Business groups react to triggering of Article 50

Business groups have expressed their opinions on the forthcoming Brexit negotiations and trade talks in the wake of Prime Minister Theresa May’s signing of the letter that triggers Article 50.

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A press release from the Confederation of British Industry (CBI) said: ‘Businesses across Britain are 100% committed to making a success of Brexit – and getting off to a good start in the negotiations will be vital in getting the best deal.’

The British Chambers of Commerce (BCC) suggested that UK businesses would like exit and trade talks to take place simultaneously. Adam Marshall, its Director General, commented: ‘Concluding exit and trade negotiations at the same time would moderate adjustment costs for UK businesses and enable trade between UK and EU firms to continue with less disruption.’

The Federation of Small Businesses (FSB) called for the government to secure ‘the easiest possible access to the single market’. Mike Cherry, National Chairman of the FSB, said: ‘Now that Article 50 has been triggered, it is time for the government to work towards a pro-business Brexit and give small firms some clarity on how leaving the EU will impact their businesses.

‘The government must push for a comprehensive free trade agreement with the EU based on ease and cost, and then support small firms to take advantage of new trade agreements with priority markets around the world.’

Meanwhile, Stephen Martin, Director General of the Institute of Directors (IoD), said: ‘Now the real work begins. Ministers must roll up their sleeves and focus on getting a good deal for Britain in the tough negotiations ahead. Success means listening to business on the vital priorities of maintaining tariff-free trade, minimising customs red tape and keeping the bureaucratic hurdles to bringing in necessary skills as low as possible.’

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MPs call for review into costs of quarterly tax reporting for small businesses

The Treasury Select Committee has requested an independent review into the estimated costs of mandatory quarterly tax reporting for small firms.

The government’s Making Tax Digital (MTD) plans include requirements for small businesses to submit quarterly tax updates to HM Revenue & Customs (HMRC). However, many believe that the costs of the proposals to firms have been underestimated. Now the committee of MPs has called for an independent review by the Administrative Burdens Advisory Board (ABAB) to properly assess the impact.

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The Federation of Small Businesses (FSB) has welcomed the independent review. It recently commissioned an external economics consultancy to provide an estimate of the costs of MTD to small firms. The consultancy found that the average annual cost would be £2,770 per business.

Mike Cherry, National Chairman of the FSB, said: ‘We are delighted to see the Treasury Committee embrace our recommendation for a full pilot of mandatory quarterly tax reporting before MTD is launched.

‘Research commissioned by FSB indicates that HMRC has significantly underestimated the true cost to small businesses of quarterly tax reporting. We therefore fully support the ABAB review and look forward to working with the body to further scrutinise HMRC’s implementation of MTD.’

Last year the ABAB stated that it held ‘significant concerns’ about mandatory quarterly tax reporting, and said that the proposals would be ‘more burdensome than they currently are with increased record keeping and compliance costs’.

New 12-sided pound coin enters circulation

The new 12-sided £1 coin enters circulation today.

To help combat the production of counterfeit money, the new pound coin features a ‘hidden high security feature’, which the Royal Mint hopes will make its design harder to replicate.

Roughly 1.5 billion new coins have been struck by the Royal Mint so far, with supplies of the coin initially having been delivered to 33 UK banks and post offices. The coins will become widely available over the coming weeks.

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Consumers will be able to use old pound coins for a period of six months following the introduction of the new coin. After this transition period, the old one pound coin will be demonetised on 15 October.

The Royal Mint is urging consumers to deposit their old pound coins at their local bank before this date. After this date, retailers will not be obliged to accept old pound coins, and consumers will be required to take their old coins to a bank to exchange them.

Commenting on the introduction of the new coin, Adam Lawrence, Chief Executive of the Royal Mint, said: ‘It’s been designed to be fit for the future, using security features that aim to safeguard our currency, and currencies around the world, for years to come.’

Further information on the new £1 coin can be found here: www.thenewpoundcoin.com.

State pension age ‘could rise to 70’, report suggests

An analysis carried out by the Government Actuary’s Department (GAD) has revealed that workers aged 30 and under may not receive a state pension until the age of 70.

The GAD has suggested that the state pension age could rise to 70 as soon as 2054.

Under existing legislation, the state pension age for those born after 1978 is set to rise to 68. Currently, the earliest age at which a woman can begin receiving a state pension is 63, whilst a man can start to receive a state pension at the age of 65.

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By the end of 2018, the state pension age will have risen to 65 for both men and women.

The government is expected to address the rise in the cost of pensions, which is caused by longer life expectancy and therefore an increasing ratio of pensioners to workers.

Commenting on the issue, Steve Webb, the former Pensions Minister, said: ‘It is one thing asking people to work longer to make pensions affordable, but it is another to hike up pension ages.’

FSB research reveals single market access is ‘top priority’ for small businesses

Research carried out by the Federation of Small Businesses (FSB) has revealed that small businesses’ top priority post-Brexit is to be able to access the EU single market.

63% of firms surveyed believe that access to this market is key. Meanwhile, 49% of businesses selected the US as a priority market, with a further 28% choosing China as a key target market.

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The FSB also discovered that 58% of small businesses find the EU single market easier to trade with than non-EU markets.

Additionally, 45% of exporters and 53% of importers find it cheaper to trade with the EU single market than to trade with non-EU markets.

Commenting on the findings, Mike Cherry, National Chairman of the FSB, said: ‘Small firms trade with countries based on ease, cost and value and any future trade deal must deliver on these key aspects, both with the EU single market and non-EU markets.

‘The top non-EU countries of choice for trade deals include the US and China. However, the reality is that the EU single market is still a crucial market for smaller firms and cannot be undervalued.’

The FSB has called for the government to ‘secure the easiest and least costly access to the EU single market’ in its Brexit negotiations

New imaging system to allow bank cheques to clear in a day

New technology to be introduced later this year will allow cheques paid into bank accounts to be cleared within one working day.

The Cheque and Credit Clearing Company (C&CCC) – the organisation that manages the cheque-clearing system – claims that a new image clearing system will ‘revolutionise how cheques are cleared in the UK’.

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Instead of the current paper-based system, whereby the actual paper cheque is transported around the country to be cleared, which can take up to six days, a digital image of the cheque will be used instead. This should significantly speed up the process.

The changes will be phased in from October 2017, although it won’t be until the second half of 2018 before all UK banks and building societies are able to offer the new service.

James Radford, Chief Executive of the C&CCC, said: ‘These changes will put cheques firmly in the 21st century, delivering real and important benefits for the many individuals, charities and businesses that regularly use cheques.

‘Not only will cheques clear faster but banks and building societies may offer their customers the option of paying in an image of a cheque rather than the paper cheque itself.’

Cheque use has declined in recent years, especially with the growth in internet bank transfers. The banking industry has previously expressed a desire to phase them out entirely by 2018. However, they remain an important method of payment, with some 477 million cheques written in the UK in 2016.

Inflation rises above Bank of England’s target rate

Inflation as measured by the Consumer Price Index (CPI) rose to 2.3% in February – up from 1.8% in January, according to the latest figures from the Office for National Statistics (ONS).

This is the highest rate since September 2013 and is above the Bank of England’s target of 2%. The Bank previously said that it expects CPI inflation to peak at 2.8% next year.

The ONS has attributed the increase partly to rising fuel and food prices – the latter recording their first annual increase for more than two-and-a-half years.

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The fall in the value of the pound since the Brexit vote, which makes imports more expensive, has been cited as a reason for the rise in food prices. However, the pound rose sharply after the news of the inflation rate, with Sterling rising by a cent against the dollar.

Anna Leach, Head of Economic Intelligence at the Confederation of British Industry (CBI), said: ‘While inflation has risen above the Bank of England’s 2% target, it is still relatively low by historical comparison. Nonetheless, inflation is likely to rise further still, on the back of stronger fuel prices and as the impact of the weaker exchange rate feeds through. Also, other price data indicates rising costs for businesses, with input prices up 19% on the year.’

The Retail Prices Index (RPI) measure of inflation rose to 3.2% in February from 2.6% the previous month.