The Confederation of British Industry (CBI) has stated that economic growth in the UK is on course to remain ‘steady, but subdued’ over the next couple of years.
The business group said that 2017 has seen ‘tepid growth’, and predicts that Gross Domestic Product (GDP) will grow at a rate of 1.5% in 2017, 1.5% in 2018 and 1.3% in 2019.
It also predicts quarterly GDP growth of 0.3% up to the end of 2019.
Commenting on the forecasts, Rain Newton-Smith, Chief Economist at the CBI, said: ‘After a timid 2017, UK economic growth is set to remain steady but sluggish, with less pep than we’ve seen over the past few years.
‘We expect domestic demand to remain soft. Household spending will remain under pressure from squeezed real wages and Brexit uncertainty will weigh on business investment.’
The CBI called for the government to make progress in its Brexit negotiations with the EU, and urged for clarity in regard to transitional arrangements.
The £100 penalty for filing a late tax return could be scrapped and replaced with a new driving licence-style points system, HMRC has revealed.
Under new plans being considered by the tax authority, taxpayers who miss the self assessment filing deadline could receive points instead of an immediate fine.
Only those taxpayers accruing too many points would then be penalised. Individuals would also see points wiped from their record after a set period of time.
The new ‘holistic’ approach is intended to focus on taxpayers who persistently break the rules rather than those who make genuine errors of judgement.
The proposals are included in the Treasury’s Red Book, which states: ‘The government will reform the penalty system for late or missing tax returns, adopting a new points-based approach. It will also consult on whether to simplify and harmonise penalties and interest due on late payments and repayments.
‘This will ensure that the system is fair, simple and effective across different taxes. Final decisions on both measures will be taken following this latter consultation.’
Under the current system, taxpayers who fail to submit their tax return by the 31 January deadline are liable to an instant £100 fine, with further penalties applying for prolonged delays.
It is thought that around 840,000 taxpayers missed the filing deadline in the last tax year.
In a new report, building society Nationwide has stated that the Autumn Budget changes to Stamp Duty Land Tax (SDLT) for first-time homebuyers will have only a ‘modest impact’ on housing demand.
Chancellor Philip Hammond abolished SDLT for first-time homebuyers in England, Northern Ireland and, temporarily, for those in Wales, from 22 November. The abolition applies for individuals seeking to purchase a first home worth up to £300,000. Wales will receive devolved stamp duty powers in April 2018, when its Land Transaction Tax (LTT) comes into effect.
To assist those in London and other expensive regions, the first £300,000 of the price of a home valued at £500,000 will be exempt from SDLT for first-time homebuyers.
Different rules apply in Scotland, where the Land and Buildings Transaction Tax (LBTT) is applicable.
Commenting on the report, Robert Gardner, Chief Economist at Nationwide, said: ‘The decision in the Budget to abolish stamp duty for first-time buyers purchasing a property up to £300,000 (with relief for those purchasing a property up to £500,000) is likely to have only a modest impact on overall demand.
‘In many regions, first-time buyers already paid little or no stamp duty as the price of the typical first-time buyer property was below the previous threshold of £125,000.’
Meanwhile, the Office for Budget Responsibility (OBR) warned that the abolition of SDLT for first-time buyers could result in higher house prices, as prospective buyers will have more money to put towards a deposit.
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.’
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.’
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.
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.’