The Institute for Fiscal Studies (IFS) has urged Chancellor Rishi Sunak to use the forthcoming Budget to raise taxes.

The think tank stated that the Chancellor either needs to raise taxes or ‘break a fiscal rule’ in order to avoid day-to-day spending cuts beyond 2021.

However, the Conservative Party’s election manifesto promised not to raise income tax, national insurance or VAT.

The IFS has also called on the Chancellor to abolish Entrepreneurs’ Relief and end the ‘ludicrously generous tax treatment of capital gains at death and of inherited pension pots’.

Commenting on the matter, Paul Johnson, Director of the IFS, said:

‘Rishi Sunak’s first Budget could be the most important fiscal event in years. It will set the direction of policy for the next five years. If this new government is going to make radical changes to taxes and spending, this surely is the time to do it.

‘There are plenty of tax rises which would both raise revenue from better off individuals and improve the coherence of the tax system.’

We will update you on pertinent Budget announcements.

Internet link: FS publications

The Prime Minister, Boris Johnson, has announced that employees will be entitled to Statutory Sick Pay (SSP) from day one when self-isolating rather than having to wait until day four under the SSP waiting days rules.

The change will be included in a package of measures, to be introduced by emergency legislation, to deal with coronavirus.

Updating Parliament on the Government’s response to the virus, Prime Minister Boris Johnson told MPs:

‘I can today announce that the Health Secretary will bring forward, as part of our emergency legislation measures, to allow the payment of Statutory Sick Pay from the very first day you are sick instead of four days under the current rules.

‘No one should be penalised for doing the right thing.’

The Prime Minister had earlier said:

‘We are not at the point yet where we are asking large numbers of people to self-isolate, but that may of course come if large numbers have the symptoms.

‘If they stay at home, they are helping to protect all of us by preventing the spread of the virus.’

The press release advises that the change will be a temporary measure to respond to the outbreak and will lapse when it is no longer required. We will keep you updated on developments.

Internet links: GOV.UK news GOV.UK guidance

The government has confirmed that parents who suffer the loss of a child will be entitled to two weeks’ statutory leave.

Under the new entitlement working parents who lose a child under the age of 18 will get two weeks’ statutory leave and where they meet the necessary conditions a legal right to two weeks’ paid bereavement leave.

Business Secretary Andrea Leadsom, stated:

‘The Parental Bereavement Leave and Pay Regulations, which will be known as Jack’s Law in memory of Jack Herd whose mother Lucy campaigned tirelessly on the issue, will implement a statutory right to a minimum of 2 weeks’ leave for all employed parents if they lose a child under the age of 18, or suffer a stillbirth from 24 weeks of pregnancy, irrespective of how long they have worked for their employer.

This is the most generous offer on parental bereavement pay and leave in the world, set to take effect from April.’

Under the new rules, parents will be able to take the leave as either a single block of two weeks, or as two separate blocks of one week each taken at different times across the first year after their child’s death.

The right to Parental Bereavement Leave (PBL) will apply to all employed parents who lose a child under the age of 18, or suffer a stillbirth (from 24 weeks of pregnancy), irrespective of how long they have been with their employer.

Parents with at least 26 weeks’ continuous service with their employer and weekly average earnings over the lower earnings limit (£118 per week for 2019/20) will also be entitled to Statutory Parental Bereavement Pay (SPBP), paid at the statutory rate of £148.68 per week (for 2019/20), or 90% of average weekly earnings where this is lower.

The government has confirmed SPBP will be administered by employers in the same way as existing family-related statutory payments such as Statutory Paternity Pay.

Internet link: GOV.UK news

The Financial Conduct Authority (FCA) has confirmed it will introduce new rules in April this year that it says will make the costs of overdrafts clearer and easier to compare.

The rules will mean banks can only charge for overdraft users a simple annual interest rate – without additional fees and charges.

According to the FCA, seven out of ten overdraft users will be better off or see no change in cost.

Christopher Woolard, Executive Director of Strategy and Competition at the FCA, said:

‘Our changes expose the true cost of an overdraft. We have eliminated high prices for unarranged overdrafts.

‘This will result in a fairer distribution of charges, helping vulnerable consumers, who were disproportionately hit by high unarranged overdraft charges, and many people who use their overdraft from time-to-time.’

However, many banks have responded by hiking the interest rates they charge on overdrafts and several of the largest providers are set to introduce rates of up to 40%.

The FCA has sent a letter to the providers asking them to explain what influenced their decision and to ask how the banks will deal with any customers who could be worse off following the changes.

It said some firms could reduce or waive interest for customers who are in financial difficulty because of their overdraft.

Internet links: FCA press release FCA letter

Employees are allowed to claim tax relief on their annual professional fees or subscriptions to some HMRC approved professional organisations. The costs are tax deductible generally where the individual must have membership to do their job or it is helpful for their work. Where the fees are paid by the individual’s employer this will not generally result in a benefit in kind charge.

HMRC has updated the list of approved bodies which also includes not only details of the professional bodies that are approved but details of qualifying annual subscriptions for journals.

Internet link: GOV.UK professional subscriptions