valued at a maximum of £100,000, this relief is set to decrease to £60,000 in two years, alongside a significant cut in the annual tax-free allowance for capital gains from £12,300 to £3,000. Chancellor Rachel Reeves said the Government is "committed to creating a positive environment for entrepreneurship," yet many entrepreneurs fear that the erosion of this relief will make the UK less attractive for starting and exiting businesses.
The Times

11/11/2024

Charities to cut services following tax raid
Charity bosses have warned they’ll have to scrap services after the Chancellor’s increase in NICs for employers. The voluntary sector employs around one million people - the National Council for Voluntary Organisations (NCVO) warns of a £1.4bn-a-year blow to their staffing bill. Age UK and Marie Curie are among the charities warning of a cut to the support they can offer. The Association of Chief Executives of Voluntary Organisations has written to Rachel Reeves asking that charities be exempted from the rise.
Daily Mail

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