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UK TAX
Weekly News 7th Oct
Prime Minister promises ‘new partnership’ with the EU
Last week, the prime minister Keir Starmer met with European Commission President Ursula von der Leyen, marking his first visit to Brussels since becoming Prime Minister.
The primary goal of this meeting for Starmer was to rebuild relations and trust between the UK and the EU following the intense Brexit negotiations. At the same time, he aimed to advance cooperation on key areas including energy security, climate change, illegal immigration, and economic growth.
At the press conference, Prime Minister Starmer emphasised that this would ‘open a new chapter in the UK-EU relationship’ and move away from “the old path of negotiations” in favour of a more constructive approach.
Starmer and von der Leyen are expected to meet again this autumn, with regular UK-EU leadership summits starting from early next year.
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Acid attack outside London school injures three people
Last week, a vicious attack occurred outside Westminster Academy in central London, where three people, including a teacher and two students, were doused with a “corrosive substance” (believed to be sulfuric acid). The suspect fled the scene after the attack.
Reports suggest the target was a 14-year-old girl who had just finished school and was standing by the main road outside the school. Two others were injured while trying to help her after she was attacked. According to the injured girl’s father, her injuries were severe, and she remains in the hospital. The attack has left her with serious psychological trauma, and she plans to withdraw from Westminster Academy. Her family will also be moving out of the community.
Following the incident, London police launched an emergency manhunt and arrested a 35-year-old man on suspicion of causing grievous bodily harm.
It is unclear what motivated the attack or why the suspect targeted the 14-year-old girl. Police have increased patrols around the school and are appealing for anyone who may have dashcam footage of the incident to come forward.
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Starling Bank fined £29 million for lapses in financial crime prevention
The UK’s Financial Conduct Authority (FCA) recently fined Starling Bank £29 million for inadequate anti-money laundering monitoring and sanction screening systems, which allowed financial crimes to occur.
Starling Bank, the UK’s first fully digital bank, is authorised by the Prudential Regulation Authority (PRA) and regulated by both the PRA and the FCA. As of 2023, the bank has over 3 million customers with total deposits exceeding £9 billion.
The FCA investigation found that Starling’s measures to combat financial crime had not kept pace with its growing customer base and that the bank repeatedly violated regulations by opening accounts for high-risk customers. Between September 2021 and November 2023, Starling opened over 54,000 accounts for 49,000 high-risk customers.
Additionally, a review in January 2023 revealed that Starling’s automated sanction screening system had only checked a small portion of the list of individuals sanctioned since 2017.
An internal review later revealed systematic issues in the bank’s sanction framework, which may have violated multiple financial sanctions, providing opportunities for criminals and sanctioned individuals. In its response, Starling stated that it fully accepts the investigation’s findings and has completed a detailed review of transactions and accounts associated with the violations.
Ed Sheeran found to pay more tax than Starbucks
Ed Sheeran, the first UK artist to receive the Gold BRIT Billion Award, paid more in taxes in 2023 than global coffee chain Starbucks, following a record-breaking year in music and touring.
According to reports, the 33-year-old music superstar’s company, Ed Sheeran Limited, generated a profit of £36,501,915 in 2023, more than double the previous year’s figure. The company paid £8,415,815 in corporate taxes, which is about £1.2 million more than Starbucks.
Income Taxed estimates that Ed Sheeran also paid £5,508,662 in dividend taxes in 2023, bringing his total tax bill to nearly £14 million (£13,924,477).
Managing Director & Tax Expert at Income Taxed Andrew Smith commented ‘What’s particularly commendable is that despite the company’s record profits, Ed took a more modest dividend than the previous year…This decision, which still resulted in an estimated personal tax liability of about £5.5 million on dividends alone, showcases a balanced approach to wealth management and fiscal responsibility’
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eBay eliminates private selling fees
Online retailer eBay has announced the elimination of nearly all fees for private sellers across most categories, a move made in response to growing competition from platforms like Depop and Vinted. This means eBay sellers in the UK will no longer have to pay transaction fees, with exceptions for cars, motorcycles, and other vehicles.
In April this year, eBay removed fees for private sellers of second-hand clothing, which led to double-digit growth in the number of listings for popular items like jeans, shirts, and dresses.
Private seller fees on eBay refer to various charges that individual users face when selling items. The specific fees depend on the category of the item, the seller’s location, and promotional options.
However, many platforms charge buyers instead of sellers. For example, Vinted does not charge for listing or selling, but buyers pay a “buyer protection fee,” which ranges from 3% to 8% of the item’s pre-shipping price. Depop also eliminated all listing fees for new items in March this year.
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