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In this month’s e-News we consider what each party is offering for small businesses.

We firstly look at what the ICAEW (Institute of Chartered Accountants in England and Wales) consider priorities for the new government and then have a look at the key business proposals each major party is proposing in their manifesto.

We also report on the roll out of tax free childcare and the guidance available for parents on the choices and support available, the latest advisory fuel rates and labour market statistics.

Finally, with guidance on cyber security and the latest report from the Pensions Regulator there is lots to consider.

Article Index

  • Small Business Taskforce outlines priorities ahead of the General Election
  • What the manifestos promise for the self-employed
  • Tax-Free Childcare and childcare options
  • Advisory fuel rates for company cars
  • Guidance protects against ‘ransomware’ attacks
  • TPR name and shame those who fail to comply
  • Rising employment statistics

Small Business Taskforce outlines priorities ahead of the General Election

The Small Business Taskforce has outlined its priorities ahead of the General Election.

The Taskforce which is made up of 14 organisations, including the Institute of Chartered Accountants in England and Wales (ICAEW), Enterprise Nation and the Entrepreneurs Network, has set out six key recommendations in its election manifesto to help ‘build a positive and progressive business case for Britain’.

The Taskforce is recommending the next government should provide an environment which ‘champions the role of small businesses’ and creates a tax system that supports businesses of all sizes.

They also call for the next government to provide an advantageous pensions and benefits system, supply procurement opportunities that are beneficial to all and create a workforce that is equipped for enterprise.

Clive Lewis, Head of Enterprise at the ICAEW, commented:

‘Whatever the outcome on 8 June, the incoming government must provide a solid platform for small businesses to flourish and grow.’

‘Currently businesses are cautious about the future and are holding back on investment, therefore it’s vital that, in the run-up to the General Election, all political parties spell out how they plan to encourage businesses to invest in long-term growth.’

To read more of the Small Business Taskforce’s manifesto visit the following link.

Internet links: economia news Manifesto

What the manifestos promise for the self-employed

(As set out in www.simplybusiness.co.uk and The Guardian)

CONSERVATIVES

In their manifesto, the Conservatives say that they are “the party of enterprise and of the entrepreneur” and that they “understand that small businesses are the wellspring of growth.”

Tax

  • The Conservatives plan to reduce corporation tax to 17 per cent by 2020 (from its current level of 19 per cent).
  • They promise to “simplify the tax system” for self-employed people and small businesses.
  • They want to conduct a review of the business rates system, make sure that revaluations are conducted more frequently, and explore the introduction of self-assessment to the valuation process.

Funding

  • They say they’d help innovators and startups, by encouraging early stage investment and considering further incentives.

Public sector contracts

  • They say they’d ensure that 33 per cent of central government purchasing came from SMEs by the end of the parliament.

Late payments

  • They’d make sure that big contractors government worked with complied with the ‘Prompt Payment Code’ on their government contracts and in their work with others. Those who failed to do this would lose the right to bid for government contracts.

Employment law

  • The Conservatives say they’d continue to increase the minimum wage to 60 per cent of median earnings by 2020.
  • They want to give self-employed people and workers in the ‘gig economy’ better protection, but they’re waiting for Matthew Taylor’s report before deciding how to do this.

Tech companies

  • They say they’d “help digital businesses to scale up and grow” and ensure that consumers and businesses have access to digital infrastructure.

Brexit and international trade

  • They confirm that the UK will no longer be a member of the single market or the customs union, but they plan to negotiate a free trade agreement with the EU, and to form new trade agreements with non-EU countries.
  • The Conservatives want to “forge a new culture of exporting among UK businesses”.

Read the Conservative party’s manifesto.

LABOUR

In their manifesto, Labour claim to be the “party of small businesses”, and say that they “understand the challenges our smaller businesses face.” Here’s what their manifesto has to offer.

Tax

  • Labour plans to increase the main rate of corporation tax, reaching 26 per cent by 2020-21, but to reintroduce the ‘small profits rate’ for small businesses. This would apply to companies with annual profits below £300k and would be set at 20%, rising to 21% in 2020-21.
  • Labour wouldn’t require small businesses (those with a turnover of less than £85k) to submit quarterly tax returns, which is part of the incoming Making Tax Digital plans.
  • They promise a “package of reforms to business rates”, including raising the tax in line with CPI (consumer price index) rather than RPI (retail price index), exempting new investment in plant and machinery from valuations, and providing access to “a proper appeals process.”

Funding

  • They say they’d mandate the new National Investment Bank and regional development banks, which would identify where the needs of SMEs aren’t being met, and prioritise lending.

Late payments

  • Labour say they’d make sure that anyone bidding for a government contract pays its suppliers within 30 days.
  • They’d also develop a system of binding arbitration and fines for persistent late-payers for the public and private sectors.

Employment law

  • Labour promise to give all workers equal rights from day one, whether part-time or full-time, temporary or permanent.
  • They want to extend the rights of employees to all workers, including shared parental pay.
  • They say they’d ban zero hours contracts.
  • Labour want to raise the Minimum Wage to the level of the Living Wage (expected to be at least £10 per hour by 2020) for all workers aged 18 or over.
  • They also plan to clamp down on bogus self-employment, with the law assuming a worker is an employee unless the employer can prove otherwise.

Tech companies

  • They’d appoint a Digital Ambassador to promote Britain as an attractive place for investment, and provide support for start-ups to become world-class digital businesses.

Brexit and international trade

  • In negotiations, Labour say they’d “champion the export interests of SMEs, ensuring all new trade agreements include a commitment to support their market access needs.”

Read the Labour party’s manifesto.

 

LIBERAL DEMOCRATS

The Liberal Democrats say that “the role of entrepreneurs and small businesses in delivering a thriving economy is fundamental”.

Tax

  • They’d reverse the Conservative decision to cut corporation tax to 17 per cent.
  • They want to reform corporation tax so that the smallest businesses benefit, but the biggest multinationals can’t avoid paying their share. They say they’d take tough action against corporate tax evasion, setting a target for HMRC to reduce the tax gap.
  • The Lib Dems want to review business rates, prioritising the development of the digital economy and lessening the burden on smaller businesses. Business rates would be the priority for future business tax cuts.

Funding

  • The Liberal Democrats want to expand the activities of the state-owned British Business Bank, tackling the shortage of capital for growing firms.
  • They plan to create a new ‘start-up allowance’ to help in the first few weeks of setting up a business.
  • They also want to provide mentoring support so that fast-growing businesses can scale up.

Employment law

  • The Lib Dems are keen to modernise employment rights, thinking about the ‘gig economy’ in particular.
  • They want to end abuse of zero hours contracts, creating a formal right to request a fixed contract and considering the introduction of a right to make regular work patterns contractual after a certain period of time.

Tech companies

  • They want to double the number of SMEs participating in the digital economy by supporting ICT capital expenditure by businesses in non-digital sectors.
  • They want to create a network across the UK of technology company incubators.

Brexit and international trade

  • They believe that trade must be able to continue without customs controls at the border, and we should stay within the single market.

Read the Liberal Democrat party’s manifesto.

PLAID CYMRU

Plaid Cymru has launched a manifesto based around more devolution and a fight to protect funding and rights after Brexit, with its leader, Leanne Wood, saying only her party can protect Wales against an otherwise dominant Conservative government.

The 51-page manifesto, titled Action Plan 2017, calls for Wales to maintain free trading links with the rest of Europe after departure from the EU, and for guarantees over the £680m of annual funding a year from EU sources.

It also seeks a unilateral pledge on the rights of overseas Europeans living and working in Wales, and a proper post-Brexit deal for Welsh agriculture and industry.

In other areas the manifesto seeks more capital investment and better transport links, local powers in areas including benefits and taxation, a green energy programme and the scrapping of the Trident nuclear submarine replacement.

Read Plaid Cymru’s manifesto.

Tax-Free Childcare and childcare options

Tax-Free Childcare, the new government scheme to help working parents with the cost of childcare launched at the end of April and is being rolled out to parents, starting with those parents with the youngest children first.

For every £8 a parent pays in, the government will pay in an extra £2. Parents can receive up to £2,000 per child, per year, towards their childcare costs making a total amount of £10,000. Higher limits of £4,000 and £20,000 apply for disabled children.

To qualify for Tax-Free Childcare parents and partners in the household must generally meet a minimum income level of on average £120 a week and each earn less than £100,000 a year.

The scheme will be available for children up to the age of 12, or 17 for children with disabilities. All eligible parents will be able to join the scheme by the end of 2017. Those eligible will be able to apply for all their children at the same time although the government rollout will start with the youngest children first. Parents will need to open an online account, which they can use to pay for childcare from a registered provider.

For those employers who currently offer Employer Supported Childcare, usually in the form of childcare vouchers, these schemes can remain open to new entrants until April 2018. Existing members have the option to remain in their existing scheme or change over to Tax-Free childcare as their child becomes eligible. It is not possible to benefit from tax-free childcare and employer supported childcare at the same time.

A calculator for parents comparing the options and guidance on the other government provided free childcare available are available on GOV.UK.

Internet links: Childcare calculator Childcare choices

Advisory fuel rates for company cars

New company car advisory fuel rates have been published which took effect from 1 June 2017. The guidance states: ‘You can use the previous rates for up to one month from the date the new rates apply’. The rates only apply to employees using a company car.

The advisory fuel rates for journeys undertaken on or after 1 June 2017 are:

Engine size Petrol
1400cc or less 11p
1401cc – 2000cc 14p
Over 2000cc 21p
Engine size LPG
1400cc or less 7p
1401cc – 2000cc 9p
Over 2000cc 14p
Engine size Diesel
1600cc or less 9p
1601cc – 2000cc 11p
Over 2000cc 13p

The guidance states that the rates only apply when you either:

  • reimburse employees for business travel in their company cars
  • require employees to repay the cost of fuel used for private travel

You must not use these rates in any other circumstances.

If you would like to discuss your car policy, please contact us.

Internet link: GOV.UK AFR

Guidance protects against ‘ransomware’ attacks

The National Cyber Security Council (NCSC) has published guidance for small businesses about how they can prevent, detect and respond to ransomware attacks following the widespread ‘WannaCry’ ransomware attack in early May.

Further guidance has been produced by the Charity Commission for England and Wales for charity trustees on this issue.

Internet links: https://www.ncsc.gov.uk/guidance/ransomware-latest-ncsc-guidance

https://www.gov.uk/government/news/ransomware-threat-keep-your-charity-safe

TPR name and shame those who fail to comply

The latest Compliance and Enforcement Bulletin from the Pensions Regulator (TPR)  makes interesting reading as it sets out cases and the powers TPR have used relating to automatic enrolment and associated employer duties.

TPR are warning employers that ignoring TPR penalties could seriously damage a business’ reputation.

TPR are maintaining a tough approach towards those employers who try to get away with not giving their staff the pension that they are due. The latest development is to publish details of those who have paid their Escalating Penalty Notice (EPN) but remain non-compliant. We will also publish the details of those who failed to pay their EPN, and as a result have been made subject to a court order.

The details published will include the employer’s name, the penalty amount, and the first part of their postcode.

Internet links: TPR Bulletin EPN employer details

Rising employment statistics

The Office for National Statistics has published the latest employment statistics which reveal:

  • Estimates from the Labour Force Survey show that, between October to December 2016 and January to March 2017, the number of people in work increased, the number of unemployed people fell, and the number of people aged from 16 to 64 not working and not seeking or available to work (economically inactive) also fell.
  • There were 31.95 million people in work, 122,000 more than for October to December 2016 and 381,000 more than for a year earlier.
  • The employment rate (the proportion of people aged from 16 to 64 who were in work) was 74.8%, the highest since comparable records began in 1971.
  • There were 1.54 million unemployed people (people not in work but seeking and available to work), 53,000 fewer than for October to December 2016 and 152,000 fewer than for a year earlier.
  • The unemployment rate (the proportion of those in work plus those unemployed, that were unemployed) was 4.6%, down from 5.1% for a year earlier and the lowest since 1975.
  • There were 8.83 million people aged from 16 to 64 who were economically inactive (not working and not seeking or available to work), 40,000 fewer than for October to December 2016 and 82,000 fewer than for a year earlier.
  • The inactivity rate (the proportion of people aged from 16 to 64 who were economically inactive) was 21.5%, down from 21.8% for a year earlier and the joint lowest since comparable records began in 1971.
  • Latest estimates show that average weekly earnings for employees in Great Britain in nominal terms (that is, not adjusted for price inflation) increased by 2.4% including bonuses, and by 2.1% excluding bonuses, compared with a year earlier.
  • Latest estimates show that average weekly earnings for employees in Great Britain in real terms (that is, adjusted for price inflation) increased by 0.1% including bonuses, but fell by 0.2% excluding bonuses, compared with a year earlier.’

Responding to the latest data, Alpesh Paleja, CBI Principal Economist, said:

‘Rising employment continues to reinforce the importance of the UK’s flexible labour market.’

‘However, weakening productivity and slower pay growth, coupled with rising inflation, will continue to squeeze real household earnings.’

‘Therefore maintaining the UK’s reputation as a great place to do business, for example by increasing R&D spend to 3% of GDP by 2025, will help boost the UK’s productivity. This is the only sustainable route to higher wages, and better living standards.’

Internet links: ONS statistics CBI news

This information is subject to change and is not professional advice. Refer to our disclaimer for more details.