The week’s latest news in business and employment.
85% of UK Manufacturers Would Prefer to Remain in EU
- 1 85% of UK Manufacturers Would Prefer to Remain in EU
- 2 Pubs and Bars Slash Prices to Support VAT Cut Campaign
- 3 OECD Approves Reform Package that will Clamp Down on Corporate Tax Avoidance
- 4 Rise in Tax Subsidy for Self Employed Sparks Rethink of National Insurance Rules
- 5 Employers Warned About £20,000 Fine if They Fail to Pay New Minimum Wage
An overwhelming portion of UK manufacturing companies surveyed by EEF said they would prefer to remain in the EU, according to a recent BBC report.
The survey, carried out by manufacturers’ organisation EEF, found that 85% of manufacturing companies would vote for Britain to stay part of the EU, despite the economic difficulties that have hit the industry in the last few years. 90% of companies with 250 or more employees felt the same way.
Only 7% meanwhile opted to leave.
EEF chief executive Terry Scuoler expressed his puzzlement over the poll results.[quote]Despite the continued problems in the eurozone, manufacturers remain overwhelmingly of the view that our economic wellbeing is inextricably linked to the EU and that we must stay in the membership.
It makes no sense to disengage from our major market and it remains fanciful to think we can just pull up the drawbridge and walk away with no consequences.”[/quote]
EEF represents over 6000 companies, 160 of which were involved in the poll.
Two other polls that took place in August showed that the growth of the UK manufacturing sector has slowed in recent years, with both input and output increasing at a lower rate.
Pubs and Bars Slash Prices to Support VAT Cut Campaign
Public houses and bars all over Britain were reported to slash the prices of food and drink last week as part of a campaign to cut VAT rates in the UK.
The nationwide price cut, which took place on Wednesday September 24 and lasted for a day, saw around 15,000 pubs and bars lower prices of their food and drink by 7.1%, to demonstrate the benefits of cutting VAT.
At the moment, all pubs and bars in the UK are subject to a 20% rate of VAT, whilst supermarkets are able to benefit from a zero VAT rate.
Founder of the Cut VAT Campaign, Jacques Borel, has already managed to secure VAT cuts in several European countries including France and Germany, and now hopes to do the same in the UK.[quote]Our message is clear – a reduction in the level of VAT on a long-term basis will generate growth and create jobs in the important leisure and hospitality sector,”[/quote]
Meanwhile, a Treasury spokesperson said;[quote]We are committed to supporting the leisure and hospitality industry and have cut the tax on a typical pint of beer by one penny at Budget 2013 and by a further one penny at Budget 2014.
This makes a pint of beer 8p cheaper than under inherited duty plans.”[/quote]
OECD Approves Reform Package that will Clamp Down on Corporate Tax Avoidance
The Organisation for Economic Co-Operation and Development (OECD) approved and published a new reform package this week, which finance ministers hope will begin the end of corporate tax avoidance.
The package, which offers up new rules to increase transparency and
close tax loopholes, comes as an encouraging response to world finance ministers for whom global tax avoidance is a continuous worry.
Many ministers, including UK chancellor George Osborne, have argued that the scale of corporate tax avoidance exhibited by the likes of Amazon and Starbucks is a global problem and one that no country can deal with on its own. The new OECD package is likely to unite developed countries and set them on the path to eliminating tax avoidance for good.
Among the new approved reforms are an obligation of multinationals to report their revenues, profits and taxes on a country-by-country basis; a limitation of use of tax havens; the confrontation of ‘treaty shopping’, and changes to domestic and international laws that will help close tax loopholes.
The OECD proposal has been approved by all member nation states, marking the beginning of a new era of honest and transparent taxation in the developed world.
Rise in Tax Subsidy for Self Employed Sparks Rethink of National Insurance Rules
A rise in a hidden tax subsidy granted to those are self employed has triggered calls for a rethink of national insurance rules, a report has claimed.
National insurance tax subsidies granted to those who are self-employed in the UK are said to have risen by two thirds over the past two years, growing from £1.7 billion in 2011-12 to £2.9 billion.
The subsidies, granted in the form of reduced national insurance contributions for self employed lawyers, accountants, teachers. writers and retailers, have begun to be confused with benefits thanks to the new single-tier pension. The single-tier scheme puts the self-employed on the same footing as employees and has ended the last distinction in benefit eligibility between employees and the self-employed.
It has therefore increased bias in the tax system towards the self employed and therefore enables them to benefit from paying less national insurance than other people.
A report by thinktank CentreForum last year said:[quote]There is no compelling reason for the4 self-employed to pay any less into the system. The large tax differential leaves the door open to tax avoidance and benefits the richest most.”[/quote]
However, the Treasury has said it is reluctant to increase the levy paid by the self-employed due to the potential political fallout it could cause. It also suggested that the generous tax treatment could act as compensation for the riskier nature of being self-employed.
Employers Warned About £20,000 Fine if They Fail to Pay New Minimum Wage
Employers are being warned about a possible £20,000 fine should they fail to adhere to the new minimum wage laws that take effect from Wednesday October 1.
The new law means a new national minimum wage rate for employees in the UK, which their employers could be heftily fined for if they fail to pay.
HM Revenue & Customs claims it will be taking tough action on companies that do not increase their workers’ wages when the new rate comes into effect. with the possibility of a £20,000 fine for every worker found to be underpaid.
HMRC says it also has the powers to name and shame the employers that do not pay their workers fairly, having already pinpointed 25 companies around the time of the last minimum wage increase.
However, many companies have already complained this practice, arguing that their public reputation took a toll thanks to a minor or accidental negligence of the law.
The new increase will mean that adults on a minimum wage of £6.31 an hour can now expect to receive £6.50 an hour, whilst 18-20 year olds will receive £5.03 up from £4.93.
16-17 year olds will receive a 7p rise to £3.79, and apprentices can expect their wage to go up by £2.73.