In this edition of RSM’s weekly round-up of the most important tax news, we cover the latest developments. Please feel free to share this update with any of your colleagues and invite them to sign up to our regular briefings here.
Tax bills rise as post-pandemic employment earnings squeezed by “bracket creep”
Although median employment earnings have risen since the period before the pandemic began, the personal tax allowance and the starting point for top rate taxes have hardly increased. When it comes to taxes, the “squeezed middle” will continue to be squeezed until both the personal allowance and the starting point for the higher rates of tax are consistently increased in line with inflation.
Decarbonisation challenge for the UK government to avoid regional and sectoral disparity in the energy transition
As world leaders, corporates and financiers left Glasgow following COP26, the conference concluded by asking for another chance. Despite notable progress on methane reduction, deforestation and carbon offsets, the eleventh-hour switch to phasing down, as opposed to phasing out coal, failure to agree on national plans to cut emissions and the funding to do so was disappointing. Nonetheless, the UK government remains obliged to meet its legally binding net zero target. To avoid deterioration of some UK industry sectors and pockets of high unemployment arising from the UK’s decarbonisation programme, it is essential that holistic tax policies are introduced to avoid regional and sectoral disparity as the winners and losers in the energy transition become apparent.
Tribunal pressures HMRC to speed up VAT refunds for DIY housebuilders
A tax tribunal has ruled that self-builders using HMRC’s DIY housebuilders’ scheme are entitled to claim interim VAT refunds instead of waiting until the project is complete before getting their money back. But could HMRC be about to sweep this decision under the carpet?