Economy grows by record 15.5%
ONS Data shows that the UK economy grew at a record pace in the third quarter of this year. The country’s emergence from the first lockdown saw GDP rise by 15.5% between July and September. However, growth was weaker in September than in the preceding months, while the country’s economy is still some 8.2% smaller than pre-pandemic levels. Despite the rebound in Q3, analysts have warned that the economy was likely to shrink again in Q4 of 2020 due to the impact of first local lockdowns followed by the widespread national lockdown imposed on November 2nd.
Chancellor Sunak extends investment relief for manufacturing sector
Rishi Sunak is set to extend a temporary cap of £1m on tax relief for manufacturing firms on investments in plant and machinery until January 2022. The annual investment allowance break had been due to end on January 1 when the cap would have reverted to £200,000.
Changes to Capital Gains Tax?
Staying on the subject of Rishi Sunak, business leaders and entrepreneurs have expressed their concerns over plans to align capital gains tax with income tax, warning any potential recovery would be stifled by such a move. Lord Leigh of Hurley, senior treasurer of the Conservative Party and a senior partner at Cavendish Corporate Finance, said: “Proposals to simplify tax by equating income and capital don’t reflect the differences between the two. Capital gains are rewards for a risk taken by investing in an asset which might become worthless. Income involves no risk at all. If you want people to move from a comfortable salary to invest in a new business, take a risk, employ people, as I did, they have to feel that tax on any success reflects that risk.”
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