Lowest paid workers see fastest earnings growth in 2016 – Article Gerrards Cross : Nunn Hayward
Pay growth between April 2015 and April 2016 was fastest at the bottom end of the earnings scale, according to an annual survey by the Office for National Statistics (ONS).In the period, the lowest paid 5% of workers saw an average 6.2% increase in their weekly wage, while the weekly earnings growth for the highest paid 5% of workers was just 2.5%. The growth in median weekly pay across the UK was 2.2%.
ONS statistician, James Scruton, said: ‘The reason for growth being fastest at the bottom end of the pay scale is likely to be the result of the introduction of the National Living Wage (NLW) shortly before the mid-April 2016 pay period covered by the survey, as we saw a definite boost in pay for those previously paid just below the new rate of £7.20 an hour.
‘We saw a similar pattern back in 1999 when the National Minimum Wage (NMW) came into force.’
The survey – known as the Annual Survey of Hours and Earnings (ASHE) – also measures the gender pay gap. In 2016, the headline figure – the difference between men’s and women’s full-time median hourly pay (excluding overtime) – fell from a revised 9.6% in 2015 to 9.4% in 2016. This is the lowest it has been since the series began in 1997, when the gap was 17.4%.
For higher earners, the gap between men and women for full-time employees has remained largely consistent over time, at around 20%. For the lowest earners, however, the gap has narrowed over the long-term, to 4.9% in April 2016. This constituted the largest year-on-year decrease in the gender pay gap for the bottom tenth of earners since records began in 1997.
Again, the ONS claims that this is likely to be connected to the introduction of the NLW.
CBI outlines Autumn Statement proposals – Article Gerrards Cross : Nunn Hayward
In its Autumn Statement submission, the Confederation of British Industry (CBI) has urged Chancellor Philip Hammond to consider a range of measures to help boost the UK economy following the vote to leave the EU.
The CBI has called for the Government to ‘lay foundations allowing firms to navigate a more uncertain economic outlook’ and to invest for the future.
The business group also requested an increase in average public sector net investment spending this Parliament to 2% of Gross Domestic Product (GDP). This would raise average annual public investment by £6 billion.
Echoing the call made by the British Chambers of Commerce (BCC) in its own Autumn Statement submission, the CBI also urged the Chancellor to increase the Annual Investment Allowance (AIA).
The group proposes raising the allowance to £1 million until the end of 2018 to ‘increase the attractiveness of near-term investment’.
Other proposals put forward by the CBI within its submission include the ‘fast delivery’ of planned infrastructure investments and for the Government to use business rates to incentivise productive investment.
Carolyn Fairbairn, Director General of the CBI, commented: ‘The Chancellor should capitalise on the UK’s core strengths, setting out a pro-enterprise agenda that instils confidence and kick starts investment.
‘With huge variations in productivity between different parts of the country, the top priority must be to set out a programme that will get our regions firing on all cylinders and supports businesses to innovate, invest and create jobs in the years ahead.
‘Amid economic uncertainty, it’s important that the Government does what it can to incentivise businesses to invest today, rather than postpone until tomorrow.’
Banks hurting small businesses with branch closures, claims FSB – Article Gerrards Cross : Nunn Hayward
Small firms are being ‘let down’ by local bank branch closures, according to the Federation of Small Businesses (FSB).
In a new report, the FSB claims that, in the last 25 years, the total size of the branch network has halved to just over 8,000 branches and is set to halve again in the next ten years.
Mike Cherry, National Chairman of the FSB, stated: ‘The rapid pace of bank branch closures across the UK presents some very real and tough challenges for small businesses. FSB members highly value the face-to-face interaction they receive in-branch, particularly when making complex financial transactions, with staff who often have a greater understanding of their business and the local economy.’
The report also notes that many small firms deal heavily in cash and cheques, and therefore need access to over-the-counter banking facilities on a regular basis, rather than relying on internet banking.
Mr Cherry commented: ‘Small businesses are keen to embrace the opportunities of the digital economy – 94% of small businesses already use internet banking. However, barriers towards digital inclusion, such as unreliable broadband connectivity and a lack of confidence in using digital services creates serious challenges. These are some of the reasons which explain why the protection of in-branch banking is so important for financial inclusion.’
The FSB calls on the Government and the banking sector to improve small business awareness and confidence in the Access to Banking Protocol, which was introduced in March 2015 to ensure that customers were offered alternative ways of banking in their local area if a branch closed down.
According to the FSB, there is ‘extremely limited awareness of the Protocol’ and businesses ‘urgently need a strengthening of the Protocol to ensure banks undertake a proper consultation process, engage with small businesses affected by branch closures and provide appropriate banking service alternatives’.
Significant rise in manufacturing exports, survey reveals – Article Gerrards Cross : Nunn Hayward
The depreciation in sterling has contributed to a significant rise in manufacturing exports, a survey by the Confederation of British Industry (CBI) has revealed.
The CBI’s latest Industrial Trends Survey showed that, in the three months to October, export volumes grew at their fastest pace for two and a half years.
The survey also indicated that competitiveness within EU markets rose at its fastest rate since 2000.
However, 47% of manufacturers revealed that the sharp depreciation in sterling has had a negative impact on their business, with just 32% stating that it has had a positive impact.
Concerns have also been raised over the shortage of skilled labour, with nearly a quarter of manufacturers stating that the reduced availability of such labour could limit output over the coming months.
Rain Newton-Smith, Chief Economist at the CBI, commented: ‘Firms will be seeking further details on a long-term industrial strategy from the Autumn Statement that combines sectors and places.
‘Ultimately, all businesses need greater clarity from the Government on the fundamental issues of skills and barrier-free access to EU markets as soon as possible.’
Millions of married couples are yet to claim the Government’s Transferable Tax Allowance, latest figures from HMRC show.
Of the 4.2 million couples eligible for the tax allowance, just one million have actually claimed the relief, which could be worth a few hundred pounds.
Introduced in April 2015, the Transferable Tax Allowance allows eligible married couples and civil partners to transfer 10% of their personal allowance to their spouse (£1,100 for the 2016/17 tax year).
This means that for those couples where one person does not use all of their personal allowance the benefit will be worth up to £220 in 2016/17.
However, is also possible to backdate a claim for the previous tax year. With the allowance worth £212 in 2015/16, it may now be possible to claim up to a combined total of £432 for both tax years.
The option to transfer is only available to couples where neither pays tax at the higher or additional rate. The lower earner must also have an income of £11,000 or less.
Eligible couples can apply for the marriage allowance online at www.gov.uk/apply-marriage-allowance. The spouse or partner with the lower income applies to transfer some of their personal allowance by entering some basic details.
Where either spouse was born before 6 April 1935, then a married couple’s allowance is available instead.
We can advise on a range of personal tax issues – please speak to us for further information.
The Institute of Chartered Accountants in England and Wales (ICAEW) has joined forces with 12 other organisations to create a Small Business Taskforce, designed to support small and medium-sized enterprises (SMEs) as the UK negotiates its exit from the EU.
In a letter sent to the Government, the new taskforce called for exports to be protected and a review of the funding available for business support to be undertaken.
The group also suggested that a consultation with small businesses and self-employed individuals regarding trade deals and domestic policy be carried out.
Echoing calls made by the British Chambers of Commerce (BCC) in its Autumn Statement submission for the Government to ‘introduce no new input taxes or other significant costs on businesses for the remainder of this Parliament’, the taskforce has also urged the Government not to introduce new taxes without proper consultation following the UK’s exit from the EU.
Both the BCC and the Federation of Small Businesses (FSB) have stated that they will work with the Small Business Taskforce ‘on an issue-by-issue basis’.
The Treasury has announced that it is shelving George Osborne’s plan to allow pensioners to sell their annuities for cash.
The former Chancellor mooted the idea in March 2015 as part of his plan for wide-ranging ‘pension freedoms’.
The scheme would have given people who already hold an annuity similar freedoms to those approaching retirement, who are no longer required to buy an annuity with their pension pot. Individuals would have been able to sell their annuity income without the current tax restrictions, providing their annuity provider agreed.
However, the idea has been dogged by controversy, with many experts predicting that those who sold their annuities would be likely to get a poor deal.
The Association of British Insurers (ABI) said the abandonment of the plan was the ‘right decision’. Rob Yuille, Head of Retirement Policy at the ABI, said: ‘The industry has consistently supported the freedom and choice reforms, but we agree with the Government that the secondary annuity market came with considerable risks for customers, including from unregulated buyers.’
Explaining the decision, Simon Kirby, Economic Secretary to the Treasury, said: ‘Allowing consumers to sell on their annuity income was always dependent on balancing the creation of an effective market with making sure consumers are properly protected.
‘It has become clear that we cannot guarantee consumers will get good value for money in a market that is likely to be small and limited.’