Connect with us

Finance

MORTGAGE SALES RISE BY £637M IN NOVEMBER

Published

on

MORTGAGE SALES RISE BY £637M IN NOVEMBER

Buy-to-let sales up by 11%

Mortgage sales in the UK rose by 4.1% (£637.4 million) in November, according to Equifax Touchstone analysis of the intermediary marketplace. Year-on-year sales were up 3.0% (£470.1 million).

Buy-to-let sales for the month jumped 10.8% (£334.1 million) on October. Residential figures were also up, increasing 2.5% (£303.3 million) on the previous month.

The majority of regions across the UK witnessed positive sales growth in November. Wales led the way with a rise of 9.9%, followed by the South East (8.0%) and the Midlands (7.5%). The North West and London were the only regions to see a drop in sales, falling by 2.3% and 2.6% respectively.

Region Total mortgage sales growth
Wales 9.9%
South East 8.0%
Midlands 7.5%
South West 5.8%
South Coast 5.6%
Scotland 5.3%
North East 4.2%
Home Counties 3.6%
Northern Ireland 3.4%
North and Yorkshire 3.2%
North West -2.3%
London -2.6%

 John Driscoll, Director at Equifax Touchstone, said: “Mortgage sales in the UK have once again remained strong. Buy-to-let figures in particular have continued to gain momentum, enjoying positive growth for a fourth consecutive month, a trend we expect will continue given increasing difficulty in getting on the housing ladder and the subsequent increase in demand for rental properties.

“As we approach the end of the year, the outlook for the market remains unclear. The full impact of the recent rate hike on sales is yet to be fully felt and even the abolition of stamp duty for first time buyers announced in November’s budget was not received as wholly positive; some within the industry believe house prices may actually rise as a result, which could negatively affect mortgage sales.”

The data from Equifax Touchstone, which covers the majority of the intermediated lending market, shows that the average value of a residential mortgage in November was £191,425 (2016: £190,627) and £144,537 for buy-to-let (2016: £163,115).

Finance

VAT domestic reverse charge set to impact over 1.2 million construction workers from 1st March

Published

on

VAT domestic reverse charge set to impact over 1.2 million construction workers from 1st March 1
  • HMRC’s new VAT domestic reverse charge for building and construction services comes into effect from 1st March 2021
  • Construction firms could see disruption in trader/supplier relationships as well as potential issues with cash flow due to the change

HMRC’s new VAT domestic reverse charge for building and construction services comes into effect from 1st March 2021. With this in mind, specialists from Chartered Accountancy practice, Sheards Accountancy delve into the impact the legislation will have on both the construction and property industries.

The reverse charge will apply to all CIS registered businesses buying and selling construction services that are subject to CIS reporting, apart from those that are zero-rated, up to the point in the supply chain where the customer is the end-user. At this point, the normal reporting and collection of VAT resumes.

Where the reverse charge applies, rather than the supplier charging and accounting for the VAT, the recipient of those supplies accounts for the VAT. In practice, this will mean that where there is a chain of contractors/subcontractors working on a building project, for example, none of those entities will add VAT to their invoices, other than the main contractor who is invoicing the end-user of the property.

Currently, in Great Britain, there are 290,3741 registered construction firms with 1,279,000 people employed in the industry. The construction sector has a monthly output of £14,014 million2 with an average weekly earning in the industry of £6481. But the industry has faced a number of challenges in recent years, which saw 3,502 insolvencies1 in the construction sector in 2019, equating to around a fifth of all insolvencies.

Kevin Winterburn, director at Sheards Accountancy commented: “The changes are a response to what HMRC have described as significant VAT fraud in the industry but they do in a way reflect a lack of trust to those operating in the sector from HMRC. The changes could have huge impacts on a company’s cash flow, so it’s essential that construction workers speak to their advisors, traders and suppliers ahead of 1st March.”

One of the biggest challenges for businesses in the sector is cash flow and a recent survey revealed that 1 in 53 construction companies say cash flow is a constant problem, with 84%4 of construction companies reporting that they had problems with cash flow. When the VAT domestic reverse charge comes into play on the 1st March 2021, experts predict this could have a negative impact on the already stretched cash flow issues in the construction industry, so it’s important for firms to review their existing work pipelines and relationships to prepare for the change.

Specialists from Sheards Accountants share their top considerations to prepare for the VAT domestic reverse charge changes:

  1. From a supplier point of view the legislation change will mean:

  • You will need to continue to validate sub-contractors for CIS purposes as usual
  • You will need to check and validate your CIS services customer’s VAT status
  • You will need to check if you have confirmation that your customer is the end-user – keep a record of it
  • If the customer isn’t VAT registered – no change to the current process, charge 20% VAT on income
  • If the customer is VAT registered but also an end-user – no change to the current process, charge 20% VAT on income
  • If the customer is VAT registered but is not an end-user– reverse charge VAT is applied
  1. From a customer point of view, the legislation change will mean:

  • You will need to inform your supplier whether or not you are the end-user
  • If you are the end-user, you will be charged 20% VAT and you will be able to reclaim it if you are VAT registered
  • If you are not the end-user and the invoice is subject to CIS, the supplier’s invoice should be subject to reverse charge and you can’t reclaim any VAT on it
  1. Review your existing trader relationships. It’s more important than ever to have a clear picture of all the traders and various suppliers you could work with on a project. Reviewing the various traders you will work with ahead of beginning a project will allow you to identify where the VAT should and should not be.

  2. From the 1st March 2021, invoices will have to state that the reverse charge is being applied and no output VAT should be charged. The VAT-registered customers will then need to charge themselves VAT and then claim relief in the normal way. They will do this by using the reverse charge tax rate.

  3. If you are on the flat rate scheme – you may need to leave before 1st March 2021. This should be discussed with your accountant beforehand.

  4. Looking further down the line at work which will begin after the 1st March but which might have already been agreed in contracts, these may need to be reviewed in order to reflect the changes. Contracts should clearly state where VAT is being charged and it’s important that any existing contracts are amended to avoid any issues with payment once a job is complete.

  5. Projects existing prior to 1st of March will need split treatment if they are continuing post 1st of March. If you’re unsure of how to do this, speak to your accountant.

Kevin summarises: “The VAT domestic reverse charge has been a long time coming and it’s something everyone in the industry has been aware of since 2019. But with the 1st March quickly approaching, it’s important for firms in the construction and property industries to start implementing changes to the way they work to make sure they are covered.

“We hope by highlighting the key considerations for everyone in the industry, including suppliers and customers, the changes and responsibilities of each party will be clearer.”

To find out more about the VAT domestic reverse charge please visit: https://www.sheards.co.uk/news/sheards-blog/archive/article/2021/January/vat-domestic-reverse-charge-for-building-and-construction-services

Continue Reading

Finance

Global dividend payouts forecast to revive in 2021

Published

on

Global dividend payouts forecast to revive in 2021 2

By Joice Alves

LONDON (Reuters) – Global dividend payments could rebound by as much as 5% this year, a new report estimated on Monday, after the coronavirus caused the biggest slump in payouts since the financial crisis more than a decade ago.

Companies’ payouts to shareholders plunged more than 10% on an underlying basis in 2020 as one in five cut their dividends and one in eight cancelled them altogether.

A total of $220 billion worth of cuts were made between April and December, based on investment manager Janus Henderson’s Global Dividend Index. But there are signs companies are beginning to reinstate at least some of them.

Janus Henderson’s report warned that dividends could still fall 2% this year, in a worst-case scenario. But its best-case scenario sees 2021 dividends up 5% on a headline basis.

“It is quite likely we will see companies pay special dividends in 2021, utilising strong cash positions to make up some of the decline in distributions in 2020”.

Banking dividends will be likely to drive the rebound in payouts in 2021, the report said, after the European Central Bank and Bank of England eased blanket bans for lenders on dividends and buybacks. These were imposed during the first wave of the crisis to prepare for a potential increase in bad loans.

UK lenders Barclays and NatWest resumed payouts this month.

Last year, dividend bans meant banks cut or cancelled $70 billion of payments globally, according to the report.

But the overall global dividend cuts proved less dramatic than expected. In August, Janus Henderson had expected the virus to drive corporates to cut $400 billion worth of dividends, nearly double the eventual outcome.

A resilient fourth quarter of 2020 helped, said Janus Henderson. The likes of German car maker Volkswagen and Russia’s largest lender Sberbank restored payments.

Mining and oil companies cut dividends after a slump in commodity prices, while consumer discretionary companies also took a hit following lockdowns.

European dividends, not including Britain, fell by 28.4% on an underlying basis in 2020 to $171.6 billion. “This was the lowest total from Europe since at least 2009,” Janus Henderson said.

(GRAPHIC: Dividend cuts by region –

Global dividend payouts forecast to revive in 2021 3

In contrast, North American payouts rose 2.6% for the full year, setting a new record of $549 billion, the report said. Canada had the fewest dividend cuts anywhere in the world, the index showed.

Continue Reading

Finance

Former Bank of England Governor Carney joins board of digital payments company Stripe

Published

on

Former Bank of England Governor Carney joins board of digital payments company Stripe 4

By Kanishka Singh

(Reuters) – Mark Carney, former head of the UK and Canadian central banks, has joined the board of U.S. digital payments company Stripe Inc, days after the company was reported to be planning a primary funding round valuing it at over $100 billion.

“Regulated in multiple jurisdictions and partnering with several dozen financial institutions around the world, Stripe will benefit from Mark Carney’s extensive experience of global financial systems and governance”, the company said on Sunday, confirming a report by the Sunday Times newspaper.

Forbes magazine had reported on Wednesday that investors were valuing Stripe at a $115 billion valuation in secondary-market transactions.

A senior Stripe executive told Reuters in December that the company plans to expand across Asia, including in Southeast Asia, Japan, China and India.

The company offers products that allow merchants to accept digital payments from customers and a range of business banking services.

Stripe raised $600 million in April in an extension of a Series G round and was valued back then at $36 billion.

Consumer-facing fintechs have seen a boost to their businesses during the COVID-19 pandemic, as people have been staying at home to avoid catching the virus and have increasingly been managing their finances online.

Carney, who headed the Bank of England and the Bank of Canada, had a 13-year career at Wall Street bank Goldman Sachs Group Inc in its London, Tokyo, New York and Toronto offices.

He is the United Nations special envoy on climate action and finance.

(Reporting by Kanishka Singh in Bengaluru; Editing by William Mallard)

Continue Reading
Editorial & Advertiser disclosureOur website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.

Call For Entries

Global Banking and Finance Review Awards Nominations 2021
2021 Awards now open. Click Here to Nominate

Latest Articles

Damage to United Boeing 777 engine consistent with metal fatigue - NTSB 5 Damage to United Boeing 777 engine consistent with metal fatigue - NTSB 6
Top Stories1 min ago

Damage to United Boeing 777 engine consistent with metal fatigue – NTSB

By David Shepardson and Jamie Freed WASHINGTON (Reuters) – Damage to a fan blade on an engine that failed on...

Oil prices jump more than $1 as U.S. output slow to restart 7 Oil prices jump more than $1 as U.S. output slow to restart 8
Top Stories4 mins ago

Oil prices jump more than $1 as U.S. output slow to restart

By Jessica Jaganathan SINGAPORE (Reuters) – Oil prices jumped by more than $1 on Tuesday, underpinned by optimism over COVID-19...

Total sells wind and solar farm stakes to Credit Agricole and Banque des Territoires 9 Total sells wind and solar farm stakes to Credit Agricole and Banque des Territoires 10
Business6 mins ago

Total sells wind and solar farm stakes to Credit Agricole and Banque des Territoires

PARIS (Reuters) – French energy group Total has agreed to sell off stakes in some wind and solar farms to...

What banks need to know about observability 11 What banks need to know about observability 12
Banking41 mins ago

What banks need to know about observability

By Abdi Essa, Regional Vice President, UK&I, Dynatrace More aspects of our everyday lives are taking place online – from how we...

What finding Alice has taught us about the pitfalls of no will 13 What finding Alice has taught us about the pitfalls of no will 14
Investing49 mins ago

What finding Alice has taught us about the pitfalls of no will

ITV’s latest television drama Finding Alice has been a necessary diversion during these endless winter weeks of lockdown, but it...

Unlocking the potential of APIs 15 Unlocking the potential of APIs 16
Top Stories55 mins ago

Unlocking the potential of APIs

Corporate expectations for fast, efficient and convenient payment services are now the norm. BNY Mellon Treasury Services’s Sindhu Vadakath, Head...

Tapping into the right minds 17 Tapping into the right minds 18
Top Stories1 hour ago

Tapping into the right minds

By David Holden-White, co-founder and managing director, techspert.io The world is awash with information. Analyst house IDC estimated that more...

VAT domestic reverse charge set to impact over 1.2 million construction workers from 1st March 19 VAT domestic reverse charge set to impact over 1.2 million construction workers from 1st March 20
Finance2 hours ago

VAT domestic reverse charge set to impact over 1.2 million construction workers from 1st March

HMRC’s new VAT domestic reverse charge for building and construction services comes into effect from 1st March 2021 Construction firms...

Report explores the Ceramic Ink Market likely to emerge over a period of 2019– 2029 21 Report explores the Ceramic Ink Market likely to emerge over a period of 2019– 2029 22
Research Reports2 hours ago

Report explores the Ceramic Ink Market likely to emerge over a period of 2019– 2029

Ceramic Ink market players – Torrecid Group, Ferro Corporation, Marabu GmbH & Co. KG, Chromaline, Fenzi Group SpA, Rex-Tone Industries...

Detailed examination of the Micro Robots Market to hold a high potential for growth by 2021 23 Detailed examination of the Micro Robots Market to hold a high potential for growth by 2021 24
Research Reports2 hours ago

Detailed examination of the Micro Robots Market to hold a high potential for growth by 2021

Micro Robots market study depicts an extensive analysis of all the players running in the Micro Robots Market report based on distribution...

Newsletters with Secrets & Analysis. Subscribe Now