The Institute of Directors (IoD) has published a list of 14 business and economic predictions for 2018.
In its publication, the IoD predicts that 2018 will be a year of ‘great change&squo; for UK companies. The business group’s predictions cover a range of key issues, such as taxation, Europe and trade, employment and the UK economy.
It speculates that the Treasury will attempt to tax self-employed individuals ‘more like employees’, and predicts that Chancellor Philip Hammond will launch a consultation on the matter in the 2018 Autumn Budget.
The IoD also predicts that, by March, the UK and the EU will have reached an agreement on transitional Brexit arrangements, and a written commitment will be made.
Meanwhile, the number of companies being formed will ‘continue to rise’ in 2018, the Institute speculates. Its latest survey on confidence amongst business start-ups revealed that UK entrepreneurs are entering into 2018 with a ‘positive attitude’ towards investment in their firm.
Commenting on the predictions, Edwin Morgan, Interim Director of Policy at the IoD, said: ‘2018 will be another big year for business. The ongoing Brexit negotiations will be playing on many business leaders’ minds, but it would be a mistake to think it’s the only show in town.
‘By the end of 2018, if decent progress is made in the Brexit talks, companies will hopefully be able to look forward to the coming years with greater clarity and positivity about where the UK is going.’
The IoD’s full list of predictions can be found here.
In its Autumn Budget submission, the British Chambers of Commerce (BCC) has warned the Chancellor that ‘immediate action’ is required to ensure that UK businesses aren’t hit with further business rates increases.
The BCC has urged the government to abandon the annual uprating of business rates for the next two years. It also called for the government to exclude plant and machinery from business rates valuations.
Echoing the call made by the Institute of Directors (IoD), the BCC urged the government to temporarily increase the Annual Investment Allowance (AIA) from its current rate of £200,000 per annum to £1 million, in order to ‘incentivise business investment during the Brexit process’.
In addition, the business group called for the government to refrain from imposing ‘more input taxes or other significant costs’ on firms, and urged the Chancellor to commit to ensuring adequate mobile coverage across the UK by 2020.
Commenting on the wishlist, Dr Adam Marshall, Director General of the BCC, said: ‘At a critical moment for the UK economy, the Chancellor must be bold – and deliver a big Budget that prioritises economic confidence and investment.
‘The best possible Brexit deal won’t be worth the paper it’s written on if conditions for growth aren’t right here at home. The Chancellor has a unique chance to move the dial on growth and productivity now, leaving the UK in a position to succeed over the long-term.
‘Action to slash the upfront costs faced by business, to incentivise investment and to improve mobile coverage and infrastructure would lead to a real boost to productivity, wages and trade.’
The Chancellor will deliver the Autumn Budget on Wednesday 22 November. Make sure you keep an eye on our website for coverage of the key announcements.
A survey carried out by the Institute of Directors (IoD) has suggested that almost a third of UK business leaders have not heard of the new General Data Protection Regulation (GDPR).
The GDPR comes into effect on 25 May 2018, and will strengthen the obligations on all businesses in regard to the safeguarding of individuals’ personal information. Firms must be accountable for their data usage, and must identify a lawful basis for processing personal data.
The IoD surveyed almost 900 businesses and found that four in ten company directors don’t know if their business will be affected by the new data protection rules.
It also discovered that half of directors have not discussed GDPR compliance arrangements with individuals with whom they share data.
Commenting on the findings, Jamie Kerr, Head of External Affairs at the IoD, said: ‘It was clear from the outset that this would be a mammoth task for small and large businesses alike, but the scale of the challenge has not necessarily translated into preparedness for the new regulation, despite the huge costs of non-compliance.
‘It is crucial everyone understands just how big this regulatory change will be for business leaders over the next few months.
‘We urge the regulator to step up its engagement with businesses to ensure that they are spreading the message far and wide.’
Businesses who fail to comply with the GDPR will face fines of up to €20 million, or up to 4% of total annual worldwide revenue, whichever is the greater.
The government has created a new business advisory group, comprised of five major UK business groups.
The Confederation of British Industry (CBI), the Federation of Small Businesses (FSB), the British Chambers of Commerce (BCC), the Institute of Directors (IoD) and manufacturers’ organisation the EEF make up the new business group, and their director generals will meet weekly with the Business Secretary, Greg Clark.
During a recent parliamentary session, Mr Clark reported that he had met with businesses, business leaders, employees and investors around the UK since the Brexit vote. The new group will seek to ensure that business has more input into the Brexit negotiations.
Dr Adam Marshall, Director General of the BCC, hopes that the new business advisory group will also help to achieve a ‘business-friendly’ Brexit outcome that addresses firms’ ‘real-world needs’.
Commenting on the creation of the new business group, Mr Clark said: ‘The government is creating a new EU exit business advisory group to ensure business is not only heard, but is influential throughout the negotiations.’
Meanwhile, Stephen Martin, Director General of the IoD, stated: ‘A good Brexit outcome is one that puts the economy, jobs and prosperity right at the centre of the negotiations, so we wholeheartedly welcome the formation of this advisory group by the government.’
A snap poll carried out by the Institute of Directors (IoD) has found that, following the General Election and the subsequent Hung Parliament, business confidence in the UK economy has ‘fallen dramatically’.
The poll of 700 IoD members revealed that businesses require ‘rapid agreement’ on transitional arrangements that arise from Brexit talks, alongside clarity as to whether EU nationals already residing in the UK will be permitted to remain in the country following Brexit.
Businesses also have ‘no desire’ for another election this year, the poll suggested.
The IoD has called for the government’s main priority to be striking a new trade deal with the EU.
It also warned that political uncertainty generated by the election could have ‘disastrous’ consequences for the UK economy.
Stephen Martin, Director General of the IoD, said: ‘The needs of business and the discussion of the economy were largely absent from the [General Election] campaign, but this crash in confidence shows how urgently that must change in the new government.’
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.
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.’
The Institute of Directors (IoD) has claimed that the tax system is not keeping up with the growth of self-employment and the digital economy, and has called for Chancellor Philip Hammond to create a new Tax Commission when he presents his Budget on 8 March.
In its Budget submission, the IoD argues that a new Commission should investigate how the tax applied to the self-employed could be brought in line with employees, and how online stores could be taxed fairly in relation to high street shops.
Stephen Martin, Director General of the IoD, said: ‘In the short-term, the government must take action to relieve some of the pressure on the small businesses facing hikes in business rates, and encourage companies to bring forward productivity-boosting investment.
‘But we should also look to the future, launching a new Tax Commission to look at what the growth of self-employment and online business means for the tax system. The goal must be a much more level playing field, which treats both high street and online businesses fairly, and adapts to the growth of the ‘platform economy’, which is leading to an increase in flexible work.’
The IoD has also called on the Chancellor to:
- grant further reliefs from business rates for small businesses occupying properties worth up to £100,000
- increase the Annual Investment Allowance (AIA) cap to £1 million
- reiterate the manifesto pledge for the UK to have the lowest corporation tax rate in the G7
- consult on creating a simpler tax system for small businesses, with a fixed rate for company owners to pay themselves, rather than the different rates of income tax, national insurance, corporation tax and dividend tax
- consult on ‘liberalising’ investment schemes for start-ups.
The Chancellor will present the 2017 Spring Budget on Wednesday 8 March. Make sure you keep an eye on our website for coverage of the key announcements.