23. Weekly Newsletter
Minimum Global Tax of 15%
The G-7 countries, which includes the UK, has agreed to back a minimum global tax of 15% for corporations. It has been indicated that this landmark move has been approved in order to raise funds for pandemic-hit governments from, in particular, tech giants who have mainly financially benefited from global lockdowns. Meanwhile, the UK’s corporation tax rate has already sat at 19% for a relatively prolonged period but is now set to be raised to up to 25% in April 2023 depending on profit levels (smaller profits of <£50,000 will remain on 19%).
On the 11th of June, Cornwall will be hosting the G-7 summit and the proposal of an additional tax on digital companies may be discussed as the UK, Spain, Italy and India have frequently flirted with the idea- despite American opposition. Further clarity is still required upon how any tax-related global policies will influence the UK’s tax-friendly overseas territories such as the British Virgin Islands and Cayman Islands.
COVID Update
Over 4.5m people in the UK have tested positive for COVID but the daily rise in cases has remained consistently low for most of the year- however, cases are now rising. A total of almost 127,850 deaths have been attributed to the virus and the daily increase sits in the single digits. Nationally, 40.5m people have received their first vaccine and approximately 28m of these patients have also received their second dose. This brings the total number of inoculations carried out, by the private sector and National Health Service, to around 68.5 million.
The aviation sector, which has faced a visibly challenging pandemic, is now pushing for a UK-US travel corridor after having deemed transatlantic as “essential to igniting economic recovery”. Due to high case rates in the US they currently feature on Britain’s “amber list” (alongside Sweden) which requires self-isolation upon arrival for 10 days. Fresh challenges have been faced by the travel industry after Portugal, the destination of the all-English Champions League final, was taken off the “green list” and another seven countries were simultaneously added to the “red list”.
UK House Prices Rise
In the year to May, UK average house prices rose by more than £22,000 (up 9.5%) to a total of £261,743 according to Halifax Bank. This latest research also concluded that annual house price inflation was at its highest rate for almost seven years following strong growth of 1.3% month-on-month. Galley, the MD of Halifax, stated that prices have risen due to there being “greater demand for larger properties with more space”.
A contributor to this meteoric rise has been the attributed to the lucrative stamp duty holiday which will eventually begin to taper off from the 30th of June. On the global scale, nations such as Turkey (up 32.0%), New Zealand (22.1%) and Luxembourg (up 16.6%) have seen prices rise even higher despite wages mainly falling. As a result of this, Nationwide Building Society predict continued increases until government job protection schemes come to an end and prices could start to abruptly decline.
