Access to single market will be ‘number one priority’ in Brexit negotiations

Business Secretary Sajid Javid has insisted that retaining the UK’s access to the single market will be the ‘number one priority’ during Brexit negotiations with the European Union.

Mr Javid met with more than 20 representatives of business groups and key industries, including leaders from the Confederation of British Industry (CBI), Institute of Directors (IoD) and the British Chambers of Commerce (BCC). Following the meeting, he told reporters that the need to secure continued access to the single market was the biggest issue raised, and said: ‘While I’m not in a position to make promises, I told everyone that my number one priority will be just that’.

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He also said that the Business Department had a single named contact for more than 80 of Britain’s top inward investors and exporters, and that the department would be contacting those companies in the coming weeks.

Meanwhile, a survey by the IoD of 1,000 of its members found that a quarter planned to freeze recruitment following the referendum result, with 5% planning to cut jobs. Almost two-thirds said the vote was negative for their business.

Simon Walker, director general of the IoD, told the BBC: ‘Business leaders are very, very concerned. Nearly half of them expect the other member states to punish Britain.

‘There’s no point crying over spilt milk. Over time we must not lose faith in business to recover, but it was always going to be a shock with a loss of jobs and economic growth for quite a long time and it looks as though it will permeate through the whole of British business.’

However, the survey found that almost a third of IoD members intend to keep hiring at the same pace.

State Pension warning to be issued to thousands

The Government has stated that it will send letters to more than 100,000 individuals who may potentially miss out on the new State Pension due to their lack of national insurance contributions (NICs).

A rule change came into effect during April requiring savers to have accrued a minimum of ten years of NICs in order for them to be eligible for the Government’s new State Pension.

A Work and Pensions Select Committee report has claimed that many individuals would have been oblivious to this rule change, and may, in fact, not be entitled to receive a weekly pension payment.

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Only those who have made NICs for 35 years will be entitled to the full weekly amount of £155.65. Savers with NICs of between ten and 35 years will be eligible to receive a proportion of this amount.

However, individuals who have made fewer than ten years of NICs will not be entitled to receive any amount.

The Department for Work and Pensions (DWP) has stated that it intends to write to individuals most at risk before the end of 2016.

From 6 April 2016, eligible retirees have been able to claim the new State Pension if:

  • they are a man born on or after 6 April 1951
  • they are a woman born on or after 6 April 1953.

From 2020, the State Pension age (SPA) will be equalised for men and women, and will be set at 66.

Savers who reached SPA before the introduction of the new State Pension had been able to increase their additional State Pension through the payment of Class 3A voluntary NICs.

No change to tax rules following EU referendum result, HMRC states

HM Revenue & Customs (HMRC) has stressed that tax laws have not changed following the UK’s vote to leave the EU.

The result has generated much economic and financial uncertainty. However, a recorded message on the HMRC helpline informs callers that tax rules and regulations remain the same.

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The message states: ‘There are no changes to any taxes, tax credits, child benefits or other HMRC services as a result of the vote on the EU referendum.

‘Everything is continuing as normal. No laws have changed. There is no need to contact HMRC as a result of the EU referendum.’

The message is intended to deter individuals from calling HMRC in relation to the vote to leave.

Plans had been made prior to the vote to add the recorded message to the helpline: the tax authority stressed that this had not been added as a result of taxpayer calls.

Some significant changes to financial regulations are expected to come into effect in the future. Whatever these changes may involve, we will keep you up-to-date on any measures that could affect you and your business, and will continue to assist with your tax and financial planning requirements, both now and in the future. Please contact us for advice.

Chancellor: no emergency Budget following Brexit vote

Chancellor George Osborne has suggested that an immediate emergency Budget will not take place following the UK’s vote to leave the European Union (EU).

In his first speech after the referendum result, the Chancellor said the economy was ‘going to have to adjust to the new situation we find ourselves in’, but he added that it was ‘perfectly sensible to wait for a new Prime Minister’ and the Office for Budget Responsibility’s (OBR) autumn forecasts before taking any action.

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Following the referendum result, Prime Minister David Cameron announced that he will resign from his post, with effect from October.

Mr Osborne also argued that Britain is ready to ‘confront what the future holds for us from a position of strength’.

The statement came as the consequences of the vote to leave continue to take effect on the UK’s economy and its banking industry: shares remain unstable, with the FTSE 100 index down by 0.4%.

Additionally, in the aftermath of the vote, the pound fell to its lowest level since 1985.

Mr Osborne had previously stated that the Government had to ‘fix the roof so that we were prepared for whatever the future held’.

In reference to this, the Chancellor said that the UK economy ‘is about as strong as it could be to confront the challenge our country now faces’.

Mr Osborne’s statement was made in an effort to calm the financial markets following uncertainty generated by the Brexit vote. In order to help the stock markets, the Chancellor revealed that he had been in communication with European finance ministers, the International Monetary Fund (IMF) and the US Treasury Secretary.

Furthermore, in the wake of the decision, Mark Carney, the Governor of the Bank of England (BoE), said that extensive contingency plans had been made in preparation of a leave vote. Mr Osborne confirmed that the BoE has set aside funds of £250 billion to support the UK’s banks and markets.

 

Business groups react to Brexit decision

Business groups have responded to the UK’s decision to leave the European Union (EU).

The decision will affect many businesses and individuals, as the UK potentially enters a period of economic uncertainty.

Reacting to the result, many business groups have cited the need for prolonged economic stability and security.

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Carolyn Fairbairn, Confederation of British Industry (CBI) Director General, commented on the consequences of the vote to leave, saying: ‘Many businesses will be concerned and need time to assess the implications. But they are used to dealing with challenge and change and we should be confident they will adapt.

‘The urgent priority now is to reassure the markets. We need strong and calm leadership from the Government, working with the Bank of England, to shore up confidence and stability in the economy.’

Dr Adam Marshall, Acting Director General of the British Chambers of Commerce (BCC), also responded, calling for the stabilisation of trading markets: ‘Some businesspeople will be pleased with the result, and others resigned to it. Yet all companies will expect swift, decisive and coordinated action from the Government and the Bank of England to stabilise markets if trading conditions or the availability of capital change dramatically.’

The pound fell to its lowest level since 1985 in the wake of today’s historic result, while the London stock market fell by 8%.

National Chairman of the Federation of Small Businesses (FSB), Mike Cherry, stressed the importance of economic stability for small businesses. He commented: ‘Today we call on the Government and the Bank of England to urgently put in place measures to prevent any further instability negatively impacting small businesses in the UK. Small firms need to know what this means for access to the single market as soon as possible.’

Meanwhile, Frances O’ Grady, General Secretary of the Trades Union Congress (TUC) outlined the need to ensure that UK jobs are safeguarded, stating: ‘As the UK prepares to leave the EU, the first priority now is to protect jobs and defend the living standards of working people. The Government must urgently set out a plan to defend UK industry and keep British jobs. That means defending the pound and stimulating the economy.’

Following the referendum result, Prime Minister David Cameron announced that he will resign from his post with effect from October.

Business world ‘divided’ on EU membership as voters head to the polls

As voters head to the polls to decide whether the UK should remain a member of the European Union (EU) today, prominent figures from the world of business have expressed starkly contrasting views on the benefits of membership.

Gerald Mason – senior vice president of Tate & Lyle Sugars, one of Britain’s oldest companies – has written a pro-Brexit letter to his staff claiming that their jobs would be more secure outside of the EU. He said: ‘Last year EU restrictions and tariffs pushed our raw material costs up by nearly 40 million euros (£31 million) alone, turning what should have been a good profit that we would all share into a 25 million euro loss’.

Meanwhile, entrepreneur Sir James Dyson wrote in The Times newspaper that the referendum was ‘the last opportunity to regain control of our futures’, and that voting to remain in the EU ‘would be an act of national self-harm’.

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However, the same edition of The Times carried a letter signed by more than 1,280 executives, including directors from 51 FTSE 100 companies, urging Britons to vote Remain. The letter said: ‘We know our firms are stronger in Europe. Our reasons are straightforward: businesses and their employees benefit massively from being able to trade inside the world’s largest single market without barriers.

‘We know that Britain leaving the EU would mean having to re-establish terms of trade from scratch with our home market of 500 million consumers. That wouldn’t just hurt exporters but the hundreds of thousands of small and medium firms who do business with them.’

‘Divided’

The letter’s signatories employ a combined figure of some 1.75 million people. But despite the number of pro-Remain executives, Leave campaigner Daniel Hannan has insisted that the business world is ‘divided’, with many smaller businesses being pro-Leave.

He told the BBC: ‘We know that big businesses like Brussels, they’ve spent years and they’ve spent millions lobbying in Brussels to get rules that suit them and hurt their rivals. The business community is divided, with the exception of the mega banks and the large multinationals which are overwhelmingly pro-EU because they’ve used the regulatory system in Brussels to raise barriers to entry to make it much tougher for a start-up or an innovator to challenge them.’

The view from Europe

Division over Brexit is reflected across Europe. Germany’s finance minister Wolfgang Schaeuble has said a vote to leave would mean Britain leaving the European single market, and that ‘out is out’, making it much tougher for Britain to negotiate a favourable trade deal.

But Markus Kerber, the director general of the BDI, which represents German industry, told the BBC: ‘Imposing trade barriers, imposing protectionist measures between our two countries – or between the two political centres, the EU on the one hand and the UK on the other – would be a very, very foolish thing in the 21st century.

‘The BDI would urge politicians on both sides to come up with a trade regime that enables us to uphold and maintain the levels of trade we have, although it will become more difficult.’

Uncertain times

With pre-referendum opinion polls too close to call, and with Chancellor George Osborne warning of the need for a second 2016 Budget in the event of a Leave vote, the country is potentially entering a period of considerable uncertainty.

But regardless of the outcome of today’s vote, we will be on hand to advise you and your business, and to help guide you through whatever lies in store. Please contact us for advice.

Call for banks and charities to do more to protect scam victims

Banks and charities should take greater responsibility for those who may be vulnerable to scams, including delaying payments while family members are alerted, according to the Chartered Trading Standards Institute (CTSI).

The CTSI commissioned a report from Bournemouth University’s National Centre for Post-Qualifying Social Work into scam victims, and its recommendations to financial institutions and charities include:

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  • recognising their duty of care to dementia sufferers who could make an ‘unwise decision’ as a result of their cognitive state
  • allowing vulnerable people to put a 24 hour delay on new or large transactions from leaving their bank accounts and sending an email or text alerting a carer or loved one at the start of that period
  • adopting a default that personal data is not shared without a clear opt in and that it is not held for longer than 12 months before permission is sought again.

This last measure is an attempt to prevent the creation of lists of vulnerable people, which are sold between criminals. According to Trading Standards officers, there are nearly 200,000 potential victims on such lists, who may be targeted by mail or doorstep scams. Victims of scam mail have an average age of 74, and have typically lost more than £1,000.

Leon Livermore, CTSI chief executive, stated: ‘Vulnerability is not a term that is defined in law, which means it is difficult for professionals to introduce measures to protect vulnerable people.

‘We believe that banks and charitable organisations can do more without the need for legislation and that these relatively straightforward asks would lead to a dramatic reduction in detriment.

‘Adult social care faces a massive funding shortfall and people who are scammed are much more likely to need support. These measures will protect our ageing population and reduce the burden on the state.’

Payments UK, which oversees the way transactions are made, said the idea of a payment delay had not previously arisen in consultations about scams. A spokesperson said: ‘All the banks offer different services and products to help vulnerable people manage their finances, and we would urge a customer to speak to their bank if they want to find out more’.