Latest news with #taxes
Yahoo
4 hours ago
- Business
- Yahoo
3 New Red Flags the CRA is Watching for Old Age Security Pensioners
Written by Amy Legate-Wolfe at The Motley Fool Canada For Canadian retirees, Old Age Security (OAS) can be a steady stream of support. But just because the money shows up in your account every month doesn't mean the Canada Revenue Agency (CRA) isn't paying attention. With financial pressures rising and more Canadians relying on government benefits, the CRA has sharpened its focus on how OAS income fits into the bigger tax picture. If you're collecting OAS, here are three new red flags the CRA is watching for, and a smart way to put that money to work without drawing unwanted attention. The first red flag is unreported income. While many retirees believe their OAS and Canada Pension Plan (CPP) are the only numbers that matter, that's often not the case. More seniors are working part-time or freelancing in retirement. Others might rent out a room in their home or sell crafts online. These side hustles, even small ones, can trigger CRA attention if they aren't declared. The agency cross-references income slips and financial accounts. If something doesn't line up, expect a follow-up. The second red flag is aggressive deductions or credits. Claiming large medical expenses, charitable donations, or home accessibility renovations isn't an issue if you have the receipts. But if the claims don't match your income or usual spending patterns, the CRA might take a closer look. This is especially true for seniors making multiple claims in one year or using unfamiliar tax advisors who promise big returns. If it looks too good to be true, it probably is, and the CRA knows it. The third red flag is crossing the OAS clawback threshold. For 2025, if your net income is more than $90,997, you'll start repaying part of your OAS. This recovery tax gets deducted monthly once you pass the limit. What's tricky is that many seniors don't realize investment gains, pensions, or even Registered Retirement Savings Plan (RRSP) withdrawals could push them over. The CRA calculates this clawback based on your total income, so it's important to know where you stand before tax season. While that all might sound intimidating, there's good news, too. If you don't need every dollar of your OAS for daily expenses, investing some of it can be a smart move. One strong choice for retirees looking for consistent income is Chartwell Retirement Residences (TSX: Chartwell operates senior living communities across Canada. If there's one industry built for long-term growth, it's housing for an aging population. Chartwell shares are currently trading around $18. The real estate investment trust (REIT) offers a dividend yield near 3.4%, with monthly payouts. That means you're getting cash flow every month, which pairs nicely with how OAS arrives in your account. It's a comfortable match for retirees looking to build a steady income stream that doesn't fluctuate wildly with the market. Over the past year, Chartwell has generated about $917 million in revenue and maintains a market cap just under $5 billion. The dividend stock also declared a $0.051 monthly distribution for May 2025, in line with previous months. While it's not the highest-yielding REIT out there, it makes up for it with consistency and a business model tailored to senior needs. Even small investments can add up. If you put aside $200 of your OAS each month and buy Chartwell shares, you'd start collecting dividends right away. Those dividends can be reinvested to buy more shares or withdrawn to cover lifestyle expenses. Over time, it creates a little income engine powered by real estate and demographic trends. In fact, if you invested your $8,732.04 OAS maximum payment, it could bring in almost $300 in annual income, or $24.65 monthly! COMPANY RECENT PRICE NUMBER OF SHARES DIVIDEND TOTAL PAYOUT FREQUENCY TOTAL INVESTMENT $17.99 485 $0.61 $295.85 Monthly $8,715.15 And because Chartwell pays a stable monthly dividend and doesn't generate extreme capital gains, it's less likely to push you over the OAS income threshold. As long as your total income stays below the recovery limit and you declare everything properly, the CRA should have no issue with how you use your pension. All considered, Chartwell offers a way to turn some of your pension into something steady, dependable, and built for the long term. The post 3 New Red Flags the CRA is Watching for Old Age Security Pensioners appeared first on The Motley Fool Canada. More reading Made in Canada: 5 Homegrown Stocks Ready for the 'Buy Local' Revolution [PREMIUM PICKS] Market Volatility Toolkit Best Canadian Stocks to Buy in 2025 Beginner Investors: 4 Top Canadian Stocks to Buy for 2025 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Al Arabiya
12 hours ago
- Business
- Al Arabiya
Some US Restaurants and Servers Oppose Republicans' 'No Tax on Tips' Budget Proposal
Some segments of the US restaurant industry don't support President Donald Trump's proposal to eliminate federal taxes on tips, saying it would help too few people and obscure bigger issues in the way tipped workers are paid. The Independent Restaurant Coalition, which represents nearly 100,000 restaurants and bars, has appealed to Congress to reconsider the proposal, which is part of the president's spending bill. Even some workers who rely on tips say they oppose making them tax-deductible. 'I think there's a huge hole in this concept of no tax on tips because a lot of restaurant workers aren't receiving tips in the first place,' said Elyanna Calle, a bartender in Austin, Texas, and president of the Restaurant Workers United union. 'It's not helping most kitchen workers, and oftentimes those are the people who are being paid the least.' Tips included in sprawling tax cuts package. For now, making tips tax-free appears to have broad support among lawmakers. Both Trump and his Democratic rival in last year's US presidential election, former Vice President Kamala Harris, campaigned on the concept. The House included it in a tax cuts package approved last month. The bill would eliminate federal income taxes on tips for people working in jobs that have traditionally received them, as long as they make less than $160,000 in 2025. The Senate Finance Committee passed a modified version on Monday. Senators capped deductions at $25,000 and want to phase them out for individuals whose income exceeds $150,000. Eligibility would be based on earnings as of Dec. 31, 2024. Both the House and Senate committee measures would apply through the 2028 tax year. The Finance Committee specified that cash tips qualify but said the term applied to tips paid in cash, charged to credit cards, or received from other employees under a tip-sharing arrangement. Main industry trade group supports tax-free tips. Wary of wading into politics, many restaurant chains contacted by The Associated Press about tax-free tips didn't respond or referred questions to the National Restaurant Association, including Waffle House, The Cheesecake Factory, First Watch, and the parent companies of Olive Garden, Applebee's, and Chili's. The National Restaurant Association, a trade organization that represents nearly 500,000 US restaurants and bars, applauded the House's passage of Trump's spending bill and said it wants to see tax-free tips. The association estimates the measure would benefit more than 2 million servers and bartenders. But the US restaurant industry has more than 12 million workers, including dishwashers and chefs, according to government data. The Independent Restaurant Coalition says the no-tax-on-tips proposal leaves out too many of those workers. A push to eliminate taxes on service charges. The coalition wants Congress to eliminate taxes on service charges, which are being used to compensate employees at an increasing number of restaurants. Around 15 percent of US restaurants add some form of service charge to customers' bills, according to the National Restaurant Association. George Skandalos, a pizza restaurant owner in Moscow, Idaho, was tired of seeing servers count out hundreds of dollars of tips at the end of the night while people in the kitchen scrubbed the floor on their hands and knees. So he started experimenting with different compensation models. Skandalos tried pooling servers' tips and distributing them but ran into rules preventing that. He tried raising his menu prices and explaining that a percentage of each order was going to employee compensation, but customers didn't understand and kept tipping. Skandalos now has a gratuity-free policy at his restaurant, Maialina. He charges a 20 percent service fee that is distributed to all employees and helps pay for benefits like paid vacation and parental leave. 'The vast majority of customers appreciate the effort,' he said. Skandalos said no tax on tips doesn't acknowledge restaurants like his that are trying to distribute pay more equally. He would like to see service charges exempted from taxes. 'This bill is a very good start in terms of trying to leave more money in people's pocketbooks, but now let's finish what we started and make it a great thing for the restaurant industry overall,' he said. Tipped workers seek higher wages. But Ted Pappageorge, the secretary-treasurer of the Culinary Workers Union Local 226 in Las Vegas, said restaurants should just pay their kitchen workers more to compensate for servers earning tips. 'No tax on tips is an opportunity for Republicans and Democrats to deliver something to working-class folks,' he said. Pappageorge wants Congress to take up a separate bill introduced by Nevada Democrat Steven Horsford that would eliminate taxes on tips but also require restaurants to pay workers at least the federal minimum wage of $7.25 per hour. In 43 states, restaurants are currently allowed to pay tipped workers as little as $2.13 per hour. Yolanda Garcia, a barista at Resorts World in Las Vegas and a member of the Culinary Workers Union, also supports Horsford's bill. Garcia said she makes $33,000 a year, including up to $600 per month in tips. 'Tips are never guaranteed,' she said, 'but if they were tax-free it would help make up for that uncertainty. It would help me get more groceries. Right now the price of everything has gone up,' Garcia said. Calle, the Austin bartender and union leader, said she also benefits from tips, but they're inconsistent. She suspects tipping would decline if the tax-free provision passes because customers will resent it. For Calle, the underlying problem that must be solved is low base pay. 'I think that if we continue to make the shift into relying on tips for people, it gives incentives for companies to not raise wages,' she said.
The Independent
12 hours ago
- Business
- The Independent
Some US restaurants and servers oppose Republicans' 'no tax on tips' budget proposal
Some segments of the U.S. restaurant industry don't support President Donald Trump's proposal to eliminate federal taxes on tips, saying it would help too few people and obscure bigger issues in the way tipped workers are paid. The Independent Restaurant Coalition, which represents nearly 100,000 restaurant and bars, has appealed to Congress to reconsider the proposal, which is part of the president's spending bill. Even some workers who rely on tips say they oppose making them tax-deductible. 'I think there's a huge hole in this concept of 'no tax on tips' because a lot of restaurant workers aren't receiving tips in the first place,' said Elyanna Calle, a bartender in Austin, Texas, and president of the Restaurant Workers United union. 'It's not helping most kitchen workers, and oftentimes those are the people who are being paid the least.' Tips included in sprawling tax cuts package For now, making tips tax-free appears to have broad support among lawmakers. Both Trump and his Democratic rival in last year's U.S. presidential election, former Vice President Kamala Harris, campaigned on the concept. The House included it in a tax cuts package approved last month. The bill would eliminate federal income taxes on tips for people working in jobs that have traditionally received them as long as they make less than $160,000 in 2025. The Senate Finance Committee passed a modified version on Monday. Senators capped deductions at $25,000 and want to phase them out for individuals whose income exceeds $150,000. Eligibility would be based on earnings as of Dec. 31, 2024. Both the House and Senate committee measures would apply through the 2028 tax year. The Finance Committee specified that 'cash tips' qualify but said the term applied to tips paid in cash, charged to credit cards or received from other employees under a tip-sharing arrangement. Main industry trade group supports tax-free tips Wary of wading into politics, many restaurant chains contacted by The Associated Press about tax-free tips didn't respond or referred questions to the National Restaurant Association, including Waffle House, The Cheesecake Factory, First Watch and the parent companies of Olive Garden, Applebee's and Chili's. The National Restaurant Association, a trade organization that represents nearly 500,000 U.S. restaurants and bars, applauded the House's passage of Trump's spending bill and said it wants to see tax-free tips. The association estimates the measure would benefit more than 2 million servers and bartenders. But the U.S. restaurant industry has more than 12 million workers, including dishwashers and chefs, according to government data. The Independent Restaurant Coalition says the 'no tax on tips' proposal leaves out too many of those workers. A push to eliminate taxes on service charges The coalition wants Congress to eliminate taxes on service charges, which are being used to compensate employees at an increasing number of restaurants. Around 15% of U.S. restaurants add some form of service charge to customers' bills, according to the National Restaurant Association. George Skandalos, a pizza restaurant owner in Moscow, Idaho, was tired of seeing servers count out hundreds of dollars of tips at the end of the night while people in the kitchen scrubbed the floor on their hands and knees. So he started experimenting with different compensation models. Skandalos tried pooling servers' tips and distributing them but ran into rules preventing that. He tried raising his menu prices and explaining that a percentage of each order was going to employee compensation, but customers didn't understand and kept tipping. Skandalos now has a gratuity-free policy at his restaurant, Maialina. He charges a 20% service fee that is distributed to all employees and helps pay for benefits like paid vacation and parental leave. The vast majority of customers appreciate the effort, he said. Skandalos said 'no tax on tips' doesn't acknowledge restaurants like his that are trying to distribute pay more equally. He would like to see service charges exempted from taxes. 'This bill is a very good start in terms of trying to leave more money in people's pocketbooks, but now let's finish what we started and make it a great thing for the restaurant industry overall,' he said. Tipped workers seek higher wages But Ted Pappageorge, the secretary-treasurer of the Culinary Workers Union Local 226 in Las Vegas, said restaurants should just pay their kitchen workers more to compensate for servers earning tips. ''No tax on tips' is an opportunity for Republicans and Democrats to deliver something to working class folks,' he said. Pappageorge wants Congress to take up a separate bill introduced by Nevada Democrat Steven Horsford that would eliminate taxes on tips but also require restaurants to pay workers at least the federal minimum wage of $7.25 per hour. In 43 states, restaurants are currently allowed to pay tipped workers as little as $2.13 per hour. Yolanda Garcia, a barista at Resorts World in Las Vegas and a member of the Culinary Workers Union, also supports Horsford's bill. Garcia said she makes $33,000 a year, including up to $600 per month in tips. Tips are never guaranteed, she said, but if they were tax-free, it would help make up for that uncertainty. 'It would help me get more groceries. Right now, the price of everything has gone up,' Garcia said. Calle, the Austin bartender and union leader, said she also benefits from tips, but they're inconsistent. She suspects tipping would decline if the tax-free provision passes, because customers will resent it. For Calle, the underlying problem that must be solved is low base pay. 'I think that if we continue to make the shift into relying on tips for people, it gives incentives for companies to not raise wages,' she said.
Times
12 hours ago
- Business
- Times
Business live: Thursday June 19 — as it happened
The chancellor has defended Labour as the party of business after her tax-raising budget, particularly the employers' national insurance rise, which increased business costs and hit relations with leaders. Rachel Reeves told The Times CEO Summit: 'When I was here last year, I said the number one job for an incoming Labour government would be to return stability to the economy after the turbulence we've had really for the previous decade, and I think that we have achieved that. It's not easy … because if we're going to return stability to the economy, you have to make sure the sums add up and that meant a number of difficult decisions on tax and on spending.' Asked whether she could rule out further tax rises at the autumn budget, she said: 'I don't think that it would be responsible to try to write another four years' worth of budgets before we have even got to the end of the first year of this.' She added: 'The world is changing. We can see that all around us … but we made these commitments around taxes on working people, and we also made a commitment around corporation tax in our manifesto … we plan to stick to those commitments.' Please enable cookies and other technologies to view this content. You can update your cookies preferences any time using privacy manager. Rachel Reeves called for a de-escalation of rising tensions and confrontations in the Middle East as she said that the Treasury was monitoring the potential impact on the UK, particularly from rising oil prices. 'At all the times we're monitoring situations around the world and the impact that they may have,' the chancellor told The Times CEO summit. 'I wouldn't say that we are overly concerned about the movements we've seen today [in the oil price]. Obviously, the concern would be that Strait of Hormuz is closed or at least that the trade is disrupted, which would have an impact on oil, but also on wider movements of goods, as we've seen in the past.' The chancellor Rachel Reeves is speaking at the CEO Summit. Dominic O'Connell, a presenter of Times Radio and a columnist for The Times, tweets: Please enable cookies and other technologies to view this content. You can update your cookies preferences any time using privacy manager. Please enable cookies and other technologies to view this content. You can update your cookies preferences any time using privacy manager. Please enable cookies and other technologies to view this content. You can update your cookies preferences any time using privacy manager. Please enable cookies and other technologies to view this content. You can update your cookies preferences any time using privacy manager. Please enable cookies and other technologies to view this content. You can update your cookies preferences any time using privacy manager. The FTSE 100, which was trading down 19 points in the approach to interest rate decision at midday, is now down 28 points. The rise in the pound against the dollar eased a little to $1.3433. Brent crude has risen above $77 a barrel and gold is higher on safe-haven buying, up 0.12 per cent to $3,373.25. Miners continue to lead the fallers on the FTSE 100. The aircraft parts maker Melrose remained the biggest riser and BP and Shell continued to be buoyed by higher oil prices. The monetary policy committee (MPC) said it expected the economy to grow by 0.25 per cent in the second quarter of the year, up slightly from its previous forecast published in May, despite a 0.3 per cent economic contraction in April. The revision comes after gross domestic product rose by 0.7 per cent in the first three months of the year, exceeding expectations. The three MPC members that voted for a quarter-point cut — Alan Taylor and Swati Dhingra, external panellists, and Dave Ramsden, a deputy governor — said the jobs market had loosened materially. The six that voted to hold, including Andrew Bailey, the Bank's governor, were concerned about near-term inflation staying above 3 per cent. Some conceded, however, that higher unemployment caused by sluggish consumer spending would constrain economic growth, signalling that rates could fall more quickly in response to a slowing economy. The Bank of England has voted to keep interest rates unchanged at 4.25 per cent amid uncertainty about the inflationary fallout from the Israel-Iran conflict. The decision was expected. The nine-member monetary policy committee (MPC) voted by a majority of 6–3 to keep the rate unchanged. Three members wanted a quarter-point cut to 4 per cent. Inflation would remain at about 3.5 per cent for the rest of the year, the MPC said, rising to a peak of 3.7 per cent in September. The Bank's target is 2 per cent. Although the central bank had already warned of elevated inflation for the rest of the year previously, higher oil prices caused by the Israel-Iran conflict risk fuelling a larger-than-expected rise in the cost of living. Andrew Bailey, governor of the Bank of England, said that the world was highly unpredictable amid worsening geopolitical tensions and uncertainty over President Trump's final tariff policies. A 90-day pause to Trump's 'reciprocal tariffs' is due to end next month. The FTSE 100 was trading down 19 points in the approach to the interest rate decision at midday after having fallen 32 points at the start of trading. The pound has strengthened against the dollar to $1.3436. Brent crude was trading at about $77 barrel on concerns about supply due to the continuing Iran-Israel conflict. Safe-haven buying of gold has lifted the price a little to $3,376.80. In the blue chip index, miners continue to lead the fallers. Financial and leisure stocks were also lower. The aircraft parts maker Melrose was the biggest riser, but BP and Shell were also buoyed by higher oil prices. Schools need to do a better job of preparing young people for work in this new world of artificial intelligence, Alison Brittain believes. Speaking at The Times CEO Summit, Brittain, chairwoman of the Premier League and Dunelm, said: 'We always think of 15 to 24-year-olds — and there are 7.5 million of them in the UK — as digital natives but research shows that 25 per cent of young people think they are leaving school with no digital skills.' She added that the UK education system was 'not able to keep pace' with technological advances. '[Schools] are not producing people who are ready to go into workplaces and the new world,' she said. Artificial intelligence is going to change everything, Dame Carolyn McCall, chief executive of ITV, told The Times CEO Summit. 'Where it's really transformative [for ITV] is in production,' she said. 'We're already using it for dubbing and subtitling. It's definitely very enabling.' She believes, however, that technology will not be able to replace humans' creativity. 'Everyone is terrified of not doing enough with artificial intelligence. It's going to change everything but we believe the creativity of human beings is front and centre.' The Norwegian central bank has delivered a surprise quarter-point cut in interest rate to 4.25 per cent, its first reduction of borrowing costs in five years. 'Inflation has declined since the monetary policy meeting in March and the inflation outlook for the coming year indicates lower inflation than previously expected,' Ida Wolden Bache, governor of Norges Bank, said. The currency and Norwegian government bond yields fell. The dollar was up more that 1 per cent against the Norwegian crown. Government bond yields fell after the decision by as much as 10 basis points to 3.95 per cent, the lowest since May. Oeystein Doerum, chief economist at the Confederation of Norwegian Enterprises, said: 'Not only did the cut come earlier than expected, the interest rate path has also been lowered in the short term.' The boss of Aviva ruled out embarking on overseas acquisitions once she has completed the FTSE 100 insurer's pending £3.7 billion integration of the UK-focused Direct Line. Dame Amanda Blanc has run Aviva since 2020 and spent her first years selling a string of its non-core businesses abroad to focus the group on its core markets of the UK, Ireland and Canada. She told The Times CEO Summit that 'CEOs start to lose the plot' when they try to pursue a strategy that did not work in the past. It is ultimately for savers in defined contribution schemes to decide whether they want to invest more in UK private assets, the boss of the insurance and savings giant Aviva has warned the government. Ministers are trying to push pension providers such as Aviva to funnel more retirement money into British assets but Dame Amanda Blanc, the Aviva chief, said that politicians often confused defined benefit and defined contribution (DC) schemes. When it came to workplace DC funds, where it is down to members to oversee their savings, it is not for providers of the funds to interfere, she suggested. 'We're not the decision-makers,' she told The Times CEO Summit. 'It's their pension, not ours.' Saul Klein, the executive chairman of Phoenix Court, home to a number of venture capital funds, outlined some of the problems with the government's targets of directing pension fund investments into private markets. 'The problem is that there are only two people who are investing at scale in the UK economy. One is the Treasury through the British Business Bank … and the other is M&G. Everything else is putting out press releases,' Klein said. Lionel Assant, global co-chief investment officer at Blackstone, said he was positive about the business environment in the UK and that it was by far the firm's largest market in Europe, with investments worth more than $100 billion. He said investors would benefit from the UK's 'pro-growth government' and that businesses would not necessarily find a similar attitude from politicians and regulators in other European countries. He pointed out, however, that there was a reason that UK-listed stocks continued to trade at a discount to their US peers and that assets were priced fairly, adding: 'The market is not wrong most of the time … The market pays for growth.' Tara Davies, co-head of Emea and of European infrastructure at KKR, has addressed the firm's decision to step away from a £4 billion investment in Thames Water, Helen Cahill writes. She said the American investment firm spent 'an inordinate amount of time' preparing a bid for the water utility and prepared a 270-page turnaround plan for the company. Yet, she told The Times CEO Summit, it encountered an 'exceptionally complex' situation with the bid, as it worked through the considerations of a wide range of stakeholders, including the government, lenders and the water regulator. She said KKR had to consider whether the bid would be in the best interests of fund investors and decided against moving ahead. The Iranians 'in their death throes' are at risk of giving an 'enormous shock' to markets, 'the scale of which we haven't seen since the 1970s', Sir Niall Ferguson told The Times CEO summit. He said the market was complacent and underestimating the risk of an economic shock that could take the price of oil above $100 for more than a day. He said: 'I think the markets are complacent about this, because there have been so many Middle Eastern crises in our lifetimes that produced only a blip in the oil price. 'But remember: when an authoritarian regime is on its last legs, when it's the end game, they tend not to go quietly.' He predicted that the most clear-cut way the Iranian regime and its allies could hurt the US was by blocking the Strait of Hormuz. President Trump is likely to have 'already taken the decision to hit' Iran's Fordo nuclear facility, according to Sir Niall Ferguson, the Milbank family senior fellow at the Hoover Institution, Stanford University, and a senior faculty fellow of the Belfer Center for Science and International Affairs at Harvard. Ferguson told The Times CEO Summit: 'My Israeli sources and some of my sources in Washington think it happens tonight.' The Swiss National Bank has cut its interest rate by a quarter-point to zero in response to falling inflation, a stronger Swiss franc and economic uncertainty caused by America's trade had expected the move. It was the central bank's sixth rate cut since March 2024. The recruitment company's shares dropped more than 14 per cent this morning after it warned that profits would be lower than expected. Tom Howard comments on Hays' warning: 'The recruitment market has been tough for two years now: the longest downturn anyone in the industry can recall. 'After the initial post-lockdown boom in hiring as the world reopened, many companies have become more cautious with the world stuck in a state of almost permanent uncertainty, be that because of sticky inflation and higher interest rates or wars in Ukraine and the Middle East. President Trump's flip-flopping on tariffs has not helped either. 'On the other side, white-collar workers, many of whom moved jobs and got big pay rises a few years ago, are happy to stay put. They worry that if they move and the economic outlook does deteriorate, they could be the last in and first out. 'The industry has repeatedly had to push back its expectation of when the hiring market might start to pick up. Hays' latest profit warning suggests the recovery is still a while away yet.' The FTSE 100 has opened 32 points, or 0.37 per cent, down at 8,811.03, after President Trump approved a plan to attack Iran, pending a final order. The more UK-focused FTSE 250 dropped 149 points, or 0.7 per cent, to 21,140.27. The biggest fallers in early trading are miners, airlines and financial stocks. Oil stocks are among the biggest risers and defence shares are higher. What a difference an hour makes. Earlier this morning, futures were pointing to the FTSE 100 opening 10 points higher. Now they are pointing to the index opening 30 points lower. Investors are wary about the conflict in the Middle East and the Bank of England's interest rate decision at noon. The pound is weaker against the dollar at $1.3402, down 0.12 per cent. Please enable cookies and other technologies to view this content. You can update your cookies preferences any time using privacy manager. Morrisons will deliver its second-quarter trading update later this morning, Isabella Fish, Retail Editor, writes. The UK's fifth-largest grocer, owned since 2021 by the American private equity firm Clayton, Dubilier & Rice, reported like-for-like sales growth of 2.1 per cent in the three months to January 26, having risen 4.9 per cent in the previous quarter. The grocer blamed the sharp slowdown in sales in the first quarter on a ransomware attack in November at Blue Yonder, its supply chain management software provider, which affected product availability and forced it to cut prices on some items. Morrisons can ill afford any further setbacks as it undergoes a turnaround under Rami Baitiéh, its chief executive, who joined in 2023. Hays: The FTSE250 recruiter has warned that it expects to pre-exceptional operating profit to be about £45 million for the year to the end of June. Analysts had forecast profits of £56.4 million. 'Activity levels during our fourth quarter have reduced sequentially driven primarily by broad-based weakness in permanent markets globally, reflecting low levels of client and candidate confidence as a result of macroeconomic uncertainty. Temporary and contracting activity continues to be more resilient,' the company said. Vodafone: The FTSE 100 telecoms company has appointed Pilar López as chief financial officer. The Microsoft executive will join in October 2025. Vodafone announced in May that Luka Mucic, the current finance chief, was leaving to lead Germany's largest landlord. Revolution Beauty: Mike Ashley's Frasers Group has abandoned its bid to take over the struggling cosmetics business, which has put itself up for sale. Frasers had said this month that it was considering a bid for Revolution. The Bank of England is expected to keep interest rates unchanged at 4.25 per cent to give it time to see if the economy and inflation continue to weaken amid a possible inflation shock from the Israel-Iran conflict. Inflation cooled slightly in May to 3.4 per cent after a jump in April because price growth in the services sector, closely watched by the monetary policy committee (MPC), had dropped sharply. Wage growth has slowed, however, the job market is weaker and the economy shrank in April. Economists expect the nine-member MPC to vote 7-2 to hold borrowing costs when the decision is released at noon. Beyond today's meeting, investors think the Bank could lower rates one or two more times across the remaining four gatherings that will take place before the end of the year. The FTSE 100 is forecast to open 10 points higher, with investors wary over the possible entry of the United States into the Israel-Iran conflict. President Trump kept the world guessing about whether America would join Israel's bombardment of Iranian nuclear sites, saying at the White House yesterday: 'I may do it. I may not do it.' The Wall Street Journal said Trump had told senior aides he approved attack plans on Iran but was holding off on giving the final order to see if Tehran would abandon its nuclear programme. Overnight, Israel's military said it was carrying out new strikes on Tehran and Iranian missiles hit a hospital in southern Israel. In Japan the Nikkei sank 0.8 per cent, the Hang Seng in Hong Kong lost 1.7 per cent and Taiwan's Taiex declined 1.6 per cent. The oil price rose 0.5 per cent to £77 a barrel and the gold price and the dollar strengthened. Wall Street is closed today for a holiday. How can the UK become a more attractive place for international investors? How can we encourage UK savers to invest more in the economy? What can the Labour administration do to attract the capital it needs for its ambitious plans? Those questions will be top of the agenda this morning when UK business leaders, investors and senior politicians gather for The Times CEO Summit. Executives from KKR and Blackstone, two of the UK's biggest foreign investors, and a senior government minister will discuss investment in the country. The skills we need in an era of AI and hybrid working will be discussed on a panel that includes Alison Brittain, chair of the Premier League, Kenton Jarvis, chief executive of easyJet, and Dame Carolyn McCall of ITV. Richard Fletcher, Business Editor, will talk to Amanda Blanc, chief executive of Aviva, about her turnaround of the insurer and her plans following the £3.7 billion acquisition of rival Direct Line. You can follow the summit on this blog, @TimesBusiness on Twitter or the hashtag #TimesCEOSummit.
Yahoo
12 hours ago
- Business
- Yahoo
Some US restaurants and servers oppose Republicans' 'no tax on tips' budget proposal
Some segments of the U.S. restaurant industry don't support President Donald Trump's proposal to eliminate federal taxes on tips, saying it would help too few people and obscure bigger issues in the way tipped workers are paid. The Independent Restaurant Coalition, which represents nearly 100,000 restaurant and bars, has appealed to Congress to reconsider the proposal, which is part of the president's spending bill. Even some workers who rely on tips say they oppose making them tax-deductible. 'I think there's a huge hole in this concept of 'no tax on tips' because a lot of restaurant workers aren't receiving tips in the first place,' said Elyanna Calle, a bartender in Austin, Texas, and president of the Restaurant Workers United union. 'It's not helping most kitchen workers, and oftentimes those are the people who are being paid the least.' Tips included in sprawling tax cuts package For now, making tips tax-free appears to have broad support among lawmakers. Both Trump and his Democratic rival in last year's U.S. presidential election, former Vice President Kamala Harris, campaigned on the concept. The House included it in a tax cuts package approved last month. The bill would eliminate federal income taxes on tips for people working in jobs that have traditionally received them as long as they make less than $160,000 in 2025. The Senate Finance Committee passed a modified version on Monday. Senators capped deductions at $25,000 and want to phase them out for individuals whose income exceeds $150,000. Eligibility would be based on earnings as of Dec. 31, 2024. Both the House and Senate committee measures would apply through the 2028 tax year. The Finance Committee specified that 'cash tips' qualify but said the term applied to tips paid in cash, charged to credit cards or received from other employees under a tip-sharing arrangement. Main industry trade group supports tax-free tips Wary of wading into politics, many restaurant chains contacted by The Associated Press about tax-free tips didn't respond or referred questions to the National Restaurant Association, including Waffle House, The Cheesecake Factory, First Watch and the parent companies of Olive Garden, Applebee's and Chili's. The National Restaurant Association, a trade organization that represents nearly 500,000 U.S. restaurants and bars, applauded the House's passage of Trump's spending bill and said it wants to see tax-free tips. The association estimates the measure would benefit more than 2 million servers and bartenders. But the U.S. restaurant industry has more than 12 million workers, including dishwashers and chefs, according to government data. The Independent Restaurant Coalition says the 'no tax on tips' proposal leaves out too many of those workers. A push to eliminate taxes on service charges The coalition wants Congress to eliminate taxes on service charges, which are being used to compensate employees at an increasing number of restaurants. Around 15% of U.S. restaurants add some form of service charge to customers' bills, according to the National Restaurant Association. George Skandalos, a pizza restaurant owner in Moscow, Idaho, was tired of seeing servers count out hundreds of dollars of tips at the end of the night while people in the kitchen scrubbed the floor on their hands and knees. So he started experimenting with different compensation models. Skandalos tried pooling servers' tips and distributing them but ran into rules preventing that. He tried raising his menu prices and explaining that a percentage of each order was going to employee compensation, but customers didn't understand and kept tipping. Skandalos now has a gratuity-free policy at his restaurant, Maialina. He charges a 20% service fee that is distributed to all employees and helps pay for benefits like paid vacation and parental leave. The vast majority of customers appreciate the effort, he said. Skandalos said 'no tax on tips' doesn't acknowledge restaurants like his that are trying to distribute pay more equally. He would like to see service charges exempted from taxes. 'This bill is a very good start in terms of trying to leave more money in people's pocketbooks, but now let's finish what we started and make it a great thing for the restaurant industry overall,' he said. Tipped workers seek higher wages But Ted Pappageorge, the secretary-treasurer of the Culinary Workers Union Local 226 in Las Vegas, said restaurants should just pay their kitchen workers more to compensate for servers earning tips. ''No tax on tips' is an opportunity for Republicans and Democrats to deliver something to working class folks,' he said. Pappageorge wants Congress to take up a separate bill introduced by Nevada Democrat Steven Horsford that would eliminate taxes on tips but also require restaurants to pay workers at least the federal minimum wage of $7.25 per hour. In 43 states, restaurants are currently allowed to pay tipped workers as little as $2.13 per hour. Yolanda Garcia, a barista at Resorts World in Las Vegas and a member of the Culinary Workers Union, also supports Horsford's bill. Garcia said she makes $33,000 a year, including up to $600 per month in tips. Tips are never guaranteed, she said, but if they were tax-free, it would help make up for that uncertainty. 'It would help me get more groceries. Right now, the price of everything has gone up,' Garcia said. Calle, the Austin bartender and union leader, said she also benefits from tips, but they're inconsistent. She suspects tipping would decline if the tax-free provision passes, because customers will resent it. For Calle, the underlying problem that must be solved is low base pay. 'I think that if we continue to make the shift into relying on tips for people, it gives incentives for companies to not raise wages,' she said. Dee-ann Durbin, The Associated Press
