Motorists ‘less likely to choose diesel cars’ following Autumn Budget tax changes

A survey carried out by CLM Fleet Management has suggested that UK drivers are less likely to purchase diesel cars, following tax changes made by Chancellor Philip Hammond in the recent Autumn Budget.

The Chancellor announced that, for new diesel vehicles registered after 1 April 2018 that do not meet the Real Driving Emissions 2 (RDE2) standard, a supplement will be charged on their First Year Rate, to the effect of moving up by one Vehicle Excise Duty (VED) band.

After the first year, vehicles with zero emissions will be exempt from the standard rate of vehicle tax, and other petrol or diesel vehicles will pay a standard rate of £140 a year. An additional rate will be added to the vehicle tax for all new vehicles with a list price of over £40,000.

59% of survey respondents stated that they would be less likely to purchase a diesel car as a result of the increase in VED from April 2018.

The Chancellor also announced that the diesel supplement will be increased from 3% to 4% from 6 April 2018, but will be removed altogether for diesel cars which are certified to the RDE2 standard.

The CLM survey also quizzed respondents over this increase: 62% said that the change will not impact upon their buying decision, with a further 17% stating that they would be less likely to choose a diesel car.

Commenting on the findings, John Lawrence, Managing Director of CLM Fleet Management, said: ‘We have already seen a steep decline in diesel sales this year as drivers have reacted to negative publicity around poor air quality and diesels. And these latest announcements look set to accelerate that process.’

More than £1 billion stolen from bank accounts via credit card fraud, research finds

Research carried out by price comparison site comparethemarket.com has revealed that more than £1 billion has been stolen from bank accounts through credit and debit card fraud in the past year.

The research found that one in ten individuals have cancelled their credit card or debit card as a result of attempted fraud, and that five million consumers have been victims of cybercrime in the past year.

It found that the average amount stolen from individuals was £544, and that more than a third of consumers who have had money stolen in the past year have been victims of credit card or debit card fraud before.

Additionally, over half of consumers surveyed believe that the government isn’t doing enough to tackle cybercrime, comparethemarket.com revealed.

Commenting on the issue, Shakila Hashmi, Head of Money at comparethemarket.com, stated: ‘Digital banking is the new frontier for criminal activity, and whilst banks will be doing their best to prevent fraud, people should ensure that they are doing everything they can to protect themselves.’

Government unveils new Industrial Strategy white paper

The government has published a white paper outlining a new ‘ambitious’ Industrial Strategy, which aims to boost the UK economy and ‘embrace the opportunities of technological change’.

The white paper sets out a long-term vision for how the UK can ‘build on its economic strengths’, improve its productivity performance, embrace technological change and increase UK workers’ earning power.

Within the paper, the government also committed to investing an additional £725 million over the upcoming three years in the Investment Strategy Challenge Fund, which will be used to help improve the UK construction sector and create new, affordable places to live and work.

Commenting on the white paper, Prime Minister Theresa May said: ‘Our modern Industrial Strategy will shape a stronger and fairer economy for decades to come.

‘It will help create the conditions where successful businesses can emerge and grow, and support these businesses in seizing the big opportunities of our time, such as artificial intelligence and big data, whilst also making sure our young people have the skills to take on the high-paid, high-skilled jobs this creates.’

Meanwhile, the British Chambers of Commerce (BCC) welcomed the white paper. BCC Director General, Dr Adam Marshall, stated: ‘Businesses will welcome the sense of mission that infuses the Industrial Strategy, as well as its assessment of the challenges and opportunities that the UK faces, particularly as both businesses and government look to forge a new path beyond the European Union’.

The white paper can be read in full here.

Number of apprenticeships has fallen by 59%, data reveals

The number of individuals starting apprenticeships in England has fallen by 59%, according to figures published by the Department for Education (DfE).

The data showed that, between May and July of this year, only 48,000 people began an apprenticeship – a significant fall when compared to the same period in 2016, when 117,000 individuals entered into an apprenticeship.

Experts believe that the introduction of the Apprenticeship Levy in April 2017 has contributed to the fall in the number of workers beginning an apprenticeship.

The Levy was introduced as part of a government target to encourage the creation of three million apprenticeships in England by 2020, with the stated aim of providing ‘a more sustainable workforce and helping to bridge the UK skills gap’.

It changes the way in which apprenticeships are funded, requiring larger UK employers with pay bills of over £l3 million to invest a percentage of their annual pay bill in apprenticeships.

Commenting on the DfE data, Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), said: ‘Getting more people doing apprenticeships is critical, especially if we are to tackle the skills shortage biting many small firms.

‘The Apprenticeship Levy isn’t solely to blame for this drop. The reality is that 98% of firms don’t pay the levy, and these small businesses will be essential to the government reaching its target of three million apprenticeships by 2020.’

UK on course for ‘longest period of falling living standards since records began’

Think tank the Resolution Foundation has suggested that the UK economy is on course for ‘the longest period of falling living standards since records began’.

In its post-Budget analysis, the Foundation stated that the current squeeze on incomes will last longer than the one that occurred following the 2008 recession.

The Resolution Foundation also stated that Chancellor Philip Hammond is faced with ‘grim economic forecasts’, following the recent publication of a fiscal and economic outlook by the Office for Budget Responsibility (OBR).

In its report, the OBR revised down its outlook for productivity growth, business investment and Gross Domestic Product (GDP) growth across the forecast period. It reduced its 2017 growth forecast from 2% to 1.5%, and predicted that growth will subsequently pick up to 1.6% by 2022.

Commenting on the Resolution Foundation’s analysis, Torsten Bell, its Director, said: ‘Faced with a grim economic backdrop, the Chancellor will see this Budget as a political success. But that would be cold comfort for Britain’s families given the bleak outlook it paints for their living standards.

‘Hopefully the OBR’s forecasts prove to be wrong because, while the first sentence of the Budget document reads ‘the United Kingdom has a bright future’, the brutal truth is: not on these forecasts it doesn’t.’

Meanwhile, commenting on the ‘grim forecasts’, the Chancellor stated: ‘The challenge for us as a nation is to prove them wrong.’

View our 2017 Autumn Budget Report

Chancellor Philip Hammond delivered his 2017 Autumn Budget speech yesterday, outlining a range of tax and financial measures.

Mr Hammond’s speech unveiled a raft of amendments, including scrapping Stamp Duty Land Tax (SDLT) for first-time homebuyers, an increase in the personal allowance (PA) to £11,850 from April 2018 and concessions for firms affected by the business rates ‘staircase tax’.

Further details regarding the announcements made by the Chancellor featured in the official press releases. Our comprehensive Budget Summary outlines the key measures, including some of the less-publicised changes that may impact upon your business or personal finances.

For a detailed overview of the Autumn Budget information, please read our 2017 Autumn Budget Summary.

2017 Autumn Budget – what to expect

Chancellor Philip Hammond will deliver his 2017 Autumn Budget speech today at 12.30pm. We will be keeping you up to date on the key Budget announcements, and will be supplying a full summary which will appear on the site tomorrow morning.

Following the release of new figures that revealed a rise in government borrowing in October, Mr Hammond faces an uphill battle in attempting to balance the books against a weakening economic backdrop.

In his Budget speech, the Chancellor is expected to announce a range of fiscal measures designed to help young people: Mr Hammond recently stated that it is ‘not acceptable’ that millennials are unable to get onto the property ladder.

As a result, many expect the Chancellor to announce a change to the way in which stamp duty land tax is charged for first-time homebuyers, with some experts predicting that Mr Hammond could scrap the tax altogether.

Meanwhile, others predict that the Chancellor will announce changes to income tax. He previously pledged to raise the personal allowance (PA) to £12,500 by 2020, and many anticipate that the PA could be frozen in today’s Budget speech.

The Chancellor is also rumoured to be considering a host of measures intended to help UK businesses, including an overhaul of the business rates system.

Following calls made by leading business groups, including the Federation of Small Businesses (FSB) and the British Chambers of Commerce (BCC), Mr Hammond may seek to stall the upcoming 3.9% business rates rise, due to come into effect from April next year, and look to abolish the so-called business rates ‘staircase tax’.

Furthermore, some industry experts believe that the government may also lower the VAT threshold, which currently stands at £85,000. However, the FSB has warned that reducing this threshold will ‘drain small businesses of time and money’, and create ‘a real drag on business output’.

Survey suggests two in five SMEs ‘unprepared’ for new GDPR

A survey carried out by the Data Compliance Doctors has suggested that two in five UK small and medium-sized enterprises (SMEs) – around 2.1 million businesses – are unprepared for the upcoming introduction of the new General Data Protection Regulation (GDPR).

The new GDPR is set to come into effect on 25 May 2018, and will strengthen the obligations on all businesses in regard to the safeguarding of individuals’ personal information. Businesses have been advised to review their data privacy and security practices ahead of the implementation of the GDPR.

The survey found that, of the 61% of UK firms that have started to prepare, over 600 hours have been spent getting businesses ready for the new data protection requirements.

It also revealed that a further 27% of firms have employed new staff members to help prepare for the introduction of the GDPR.

Lisa Chittenden, Data Compliance Doctor at the Data Compliance Doctors, commented: ‘Our survey has revealed a mixed bag in terms of GDPR preparation amongst SMEs.

‘Some have spent a lot of time and money to ensure they are in a good position come May 25, 2018. However, our figures show there are many thousands that have not even started, despite all the discussion and media stories in recent months. But, with six months to go, it’s not too late to get yourself up to speed.’

Lowering VAT threshold would put SMEs at a disadvantage, FSB warns

The Federation of Small Businesses (FSB) has warned that lowering the VAT threshold would ‘drain small businesses of time and money’.

The FSB stated that forcing small businesses into the VAT regime ‘would create a real drag on business output’.

The warning came as a survey carried out by the FSB found that VAT-registered small business owners spend an average of 44 hours each year managing VAT administration.

27% of businesses surveyed said that they find the VAT system difficult to understand, with 21% revealing that different VAT thresholds pose as barriers to understanding.

Meanwhile, 43% of businesses stated that calculating the proportion of VAT owed is the most time-consuming compliance requirement, with a further 17% citing filling out VAT returns as being the most onerous VAT task they must carry out.

Mike Cherry, National Chairman of the FSB, said: ‘VAT is the most time-consuming tax to deal with. Small firms and the self-employed spend days and days every year complying with their VAT obligations – time that should be spent expanding their businesses.

‘A sudden drop in the VAT threshold would punish the smallest of businesses and shift, rather than solve, the bunching issue. The Chancellor should be prioritising simplification, rather than expansion, of VAT and the tax system at large.’

TUC urges Chancellor to use Autumn Budget to ‘end wage squeeze’

The Trades Union Congress (TUC) has urged Chancellor Philip Hammond to use next week’s Autumn Budget to put an end to the ‘wage squeeze’ currently plaguing UK workers.

Official figures recently published by the Office for National Statistics (ONS) revealed that inflation ‘remained steady’ in October at 3%, with higher food prices being offset by lower fuel costs.

Meanwhile, wage growth figures outlined that workers’ earnings, excluding bonuses, fell by 0.5% in real terms, when taking inflation into account. This represents seven months of negative pay growth.

Commenting on the new inflation and wage growth figures, the TUC called for Mr Hammond to ensure that UK workers are given a pay rise in the Autumn Budget.

Frances O’Grady, General Secretary of the TUC, said: ‘This is the seventh month in a row that prices have risen faster than wages. But ministers are still standing on the side-lines.

‘Running the economy is not a spectator sport – the Chancellor must have a game plan to give Britain a pay rise in next week’s Budget.’

The TUC also called for the National Minimum Wage (NMW) to be raised to £10 per hour ‘as soon as possible’.