21stJun
News article

Manufacturers call for support package

Manufacturing trade body Make UK is calling for an emergency, pre-recess package of business support measures.

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Manufacturing trade body Make UK is calling for an emergency, pre-recess package of business support measures.

The call comes after a Make UK survey showed growth and orders slowing significantly with exports close to a standstill.

Make UK has made recommendations for measures government can introduce now to address rising business costs including the following:

  • waive or reduce business rates for the next 12 months
  • implement VAT deferrals for larger businesses and waive completely for SMEs
  • temporarily freeze the Climate Change Levy
  • review the efficacy of the business interruption loan schemes introduced during the pandemic and deploy a successor scheme
  • Extend the 130% super-deduction tax break, due to end in March 2023
  • make the increase in the Annual Investment Allowance permanent.

Stephen Phipson, chief executive of Make UK, said: 'Whilst industry has recovered strongly over the last year we are clearly heading for very stormy waters in the face of eyewatering costs and a difficult international environment.

'Clearly some of the factors impacting companies are global and cannot be contained by the UK government alone. However, given the rate at which companies are burning through their balance sheets just to survive, it must take immediate measures to help shield companies from the worst impact of escalating costs and help protect jobs.'

20thJun
News article

MTD for income tax pilot extended

HMRC is extending the pilot for Making Tax Digital for income tax self assessment (MTD ITSA) to more self-employed workers and landlords.

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HMRC is extending the pilot for Making Tax Digital for income tax self assessment (MTD ITSA) to more self-employed workers and landlords.

From July, those taking part will be able to test MTD ITSA before April 2024, including their own internal processes for managing MTD.

Agents and customers are already taking part, and HMRC wants more agents to start signing up a small number of their clients to trial the system.

From April 2024, all businesses with annual income from self employment or property above £10,000 will have to follow MTD rules.

Under MTD, the quarterly reporting is a summary, providing a total of the incomes and outcomes going through the business per quarter. As a result, there is not necessarily a need to report under each property address as it is an accumulation of the all the data that is required, HMRC said.

In a statement HMRC said: 'We will be testing the first quarterly submission with some of these customers from 6 July, after which we aim to open up the pilot more widely to some customer types. 

'The update to agents is encouraging them to start considering whether they can bring some customers into the pilot this summer, providing them with an opportunity to test MTD for ITSA with their clients as well as playing a key role in testing the new system themselves before mandation in 2024.'

17thJun
News article

Bank of England raises UK interest rates to 13-year high of 1.25%

The Bank of England (BoE) has raised UK interest rates to a 13-year high of 1.25% and is now predicting inflation will hit 11% this autumn, when energy bills are set to rise again.

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The Bank of England (BoE) has raised UK interest rates to a 13-year high of 1.25% and is now predicting inflation will hit 11% this autumn, when energy bills are set to rise again.

Six out of nine Monetary Policy Committee (MPC) members voted for a 0.25 basis point hike, leading to a fifth consecutive rise.

It is the first time since January 2009 that the rate has been higher than 1%. Three members of the MPC voted to raise interest rates to 1.5%, which would have been the biggest rise since 1995.

David Bharier, Head of Research at the British Chambers of Commerce (BCC), said: 'While expected, the decision to raise the interest rate will add further concern to businesses amid a weakened economic outlook, soaring cost pressures and labour shortages.

'The increase signals the Bank's intention to tackle inflation but businesses have been raising the alarm about spiralling prices since the start of 2021 and a higher interest rate is unlikely to address many of the global causes of this.

'The increase could impact smaller businesses who may be reliant on banking or overdraft facilities, for instance, those buying goods in bulk in an attempt to offset raw material shortages.'

16thJun
News article

IoD launches new inquiry into governance arrangements and framework

The Institute of Directors (IoD) has launched a new inquiry to analyse how good corporate governance can drive innovation.

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The Institute of Directors (IoD) has launched a new inquiry to analyse how good corporate governance can drive innovation.

The IoD's inquiry aims to 'identify good practices that, if more widely adopted, can help governance to become an active driver of sustainable value creation'.

The business group's Centre for Corporate Governance was founded in 2020 and seeks to explore current issues in corporate governance and company stewardship to help businesses and the wider society.

Dr Roger Barker, Director of Policy and Governance at the IoD, said: 'For some, the connection between corporate governance and innovation may not necessarily be obvious. This study seeks to test the hypothesis that good governance can actually be a key driver of an innovative organisational culture.

'In particular, an effective board of directors can be instrumental in opening up a company to new ideas and ways of working. We hope that the business community will share their experiences and enable us to identify how governance can make a significant impact on organisational potential.'

The IoD intends to publish a report on its findings this autumn.

15thJun
News article

Trade body urges Chancellor to keep tax rates low on electric company cars

The British Vehicle Rental and Leasing Association (BVRLA) has urged Chancellor Rishi Sunak to keep benefit-in-kind (BiK) tax rates low on electric company cars to promote their usage amongst UK workers.

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The British Vehicle Rental and Leasing Association (BVRLA) has urged Chancellor Rishi Sunak to keep benefit-in-kind (BiK) tax rates low on electric company cars to promote their usage amongst UK workers.

The BVRLA said that BiK tax rates for electric vehicles (EVs) are only known up to 2024/25, and that beyond this time, 'the government's intentions aren't clear'. It is calling on the government to 'provide as much foresight on future rates as possible' and ensure the tax on EVs is kept down to incentivise usage.

Commenting on the issue, Gerry Keaney, Chief Executive of the BVRLA, said: 'The strides we have made as an industry to phase out petrol and diesel cars before 2030 are clear – nearly 60% of electric vehicles on UK roads are company registered.

'The uncertainty caused by the lack of foresight beyond 2024/25, or by seeing a sudden jump in rates, will cause growth of EVs to stall. This needs to be addressed by the Chancellor in the Budget this autumn.'

14thJun
News article

COVID-19 emergency loan schemes may have saved 500,000 businesses

The government's coronavirus (COVID-19) emergency loan guarantee schemes may have saved between 150,000 and 500,000 businesses, according to research from the British Business Bank (BBB).

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The government's coronavirus (COVID-19) emergency loan guarantee schemes may have saved between 150,000 and 500,000 businesses, according to research from the British Business Bank (BBB).

The research also estimated that the loans have helped save between 500,000 and 2.9 million jobs.

In March 2020, in response to the global pandemic, the government deployed three loan-guarantee schemes. They were the Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS) and the Bounce Back Loan Scheme (BBLS).

According to the BBB's research, between 10% and 34% of BBLS borrowers and between 7% and 28% of CBILS/CLBILS borrowers could have permanently ceased trading in 2020 without the schemes.

Catherine Lewis La Torre, CEO of the BBB, said: 'The COVID-19 emergency loan schemes were designed to address a drastically altered economic landscape for smaller businesses as lockdowns took effect.

'This evaluation is the first indication of just how important those schemes were in saving livelihoods, businesses and hundreds of thousands of jobs, and we are proud to have played a vital role in their delivery.'

13thJun
News article

CBI downgrades forecast and warns of recession

The government must take 'vital action' to avoid a recession after the forecast for economic growth was downgraded, warns the Confederation of British Industry (CBI).

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The government must take 'vital action' to avoid a recession after the forecast for economic growth was downgraded, warns the Confederation of British Industry (CBI).

The business group says that with the cost-of-living crunch shows no sign of abating and amidst continued battles with the EU over the Northern Ireland Protocol there is a real risk that the economy stays a 'distant second to politics' this summer. 

The CBI's outlook suggests growth will soften as household spending turns downwards amid dented business and consumer confidence. As a result, the CBI has downgraded its GDP growth outlook significantly to 3.7% in 2022 and 1.0% in 2023. 

High inflation is the primary source of weaker growth. CPI inflation reached a 40-year high in April (9%), driven higher by a cocktail of challenges – ranging from supply chain pressures to rising commodity prices and the war in Ukraine. 

Tony Danker, CBI Director General, said: 'Let me be clear – we're expecting the economy to be pretty much stagnant. It won't take much to tip us into a recession. And even if we don't, it will feel like one for too many people. 

'Times are tough for businesses dealing with rising costs, and for people on lower incomes concerned about paying bills and putting food on the table.

'There is only a small window until recess. Inaction this summer would set in stone a stagnant economy in 2023, with recession a very live concern.

'We need to act now to install confidence. This can wait no longer.'

10thJun
News article

New homeowners warned over tax refund claims

New homeowners are being warned about cold calls from rogue tax repayment agents advising them to make speculative Stamp Duty Land Tax (SDLT) refund claims, which could leave them with large tax bills.

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New homeowners are being warned about cold calls from rogue tax repayment agents advising them to make speculative Stamp Duty Land Tax (SDLT) refund claims, which could leave them with large tax bills.

The warning comes after a recent spate of Stamp Duty refund claims to HMRC failed to meet specific criteria.

The agents have been known to call new property owners after finding them through Land Registry records and property search websites, promising money back on 'unknowingly overpaid' SDLT.

Recent analysis undertaken by HMRC suggests that up to a third of claims for 'multiple dwelling relief' refunds were incorrect.

HMRC raise enquiries on these claims, but sometimes that is after the agent has taken their fee, leaving the homeowner to pick up the difference. Incorrect refund claims must be repaid with interest, with some potentially facing penalties as well.

Nicole Newbury, HMRC Director for Wealthy and Mid-sized Business, said: 'We are seeing obviously spurious refund claims that are never going to succeed; but will lead to an unnecessary bill for the customer.

'So, we are warning new homeowners not to get caught out by tax repayment agents promising easy money on a 'no win, no fee' basis. If it sounds too good to be true, it probably is. We want to help people get it right and avoid unnecessary tax bills, so treat promises of easy money with real caution.'

9thJun
News article

UK economy will 'grind to a halt', warns the BCC

Britain's economy will 'grind to a halt' before shrinking in the second half of this year as rising inflation and tax increases take their toll, according to the British Chambers of Commerce (BCC).

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Britain's economy will 'grind to a halt' before shrinking in the second half of this year as rising inflation and tax increases take their toll, according to the British Chambers of Commerce (BCC).

The business group downgraded its 2022 growth forecast from 3.6% to 3.5% It also said inflation would reach 10% in the last quarter - outpacing wage increases.

The BCC also cut investment growth expectations for this year, from 3.5% to 1.8%.

The bleak outlook follows a warning from the Organisation for Economic Co-operation and Development (OECD), that the UK's growth next year will be worse than any G20 country except Russia.

The OECD said the UK is threatened by rising interest rates and taxes, as well as high inflation.

Alex Veitch, Director of Policy at the BCC, said: 'With inflation forecast to race ahead of wages, we are concerned about a dip in consumer spending which would further impact businesses and hamper growth. We forecast that if trends continue, inflation will only return to the Bank of England's target rate at the end of 2024, implying a prolonged period of difficulty for the UK.

'Against this backdrop, the government must put in place stable and supportive policies that help businesses pull the UK out of this economic quagmire. Firms must be given confidence to invest, only then can they drive the growth the economy so desperately needs.'

8thJun
News article

Give people more control over their energy bills, says CBI

Energy efficiency measures are 'missing piece' of tackling the cost-of-living crisis, says the Confederation of British Industry (CBI).

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Energy efficiency measures are 'missing piece' of tackling the cost-of-living crisis, says the Confederation of British Industry (CBI).

In a speech to business leaders CBI Director-General, Tony Danker, said people must not be left 'at the mercy of global oil and gas prices'.

According to the CBI, the best solution is to give people the tools to manage their demand via energy efficiency measures like home insulation.

The CBI points to research that shows retrofitting UK properties to improve energy efficiency could save households around £500 and cut energy costs for small and medium sized businesses by up to a quarter.

Tony Danker, CBI Director-General, said: 'People feel powerless, some are at breaking point. Their lives at the mercy of global storms that they and even their own government have little ability to control. While the government's recent support package will help ease some of the pressure, they're clear it's a temporary solution.

“Energy prices are likely to be higher for longer than we imagined. Reimagining the supply side to reduce our fossil fuel use further will take years not months. This is a long-term crisis that needs a long-term solution, but people need a fix now.

'Business and government must take this seriously. We must show decarbonisation is the solution, not the problem, or we'll lose that support. We must show now how it delivers lower bills, better jobs, and brighter economic prospects.'