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New Welsh taxes come into force

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Mark Drakeford: Landfill tax to benefit affected communities

ON APRIL 1 2018, the first Welsh taxes for almost 800 years ‘went live’.

The new Land Transaction Tax (LTT) and Landfill Disposals Tax (LDT) will replace UK Stamp Duty Land Tax (SDLT) and Landfill Tax (LfT) respectively.

These taxes will be collected and managed by the Welsh Revenue Authority (WRA).

LAND TRANSACTION TAX

The Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 will legislate for LTT in Wales. The Cabinet Secretary for Finance, Mark Drakeford, announced the new LTT rates and bands alongside the draft budget in October 2017. However, in response to the UK Autumn Budget in November 2017, he revised the rates and bands for residential properties in December 2017.

LTT will be based on a marginal rate system like SDLT, which means the purchase price is taxed at a specific rate which applies to that band. For example, table 1 below shows that a £190,000 residential property would be exempt from the first £180,000 with LTT charged on the remaining £10,000 at 3.5%.

RESIDENTIAL PROPERTIES

The proposed LTT rates and bands for residential properties are different to those that are currently in place in Wales under SDLT. As shown, residential properties up to £180,000 are exempt from LTT in Wales whilst it is currently properties up to £125,000 for SDLT.

The Cabinet Secretary for Finance commented that “this new threshold, which is £55,000 higher than the starting threshold for SDLT will reduce the tax burden for around 24,000 homebuyers in Wales.” Additional rate for residential properties.

In November 2015, the UK Government announced the higher rates of SDLT would apply from 1 April 2016 to purchases of additional residential properties, such as second homes and buy-to-let properties.

In response to this, the Welsh Government decided to impose an additional rate for LTT of 3% on all price thresholds.

NON-RESIDENTIAL PROPERTIES

There are also differences in rates and bands between LTT and SDLT for non-residential properties. LTT in Wales will include an additional rate for properties over £1 million. Individuals will pay less LTT for properties between £150,000 and £250,000 when compared to SDLT but more for properties over £1 million.

The price threshold for incurring a 2% LTT rate for non-residential lease rents is £3 million lower than SDLT. The Welsh Government explained this is due to generally lower lease rates in Wales meaning very few transactions would pay the top rate of LTT if it was consistent with SDLT.

LANDFILL DISPOSALS TAX

The Landfill Disposals (Wales) Act 2017 legislates for LDT, which will replace UK LfT in Wales from 1 April 2018. It will be a tax on the disposal of waste to landfill payable by landfill site operators. LDT will consist of a lower and standard rate like LfT but will also include a new unauthorised disposals rate.

In the Welsh Government 2018-19 budget, the Cabinet Secretary for Finance confirmed that the lower and standard rates of tax will remain consistent with LfT for 2 years with the unauthorised disposals rate set at 150% of the standard rate.

Professor Drakeford said: “The Landfill Disposals Tax Communities Scheme recognises there can be a negative impact for communities through the disposal of waste.

“Funding from the scheme will directly benefit the environment for those who live near a landfill site helping to offset the impact of waste to landfill.

“Grants of £5,000 to £50,000 will be available to projects in 2 bidding rounds every year and one project will receive funding of up to £250,000 a year.”

WELSH REVENUE AUTHORITY

The Welsh Revenue Authority (WRA) has been established to manage and collect devolved taxes in Wales. The WRA was established in October 2017 and is the first non-ministerial department to be set up by the Welsh Government. The authority will operate independently from Welsh Government and be accountable to the Assembly.

Business

Cabinet Secretary for Economy says Tata chose to ignore multi-union report

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TATA STEEL has confirmed to the Welsh Government plans to close its two blast furnaces at Port Talbot, transitioning to electric arc furnace steelmaking as part of a £1.25bn strategy. This move is set to impact approximately 2,800 jobs, with major implications for the local community and wider Welsh economy.

Jeremy Miles MS, Cabinet Secretary for Economy, Energy and Welsh Language, expressed deep disappointment over the company’s decision to disregard the multi-union report’s recommendations for a more sustainable transition. This report, commissioned by the UK Steel committee, had advocated for measures that would reduce the environmental impact of steel production while considering the workforce’s welfare.

The phased closure will begin with Blast Furnace 5 in June, followed by Blast Furnace 4 and other heavy assets by September’s end. Over the next 18 months, the first wave of job reductions will take effect, beginning this July, with further losses anticipated at the Llanwern site over the next two to three years.

The Welsh Government has criticised the pace of the transition, suggesting that a more extended consultation period between Tata and the unions might have mitigated the scale of job losses. As the company prepares for a three-year transition period, it will rely heavily on steel imports to meet customer demands, a move that raises concerns about the future of local production capacity.

Miles underscored the strategic importance of the Welsh steel sector, not only for the local economy but also as a vital component of the UK’s industrial landscape. He urged Tata Steel to avoid compulsory redundancies and to collaborate closely with the Transition Board to provide the necessary support, including reskilling and employment opportunities for the affected workers.

The confirmation of the shift has prompted significant unrest among the workforce, with unions balloting for potential industrial action. Tata has set conditions on its voluntary redundancy packages, which are subject to ongoing negotiations along with future investment commitments.

The Welsh Government remains committed to supporting the steel industry, emphasizing the need for a clear and substantial investment vision that will ensure the sector’s sustainability and the prosperity of its workforce. The transition board has already initiated various support mechanisms, including job fairs, advisory sessions, and a comprehensive action plan to cushion the economic impact on the community.

This transition marks a challenging new chapter for Port Talbot and the entire Welsh steel industry, with long-term implications for the regional economy and its people.

Commenting, Welsh Conservative Shadow Economy Minister, Samuel Kurtz MS said: “The disappointment felt by those losing employment at Tata cannot be understated. We need to support our steelworkers, not just with warm words, but with skills, retraining and jobs.

“We have been clear that we want to see a blast furnace remain open in the transition to electric arc furnaces and we need to take full advantage of the opportunities that the new Celtic Freeport will bring.”

In a joint statement following their respective contributions in response to the statement, local Senedd Members for South Wales West, Tom Giffard MS and Dr Altaf Hussain MS added: “We need to support our communities in and around Port Talbot more than ever following the disheartening news from Tata.

“It is a matter of deep regret that the Labour Welsh Government have yet to put a single penny on the table to support the UK Conservative Government-funded transition board. We need more detail from Labour as to what they are actually doing to back the workforce.”

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Business

Women make better homeworkers than men, according to new survey

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A GROUNDBREAKING survey conducted by the team behind the British Business Excellence Awards (www.britishbusinessexcellenceawards.co.uk) have uncovered a significant trend in the remote work landscape: women are leading the charge as successful remote workers, surpassing men in both productivity and overall satisfaction with remote work arrangements.

The survey, encompassing more than 2,300 UK adults in full-time employment (a 50/50 split of men and women), revealed a striking trend: over two thirds of employees (69%) perceive female remote workers as more productive than their male counterparts. Contrary to traditional assumptions, women are not only adapting to remote work, but thriving in it.

Additionally, over three-quarters of women (76%) reported increased productivity since transitioning to remote work, compared to 54% of men. This shift in productivity is closely tied to work-life balance, with 72% of women indicating an improved balance since working remotely, compared to 58% of men.

Female remote workers also stood out in terms of approachability and support, with a staggering three-quarters of respondents (75%) perceiving female colleagues as more approachable in the virtual workspace. This accessibility and support contribute to a more cohesive and connected remote work environment.

In a reflection of the evolving priorities in the business world, over half of men (54%) and three-fifths of women (61%) believe that female remote workers are more progressive when it comes to sustainability and environmental initiatives. Women in remote roles were perceived as having a stronger focus on implementing sustainable practices and promoting eco-consciousness in their virtual teams.

Conversely, the survey highlighted a perception that male remote workers are more comfortable with embracing technology and artificial intelligence (AI), with 78% of men and 61% of women expressing this view. This suggests that male remote workers are seen as driving digital transformation and leveraging tech tools more readily in the virtual workspace.

Sarah Austin, Director of the Lloyds Bank British Business Excellence Awards, commented:

“These findings challenge traditional norms and underline the importance of fostering an inclusive work environment where all employees, especially women, can thrive. The data clearly shows that women bring unique strengths to remote work, contributing to higher productivity, improved work-life balance, and a focus on sustainability.

“The survey underscores the significant advantages of supporting and promoting women in remote work settings. As businesses continue to navigate the remote work landscape, understanding and leveraging the strengths of female remote workers can lead to enhanced productivity, employee satisfaction, and overall success.”

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Improved customs infrastructure promised for Port of Fishguard

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SIGNIFICANT developments are poised to transform the Port of Fishguard in Pembrokeshire as a result of Brexit, with proposed enhancements including expanded parking for heavy goods vehicles and the construction of new processing facilities.

The Welsh Government has announced the need to augment customs infrastructure at this key transit point following the UK’s departure from the European Union. This expansion will bolster the port’s capacity and introduce a suite of new structures: two processing buildings—one permanent and one temporary—a mechanical and electrical plant, a waste management building, two water tanks, and enlarged parking facilities for heavy goods vehicles.

In preparation for these enhancements, the government has issued a tender for initial groundwork. This encompasses geotechnical and geo-environmental studies for three proposed buildings dedicated to processing, produce, small animals, and livestock. Additional plans include nine supplementary structures such as mechanical and electrical plants, an animal waste facility, various plant structures, and three water tanks.

The scheme also includes the establishment of a new parking area designed to accommodate 50 trailers, improvements to coastal protection measures, slope reprofiling, and the construction of retaining walls as necessary to support the new parking layout.

This infrastructure upgrade is in line with Stena Line Ports Fishguard’s strategy to adapt to new UK-EU trade dynamics post-Brexit. As border controls tighten, particularly for animal and plant products from the EU, physical inspections are set to begin across Great Britain from April 30 this year. Notably, Stena’s route from Rosslare to Fishguard remains the sole ferry connection from the Republic of Ireland to Great Britain that transports livestock.

Although inspections of these imports from Ireland are not anticipated to commence before spring 2025, the establishment of Border Control Post (BCP) facilities at Fishguard is essential for the inspection of imported goods, including live animals and various plant and animal products.

A Welsh Government spokesperson emphasised that the invitation for ground investigation works at the port is a precursor to the decision-making process regarding the BCP facilities, focusing on the diverse range of commodity types currently arriving at Fishguard which would necessitate such facilities.

The tender for these preliminary ground investigations is expected to be awarded by the end of the month, paving the way for a substantial redevelopment of the port’s operational

capabilities and infrastructure in response to Brexit-related requirements.

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