Unemployment, inflation & tax day – business news 24 March 2021.

James Salmon, Operations Director.

The ONS reports a fall in the jobless rate, inflation rises, 4 new investment hubs, MTD, Tax day and more.

ONS reports fall in jobless rate

The Office for National Statistics (ONS) has released data showing that the jobless rate in the UK has decreased for the first time since the onset of the coronavirus pandemic.

The rate of unemployment returned to 5% between November and January, from 5.1% in previous months, with Chancellor Rishi Sunak noting: “Coronavirus has caused one of the largest labour market shocks this country has ever faced, which is why protecting, supporting and creating jobs has been my focus throughout this crisis. We have taken decisive action with a £352bn package of support.”

Suren Thiru at the British Chambers of Commerce added: “With many firms struggling with the damage done to their cashflow by a year of COVID restrictions, unemployment is likely to remain on an upward trajectory until well beyond a full reopening of the economy.”


Inflation, the Consumer Prices Index (CPI) slipped in February compared to the previous month as rising petrol costs failed to offset discount clothing and footwear.

CPI rose 0.4 per cent in the 12 months to February, down from a 0.7 per cent rise in January. On a monthly basis, CPI rose by 0.1 per cent in February 2021, compared with a 0.4 per cent rise in February 2020, the Office for National Statistics said this morning.

Falling prices for clothing, second-hand cars, and games, toys and hobbies drove the inflation rate downwards.

Liz Truss announces four new investment hubs

The UK is creating four regional trade and investment hubs to boost economic growth across the UK. Hubs would be located in Edinburgh, Cardiff, Belfast and Darlington, Secretary of State for International Trade Liz Truss said. The Government explained that the new hubs will provide support and advice to help regional businesses to access major trade markets and boost exports.

MTD to usher in more frequent tax payments

The Treasury has suggested changing the timing of almost all tax payments after 2024 to realise its “vision [for] a tax system that works closer to real time”. Under the “making tax digital” programme, the Treasury will seek to use up-to-date digital tax return data to “bring the calculation and payment of tax closer to the point where the income or profit arises”.

The plans will see and small companies and self-employed people pay tax more frequently, and closer to the point at which they make the money. Andy Chamberlain of the freelancer trade body IPSE commented: “We have early concerns that in-year tax payments simply won’t be practical for many self-employed businesses as it is not clear how the system would account for their volatile incomes.”

Treasury’s “Tax Day” consultations a missed opportunity

After the Treasury failed to deliver proposals for fundamental tax reforms yesterday, campaigners such as Robert Palmer, executive director of Tax Justice UK, said “tax day has turned out to be a bit of a flop”. With many key decisions delayed until the autumn, the announcements amount to a mere tweaking with Tom Selby, senior analyst at AJ Bell, describing the policy papers as “the dampest of squibs”. “While reforms to modernise the way tax is administered in the UK, reduce the inheritance tax rates burden on non-taxpaying estates and deal with tax avoidance are all laudable, this feels like a missed opportunity to tackle some fairly obvious flaws in the system,” he said. Ahead of the Treasury’s announcements there was widespread speculation that higher and additional rate tax relief on pension contributions would be abolished and capital gains would be more closely aligned with income tax, but neither of these materialised.

Yellen: US wants to stop a “global race” to the bottom

Treasury Secretary Janet Yellen has said the US wants to stop a “global race” to lower taxes on corporations. Speaking at a hearing of the House Financial Services Committee to discuss the country’s recovery from the pandemic, Ms Yellen said her staff were working with the Organisation for Economic Co-operation and Development to coordinate the potential tax changes with other countries. “We’ve had a global race to the bottom in corporate taxation and we hope to put an end to that,” she said. Her comments come as White House prepares to unveil plans to raise taxes on businesses and the wealthy to help pay for $3trn of new spending on infrastructure and green jobs. Separately, Mathias Cormann, the incoming head of the OECD, has told the FT that he is “quietly optimistic” he can secure a global deal on taxing multinationals. Meanwhile, UK Chancellor Rishi Sunak told an event with Bloomberg yesterday that a multilateral solution to taxing global tech giants is “in our grasp” adding that he was “very keen to see a resolution” on the issue reached when G7 finance ministers meet in July.


Global music sales rose by 7.4% last year to $21.6 billion, according to trade body IFPI . Streaming accounted for 62% of revenues with more than 443 million people paid a subscription to a streaming service at the end of 2020. Physical sales fell by just 4.7% and revenues from performance rights dropped by 10.1%, largely because the covid-19 pandemic forced events to close.

Dormant assets scheme expanded

The Government’s dormant assets scheme is to be expanded to include insurance, pensions and investments. Currently, the scheme only covers old current and savings accounts. The Treasury claims the expansion could unlock more than £800m in lost funds which would be spent helping vulnerable people and communities across the UK.

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