Welcome to the November 2016 Newsletter from Reynolds and Co
With the Autumn Statement fast approaching, Chancellor Philip Hammond has begun to outline his priorities for the UK economy. These include plans to increase spending on infrastructure, potential changes to the way in which tax policy is made in the UK, and a significant shift in economic policy, moving away from quantitative easing.
Meanwhile, a report by the Public Accounts Committee has suggested that the Government's Better Regulation Executive has made 'limited progress' in reducing the red tape burden for businesses.
Following the Chancellor's speech on Wednesday 23 November, we will be providing coverage of the announcements on our website. We will also keep you up to date on the latest changes in our special Autumn Statement Newsletter.
Chancellor sets out his stall as the Autumn Statement approaches
Chancellor Philip Hammond is set to use the upcoming Autumn Statement to outline plans to increase infrastructure spending in an effort to boost the UK economy following the Brexit vote.
Renouncing the fiscal target set by his predecessor, George Osborne, of restoring public finances to a surplus by 2020, the new Chancellor stated that 'now is a good time to invest in genuinely productivity-enhancing infrastructure, and to take advantage of low borrowing costs and our ability to borrow'.
However, he insisted that his Autumn Statement plans would not constitute a 'fiscal splurge'.
The Chancellor's pledge to increase infrastructure spending will undoubtedly be welcomed by the British Chambers of Commerce (BCC), which in its Autumn Statement submission urged the Chancellor to 'boost business investment', improve infrastructure and demonstrate 'continued support for business'.
The business group has also called on the Chancellor to further reform the UK's business rates system, improve the implementation of the Apprenticeship Levy and invest in 'quick-start' infrastructure projects, such as housing and broadband.
It also recommends that the Government should not introduce new input taxes or other costs for businesses 'for the remainder of this Parliament', and that the Annual Investment Allowance be temporarily widened to allow for business premises improvements.
Adam Marshall, Director General of the BCC, commented: 'The Autumn Statement gives the Government a great chance to set the tone for its relationship with British businesses by pulling out all the stops to support investment, infrastructure improvements and business confidence.
'Plans to lower business costs and support investment would help firms take risks and seize opportunities in spite of the ongoing uncertainty surrounding the Brexit process.
'Westminster must do everything in its gift to improve the business environment - and firms will repay that backing with investment, hiring, training and export growth.'
To read more on this issue, please visit the Hot Topics section of our website.
'Limited progress has been made' in reducing cost of regulation
A report published by the Public Accounts Committee (PAC) suggests that the Government has made 'limited progress' in reducing the cost of regulation for UK businesses
The Government had previously pledged to reduce the total cost of red tape by £10 billion between 2015 and 2020.
However, in its report, the PAC reveals that less than £1 billion has been saved so far. It also suggests that the Government has included the compulsory 5p plastic bag charge as a 'saving' for retailers due to the additional revenue it generates.
Meanwhile, other significant costs, such as those generated by the National Living Wage, have been excluded from the target.
The report also claims that Government departments 'do not know how much it costs the business community to comply with existing regulations', and that these departments do not act to monitor and evaluate the effects of their regulatory decisions.
Following its findings, the PAC has put forward a number of recommendations to the Better Regulation Executive (BRE), the Government unit set up to cut the cost of red tape.
The PAC is urging the BRE to 'consider whether it is appropriate to include regulations imposed on business as contributing towards the target', and recommends that it sets out interim targets for savings to be achieved by the end of 2016.
Meg Hillier MP, Chair of the PAC, stated: 'A policy of reducing regulatory costs has the potential to deliver significant benefits but the Government has its work cut out if these are to be realised.'
Commenting on the report, Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), said: 'FSB members tell us regulation is the number one issue they want this Government to focus on. As we face the challenges and opportunities of Brexit, it is vital that we bolster business productivity and remove burdensome red tape.
'We urge the Government to act on this report so small businesses don't feel so overwhelmed by regulation.'
ESSENTIAL TAX DATES FOR NOVEMBER
£100 penalty if 2016 paper Tax Return not yet filed. Additional penalties may apply for further delay (no penalties if online return filed by 31 January 2017).
Submission date of P46 (Car) for quarter to 5 October.
QUOTE OF THE MONTH
'Next year's review of automatic enrolment must be used by the Government to provide a long-term plan for how workplace pensions will provide a decent retirement income for low and middle-earners.'
WEBSITE OF THE MONTH
Provides up-to-date information on a range of issues affecting small businesses.
ON OUR WEBSITE
Useful information for individuals
For a comprehensive bank of guides covering inheritance tax planning, tax-efficient investments and much more, please visit the Your Money area of our website.
A wealth of resources for businesses
With topics ranging from national insurance to forming a limited company, the Your Business section of our site is a hub of useful information for businesses.
In the News
- Treasury abandons plans to allow pensioners to sell annuities
- The Treasury has announced that it is shelving George Osborne’s plan to allow pensioners to sell their annuities for cash.
- Self-employed 'earning less than they did 20 years ago', report suggests
- Average wages for self-employed individuals are lower than they were in 1994/95, a report by the Resolution Foundation has revealed.
- Stress 'top health and safety concern in UK workplaces', TUC suggests
- A recent survey has revealed that stress is now the biggest health and safety concern within UK workplaces.
- Small businesses 'need help' with minimum wage increase, FSB claims
- The Federation of Small Businesses has called on the Government to provide more support to small businesses, to help them cope with the latest increase in the National Minimum Wage.
- Businesses expect significant economic growth over autumn, CBI suggests
- Firms expect a surge in output in the final quarter of this year, according to a survey by the Confederation of British Industry.