16thSep
News article

FSB survey suggests unemployment to rise by 50,000 as result of NICs rise

A survey carried out by the Federation of Small Businesses (FSB) has suggested that the UK unemployment rate could rise by 50,000 as a result of the increase in national insurance contributions (NICs) for employers, sole traders and employees.

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A survey carried out by the Federation of Small Businesses (FSB) has suggested that the UK unemployment rate could rise by 50,000 as a result of the increase in national insurance contributions (NICs) for employers, sole traders and employees.

The FSB carried out an assessment of the potential impacts of the 1.25% increase in NICs for employers, sole traders and employees and found that 50,000 more people could be left out of work.

The business group also warned that the impact could be even greater with the end of the Coronavirus Job Retention Scheme (CJRS) approaching.

'The government's regressive jobs tax hike will put jobs at risk, stifle start-ups and prevent new jobs from being created,' said Mike Cherry, National Chair of the FSB.

'It could mean 50,000 more people out of work after it takes effect in April. That means 50,000 livelihoods harmed – 50,000 people who would otherwise be at work in our economy.

'Combined with other rising employment costs – and firms having to make tough decisions about the futures of those who have been supported by the job retention scheme – that 50,000 figure could easily end up being a good deal greater.'

15thSep
News article

Inflation sees sharpest increase on record

Inflation rose to 3.2% last month from 2% in July ? its largest ever recorded increase, according to the Office for National Statistics (ONS).

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Inflation rose to 3.2% last month from 2% in July – its largest ever recorded increase, according to the Office for National Statistics (ONS).

The Consumer Prices Index (CPI) measure of inflation for August was the highest since March 2012, though the ONS said much of the effect was likely to be temporary.

That was because a rise in restaurant and cafe prices last month compares to a period last year when they fell as a result of discounts offered under the government's 'Eat Out to Help Out' scheme.

Transport costs also made a big impact, with petrol prices at their highest since September 2013.

Rising food prices helped pushed inflation higher too, with the ONS saying this was due to 'shortages of supply chain staff and increased shipping costs, coupled with demand increases following the lifting of national lockdowns'.

The increase of 1.2 percentage points between the July CPI rate and the August CPI reading was the biggest on record, the ONS said.

14thSep
News article

Higher taxes and lower business investment 'not a plan for growth', warns CBI

The UK government faces big choices this autumn if it wants to stimulate economic growth, the Confederation of British Industry (CBI) has said.

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The UK government faces big choices this autumn if it wants to stimulate economic growth, the Confederation of British Industry (CBI) has said.

Following the recent government announcement on plans to increase national insurance contributions (NICs) to support social care, UK business is clear that the time for further business tax increases must end, said the CBI.

The CBI suggested that the government must reward those firms who invest, which is essential to a high-growth, sustainable recovery.

The business group has identified four key levers the government can use to get businesses investing more:

  • Smarter taxation – reward those firms who invest; for example, stop punishing greening UK building stock through business rate increases.
  • New skills for new markets – creating individual training accounts to access support more easily, for those most in need and/or out of work.
  • Catalytic public investment – to speed up the development of major infrastructure projects, new industries and cutting-edge tech.
  • Market making – replicate the successes of offshore wind in hydrogen and other emerging industries and fundamentally rebalance UK economic regulation.

Tony Danker, Director General of the CBI, said: 'We're at an inflexion point. Brexit, COVID, climate change all demand that the UK forges a new growth story to compete in the world. And believe me this will be a competition – for new markets, new skills and technological advantage.'

13thSep
News article

Thousands of teenagers missing out on Child Trust Fund cash

HMRC is urging young people to check if they have a Child Trust Fund (CTF) account.

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HMRC is urging young people to check if they have a Child Trust Fund (CTF) account.

It is now one year since the first account holders started turning 18 and around 55,000 CTFs mature every month. This means their owners can withdraw funds or transfer savings into an adult ISA. HMRC says hundreds of thousands of accounts have been claimed so far, but many have not.

CTFs were set up for all children born between 1 September 2002 and 2 January 2011 with a live Child Benefit claim. Parents or guardians set up these accounts with CTF providers – usually banks, building societies or investment managers – using vouchers provided by the government. If an account was not opened by the child's parent, HMRC set one up on the child's behalf.

Between 2002 and early 2011, almost six million CTFs were opened by parents or guardians, with a further million set up by HMRC.

Economic Secretary to the Treasury, John Glen, said: 'It's fantastic that so many young people have been able to access the money saved for them in CTFs but we want to make sure that nobody misses out on the chance to invest in their future.

'If you're unsure if you have an account or where it may be, it's easy to get help from HMRC to track down your provider online.'

To help young people find their accounts, HMRC has created an online tool.

10thSep
News article

ICAEW calls for new governance structure to achieve net zero by 2050

The Institute of Chartered Accountants in England and Wales (ICAEW) has called for the government to implement a new governance structure to help the UK achieve net zero by 2050.

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The Institute of Chartered Accountants in England and Wales (ICAEW) has called for the government to implement a new governance structure to help the UK achieve net zero by 2050.

The ICAEW believes the UK government should establish a net zero implementation board which should be given cross-governmental responsibility for net zero planning.

The Institute also recommended that the government provides businesses with a detailed plan to reach net zero in key parts of the UK economy, such as energy, housing and transport. This would allow businesses to build up skills, investment and capability in their workforces, the ICAEW stated.

It suggested that the COP26 summit in November could be a target date for the government to publish its net zero delivery plans.

Iain Wright, Managing Director for Reputation and Influence at the ICAEW, said: 'Achieving net zero will require the whole country to work together.

'The longer we as a country leave this, the more difficult, disruptive and expensive the transition will be.

'There is no clear structure for the UK to reach the target by 2050. There's no clarity or co-ordination between government, the devolved nations, local authorities and business and we need leadership to spearhead this important goal.'

9thSep
News article

Chancellor to deliver Autumn 2021 Budget on 27 October

HM Treasury has announced that Chancellor Rishi Sunak will deliver the Autumn 2021 Budget on Wednesday 27 October.

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HM Treasury has announced that Chancellor Rishi Sunak will deliver the Autumn 2021 Budget on Wednesday 27 October.

On 7 September the Chancellor launched Spending Review 2021, which will conclude on 27 October and will be presented alongside the Autumn Budget. The Spending Review will outline government departments' resource and capital budgets from 2022-23 to 2024-25.

The Spending Review is also expected to set out how the government will deliver on its promises to the British public through leading the transition to net zero across the country; ensuring strong and innovative public services; levelling up across the UK to increase and spread opportunity; and delivering its Plan for Growth.

Commenting on the Spending Review, the Chancellor said: 'Despite the worst economic recession in 300 years, we have not only got people back into work through the Plan for Jobs but continued to deliver on the priorities of the British people.

'At the Spending Review later this year, I will set out how we will continue to invest in public services and drive growth while keeping the public finances on a sustainable path.'

8thSep
News article

Business groups warn over tax increases

Business groups have warned that the government's plan to raise national insurance contributions (NICs) and add a surcharge to dividend income will hamper the economic recovery.

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Business groups have warned that the government's plan to raise national insurance contributions (NICs) and add a surcharge to dividend income will hamper the economic recovery.

The government has announced a 1.25 percentage point increase in NICs to pay for increased spending on health and social care. It has also increased the scope of NICs to include retirees who continue to work, and there will be an additional 1.25% charged on dividend income.

Suren?Thiru, Head of Economics at the British Chambers of Commerce (BCC), said:?'Businesses strongly oppose a rise in NICs as it will be a drag anchor on jobs growth at an absolutely crucial time. Firms have been hammered by 18 months of COVID-related restrictions and have built up huge debt burdens.

'This rise will impact the wider economic recovery by landing significant costs on firms when they are already facing a raft of new cost pressures and dampen the entrepreneurial spirit needed to drive the recovery.'

Lord Bilimoria, President of the Confederation of British Industry (CBI), said: 'The national insurance increase will directly hurt a business's ability to hire staff at a time when businesses have faced a torrid 18 months and are now fighting crippling labour shortages.

'Government must be wary of heaping further pressure on businesses who will be central to the recovery, particularly by making it more expensive to recruit.'

Andy Chamberlain, Director of Policy at the Association of Independent Professionals and the Self-Employed (IPSE), said: 'After the financial damage of the pandemic, exclusion from support and the changes to IR35 taxation, this new tax hike on dividends will make it almost impossible for freelancers to continue to work through a limited company. To limited company directors – from project managers to graphic designers – this is salt in a year of wounds.'

7thSep
News article

Staff shortages could continue for two years, warns CBI

Labour supply problems could last for up to two years and will not be solved by the end of the Coronavirus Job Retention Scheme (CJRS), the Confederation of British Industry (CBI) has warned.

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Labour supply problems could last for up to two years and will not be solved by the end of the Coronavirus Job Retention Scheme (CJRS), the Confederation of British Industry (CBI) has warned.

The CBI said that although a lack of HGV drivers has dominated the headlines, the challenge extends to many other skilled professions.

Marrying skills policies to roles with the highest unfilled vacancies, adding greater flexibility to the Apprenticeship Levy and using the government's own skill-focused immigration levers to alleviate short-term pressures are three things the UK government can do now, the CBI said. 

The CBI has also urged businesses to play their part in regard to long-term productivity reforms by continuing to invest in training, automation and digital transformation.

Tony Danker, Director General of the CBI, said: 'Labour shortages are biting?right across?the economy. While the CBI and other economists still predict growth returning to pre-pandemic levels later this year, furlough ending is not the panacea some people think will magically fill labour supply gaps. These shortages are already affecting business operations and will have a negative impact on the UK's economic recovery.

'Building a more innovative economy – coupled with better training and education – can sustainably improve business performance, wages and living standards.?But transformation on this scale?requires planning?and takes time.'

6thSep
News article

Tax-Free Childcare can ease the cost of the return to school, says HMRC

Families may be eligible for Tax-Free Childcare (TFC) to help pay for breakfast clubs and after school clubs as their children go back to school, HMRC has said.

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Families may be eligible for Tax-Free Childcare (TFC) to help pay for breakfast clubs and after school clubs as their children go back to school, HMRC has said.

Eligible families can save money on their childcare and benefit from a government top-up worth up to £2,000 every year, or up to £4,000 a year if a child is disabled.

In June 2021, almost 308,000 families across the UK benefited from making use of TFC, but HMRC says thousands are still missing out on the opportunity.

TFC is available to parents or carers who have children aged up to 11, or 17 if their child is disabled. For every £8 a parent or carer deposits into their account, they will receive a £2 top-up, up to the value of £500 every three months, or £1,000 if their child is disabled.

The 20% top-up is paid into the TFC account and is ready to use almost instantly, meaning parents and carers can use the money towards the cost of childminders, breakfast clubs and after school clubs and approved play schemes.

Myrtle Lloyd, HMRC's Director General for Customer Services, said: 'As your children head back to school this autumn, don't miss out on the opportunity to receive your 20% top-up to help pay for their childcare.

'It is quick and easy to sign up, just search 'Tax-Free Childcare' on GOV.UK.'

3rdSep
News article

Drop proposed basis period reform, urges ICAEW

Pushing through proposals to change basis periods ahead of the expansion of Making Tax Digital (MTD) will cause as many problems as it solves, the Institute of Chartered Accountants in England and Wales (ICAEW) has warned.

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Pushing through proposals to change basis periods ahead of the expansion of Making Tax Digital (MTD) will cause as many problems as it solves, the Institute of Chartered Accountants in England and Wales (ICAEW) has warned.

HMRC recently began a consultation outlining proposals to align basis periods with the tax year.

However, the ICAEW's Tax Faculty argues that implementing such changes ahead of the introduction of Making Tax Digital for income tax self assessment (MTD for ITSA) 'would not provide any genuine simplification to the UK's tax system'.

Instead, it says such reforms would be likely to increase costs, complexity and uncertainty for those businesses affected. It could also damage the UK's attractiveness as a place for the location of international service firms, the ICAEW added.

The ICAEW said that those businesses not following the tax year are likely to have very good reasons for doing so, including aligning with 31 December which is the international standard for the tax year end.

The response also highlights the considerable difficulties that the proposed change would pose for seasonal businesses, agricultural firms and GP practices.

The ICAEW concludes: 'As the UK recovers from the pandemic, the one thing businesses need most of all is a period of certainty and stability. This is not the time to make this change and we urge the government to drop the proposal.'