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A ruling by the U.S. Tax Court could require fund managers to pay self-employment taxes of over 3% on a significant portion of their income, potentially closing off a popular tax-reduction technique. The ruling, if applied broadly, would eliminate the ability for fund managers to exclude millions of dollars in income from self-employment taxes. The case was a loss for Soroban Capital Partners, and similar arguments have been made against other firms, including Point72 Asset Management. The IRS has been challenging investment funds on this issue and has been working on regulations to define limited partners more clearly. The ruling creates uncertainty and could result in limited partners being taxed more like wage earners and sole proprietors. The Biden administration has proposed taxing limited partners and S corporation owners to raise revenue. If the ruling stands, it would create a divergence between partnership members and S corporation owners who currently avoid self-employment taxes on their profits.Full Issue
Health insurance rates in the UK are expected to increase by at least 20% next year due to the surging number and cost of claims, according to industry advisers. The use of company health schemes has expanded as the National Health Service struggles to meet patient demand after the COVID-19 pandemic. A record 4.4 million people are now covered by employer health insurance, as waiting lists for hospital treatment hit record highs. Insurers are experiencing higher inflation than the medical trend rate, leading to rising premiums. Some workplace health insurance schemes are seeing rate rises of over 40%. Employers are starting to question how to tackle the rising costs, with potential solutions including employees paying a flat fee for initial consultations with online doctors or offering health screening. "The market is nervous, we are in a very unknown phase and insurers don't like unknowns," said one health insurance industry consultant.Full Issue
Half of German companies are facing difficulties in filling vacancies due to labour shortages, according to the DIHK Chamber of Commerce and Industry. Despite the stagnation of the euro zone's largest economy, Germany is experiencing deep labour shortages, particularly in skilled high-growth sectors. The proportion of companies struggling to hire has slightly decreased from the previous survey, but still stands at 50%. Achim Dercks, DIHK's Deputy Chief Executive, stated that the skilled labour situation remains critical. The German economy currently has 1.8 million unfilled jobs, resulting in a loss of over €90bn in added value. The survey also revealed that eight out of ten companies expect negative consequences from labour shortages. To address this issue, the German government has passed new legislation to facilitate the establishment of foreign workers in the country. More than half of the companies consider recruiting foreign labour and skilled workers as a viable option to secure skilled labour.Full Issue
The UAE's e& has introduced a four-day workweek for local employees, becoming the first technology company in the region to embrace workplace flexibility. The pilot aims to improve employee engagement, well-being, productivity, and innovation. Dena Almansoori, Group Chief Human Resources Officer at e&, stated that the initiative reflects the need to modernise workplace strategies and create a more efficient and fulfilling environment. Employees who opt-in to the pilot will enjoy a three-day weekend from Friday to Sunday. The company already operates a hybrid workplace, with employees working remotely a few days a week, including 'Green Fridays' to focus on sustainability. The pilot aligns with the UAE Federal Government's encouragement of a four-day workweek for government employees and follows the successful results seen in Sharjah. The introduction of the four-day workweek in Sharjah led to a 90% increase in job performance, happiness, and mental health. e&'s initiative also supports the UAE's ambition for well-being and sustainability, as well as the company's commitment to achieving net zero emissions by 2030.Full Issue