Five of the leading business groups in the UK have warned MPs that the UK is ‘not where it should be’ in regard to its Brexit plans.
The government recently confirmed that it has decided to prioritise preparing for a ‘no deal’ Brexit, and intends to advise UK businesses to begin implementing their contingency plans.
In a joint letter, the Confederation of British Industry (CBI), the Institute of Directors (IoD), the Federation of Small Businesses (FSB), the British Chambers of Commerce (BCC) and manufacturers’ organisation the EEF stated that UK firms have been ‘watching in horror’ as politicians have focused on ‘factional disputes’ rather than the practical steps that need to be taken to secure an advantageous Brexit deal.
The letter also said that firms are ‘pausing or diverting investment’ in order to prepare for a potential no deal Brexit scenario.
The business groups believe that there is ‘not enough time’ to prevent the ‘severe dislocation and disruption’ that will come hand-in-hand with a no deal Brexit scenario. They have called for MPs to ‘talk to their local business communities’ over the festive break in order to help ‘find a way forward’ when they return to Parliament.
The Low Incomes Tax Reform Group (LITRG) has called for HMRC to publish detailed Making Tax Digital for VAT (MTD for VAT) exemption guidance.
MTD for VAT is set to come into effect from 1 April 2019 for businesses which have a taxable turnover above the current VAT registration threshold of £85,000. As part of the initiative, firms must keep some records digitally, and must submit their VAT returns via an Application Programming Interface (API).
The LITRG stated that it is ‘very concerned’ that HMRC has so far failed to publish guidance on how someone might be able to claim exemption from MTD for VAT.
The Group said that without detailed guidance, some taxpayers may ‘worry unnecessarily’ as to how they will cope, and others could be left with ‘very little time to prepare’ if their application for exemption is turned down.
‘We are very concerned that HMRC has not yet published any detailed information as to how exemption from MTD for VAT may be obtained, with the start date so close,’ said Victoria Todd, Head of Team at the LITRG.
‘HMRC has said that people should contact the VAT helpline to speak to an adviser if they think they should be exempt. We would like to see more specific guidance which explains what information and evidence HMRC will require from a caller, and what they can do if their application is turned down.’
The Federation of Small Businesses (FSB) has warned that productivity amongst UK small firms is ‘still being held back’ by poor broadband and mobile coverage.
The FSB’s warning comes in response to Ofcom’s annual Connected Nations report, which revealed that, while the availability of superfast broadband has increased, only 90% of small businesses are able to access superfast speeds.
Meanwhile, 18% of rural firms ‘still lack a decent broadband connection’, according to the report. It also revealed that rural businesses receive just 41% of 4G coverage.
It is ‘imperative’ that small firms are connected to a basic level of broadband ‘without delay’, the FSB stated.
‘Access to fast and reliable broadband and good mobile signal is vital for small businesses,’ said Mike Cherry, National Chairman of the FSB.
‘There are still so many firms coming up against agonisingly slow speeds – and when your business relies on this connection, it’s not only frustrating, but impacts on your ability to do business.
‘Most businesses want to embrace digital technology to compete and enhance their productivity, but to do this they need a decent connection and good quality service.’
The Institute of Chartered Accountants in England and Wales (ICAEW) has warned that a decision to reject Prime Minister Theresa May’s Brexit deal will ‘undermine the chance of stronger economic growth’ in 2019.
In its latest economic forecast, the ICAEW predicted that the UK economy will grow by 1.6% over the coming year. It believes falling inflation, increasing domestic spending power, fiscal loosening and additional business investment in response to a Brexit deal will help to ensure the UK economy grows in 2019. However, a so-called ‘hard Brexit’ could ‘put the brakes on modest growth’, according to the Institute.
Furthermore, the ICAEW suggested that business investment will fall by 0.4% over 2018 as a whole. However, this figure could change during 2019: the ICAEW predicts that business investment will increase by 0.5% next year.
Michael Izza, Chief Executive of the ICAEW, said: ‘The need for greater stability cannot be overstated. Businesses have been unable to plan ahead, and that is a difficult environment for investment.
‘It is crucial that we avoid a disorderly exit and the activation of costly and disruptive contingency measures.
‘The potential adverse impacts on business and the wider economy could be severe, and are not helped by the decision to delay the vote on the withdrawal agreement.’
New legislation designed to ‘upgrade workers’ rights’ has been introduced by the government.
The measures will ‘ensure individuals can access fair and decent work’, and include a ‘day one’ statement of rights for all UK workers, which outlines their leave entitlement and pay.
Additionally, under the legislation, the holiday pay reference period will be extended from 12 weeks to 52 weeks, in order to ensure those in seasonal or atypical roles get the paid time off that they are entitled to.
The introduction of the new measures comes as a result of Matthew Taylor’s Review of Modern Working Practices, which was published in July 2017. The review outlined key principles for providing ‘fair and decent work for all’.
The legislation takes forward 51 of the 53 recommendations outlined by the Taylor Review.
Commenting on the legislation, Claire Walker, Co-Executive Director of Policy and Campaigns at the British Chambers of Commerce (BCC), said: ‘Businesses will acknowledge the sense in adopting most of the recommendations from the Taylor Review to reflect the changing nature of the workplace, but it is vital that employers have information and guidance to support them through any fundamental changes, and the time to adapt.
‘We look forward to working with the government to enact these changes, while making sure that businesses are not saddled with increased costs and upfront taxes as part of any reforms.’
A poll commissioned by insurance firm Aon has suggested that UK small and medium-sized enterprises (SMEs) are ‘unmindful of the risks’ that cyber-attacks and data breaches pose to their business.
The poll found that eight out of ten small firms don’t regard cyber-attacks or data breaches to be significant risks to their business.
Earlier this year, a survey carried out by the National Cyber Security Centre (NCSC) revealed that almost half of UK firms fell victim to a cyber-attack or data breach in 2017. 66% of SMEs were affected by a loss of data, according to the survey.
Aon’s poll also revealed that 31% of SMEs don’t currently insure against cyber and data risks. An additional 68% were unaware that data breaches must be reported to the Information Commissioner’s Office (ICO).
Commenting on the poll, Chris Mallett, Broking Manager at Aon, said: ‘What’s more, it revealed one in three don’t see personal information stolen as a result of a cyber-attack or fraud as a data breach.’
‘There is a lot of misunderstanding of risks, and still a worry among SMEs that it must be complicated,’ said Dr Emma Philpott, Founder of the UK Cyber Security Forum.
‘It is not always about high end security. It’s about having the basics in place to protect you from indiscriminate attacks. Educating staff takes time, but doesn’t cost anything at all.’