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Phuket business: What does the UK budget mean for British expats?

Legacy Phuket Gazette

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Phuket business: What does the UK budget mean for British expats? | The Thaiger

It’s that time again when George Osborne tries to tighten the purse strings for the UK economy and cut down the huge debt levels the youth of today have inherited from poor decision making and fiscal policies of the past.

Inconsequential it may well be to certain socio-economic brackets with Mr Osborne’s large outstretched arm unable to ruffle their financial feathers. But if we take a closer look at what has been proposed, this may have more affect on us than we think.

On first viewing, if you are in the super wealthy bracket and don the colors of say Manchester United or City, then the chancellor has just done you a huge favour in cutting the top rate of tax from 50p to 45p as from April 2013. Fantastic! Well not really, how many people in the UK are regularly earning £150,000+ per annum? I can tell you the answer, not very many. In fact it is only 1% of the UK population that have the privilege of earning these amounts.

Back to the real world and what does this mean to the rest of us. As we know, many UK expatriates come to Phuket’s paradise shores to enjoy the fruits of their retirement and a tranquil life and it is not only the retired who are flooding into Thailand. More and more people arrive every year to enjoy a slower pace of life or to set up a business with the intention of making this island their permanent home.

So what does the budget mean for them? Well, if you are a pensioner who currently enjoys the UK state pension scheme then you are going to take a hit, the main points for pensioners being; Plans to freeze the age related allowance and an automatic review of the state pension age.

A freeze in the age related allowance sector means essentially is that your UK state pension will be stagnant for the foreseeable future. The big problem with this is inflation, as the cost of living rises and the age related allowance doesn’t, the buying power of your money is going to diminish.

The next is the automatic review of the state pension age. As we are all living longer, it is only natural that this will continue to rise. This is not only happening with the state pension scheme, but also with UK company pension schemes.

Recently Tesco announced that after a review of the pension scheme, calculations on retirement benefits will be increased from aged 65 to 67. You would still be able to retire at 55, however, using the new retirement age of 67 your benefits are going to be greatly reduced. Many companies will go this way and this just shows the importance of reviewing any pension schemes that are based in the UK and having your own provision in place has never been as important.

On the plus side individual income tax allowances are going up from £8105 to £9205 from April next year. Anyone who currently benefits from a UK pension within this bracket will certainly gain.

If you have a UK frozen pension or are still contributing into this then now is the time to have it reviewed by a pension specialist as the noose keeps tightening around the pension neck. As the pension age keeps rising, more and more of us will have to work longer and longer and will have to save more and more to provide ourselves with sufficient funds to sustain us in retirement.

I, for one, don’t really fancy the idea of having to continue working well into my 70’s and would like to put my feet up and enjoy the lifestyle I have become accustomed to.

Not only are pensions on the agenda, stamp duty has increased on properties and to go through each point of the budget would be like writing War and Peace.

However the points of the budget will affect a very many of us, and they need to be addressed on an individual basis. My main advice is to seek advice.

For more information on how the UK budget affects you or UK pension plan reviews please contact [email protected] or you can follow me on twitter @ AnthonyLyman.Anthony Lyman is a Senior Financial Consultant for the Montpelier Group.

— Anthony Lyman



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Business

Hermès opens its first store in Phuket at Central Floresta

The Thaiger & The Nation

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Hermès opens its first store in Phuket at Central Floresta | The Thaiger

Hermès has opened of its first store in Phuket at Central Floresta, the newly opened lifestyle shopping destination in the heart of the island, opposite Central Festival.

As Hermès’ first venture outside the Thai capital, the new Hermès Phuket store makes a significant statement of expansion and confidence in the market. The new address in this world-renowned island will allow the growing population of local residents, along with domestic and international tourists, to discover the abundant variety of Hermès métiers and savoir-faire.

Designed by the Parisian architecture agency RDAI, the elegant 172 m² retail space is located by the shopping centre’s main entrance and benefits from a double exposure with an exterior and an interior façade.

A bamboo claustra follows the line of the mall’s exterior glass, filtering the daylight that bathes the indoor space, and further illustrates Hermès’ high regard for local craftsmanship. The interior façade is composed of a refined lacquered metal, featuring a large window display, complemented by four recesses with illuminated silk scarves.

Upon entering the store, visitors are welcomed by the House’s ex-libris and signature Grecques lights, designed for Hermès in 1925. The store is decorated with natural and local materials – bamboo floors and claustra, cognac toned Cherrywood walls, toffee coloured silk and fibre fabrics – tastefully blending various elements of Thai culture and modern architecture. The soft colour palette evokes the sand and the sun in their various shades, providing a delightfully serene and convivial atmosphere.

The overall volume is divided into two main areas by the feminine silk grid facing the entrance. The first one, with the iconic Faubourg pattern mosaic floor, allows guests to explore the silk, fashion jewellery, fragrance, art of living, and equestrian departments.

Opposite the leather goods display, an intimate space invites guests to uncover the watch and jewellery collections. Further along, one can discover the women and men’s universes. A sand coloured carpet on the floor outlines the area dedicated to the shoe collections, enriched by a delicate custom-made bamboo light module as the ceiling centrepiece.

Hermès opens its first store in Phuket at Central Floresta | News by The Thaiger Hermès opens its first store in Phuket at Central Floresta | News by The Thaiger Hermès opens its first store in Phuket at Central Floresta | News by The Thaiger

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Thailand ‘slightly impacted’ from a no deal Brexit

The Thaiger

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Thailand ‘slightly impacted’ from a no deal Brexit | The Thaiger

The EU has agreed to postpone Brexit from next Friday and give UK PM Theresa May time to get her deal approved in Parliament.

The PM had hoped to persuade the EU to delay the March 29 Brexit date, set in law, to June 30. But the EU country leaders have offered her two dates…

  1. A delay until May 22 if MPs approve her withdrawal deal in next week’s vote.
  2. 2. A shorter delay until April 12 if they reject it. But the UK will have to set out its next steps – another extension or leaving without a deal.

But the EU says a further extension beyond April 12 is only possible if the UK agrees to hold EU elections on May 23.

As to how British lawmakers can sort things out in a few weeks after two years of debate remains to be seen.

But economists are warning Thailand to brace for some fallout from the UK exit from the EU because it is more likely to happen than not, just a matter of when.

First of all, no-deal Brexit means the UK will no longer be a part of the EU bloc and will have to revert to World Trade Organisation rules on trade. Made-in-UK goods will be subject to EU tariffs, like that of other non-EU nations. Meanwhile, the price of the EU-made merchandises in the UK may become more expensive as they will have to bear the cost of imported tariffs as well.

According to SCB Economic Intelligence Centre, a no-deal Brexit will impact the UK economy and, consequently, affect British purchasing power overseas. British demand for Thai exports, namely automobiles and parts, and processed chicken meat may reduce.

British expats will also have to face a worsening rate of exchange with the Thai baht, lessening the power of the British pound they bring into the Kingdom for living, retirement or holidays.

Nonetheless, the overall impact on Thai exports should not be significant because the Thai outbound shipment to the UK represents only 1.5 percent of total Thai exports, according to the the think tank of Siam Commercial Bank.

Brexit may also prompt Thailand and the EU to renegotiate some trade deals such as import quota to the EU. Thailand may have to renegotiate the export quota with the EU on processed chicken, as an example. And Thailand may also have to negotiate another chicken export deal with the UK separately after the UK separation from the EU.

Auramon Supthaweethum, Director-General of Department of Trade Negotiations, said Brexit could complicate the process of Thai-EU free trade negotiation, which is scheduled to resume in the second half of this year.

“At any rate, after the Thai general election, Thailand is set to continue to negotiate with the EU on the Thai-EU free trade deal regardless of the UK decision.”

On the bright side, Brexit may prompt the UK investors to pay more attention to potential markets beyond the EU border. At present, direct investment from the UK to Thailand is small, accounting for only 3.5 percent of the total foreign direct investment, according to SCB.

Kasikorn Research Centre note that in addition to Brexit, Thai investors should take into account the consequences of the EU and Japan’s Economic Partnership Agreement which came into force last month.

The EPA could affect the exports of Thai automobile which is part of the Japanese’ supply chains. The EPA will end tariffs of auto and parts between Japan and EU by 2026.

Kasikorn Bank’s think tank says, in light of Brexit, some Japanese automakers will likely relocate some of their car production from the UK to other EU countries to maintain the EU trade privileges. Nissan and Honda have already flagged this probability.

Thus, the destinations for Thai exported automobiles and parts, which are part of the supply chains of Japanese automakers, may also change in accordance with Japanese automakers’ revised business strategy.

While the actual impacts on trade and investment remain to be seen, Brexit has been chiefly attributed to the volatility of the British pound since the referendum in 2016.

The SCB Economic Intelligence Centre say the weaker British pound could dampen the sentiment of British arrivals. They note that UK holidaymakers are among the high spenders in Thailand with 77,600 baht per trip.

“At any rate, since the receipts from British travelers represent only 2.1 percent of the total, the impact on the Thai tourism industry will be insignificant.”

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Doubt over ‘majority support’ in survey about drilling near Si Thep historical park

The Thaiger

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Doubt over ‘majority support’ in survey about drilling near Si Thep historical park | The Thaiger

Locals are up in arms about results from a public hearing into oil drilling project near the Si Thep historical park in Phetchabun province (just north of Bangkok). They are expressing doubt and concern over results of a public hearing that appear to show support for the project.

Thai PBS reports that Mr. Prachuab Narkthien, chairman of the club of village headmen and kamnan in Si Thep district, says he doubted the credibility of the result, which shows 62.6 percent are supportive of the drilling project near the ancient temple.

Since most people in Phetchabun province, especially in Si Thep district, have opposed the project from the beginning, Mr. Prachuab said he wondered where the 62.6 percent figure had come from.

Oil drilling by ECO Orient Resources was put on hold due to strong opposition from the Fine Arts Department and the public for fear that vibrations caused by drilling may damage the fragile ancient ruins, which await recognition by UNESCO as a World Heritage site.

Mr. Prachuab said that the public hearing was unusual because only selected people were invited to attend and he was not invited, despite the fact that he represents the district’s cultural network. He went on to say that only officials at provincial and district levels support the project while the general public is against it.

The Fine Arts Department earlier proposed the creation of a buffer zone to project the ancient ruins, believed to be those of a city of some 80,000 people at its peak during the first millennium AD.

Doubt over 'majority support' in survey about drilling near Si Thep historical park | News by The Thaiger

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