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UK TAX
Weekly News 14th Oct
Amazon announces layoffs– planned cuts to 14,000 management positions
As part of its strategy to streamline operations and increase company efficiency, Amazon recently announced a significant layoff plan, aiming to cut 14,000 managerial positions by 2025, which is expected to save between $2.1 billion to $3.6 billion annually.
Sources revealed that this layoff transformation is personally led by Amazon’s CEO Andy Jassy to reduce excess management layers and consolidate responsibilities to drive operational improvements and respond to the rapid changes in the tech industry.
According to Morgan Stanley, this layoff will reduce Amazon’s global management personnel from approximately 105,770 to around 91,936, significantly cutting costs and enhancing operational flexibility.
Over the past year, Amazon has already carried out several rounds of layoffs in its non-core business areas. In January 2023, the company announced plans to lay off more than 18,000 employees. Then, in March 2023, another 9,000 employees were laid off across various departments. Jassy also introduced a ‘whistleblower hotline’ to allow employees to report unnecessary processes that reduce work efficiency and productivity.
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Employment Rights Bill introduced to Parliament
Under the Employment Rights Bill introduced by the Labour government last week, UK workers will receive a range of new employment benefits, including the right to sick pay and the right to take paternity leave from the first day of employment.
Key measures in the Employment Rights Bill include protections against unfair dismissal from the start of a new job, and the introduction of statutory probationary periods for all new employees. In addition, the bill gives many zero-hours contract workers the right to sign guaranteed hours contracts and requires companies to make flexible working the default option where possible.
Under the new bill, UK employees will also be entitled to unpaid parental leave or bereavement leave from day one of employment, and statutory sick pay can be claimed from the first day of illness, rather than the previous fourth day. Pregnant women and new mothers will also receive stronger protections against dismissal.
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Autumn Budget plans in ‘chaos’
According to media reports, sources have revealed that the tax hike plans in the Autumn budget are in ‘complete chaos’. Chancellor of the Exchequer Rachel Reeves and other Treasury officials are testing a capital gains tax (CGT) range of 33-39%.
Capital gains tax is a tax levied on the profit (or capital gain) from selling, transferring, or disposing of assets by individuals or companies. In simple terms, capital gains tax is charged on the increase in value when you sell certain assets for more than the purchase price.
Currently, around 350,000 people in the UK pay capital gains tax, but they contribute around £15 billion in taxes annually. Under the current system, the tax rate on second home sales (up to 24%) or business shares (up to 20%) is far lower than that on wages (up to 45%).
Forecasting models show that if the tax is increased to the minimum rate of 33% being tested, several hundred million pounds more could be raised. If increased to the maximum of 39%, the annual increase in capital gains tax could actually decrease after five years.
Industry experts have already made it clear that raising taxes on non-UK residents and private equity owners would not only fail to raise the expected funds but could also deter wealthy individuals from staying in the UK, ultimately resulting in a loss of revenue for the treasury. With a series of wealth tax plans facing obstacles, the Labour government has limited time to find ways to raise funds.
UK economy rebounds after 2 months of stagnation
Data from the UK’s Office for National Statistics (ONS) shows that the UK economy grew by 0.2% in August after two consecutive months of stagnation. All major sectors saw growth in August, but the dominant services sector grew less than expected, though strong rebounds in manufacturing and construction helped overall growth.
After the data was released, the exchange rate of the British pound against the US dollar showed little change, as most investors still believe that the Bank of England will lower interest rates by a quarter of a percentage point in November.
Compared to many other G7 countries, the UK economy has recovered more slowly from the COVID-19 pandemic. Overall, UK economic output grew by 1.0% compared to a year ago, below economists’ forecast of 1.4%.
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London’s New Year’s Eve fireworks tickets to cost up to £50
The annual London New Year’s Eve fireworks tickets will soon go on sale, and this year’s ticketing process has seen significant changes!
Reportedly, this year’s fireworks will feature upgraded tickets, with visitors paying up to £50 to view the fireworks from the best vantage points along the Thames. Additionally, for the first time, non-London visitors will be charged a higher ticket price, with tickets costing £15 more than for London locals. According to the official seating map, the best-viewing areas from previous years—Blue Zone, Pink Zone, and White Zone—will charge £50 for non-London visitors, while London residents will pay only £35. Other zones will charge £35 for non-London visitors and £20 for London residents.
The first batch of tickets will go on sale at noon on Friday, October 18th, on Ticketmaster, and the second batch will be announced in December. Each person can purchase up to four tickets.
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