23rdMar
News article

2022 Spring Statement - what to expect

Chancellor Rishi Sunak will deliver the 2022 Spring Statement today. We will be keeping you up to date on the latest developments.

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Chancellor Rishi Sunak will deliver the 2022 Spring Statement today. We will be keeping you up to date on the latest developments.

With data published by the Office for National Statistics (ONS) revealing that inflation has hit a 30-year high, the Chancellor may offer more support to taxpayers in order to help with household budgets. Prices rose by 6.2% in the 12 months to February, the ONS found.

The war in Ukraine has caused steep rises in the cost of petrol and diesel. These have affected all road users, whether they are hauliers, business motorists, commuters or family drivers. It has been reported that the Chancellor is considering a temporary cut in fuel duty of as much as 5p per litre.

Meanwhile, the Federation of Small Businesses (FSB) has urged the Chancellor to use the Spring Statement to help small employers with rising overheads. The business group has recommended an increase in the Employment Allowance to £5,000 to help free up funds for investment and expansion.

Despite calls from business groups and trade bodies to delay the planned 1.25% rise in national insurance contributions (NICs), in recent months the Prime Minister and the Chancellor have jointly ruled this out.

22ndMar
News article

CMA frees leaseholders from rising ground rents

Intervention by the Competition and Markets Authority (CMA) has freed leaseholders from increasing ground rent terms that saw them trapped in homes they struggled to sell or mortgage.

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Intervention by the Competition and Markets Authority (CMA) has freed leaseholders from increasing ground rent terms that saw them trapped in homes they struggled to sell or mortgage.

Businesses which had bought freeh­olds from housing developer Countryside have now given formal commitments to the CMA to remove terms that cause ground rents to double in price.

These terms, which kick in every ten or 15 years, mean people often struggle to sell or obtain a mortgage on their leasehold home.

Their property rights can also be at risk if they fall behind on their ground rent. The move comes after the CMA secured undertakings from Countryside in September 2021 to strike out terms that doubled ground rent every ten to 15 years.

Andrea Coscelli, Chief Executive of the CMA, said: 'Thousands more leaseholders can now rest easy knowing they will not be forced to pay costly doubling ground rents. We believe these terms are unjust and unwarranted and can result in people trapped in homes they are unable to sell or mortgage – a major cause of anxiety and stress for so many.

'We welcome the commitment from these businesses to do what is right by their leaseholders by removing these terms, and we will hold them to it.'

21stMar
News article

MTD for VAT brings in an extra £195 million in tax

An estimated £195 million extra tax revenue has been collected via Making Tax Digital for VAT (MTD for VAT), according to research from HMRC.

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An estimated £195 million extra tax revenue has been collected via Making Tax Digital for VAT (MTD for VAT), according to research from HMRC.

The research, conducted by HMRC and peer reviewed by independent academics, showed that in 2019/20 the estimated additional tax revenue was between £185 million to £195 million, compared to a previous estimate of £115 million.

The tax authority stated that the additional revenue was due to the reduction in error on tax returns.

The research revealed that, for businesses below the £85,000 turnover threshold, the estimated additional tax revenue that is collected is £19 per business per quarter, which is a 2.2% increase from the average liability estimates for businesses not signed up to MTD.

For businesses above the threshold, the estimate of the average additional tax revenue is £57 per business per quarter and is a 0.9% increase.

Lucy Frazer, Financial Secretary to the Treasury, said: 'This research provides peer reviewed evidence that Making Tax Digital is likely already achieving what it was intended to do – cutting out error. This will help cut down the amount of time businesses spend on their tax affairs, freeing up more time for them to do what they care most about – being productive and growing.'

18thMar
News article

Bank of England raises interest rates for third month in a row

The Bank of England has raised interest rates for the third month in a row.

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The Bank of England has raised interest rates for the third month in a row.

The Bank also warned that the Ukraine conflict could see under-pressure households hit with double-digit inflation later this year.

Members of the Bank's Monetary Policy Committee (MPC) voted eight to one to increase rates from 0.5% to 0.75%. The move takes rates back to where they were before the pandemic struck.

Commenting on the rise, Alpesh Paleja, Lead Economist at the Confederation of British Industry (CBI), said: 'With ongoing conflict in Ukraine pushing global commodity prices higher and exacerbating supply chain disruption, the MPC are clearly making moves to counter growing inflation.

'But they will be walking a tightrope in the months ahead, having to both keep price pressures in-check and manage the impact of tighter monetary policy on economic growth – particularly against a background of rising living costs.'

17thMar
News article

BCC calls for Spring Statement to tackle cost of doing business crisis

The British Chambers of Commerce (BCC) has urged the Chancellor Rishi Sunak to take 'bold and decisive action' in his Spring Statement in order to tackle the cost of doing business crisis.

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The British Chambers of Commerce (BCC) has urged the Chancellor Rishi Sunak to take 'bold and decisive action' in his Spring Statement in order to tackle the cost of doing business crisis.

As global and domestic headwinds mount following the invasion of Ukraine, the BCC says Mr Sunak must act now to protect the UK from a renewed economic crisis. The call comes as businesses are increasingly reporting a crippling burden from a myriad of cost pressures, including rising raw material costs, soaring energy bills and other overheads.

Shevaun Haviland, Director General of the BCC, said: 'The Spring Statement is taking place against a backdrop of soaring uncertainty surrounding both the UK and global economy, so a business-as-usual approach from the Chancellor simply won't cut it.

'Business confidence is on the floor. Coming so soon after a COVID-induced squeeze on cashflow and investment plans, the cumulative effect of rising raw material costs, soaring energy bills and other overheads are causing many firms to take cost reduction measures. This is weighing down on their ability to invest, recruit and grow.'

16thMar
News article

FSB urges Chancellor to 'deliver on low tax pledge' at Spring Statement

The Federation of Small Businesses (FSB) has called on Chancellor Rishi Sunak to deliver on the government's low tax pledge at the Spring Statement on 23 March.

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The Federation of Small Businesses (FSB) has called on Chancellor Rishi Sunak to deliver on the government's low tax pledge at the Spring Statement on 23 March.

In its recently published Spring Statement submission, the business group recommended increasing the Employment Allowance to £5,000; increasing the rateable value ceiling for Small Business Rates Relief (SBRR) to £25,000; and simplifying the R&D tax credit system to make it 'more accessible for small businesses'.

The FSB also urged the Chancellor to deliver on pledges to end the UK's poor payment culture and allocate energy costs via the council tax system to micro businesses through the business rates system.

Martin McTague, National Chair of the FSB, said: 'The Chancellor has a choice: plough on with damaging tax hikes or take steps to protect the most fragile and empower small firms to deliver his 'culture of enterprise' vision.

'He rightly talks about the need to invest in capital, people and ideas. However, that investment cannot happen so long as surging operating costs are depleting cash reserves and disposable incomes.'

15thMar
News article

HMRC warns taxpayers not to share personal details online

HMRC has warned taxpayers to avoid sharing their personal information online in order to prevent their identities being used to claim self assessment refunds.

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HMRC has warned taxpayers to avoid sharing their personal information online in order to prevent their identities being used to claim self assessment refunds.

According to HMRC, criminals are attempting to obtain taxpayers’ Government Gateway log in details to register for income tax self assessment and submit bogus tax refund claims.

Taxpayers are reportedly being targeted on social media platforms by fraudsters requesting to ‘borrow’ their identities. The victims are offered a cut of the tax refund ‘risk-free’, HMRC said.

It has advised taxpayers to deal with HMRC through their tax adviser or directly in relation to self assessment refunds.

Simon Cubitt, Head of Cybercrime at HMRC, said: ‘People need to think extremely carefully before they involve themselves in an arrangement like this, because if something looks too good to be true, then it almost certainly is.

‘I urge anyone who may be aware of these dishonest attempts to recruit individuals into criminality to report it us by searching ‘report fraud HMRC’ on GOV.UK and completing our online form.’

14thMar
News article

UK economic growth to halve this year, warns BCC

UK economic growth is expected to halve this year amid soaring inflation, major tax rises, and global shocks including Russia's invasion of Ukraine, warns the British Chambers of Commerce (BCC).

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UK economic growth is expected to halve this year amid soaring inflation, major tax rises, and global shocks including Russia's invasion of Ukraine, warns the British Chambers of Commerce (BCC).

The BCC has downgraded its expectations for UK GDP growth in 2022 to 3.6% from 4.2% in its previous forecast in December 2021. This would be less than half the growth of 7.5% recorded last year.

It says business investment is forecast to grow at 3.5% in 2022, down from the previous forecast of 5.1%.

The BCC says that rising raw material costs, the increase in the energy price cap, the reversal of the hospitality VAT cut and upward pressure on energy and commodity prices from the impact of Russia's invasion of Ukraine will lift inflation.

The business group forecasts inflation reaching a peak of 8% in Q2 2022, the highest rate since July 1991. The BCC also projects that UK interest rates will double over the course of this year, from 0.5% to 1%.

Suren Thiru, Head of Economics at the BCC, said: 'Our latest outlook suggests a legacy of COVID and Brexit is an increasingly unbalanced economy with a growing reliance on household spending to drive growth. Such economic imbalances leave the UK more exposed to economic shocks and reduces our productive potential.'

11thMar
News article

Chancellor must make huge judgment call at Spring Statement, says IFS

Chancellor Rishi Sunak must make a huge judgement call on government spending and borrowing at this month's Spring Statement, the Institute for Fiscal Studies (IFS) said.

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Chancellor Rishi Sunak must make a huge judgement call on government spending and borrowing at this month's Spring Statement, the Institute for Fiscal Studies (IFS) said.

The Chancellor's Spring Statement, set to be delivered on 23 March, was not supposed to be a major fiscal event. However, the IFS says rapidly rising inflation and the onset of the conflict in Ukraine might force the Chancellor to produce more than just a new set of economic and fiscal forecasts.

Higher inflation will wipe out at least a quarter of the real terms increases to public service spending announced back in October, it added.

The IFS says that in terms of household budgets, just to provide the degree of protection against higher prices he intended back in February, Mr Sunak could need to find more than £12 billion on top of the £9 billion already committed.

Paul Johnson, Director of the IFS, said: 'At the Spring Statement Rishi Sunak has to make a huge judgment call. Will he do more to protect households from the effects of energy prices which have risen even further in the last two weeks?

'If he doesn't then many on moderate incomes will face the biggest hit to their living standards since at least the financial crisis. If he does, then there will be another big hit to the public finances.'

10thMar
News article

Student loan repayments to start at £25,000

The level at which students begin to pay back their loans will be lowered from £27,295 to £25,000.

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The level at which students begin to pay back their loans will be lowered from £27,295 to £25,000.

From September 2023, the interest rate on student loans will also be set to RPI+0%. Additionally, the length of time that students pay their loans back until they can be written off has been extended from 30 to 40 years.

University tuition fees have been capped at £9,250 for the next two years and will not rise with inflation.

The Department for Education (DoE) said that the changes would 'rebalance the burden of student loans more fairly between the student and the taxpayer and ensure that in future graduates don't pay back more than they borrowed in real terms'.

Michelle Donelan, Higher and Further Education Minister, said: 'We are delivering a fairer system for students, graduates, and taxpayers as well as future-proofing the student finance system. 'We are freezing tuition fees and slashing interest rates for new student loan borrowers, making sure that under these terms no one will pay back more than they have borrowed in real terms.'