Category Archives: Business News

Auto-enrolment to be expanded to younger workers, as minimum contributions rise

The majority of businesses across the UK are making preparations to increase their minimum workplace pension contributions, having successfully enrolled more than 8.5 million staff into schemes.

Auto-enrolment minimum contributions were due to rise in October 2017 under the original plans and then again in October 2018, but the Government took the decision to push the date back six months.

This means that the first increase will now take place on 6 April 2018 and will see total contributions increase from two per cent of qualifying earnings to five per cent of qualifying earnings, of which two per cent must be paid by the employer.

Then on 6 April 2019, the rate of contribution will rise again to a total of eight per cent of qualifying earnings, of which three per cent must be paid by the employer.

The increase in minimum contributions comes as the Government confirms that it will lower the starting age for auto-enrolment on workplace pension savings schemes from the current age of 22, down to 18.

It is believed that the move will introduce more than 900,000 young people into the workplace pension system, allowing these workers to save an additional £800 million.

Work and Pensions Secretary David Gauke told the BBC’s Andrew Marr Show: “We believe that what we’ve seen over the last few years since auto-enrolment came into place in 2012 is much greater saving for pensions.

“After decades of declines in workplace pension saving we are now seeing increases. We want to extend that benefit to people under the age of 22. At the moment the starting point is 22, we’re now lowering that to 18.”

While many workers may welcome these changes, some employers may look at them as yet more of a burden on their limited time and resources. This change will also need to be implemented into their existing payroll system if it is introduced.

LINK: Pension Contributions Rise

Businesses experiencing “live cyber attacks” urged to contact new 24-hour helpline

Police crime watchdog Action Fraud has launched a new 24-hour cyber attack helpline to assist businesses as and when they experience hacks and data breaches.

The new service, which encourages businesses to seek on-the-spot advice as soon as they spot the signs of a “live cyber attack,” has been launched following the publication of worrying new research.

According to official data from the Department for Culture, Media and Sport’s (DCMS) Cyber Security Breaches Survey 2017, almost half (46 per cent) of all UK businesses experienced at least one cyber attack during the 2016/17 financial year.

Action Fraud says that such attacks have had dire consequences for many unfortunate and ill-prepared small and medium-sized enterprises (SMEs), such as:

  • The permanent or temporary loss of customer details.
  • Website failures.
  • Loss of earnings.
  • Reputational damage.

In a bid to quite literally stop cyber attackers in their tracks, the UK’s fraud watchdog has now launched a 24-hour helpline, which is backed by specialist advisors trained in helping businesses, charities and other organisations to put an end to a cyber attack before it can cause any real damage.

Action Fraud describes a “live attack” as an attack “that is ongoing and is still affecting a business’ systems and ability to function.”

It says that all calls will be logged and reported to the National Fraud Intelligence Bureau (NFIB), which has the capacity to assess “whether there are any websites, bank accounts or phone numbers that can be closed down” as the attack is taking place.

The NFIB will “review the report and conduct a range of enquiries in order to see if there are any other connected reports or links to known criminals,” it adds.

“Live cyber reports are sent to the relevant law enforcement agency for investigation within the UK in order to get the best response; this can be a local police force or the National Cyber Crime Unit (NCCU), which forms part of the National Crime Agency (NCA).

“There may be ways for law enforcement to take action immediately,” it says.

Further information about the new helpline can be accessed here.

Moore Thompson are advising our clients to be extra cautious, as cyber attacks targeting SMEs appear to be on the rise. Always ensure that effective virus protection software is installed on any company computers, and that data and passwords are adequately protected. If in doubt, contact Action Fraud immediately.

SMEs risk losing out on Christmas income totalling £2bn if they don’t accept cards

A new study has revealed that almost half of all shoppers will not spend money with a business this Christmas if it doesn’t provide facilities to pay by card.

A study, commissioned by card machine provider Paymentsense, has found that 45 per cent of UK shoppers walk out of cash-only smaller retailers and independent outlets because they cannot pay by card, while a quarter of customers are also unlikely to return to a business if it did not take cards on a former visit.

More than 1,000 consumers took part in the research, which also revealed that shoppers use their cards to spend just under £135 a month at smaller retailers, independent restaurants and cafes. It also found that 80 per cent of those surveyed owned a contactless card.

By extrapolating the data, the study suggests that more than £2 billion of consumer spending could be missed out on by small businesses which cannot take card payments in the month running up to Christmas.

Guy Moreve, Head of Marketing at Paymentsense, said: “Contactless card payment is fast becoming the norm, with our research showing that most consumers now use credit and debit cards. Shoppers now expect to use them almost everywhere – either in a traditional or contactless manner.

“As well as the significant revenue loss, our study suggests that smaller retailers and cafes who don’t yet take card or contactless payments could permanently lose every fourth customer, which would be a particularly difficult blow at this busy time of year.”

LINK: Cash-only SMEs risk Christmas losses worth a total of £2bn

Business rates to switch from RPI to CPI, saving SMEs billions of pounds

Businesses across the UK have welcomed the Chancellor’s decision to bring forward plans changing the way business rates are set by two years.

In the Autumn Budget, Philip Hammond announced that from April 2018 business rates would rise in line with the Consumer Price Index (CPI) measure of inflation, not the Retail Price Index (RPI).

This move will help around 5.5 million small businesses to save up to £2.3 billion over the next five years, according to the Chancellor.

Business rates were due to go up next year in line with September’s RPI of 3.9 per cent, but will instead stay in line with CPI that was three per cent during the same month.

Helen Dickinson, Chief Executive of the British Retail Consortium, which campaigned for the switch alongside the British Chamber of Commerce, said: “It’s clear that the Chancellor has listened to the retail industry and the growing chorus from across business and commercial life who have spoken up in favour of action to mitigate rising rates bills.

“Crucially, this relief will unleash investment that retailers want to direct towards the needs of their customers.”

Within the Budget, Mr Hammond also promised a change to the law that has led to companies receiving much higher rates bills if their offices were in communal blocks or spread over several floors.

This move comes after the Supreme Court ruled that a single business space meant that small businesses using multiple spaces in a building had been billed for rates as if they were separate premises, but should not have been.

The Chancellor has also promised to backdate the law to compensate firms for the additional charges.

In April this year, many businesses saw a rise in their business rates, some experiencing more significant increases than others. This rise reflected the first adjustment of rateable property values for seven years.

Those hardest hit were retailers and offices in city centres where property prices have risen the most.

To prevent a similar drastic rise in future, the Government has now committed itself to revaluations on a three year basis, instead of a five year basis as previously proposed.

LINK: Autumn Budget: Business Rates

Chasing outstanding debts from an individual or sole trader

Outstanding payments can be a major headache for SMEs as they can have a significant effect on cashflow and seeking payment can take up time that would be better spent on running the business.

In fact, according to Bacs, the not-for-profit entity that runs the eponymous payment service, late payments cost UK SMEs more than £2 billion each year.

This means that recent changes to the procedures for pursuing a debt owed by an individual or a sole trader before taking court action are likely to be of widespread interest.

Indeed, it is a good idea for all business owners to be familiar with the procedures, should an issue arise.

The new Pre-Action Protocol for Debt Claims came into force on 1 October 2017.

It applies to all businesses, including sole traders, who are seeking payment of a debt from an individual, again including sole traders.

It only applies to business cases where the debtor is a sole trader. It does not apply where other Pre-Action Protocols are in effect, such as in relation to construction claims.

No Pre-Action Protocol previously existed in respect of Debt Claims, but businesses were expected to comply with the Practice Direction for Pre-Action Conduct.

The new Pre-Action Protocol sets out specific steps that businesses need to follow and details the required content of the letters that must be sent to the debtor prior to court action.

It also contains an information sheet and reply form that should be sent to the debtor.

The Protocol is intended to resolve more cases before court action is necessary.

Link: The Pre-Action Protocol for Debt Claims

Autumn Budget 2017

When Chancellor Philip Hammond stepped up to the despatch box, he would have been acutely aware of the pressure he was under.

Some 24 hours before the Chancellor was due to open his famous red box, the Office for National Statistics (ONS) confirmed a wider deficit than anticipated for October.

Ahead of the Budget, business leaders had urged Mr Hammond to get to grips with Brexit headwinds and the UK’s productivity problem, while his party’s own MPs were demanding action on issues such as housing and social care – which many believed had played a major part in the shock loss of the Government’s majority in June.

There was personal pressure too. Some eight months ago, the Chancellor’s previous Budget unravelled at alarming speed (unpopular plans to increase National Insurance contributions for some self-employed workers were dropped within seven days). He could ill afford another flagship policy disintegrating.

All things considered, Mr Hammond had the difficult task of delivering a financial statement which was both radical enough to reset the political agenda and robust enough to avoid a repeat of the spring’s hasty u-turn. Could the Chancellor – whose fondness for figures has earned him the nickname “Spreadsheet Phil” – deliver?

Economic overview:

Opening his address to MPs, Mr Hammond argued that the UK economy continues to “confound those who talk it down” and said that he was determined to invest in technological advances and seize the opportunities on offer.

He acknowledged that ongoing negotiations with the EU were at a crucial stage and with this in mind he would put aside an additional £3billion for Brexit preparations over the course of the next two years. He assured the House that the Treasury was drawing up plans for every possible outcome.

Outlining forecasts by the Office for Budget Responsibility (OBR), Mr Hammond said that the organisation was predicting that another 600,000 people would be in work by the 2020s.

Worryingly, the nation’s productivity has not improved and the predictions for growth have been cut substantially. The OBR now projects growth of 1.5 per cent this year (downgraded from two per cent in March). The forecast for next year is 1.4 per cent, and 1.3 per cent for both 2019 and 2020.

There was better news on borrowing, with Mr Hammond confirming that the forecast for this year is £49.9billion (£8.4billion less than had been projected in the spring).

And as regards the deficit, he said that the OBR figures suggested that the Government was on track to meet its target of reducing the deficit to below two per cent of GDP by 2020-21.


Business and enterprise:

Ahead of the speech there had been no small amount of speculation that the VAT threshold for businesses was to be lowered.

But the Chancellor confirmed that the registration threshold will in fact remain at its current level (£85,000) for the next two years, shying away from a contentious change.

Mr Hammond did hint that he would be considering some form of reform and said he would hold a consultation as to whether the system could be altered to “better incentivise growth”.

In relation to business rates, Mr Hammond said he had listened to concerns from business leaders. With this in mind, he has decided to bring forward the switch from the Retail Price Index (RPI) to the Consumer Prices Index (CPI) by two years. The change will now take effect in April 2018 and is expected to be worth £2.3billion to businesses over the next five years. In addition, the discount for pubs (rateable value less than £100,000) is to be extended to March 2019.

In another boost for businesses, Mr Hammond announced that he would be allocating an additional £2.3billion for investment in research and development (R&D). The main R&D tax credit will be increased to 12 per cent.

These measures were described as “the first strides towards the ambition of our industrial strategy to drive up R&D investment across the economy to 2.4 per cent of GDP.”

Amid uncertainty over the impact of Brexit, the Chancellor also confirmed that the Government would be prepared to replace money from the European Investment Fund if necessary.


Transport and infrastructure:

Mr Hammond said the Government was committed to supporting electric vehicles. Among the measures announced by the Chancellor were a £400million charging infrastructure fund.

As far as diesel cars were concerned, the Chancellor confirmed that vehicle excise duty for new vehicles that don’t meet the latest standards will increase from April 2018. The money raised will be invested in a £220million clean air fund.

£30million will be made available to enhance digital connectivity on the trans-Pennine route and councils will be able to stake a claim to £1billion for high-investment projects.

A new rail card for commuters aged 26 to 30 will enable around 4.5million travellers to get a third off rail fares.


Personal tax:

To cheers from his own benches, Mr Hammond confirmed that Stamp Duty would immediately be abolished for first-time buyers for homes worth up to £300,000 (and on the first £300,000 of properties up to £500,000). There are hopes this will stimulate a slowing property market.

There was good news for the majority of air passengers, with the announcement that from April there would be a freeze on short-haul air passenger duty and long-haul duty for those in economy. The measures will be funded by increasing taxes on private jets.

The threshold for the basic rate of income tax will rise to £11,850 in April 2018, with the higher rate threshold to climb to £46,350.

An increase to the National Living Wage, set to take effect in April, was also confirmed. It will rise from £7.50 an hour to £7.83.

Duties on beer, wine, cider and spirits will be frozen, although tobacco tax will continue to rise at inflation plus two per cent.


Public spending:

More money is to be made available to the devolved administrations (£2billion for Scotland, £1.2billion for Wales and £650million for Northern Ireland). As had been trailed beforehand it was confirmed that both Police Scotland and the Scottish Fire Service would be made exempt from VAT going forward.

Facing increasing demands to address the growing strain on the health service, Mr Hammond outlined plans for an extra £10billion in capital investment over the course of this Parliament. There was also a commitment to make additional money available to improve pay levels for NHS workers.


Welfare

The introduction of Universal Credit has come in for considerable criticism in recent weeks, with many opposition politicians urging the Government to pause roll-out of the changes.

Mr Hammond acknowledged that many Britons were facing a squeeze on their finances and, in an effort to address the controversy, confirmed that £1.5billion would be spent on efforts to make the system more generous.


Housing:

The Stamp Duty announcement has stolen the headlines, but the Chancellor announced a number of measures apparently designed to show he was taking problems facing the property market seriously.

The Chancellor admitted that young people were concerned about their prospects. While he said there was no “magic bullet” to fixing some of the problems, Mr Hammond gave a commitment that £44billion would be made available over the next five years to address some of the major problems.

It was also announced that councils will be given powers to charge a 100 per cent premium on council tax on empty properties. This is something which a number of local authorities have been lobbying for.


Tax evasion, avoidance and aggressive tax planning:

Hard on the heels of the Paradise Papers controversy, the Chancellor said that HM Revenue & Customs (HMRC) would redouble its efforts to tackle offshore tax avoidance. This strategy is calculated to raise £200million a year.


Summary:

Ahead of any Budget, the media often speculate about whether the Chancellor will pull “a rabbit from the hat”; announcing an audacious policy decided to win favour with voters. The Stamp Duty changes certainly fit the bill and are likely to dominate the headlines in the days ahead.

As far as businesses are concerned, there will no doubt be relief that the changes to the VAT threshold which had been rumoured in advance of the speech failed to materialise.

Critics may say that the Budget otherwise erred on the side of caution, with an emphasis on prudence over particularly radical announcements.

And the Treasury will no doubt be mindful that the OBR forecasts, which suggest the economy is rather weaker than was thought back in March, could mean that challenging times lie ahead.


View official documents and full Statement

Cybersecurity failings are rife amongst UK SMEs

UK-based SMEs are not doing enough to ensure the data they hold is secure, it has been reported.

Findings from a newly-published report show that more than two out of three SMEs considered that there was room for improvement in protecting their business data, while four out of 10 questioned said they did not have a cybersecurity policy in place.

The figures were published with just six months remaining until the General Data Protection Regulation (GDPR) comes into force in May 2018.

GDPR sets tough new standards for organisations’ data protection procedures, with steep penalties for those found to be non-compliant or guilty of a breach.

A key requirement of GDPR is that businesses which hold sensitive data on a large scale will need to appoint a data protection officer. At the moment, 84 per cent of businesses questioned said they had a dedicated employee responsible for IT and cybersecurity.

Individuals will receive a number of new rights under the GDPR – which will also strengthen some of the existing rights offered under the Data Protection Act.

According to the Information Commissioner’s Office (ICO), once the new legislation takes effect, individuals will have the following rights:

  • The right to be informed
  • The right of access
  • The right to rectification
  • The right to erasure
  • The right to restrict processing
  • The right to data portability
  • The right to object
  • Rights in relation to automated decision making and profiling

Whilst many of the principles from the DPA will remain, the GDPR will bring with it several new concepts and approaches, which have been described as a “game changer for everyone”. 

Businesses in particular will be adversely affected – as many will need to implement organisation-wide changes to ensure that any personal data is processed in compliance with the GDPR’s requirements.

One notable change is that companies that currently rely on ‘consent’ as a legal basis for processing personal data will need to assess the consents that they currently hold and the mechanisms through which such consents are provided in future. This is because ‘implied consent’ will no longer be deemed valid under the GDPR.

It is crucially important that businesses ensure they are fully compliant with the new regime, as enforcement powers will also increase under the GDPR – meaning that non-compliance may result in harsher ICO investigations than was previously the case.

The ICO has published full guidance to the GDPR on its website here.   

Link: Overview of the GDPR

Link: UK SMEs are negligent – and complacent – when it comes to cybersecurity

Deadline to comply with new trusts rules extended until 2018

The deadline to register new trusts and estates under new rules has been extended until the start of 2018, following complaints that the original deadline was too ambitious, potentially leaving many unable to comply.

Under the new rules, trusts and estates that have a tax liability are required to register with the HMRC trusts and estates online service by 5 October in the tax year after they were set up.

Following complaints, the deadline has now been extended by two months, meaning that new trusts and estates can now be registered with the Trusts Registration Service (TRS) up until 5 January 2018, without incurring a penalty.

The Trusts Register was launched in July this year in order to provide a dedicated online portal for trustees, representatives and agents to update their records. The service replaces the paper 41G (Trust) form and ad-hoc processes.

The deadline had already been extended once earlier this year until December 2017, but HMRC said: “Following feedback from agents and stakeholders we are pleased to announce the Trust Registration Service (TRS) deadline for new trusts has been extended further from 5 October 2017 to 5 January 2018.”

The deadline for existing trusts to register on the TRS will remain unchanged at 31 January 2018.

Link: Trusts registration service – registration deadline for new trusts extended

Britain’s small business economy is expected to grow nearly a fifth by 2025

The UK’s small business economy is expected to grow by nearly a fifth in total by 2025, but some areas are predicted to grow much quicker than others.

The predictions result from a survey by Hampshire Bank Trust and the Centre for Economics and Business Research (CEBR).

The CEBR research predicts that alongside the growth in the value of SMEs to the economy, the total number of SMEs in the UK will pass the one million mark in the coming years, with 1,022,200 predicted to be in business in the UK in 2025.

Meanwhile, it is predicted that SMEs will provide an additional 800,000 jobs in the UK economy over this period.

However, the research does not predict a uniform level of growth across the country. While Manchester and Leeds-based SMEs are predicted to grow their SME economies by 26 per cent from 2016 to 2025, another northern city, Sheffield, is predicted to see SME growth of just 14 per cent over the same period.

The London-based SME economy is by far the largest in the UK and already accounts for £152 billion of the UK’s £202 billion SME economy. It is expected to account for nearly £30 billion of the predicted £39 billion growth in the sector by 2025.

The research also quizzed SMEs on their expectations about the likely impact of Brexit, with more than one in three saying their growth expectations were lower than they were before the referendum. This compares to just one in ten that said the opposite.

Link: Britain’s small business economy predicted to be worth £241bn by 2025

Inaugural Autumn Budget date announced

The Chancellor, Philip Hammond, has announced that the first Autumn Budget to take place since the set-piece statement’s move to the end of the year will be on Wednesday 22 November 2017.

Mr Hammond announced at the Autumn Statement in 2016 that there would no longer be two major fiscal statements each year. This means that the Autumn Statement has been replaced by the Autumn Budget, and there will no longer be a Spring Budget.

While there will be a Spring Statement from 2018, this will only involve a response to the Office for Budget Responsibility’s (OBR) forecasts for the economy, and will not be a major fiscal event.

Link: Autumn Budget 2017 date confirmed