The government has sold a gilt with a negative yield for the first time. An auction by the Debt Management Office of a gilt maturing in July 2023 sold at an average yield of -0.003 per cent.
A negative yield means that the government is effectively being rewarded to borrow as investors agree to be repaid slightly less than they lent.
Since the start of this year, research has calculated central banks around the world have cut their key interest rates 148 times by a cumulative 12,488 basis points (bp). While the US has cut rates by 150 bp so far this year and the European Central Bank has left rates on hold – at already very low levels – Argentina has cut by 1700bp, Ukraine by 550bp and Pakistan by 425bp. Source: Datastream, AXA IM
The consequence of an oil price war and the pandemic has resulted that in the first time in history the oil producers failed to find enough space in the US to store a glut of crude, forcing them to pay buyers to take it off their hands. West Texas Intermediate (WTI), the US benchmark, fell to -$37.63 a barrel, a loss of approximately 300 per cent.
The Fed has increased QE by now purchasing municipal, corporate and even IG corporates that fall into the high yield index e.g. Ford.
The UK became the first country in the world to respond to the coronavirus by having its central bank directly finance its government, rather than through the intermediary of the government debt market. It involves the government’s account at the Bank of England (the “Ways and Means facility”) being extended to a temporarily unlimited amount. That will enable the government to raise money faster in the short term, avoiding the need to tap the gilts market.
If you have
at least one year’s self-assessment history and have filed your 2018-19 tax
return, you are eligible as long as you have trading profits of under £50,000
You will receive a taxable grant of 80% of your average profits. You do not need to apply, you should receive details in the post and the grant in June.
In general, the reimbursement by an employer of employee expenses is
treated for tax purposes as earnings from the employment for the tax year in
which they are paid (ITEPA 2003 ss 70 and 72) and will be taxed in the normal
way. There is, however, an exemption for ‘homeworking arrangements’ which
covers payments made by an employer to an employee in respect of reasonable
additional household expenses incurred in carrying out duties of their
employment at home (ITEPA s 316A). This is currently up to £4 a week (or £18 a
month) but, as announced in the Budget, will be increased to £6 a week from 6
April 2020. An exempt homeworking payment under s 316A can be made to employees
who work at home under a voluntary homeworking scheme (which is a crucial
difference to other expenses claimed by employees outside of these
Costs that may be covered by such homeworking payments include
additional costs of heating and lighting the work area or the metered cost of
increased water use, provided that the additional household costs are
reasonable and incurred in carrying out the employee’s duties. There might also
be increased charges for internet access, home contents insurance, business
telephone calls or the additional cost incurred as a result of business rates
liability (EIM01474). Broadband costs will only be tax exempt if the employee
is not already paying for a broadband connection (EIM01475). Payments for costs
that would be incurred whether or not the employee worked at home – for
example, mortgage interest, rent, council tax or water rates – will not be tax
The chancellor has announced that payments under income tax
self-assessment, normally due on 31 July 2020, will be deferred until 31
During this period, individuals will not be charged any penalties or
interest for late payment.
The deferral will apply automatically to all. Taxpayers who believe that
their 2019/20 income will be lower than their 2018/19 income can make a claim
to reduce their payments on account.
Deferment of VAT payments is effective immediately. Businesses should
cancel their VAT direct debits to HMRC now; otherwise payments will still be
These VAT direct debits should be restarted after 30 June 2020. The
deferment applies to VAT payments due to be made to HMRC between 20 March 2020
and 30 June 2020. HMRC says that
interest will not be applied to the deferred VAT payments.
However, VAT returns must still be submitted on time: it is only the
payment which is deferred.
Oil prices have fallen due a combination of the Saudi oil price war and a glut in supply due to lack of demand.