When you are abroad there are ways to make sure you don’t pay large on exchange rates and make the most out of your holiday budget. There are some tips you can follow to make this easier.
The pipeline has been shut for three days for maintenance and will not reopen unless sanctions are lifted.
"Pumping problems arose because of sanctions imposed against our country and against a number of companies by Western states, including Germany and the UK,” said Kremlin spokesman Dmitry Peskov.
Gas prices surged on Monday 5th September over pressing concerns around energy supplies. The Dutch month-ahead wholesale gas price, which is considered a benchmark for Europe, rose 30% in early trading on Monday, whilst prices in the UK were up as much as 35%. A German government spokesperson commented that the latest gas price surge was part of Putin's plan.
The European Union's statistics office, Eurostat, reported that consumer prices in the 19 countries using the euro rose 0.1% month-on-month in July for an 8.9% year-on-year increase. This is the highest rise since the euro was created in 1999.
Eurostat said that of the total, 4.02 percentage points came from more expensive energy, which is up due to the Russia-Ukraine war. 2.08 percentage points stem from higher food, alcohol and tobacco costs.
Last month, the European Central Bank launched a tightening cycle following years of ultra-loose monetary policy. However, the cost of services still increased by 3.7% year-on-year in July, contributing 1.6 percentage points to the final outcome.
It was recently reported that UK inflation has now exceeded 10%, prompting thousands to sign a petition urging the government to introduce an emergency budget.
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Presently, crypto assets are largely unregulated throughout the world, with the national operators in the EU only expected to demonstrate controls for tackling money laundering.
This has led representatives from the European Parliament and EU states to iron out a deal on the markets in crypto assets (MiCA) law. This will likely come into effect around the end of 2023.
"Today, we put order in the Wild West of crypto assets and set clear rules for a harmonised market," commented lawmaker Stefan Berger. "The recent fall in the value of digital currencies shows us how highly risky and speculative they are and that it is fundamental to act.”
MiCA, as the first comprehensive system for crypto-assets in the world, will contain strong measures to prevent and fight market abuse and manipulation. Other major crypto centres, including the US and UK, are yet to give similar rules the green light.
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The IEA reported that the Kremlin earned approximately $20 billion each month in 2022 from combined sales of crude oil and other products totalling around 8 million barrels per day. In 2022, total oil export revenues were up 50% for Russia.
Despite the conflict in Ukraine, Russian shipments have continued to flow to the European Union and Asia, with both China and India bagging heavily discounted cargoes.
Nonetheless, the EU bloc remained the largest market for Russian exports in April. According to the IEA, it received 43% of Russia’s shipments. However, the EU is pushing towards a full ban on Russian crudes, with sanctions against Russian state-linked companies, such as oil giant Rosneft PJSC, set to begin on May 15.
The fall marks its lowest point in two weeks as the demand outlook was pressured by increasing recession risks and Covid-19 lockdowns in China. Additionally, a strong US dollar made crude oil more costly for buyers purchasing in other currencies.
US West Texas Intermediate crude oil was down 3.2% to $99.76 a barrel, while Brent crude dropped 3.28% to $102.46 a barrel.
Also on Tuesday, French President Emmanuel Macron and Hungarian Prime Minister Viktor Orban discussed energy security amid EU efforts to persuade Hungary to agree to proposed sanctions on oil imports from Russia.
"These are volatile times, the daily price bars are outsized these days," commented John Kilduff, a partner at Again Capital LLC. "As the EU continues to dither over whether or not they are going to embargo Russian oil, that changes the calculus very much as well in both directions.”
The Public Accounts Committee (PAC) report warns that there could be “potential disruption” at the UK border if cross-border passenger volumes, which have been at a fraction of normal levels due to the pandemic, recover as expected in 2022.
This could be “exacerbated by further checks at ports as part of the EU’s new Entry and Exit system and especially at ports like Dover where EU officials carry out border checks on the UK side,” the PAC’s report says.
“The PAC has repeatedly raised concerns about the impact of changes to trading arrangements on businesses of all sizes and we remain concerned.”
Since the end of the agreed transition period on 31 December 2020, there have been a series of changes in how the UK trades with the EU, and in relation to the movement of goods between the UK and Northern Ireland.
This has led to the EU introducing full import controls. While the UK had initially intended to follow suit, the implementation of such controls has been delayed by the government three times over the past year.
“Government plans to create the most effective border in the world by 2025 is a noteworthy ambition but it is optimistic, given where things stand today,” The PAC says, moving on to comment that it is “not convinced that it’s underpinned by the plan to deliver it.”
Alex Baulf, Senior Director of Indirect Tax at Avalara explains how e-invoicing is switching up the VAT gap game.
This latest difference recorded for 2019, equating to a total VAT revenue loss of 10.3% across the EU, is known as the VAT gap. A major concern for governments across the continent, it is typically caused by a combination of fraud and tax evasion, corporate insolvency, corporate bankruptcy, maladministration and legal tax optimisation, among other activities. But it is not a case of total doom and gloom. Indeed, a key headline from the latest VAT Gap Report is that the gap has been reducing between 2015 and 2019. Yet there is no avoiding the fact that €134 billion is still a mammoth loss.
To put it into real-world terms, such a sum could be used to pay for 250 state-of-the-art hospitals or 2,500 kilometres of high-speed railway. The VAT gap is still a major concern, particularly in view of the huge investment needs EU member states must address in the coming years.
Mandatory e-invoicing
So, how can the VAT gap be tackled effectively? There is a strong case to be made for mandatory e-invoicing (also known as electronic invoicing) - not just within the EU but worldwide. As its name would suggest, e-invoicing entails the exchange of an invoice document between supplier and buyer in an integrated electronic format.
It is essentially a more watertight way of enforcing tax laws and maximising VAT collection activities compared to traditional methods of ensuring VAT compliance that typically rely on the periodic reporting of aggregated summary data and rare tax audits.
Leveraging technology and standardised datasets instead allow governments to benefit from streamlined, accurate reporting and a reliable audit trail that can be used to identify fraudulent transactions with ease. In this sense, it is a modernised, drastically enhanced way of improving the transparency of VAT payments and recovery.
The legislation landscape
It should come as little surprise, therefore, that many European countries have already established, or are in the process of establishing, legislation that governs the use of e-invoicing and promotes its use due to unlocking such benefits.
Italy and Hungary stand as prime examples, both having successfully introduced compulsory e-invoicing already. Meanwhile, many other European nations including Germany, France and Poland have outlined their intention to instate mandatory e-invoicing in the coming years.
Interestingly, the European Commission itself is considering the creation of a harmonised framework for standardised e-invoicing that will ensure transparency across EU borders, as well as exploring the possibility of a gradual introduction of obligatory e-invoicing across its member states come 2023.
Such commitments are not limited to EU efforts either. Equally, looking beyond the continent, Saudi Arabia began its rollout of e-invoicing mandate in December 2021, set to be followed by Egypt in January 2022 and Vietnam in July 2022. The business case for companies
Governments aren’t the only party that stands to benefit from mandatory e-invoicing.
Indeed, the benefits for them are clear, yet there is a strong business case to be made for organisations adopting such modernised mechanisms as well. Indeed, there are a variety of benefits that can be realised by companies. Compared to physical processes, digital e-invoicing can be handled and archived in a streamlined manner, saving not only time but equally costs relating to printing and postage. Further, compared to PDF invoicing, e-invoicing could save companies as much as 70% in processing costs.
There’s also a reduced risk of human error, removing the need for manual data entry that is typically required for PDF or paper invoices. This not only prevents administrative issues that are a significant contributor to the current VAT gap, but will save potentially awkward conversations and improve business relations.
As a third example, e-invoicing can additionally improve security thanks to the integration of encryption technology, digital signatures and secure networks, making it not only the fastest but equally the safest way to send and receive invoices.
Embracing the transition
With many countries in the process of adopting mandatory e-invoicing legislation – if not already adopted - it is clear that this form of invoicing could become the norm globally as an effective tool in tackling the VAT gap.
It is therefore imperative that organisations start thinking about making the transition proactively in order to be well prepared for regulatory changes around the corner. Further, businesses trading across territories will need to think strategically and seek to implement an e-invoicing solution that is scalable across countries and regions, as opposed to purchasing multiple individual local solutions as and when new mandates appear.
In the same way that organisations are continuing to increasingly harness technologies to digitise their operations, e-invoicing can provide a stream of benefits to both company and country alike. Early and willing adopters will not only help reduce the tax gap, but will also experience more streamlined tax and business processes, and greater business agility to meet changing requirements as the e-invoicing trend continues to spread in the future.
On Thursday evening, environment secretary George Eustice announced that butchers in abattoirs and meat processing plants will be permitted to come to the UK to work for six months. He said that extra butchers were needed to meet staffing shortages in the sector.
The government’s intervention comes several weeks after farmers in the UK began culling healthy livestock due to a lack of staff in the abattoirs and plants where the animals were being processed. Thousands of pigs have been culled in the past week alone.
The measures “will help us to deal with the backlog of pigs that we currently have on farm, give those meat processors the ability to slaughter more pigs, and crucially as well we are going to make available what is called private storage aid to help those abattoirs to temporarily store that meat,” Eustice said.
UK ministers have also launched a consultation on extending cabotage rights, which would allow foreign HGV drivers to make unlimited journeys for two weeks within the country before returning home. Currently, foreign HGV drivers are only permitted to make two trips within seven days.
The meat industry is one of several sectors in the UK struggling with labour shortages exacerbated by Brexit and the Covid-19 pandemic. A lack of HGV drivers has also led to further disruption for supply chains.
According to Reuters, the 15-year green bond, due 4 February 2037, received over €135 billion of demand. This is the highest level of demand for a green bond in the government debt market on record, closely trumping the £10 billion raised by the UK government with a £100 billion order book back in September.
The EU has hired Crédit Agricole, Deutsche Bank, Bank of America Securities, Nomura and TD Securities to lead the sale, with the launch forming part of the funding for the Next Generation EU budget.
With the EU aiming to be carbon-neutral by 2050, the bond will finance projects that benefit the environment in member states. This will include clean energy, adaptation to the climate crisis, and an increased focus on energy efficiency.
Green bonds will also help the EU tackle the coronavirus and its impact on economies. 30% of the EU’s €800 billion pandemic recovery scheme will be funded by green bonds, which will provide grants and loans to member states until the end of 2026.
Kid Misso, Vice President of Product Management at Avalara, explains how the latest EU VAT reforms will affect British businesses.
On 1st July, the EU brought in a number of VAT reforms for retailers with “third country” status which signalled a seismic shift in the way British businesses trade with the bloc post-Brexit.
An estimated 26,000 e-commerce sellers will now need to register to pay VAT for the first time via the new Import One Stop Shop (IOSS) system, a new VAT submission which will create a fast-track for quick customs clearance following the new mandate to charge VAT at point-of-sale for consignments not exceeding €150.
The aim of these reforms, which include IOSS, is to boost cross-border online trade and promote trade across the EU’s single market by reducing compliance obligations. The changes also seek to tackle the stubborn €5 billion e-commerce VAT fraud gap, with member states looking to close import loopholes and co-opt online marketplaces into collecting VAT in place of sellers.
But while the reforms will have long term benefits, and ultimately simplify the tax process, the tidal wave of legislation post-Brexit has left many businesses feeling overwhelmed by the practicalities of selling online and internationally. And this is at a time when online shopping is more popular than ever and many businesses have dipped their toes into e-commerce for the very first time.
Small and medium sized businesses in particular are set to face the biggest upheaval. Not only are they lacking the tax consultants and lawyers which e-commerce giants have in their arsenal to help understand the impact of the changes on the business, but they will also be most affected by the removal of VAT exemptions for SMEs and shipments not exceeding €22, which would cover the sale of low-cost items like books.
These businesses will have to quickly get to grips with the upfront admin involved in these changes - from understanding the classification of products sold, to labelling VAT charges on products at the point of sale, and overhauling reporting systems. The shift won’t be easy, and it certainly won’t be cheap: UK e-commerce sellers are facing £180m in additional red tape costs to navigate the reforms. The average business will likely take an £8,000 hit to upgrade their web stores to calculate the VAT due on the sales of their products at the rate applicable to the country where the customer is located and to build the necessary record-keeping ahead of implementing IOSS.
This will of course be a tough pill to swallow in today’s volatile economic climate when many sellers have been enduring a red tape headache for years. Adjusting to these reforms will also create work that a company may not have core competencies for, requiring a short term investment of time and resources into additional training. And the risks for failure to comply include fines, double duties and the possibility of shipments being blocked before arrival - consequences that will also impact customer experience and seller reputation.
But these initial growing pains will sow the seeds for expansion. The introduction of the IOSS system means that businesses can now make one single VAT return instead of a possible 27 separate filings in as many as 6 different currencies - and this will open doors to huge growth opportunities with the world’s largest trading bloc.
Even though the new regulations have already come into effect, there is still time for businesses to get their house in order now IOSS has launched, before the filing deadline on 31st August. But if sellers can get the right solutions and support in place now to set up the processes and knowledge they need to weather the storm, there is real potential for British businesses to become major exporters and lead the world in e-commerce, unhampered by third-country status.
The Chancellor of the Exchequer has written to Prime Minister Boris Johnson warning of the impact that the UK’s strict border controls is having on the country’s economic recovery.
Last month, England lifted the requirement for fully vaccinated citizens to complete the quarantine period when returning from medium-risk destinations. From 2 August, visitors from the EU and US with the same vaccine status will also be exempt from the quarantine period. However, travellers are still required to take costly tests before departure and soon after arrival. Sunak’s letter to the Prime Minister comes ahead of Thursday’s meeting of ministers to consider changes to the current coronavirus travel restrictions. However, many believe that the restrictions should remain in place to prevent a further increase in cases or the outbreak of a new variant.
