Small business owners, like everyone else in the country, want to see UK plc back on its feet but they know that they’re in for a tough, long haul. Set against a national backdrop of spending cuts, inflation set to rise and slower growth than predicted, most of them are tired of the rhetoric and want to see some concrete measures to help them flourish.
The majority of small business owners want a reduction in regulations, which they feel stifle their growth. They also want access to more lending and they would like to see more funds to finance the training of young people. And, of course, they want a decrease in taxation.
Well, maybe they will get some of their wishes coming true as, according to the leaks, the Chancellor will today present a ‘growth review’, which aims to deliver the sort of changes to business regulation and taxation, which will spur expansion in the private sector.
However, business experts are somewhat sceptical about the delivery of real policies to help small business owners lead the country’s growth. On the one hand the Government talks about beneficial changes in taxation and on the other, National Insurance Contributions are set to increase. And if business growth is top of the agenda, then why will we be faced with a massive bill to implement new employment legislation?
Let’s hope that the measures outlined later today really will offer more answers, fewer promises and a little more consistent action.
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( 3.1 / 157 )The UK continues to struggle out of the deepest recession since the 1930s. With inflation and VAT rises being felt, has the recovery been more painful than the recession? A new report suggests so, after claiming that UK households are facing their biggest drop in living standards for 30 years.
People’s earnings are not keeping up with the rise of inflation, leaving the UK to feel the pinch. With earnings becoming more stagnated, the report by the Institute for Fiscal Studies (IFS) said that households are more likely to be 6 percent worse off than they would have been if the recession had not stopped incomes from rising.
The report believes that the average household income will have fallen by 1.6 percent over the past three years. The IFS measured the household income, ahead of tomorrow’s budget, by looking at what was coming in after inflation was taken into account.
The fall in living standards is also believed to be caused by people receiving less interest from their savings, lower employment levels and tax and benefit changes, the report said.
IFS said the drop in living standards is the most dramatic fall since the 1980s and marks the first drop in the average household’s income over any three year period since the early 1990s.
At a time when the UK is struggling to recover, it means workers feel they are in no position to demand pay rises. The weak job market will also deter workers from making financial demands. Until inflation and interest levels are back to their target levels, the UK will continue to feel an even harder pinch.
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( 3 / 168 )This weeks budget is being promoted as a “budget for growth” by George Osborne, declaring that he had already “asked what is required” of the British public to ensure economic growth in last year’s budget.
The chancellor has promised that there will be no further tax increases or spending cuts and his focus will now be on the UK’s economic recovery.
Although the sharp rise in VAT at the beginning of the year will continue to be felt and an increase in National Insurance will still happen next month, however, the overall budget will not raise any extra money.
So the public don’t need to worry about anymore tax increases or cuts, but what about the current rate of unemployment? What will George Osbourne do to create jobs?
The chancellor stated in an interview that there will be a rise in apprenticeships and work experience schemes. He has obviously taken on board last week’s eye-opening unemployment statistics from the Office for National Statistics, which revealed unemployment in the UK was at its highest since 1994 - being particularly bad in 16 – 24-year-olds.
The increase to the price of fuel is set to continue to be a burden for businesses. The Chancellor said he was “looking very carefully at that” to see if he can afford to do something about the surging prices.
It is a comfort to hear that the UK should not have to brace itself for anymore cuts or increases in tax. However, the cuts and increases that have already been implemented will continue to be felt. Economic growth should be the main focus on Wednesday and it is vital the Chancellor puts in place strong actions, and not just words, to get the UK on the road to recovery.
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( 3 / 166 )Regulatory burden coming from Whitehall may become a thing of the past for small businesses due to a proposal by Business Secretary Vince Cable to impose a three-year moratorium on new regulation for small businesses.
The new government plans to cut red tape and boost the economy will be unveiled in a speech today by business minister Mark Prisk at the Federation of Small Businesses annual conference in Liverpool. Vince Cable was due to make the speech but he has been called to an emergency cabinet meeting over the crisis in Libya.
Vince Cable is expected to revoke regulations that give parents of children up to the age of 17 the right to flexible hours. He is also expected to abolish workers’ rights to request leave for training at companies with fewer than 250 staff.
The power, however, will mostly be in the hands of the companies themselves as they will be invited to pick the rules that cause businesses the most problems. Vince Cable said the least popular regulations would then be put to a Reducing Regulation Committee that would be chaired by the Business Secretary within “months.”
During today’s conference, a box full of rules and regulations that cost businesses the most time and money will be presented to Mark Prisk.
Small and medium-sized businesses account for almost 60% of jobs in the UK and for half the country's economic output. Therefore, it is time that the government make changes to the many regulations that SMEs face. However, it will remain to be seen whether a three-year moratorium will have a big enough effect on business growth.
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( 3 / 8 )Stronger action will be taken on tax cheats who MPs believe are not being punished enough after making deliberate errors on their tax returns.
HM Revenue and Customs has devised a tougher penalty regime that will replace the existing rules which allow many people who enter inaccurate tax returns to escape without receiving a penalty.
The new regime will focus on setting tougher minimum penalty rates regarding deliberate errors found in tax returns. If errors are discovered by HMRC inquiries, penalties will be as much as 100 percent of the tax owed.
MPs have called for a tougher penalty regime following a report published in the Commons Public Accounts Committee, which revealed staggering evidence of tax cheats receiving considerably low penalties, and some receive none at all.
The report said over a quarter of civil investigations into fraud resulted in a penalty of less than 10 percent of the tax due. Concern in MPs was raised when it showed that 14 percent of cases received no penalty at all.
The HMRC said that a new penalty regime has now come to force for tax returns relating to 2008-09 onwards.
It is good to see that tougher penalties are being put in place. For too long now, people have been too confident in making deliberate errors in their tax returns, knowing that they will ‘get away with it’.
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