Working longer & negative rates – business news 27 July 2021

James Salmon, Operations Director.

MPC member calls for working longer and negative rates, Doom mongering risk cutting down the recovery, ebay provides improved support to SME sellers, DWP caught in IR35 failing and more.

Working longer and negative rates could give BoE more capacity – Vlieghe
Bank of England MPC member Gertjan Vlieghe has suggested that extending the retirement age could give the central bank more firepower to fight the next recession. The Bank should also explore negative interest rates and shifting to digital cash as ways of fuelling the economy, he said in his final speech as a member of the committee. However, in the meantime Mr Vlieghe expects the current setup of 0.1% interest rates and the final £150bn of the quantitative easing programme to stay “in place for several quarters at least, and probably longer”.

Doom-mongering and threats risk cutting down recovery
Writing in the Telegraph, Kate Andrews, the economics correspondent at The Spectator, says Britain’s economic recovery remains fragile and the messaging coming out of Downing Street “does nothing to inspire confidence”. She states: “We are inching upwards, but the pace at which we do so remains in flux. The path to recovery is already littered with hurdles, from shortages in the labour market, to fast-changing consumer behaviour. The Government cannot simply rely on a spectacular recovery, especially if it chooses to put up more hurdles, rather than tearing them down along the way.”

Self-isolation exemptions to include tax collectors
Ministers have expanded the list of professions where employees can take daily lateral flow tests to avoid self-isolation to include rubbish collectors, vets and tax collectors. The move is designed to further limit the disruption caused by the “pingdemic”, which has sent millions of workers into self-isolation after being alerted by the NHS Test and Trace app.

eBay provides improved logistic options for SME sellers
UK-based sellers on eBay will now be offered a new end-to-end fulfilment service offers, which brings sellers faster delivery options, improved logistics management, more streamlined processes and better seller protection. The change comes after the site saw a 237% surge in new businesses joining the online marketplace giant amid the pandemic. “We know that managing space and storage for inventory can be one of the biggest pain points for our sellers, while an increasingly competitive retail environment means that consumers expect faster and more transparent delivery times,” eBay UK general manager Murray Lambell explained.

DWP faces £87.9m tax bill due to IR35 failings
The DWP has been issued with a £87.9m tax bill as a result of incorrectly determining the IR35 status of contractors. Seb Maley, the CEO of IR35 specialist Qdos, commented: “Given HMRC’s very own IR35 tool – CEST – was used to assess the IR35 status of contractors, here we have proof that using it can easily lead to mistakes and staggering financial consequences. But businesses aren’t required to use the tool and, as we can see here, there’s zero guarantee that HMRC will stand by the answers it delivers.” HMRC have sent a clear signal of intent, he continues. “Compliance in this area sits high on the tax office’s agenda and following reform to IR35, they are now in a position to approach businesses along with contractors.”

Swedish drinks maker Kopparberg launches damages claim against HMRC over tax
Swedish drinks maker Kopparberg has initiated legal action against HMRC accusing the UK Government of knowingly providing a tax loophole to UK-based drinks manufacturers that unfairly reduced the company’s profits. The loophole, known as post duty point dilution (PDPD), allows UK-based producers of flavoured wines and ciders to pay duty only on high strength wine concentrates imported to Britain, rather than on the finished product. Lawyers for HMRC argued that the tax regime was not discriminatory to EU companies as they were free to set up in the UK and take advantage of the same loophole.


Bitcoin rose 16% and broke the $40,000 level yesterday before quickly tumbling as Amazon denied rumours it was considering using the currency.


Tesla beat profit expectations by 45% on high deliveries with earnings per share hitting $1.45 compared to an estimated 97cents with revenue of $12 billion and positive free cash flow of $619million.

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