29thOct
News article

Chancellor to set out one-year Spending Review in November

Chancellor Rishi Sunak will set out a one-year Spending Review on 25 November as the government continues to tackle the economic slump caused by the coronavirus (COVID-19) pandemic.

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Chancellor Rishi Sunak will set out a one-year Spending Review on 25 November as the government continues to tackle the economic slump caused by the coronavirus (COVID-19) pandemic.

The Spending Review will set departments' resource and capital budgets for 2021/22, and the Devolved Administration's block grants for the same period.

The Review will focus on three areas:

  • providing departments with the certainty they need to tackle COVID-19 and deliver the government's Plan for Jobs to support employment
  • giving public services enhanced support to continue to fight against the virus, alongside delivering first-class frontline services
  • investing in infrastructure to deliver the government's plans to unite and 'level up' the country, driving the economic recovery.

Mr Sunak said: 'In the current environment it's essential that we provide certainty. So we'll be doing that for departments and all of the nations of the UK by setting budgets for next year, with a total focus on tackling COVID and delivering our Plan for Jobs.

'Long-term investment in our country's future is the right thing to do, especially in areas which are the cornerstone of our society like the NHS, schools and infrastructure.'

28thOct
News article

ICAEW calls for reform of 'inflexible business rates'

The Institute of Chartered Accountants in England and Wales (ICAEW) has called for reform of 'inflexible business rates' as businesses continue to struggle through the coronavirus (COVID-19) pandemic.

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The Institute of Chartered Accountants in England and Wales (ICAEW) has called for reform of 'inflexible business rates' as businesses continue to struggle through the coronavirus (COVID-19) pandemic.

A third of firms say they need government support to survive the next six months, according to a survey of ICAEW members.

The survey found that three-quarters of businesses had accessed one of the government's loan or support schemes during the pandemic, while 63% had furloughed employees and 48% had deferred VAT payments.

Business was down at 62% of firms and 31% expect to make redundancies over the next six months, the survey suggested.

Commenting on the findings, Iain Wright, Director of Business and Industrial Strategy at the ICAEW, said: 'With the latest restrictions casting a new black cloud over businesses that were beginning to recover from the economic effects of the pandemic, it's clear that more intervention will be needed from the government.

'In particular, some struggling companies could fail when faced with inflexible business rates bills. Reducing the business rates multiplier would bring down the cost of this charge, and therefore lessen the burden on companies at this critical time.

'Although the whole economy is suffering, it is striking that the economic effects of the pandemic affect some sectors with much more brutal damage than others.'

27thOct
News article

Survey finds small business confidence has been in negative territory since 2018

A survey carried out by the Federation of Small Businesses (FSB) has found that confidence amongst small firms has been in negative territory since July 2018.

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A survey carried out by the Federation of Small Businesses (FSB) has found that confidence amongst small firms has been in negative territory since July 2018.

The FSB's Small Business Index (SBI), which tests small firms' business confidence levels, recently posted a ninth consecutive negative reading.

The SBI, which polled 1,500 UK firms, showed that the confidence figure for the third quarter of 2020 stands at -32.6, down 28 points when compared to the second quarter of 2020.

Just 34% of those surveyed at the end of last month expect their performance to improve over the coming three months, the FSB said. 66% of businesses expect their performance to worsen. 

'Short memories are common in a crisis, but we must not forget that small firms were already under the cosh thanks to political uncertainty, rising costs and creaking infrastructure well before the Spring,' said Mike Cherry, National Chairman of the FSB.

'The Chancellor made some very welcome adjustments to support measures . . . , and it's critical that the new Job Support Scheme is straightforward to use, the self-employed can access the help they require and local authority cash grants reach as many of those in need as possible as swiftly as possible.'

26thOct
News article

NAO finds 'significant levels of furlough fraud occurred' during start of pandemic

A report published by the National Audit Office (NAO) has revealed that significant levels of furlough fraud occurred during the first few months of the coronavirus (COVID-19) pandemic.

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A report published by the National Audit Office (NAO) has revealed that significant levels of furlough fraud occurred during the first few months of the coronavirus (COVID-19) pandemic.

Employers committed furlough fraud if they claimed furlough payments but kept employees working for them against Coronavirus Job Retention Scheme (CJRS) rules. According to the NAO, HMRC's fraud hotline received more than 10,000 reports of furlough fraud.

A survey carried out by the NAO found that 9% of employees worked during lockdown at the request of their employer, against the rules of the CJRS. However, employees would not have known if their employer was part of the government furlough scheme unless their employer had informed them.

Commenting on the matter, Gareth Davies, Head of the NAO, said: 'Indications are that the schemes helped to protect jobs in the short-term, but it is also clear that many other people have lost earnings and have not been able to access support.

'It appears that the scale of fraud and error could be considerable, particularly for the furlough scheme.

'HMRC could have done more to make clear to employees whether their employer was part of the furlough scheme. In future, the departments should do more while employment support schemes are running to protect employees and counter acts of fraud.'

23rdOct
News article

Chancellor increases financial support for businesses affected by COVID restrictions

On 22 October Chancellor Rishi Sunak announced increases to the coronavirus (COVID-19) financial support measures first outlined in the Winter Economy Plan.

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On 22 October Chancellor Rishi Sunak announced increases to the coronavirus (COVID-19) financial support measures first outlined in the Winter Economy Plan.

The Chancellor has made amendments to the Job Support Scheme (JSS), which is set to take effect from 1 November. When originally announced, the JSS saw employers paying a third of their employees' wages for hours not worked, and required employers to be working 33% of their normal hours.

The Chancellor's latest announcement has reduced the employer contribution to those unworked hours to just 5%, and reduced the minimum hours requirements to 20%, so employees working just one day a week will be eligible. That means that if someone was being paid £587 for their unworked hours, the government would be contributing £543 and their employer only £44.

Additionally, the announcement has increased the amount of profits covered by the two forthcoming self-employed grants from 20% to 40%, meaning the maximum grant will increase from £1,875 to £3,750.

In regard to business grants, the Chancellor also announced approved additional funding to support cash grants of up to £2,100 per month primarily for businesses in the hospitality, accommodation and leisure sector who may be adversely impacted by the COVID-19 restrictions in high-alert level areas.

Commenting on the changes, the Chancellor said: 'I've always said that we must be ready to adapt our financial support as the situation evolves. These changes mean that our support will reach many more people and protect many more jobs.

'I know that the introduction of further restrictions has left many people worried for themselves, their families and communities. I hope the government's stepped-up support can be part of the country pulling together in the coming months.'

22ndOct
News article

IoD outlines reforms to Prompt Payment Code

The Institute of Directors (IoD) has outlined reforms to the Prompt Payment Code.

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The Institute of Directors (IoD) has outlined reforms to the Prompt Payment Code.

The IoD recently submitted its views to the government on how best to strengthen the Code. These include establishing a transparent process for dealing with Code suspensions, removals and reinstatements, and implementing a traffic light system to make it easier for business leaders to identify companies with poor payment records.

According to the business group, the major issue in regard to late payments relates to culture and the leverage big businesses have over small suppliers. The IoD stated that small business owners are often reluctant to report a client that pays late as they would not want to damage the business relationship and risk losing future custom.

Administrators of the Prompt Payment Code should be able to approach signatories on the basis of an anonymous complaint by a third party to discuss payment practices, the Institute argued.

It has called for the government to bring forward reforms to the Code and create 'a more responsible payment culture'.

21stOct
News article

HMRC urges businesses to ensure they are ready for new customs and tax rules

HMRC has urged businesses to make sure they are prepared for new customs and tax rules so that they can continue to trade with the EU from 1 January 2021.

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HMRC has urged businesses to make sure they are prepared for new customs and tax rules so that they can continue to trade with the EU from 1 January 2021.

In a letter to VAT-registered businesses, HMRC stated that it is 'really important' that firms act now. Businesses will not be able to trade with the EU from 1 January 2021 if they do not have the correct processes, contracts and agreements in place.

Businesses will need to make import and export declarations to move goods between the UK and the EU. From 1 January 2021, if firms send goods from the UK to customers in the EU, they will be responsible for completing export declarations for those goods. If businesses import goods from the EU that are on the controlled goods list (such as animal products, alcohol or tobacco or firearms), they will have to make declarations from 1 January 2021.

Business Secretary Alok Sharma said: 'Businesses must act now to ensure they are ready for the UK's new start as an independent trading nation once more.

'There will be no extension to the transition period, so there is no time to waste.'

The letter can be viewed in full here.

20thOct
News article

PAC calls on government to give 'honest picture' of UK tax gap

The Public Accounts Committee (PAC) has urged the government to give a 'more honest' picture of the likely levels of the UK tax gap.

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The Public Accounts Committee (PAC) has urged the government to give a 'more honest' picture of the likely levels of the UK tax gap.

The tax gap is the gap between the tax that should be paid on the UK's economic activity and the tax that HMRC actually collects. According to the PAC, the gap has a wide range of causes, including deliberate tax evasion and accidental taxpayer error.

HMRC's most recent estimate of the tax gap was £31 billion in 2018/19. The PAC stated that there is a wide range of estimates that render this figure 'less than useful'. The Committee said that HMRC should not be using this number without explaining its limitations.

Additionally, the PAC has accused HMRC of failing to entirely set out the relative size of the tax gap for different sectors of the UK economy.

Commenting on the matter, Meg Hillier, Chair of the PAC, said: 'Best estimates really won't do when you're talking about multi-billions of pounds that could be being collected to support public services.

'We expect HMRC to be doing more to collect the tax owed, whether from individuals or companies. With families and businesses straining every sinew to stay afloat it is just as critical that the government collects tax effectively and efficiently as it is that the government spends money wisely.'

19thOct
News article

Government outlines plans to protect future of cash

The government has outlined plans to protect the UK's cash system and ensure people have easy access to cash.

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The government has outlined plans to protect the UK's cash system and ensure people have easy access to cash.

The Treasury stated that although cash use is declining, with people increasingly choosing cards, mobiles and e-wallets to make payments, it remains crucial for groups across the UK, including the elderly and the vulnerable. 

As part of the proposals, cashback would be offered at shops without consumers having to make a purchase. Additionally, the Financial Conduct Authority (FCA) would be given overall responsibility for the UK's retail cash system to protect consumers and small and medium-sized enterprises (SMEs).

Commenting on the issue, John Glen, Economic Secretary to the Treasury, said: 'We know that cash is still really important for consumers and businesses – that's why we promised to legislate to protect access for everyone who needs it.

'We want to harness the same creative thinking that has driven innovation in digital payments to maintain the UK's cash system and make sure people can easily access cash in their local area.'

The Treasury is seeking views on the plans from consumer organisations, businesses, financial institutions, providers of ATM and payment services and others through a call for evidence. This can be found here.

16thOct
News article

Government launches new coronavirus fraud hotline

The government has launched a new coronavirus (COVID-19) fraud hotline in conjunction with independent charity Crimestoppers.

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The government has launched a new coronavirus (COVID-19) fraud hotline in conjunction with independent charity Crimestoppers.

Members of the public can now call the new fraud hotline anonymously and free of charge to report suspected fraudulent activity in regard to COVID-19 loans and grants.

The government stated that a minority of individuals have been abusing COVID-19 support schemes by claiming illegally. It has urged the public to look out for the 'tell tale signs' of fraud, including unusual buying activity by companies and individuals and cold calling by individuals falsely claiming they are from the government.

Mark Hallas, Chief Executive of Crimestoppers, said: 'Fraud against the public purse denies access to vital funds that benefit us all.

'The COVID Fraud Hotline is open 24/7, 365 days a year on 0800 587 5030 or fill in the simple and secure anonymous form at covidfraudhotline.org. You'll be doing the right thing to help ensure the public purse is protected from fraudsters.'