Small businesses struggling to access invoice finance could be helped by the introduction of proposed new laws. The plans form part of the government’s ‘modern Industrial Strategy’.
Invoice financing is an advance against a future payment, under which businesses can approach a finance provider and assign them their right to be paid in exchange for around an initial 80% of the value of the invoices. This initial advance is received within a few days while the balancing 20% (less fees and charges) is paid when the customer settles the invoice.
Currently, small suppliers which are in a contract with a larger company may not be able to secure invoice finance, due to the terms of the contract. Small suppliers often find themselves in a situation where they do not have sufficient power to renegotiate their terms and conditions.
Under the plans, after 31 December 2018 such restrictions will have no effect (with certain exceptions), and small businesses will be able to go to their lending partner to secure the finance they need.
Commenting on the news, Small Business Minister Kelly Tolhurst said: ‘These new laws will give small businesses more access to the finance they need to succeed and will help ensure they have a level playing field from which to set fair contracts with the businesses they supply.’
The government has launched a new trade taskforce, with the stated aim of helping UK businesses to ‘develop trade links around the world’.
The new taskforce, which will form part of the Board of Trade, will serve to promote the government’s ‘global Britain’ trade agenda.
Alongside the taskforce, a newly-appointed HM Trade Commissioner network will provide UK businesses with ‘support and local market knowledge’ from countries around the world. The taskforce aims to allow the UK to partner with developing countries, and to help support development and deliver jobs, growth and prosperity.
Announcing the new trade taskforce, International Trade Secretary Dr Liam Fox said: ‘Championing free trade and supporting developing nations through trade is in the UK’s interest. The prosperity created by free trade is the basis for social stability, which in turn provides the political stability which underpins our global security.
‘Prosperity, stability and global security are the prizes for a strong, rules-based international trading system, and that is what the UK needs to create.’
The government has scrapped a planned national insurance tax cut for self-employed workers.
Class 2 national insurance contributions (NICs) were due to be abolished in April 2018, but the plans were delayed for a year in 2017. The government has now announced that Class 2 NICs will not be abolished during this Parliament.
Former Chancellor George Osborne announced the tax cut during the 2016 Budget, stating that abolishing Class 2 NICs would benefit an estimated 3.4 million self-employed workers. Class 2 NICs are currently paid at a rate of £2.95 per week by self-employed individuals with profits of £6,205 or more per year.
In a written statement to MPs, Robert Jenrick, Exchequer Secretary to the Treasury, stated that eliminating Class 2 NICs would have introduced ‘greater complexity’ to the UK tax system.
He added: ‘The government remains committed to simplifying the tax system for the self-employed, and will keep this issue under review in the context of the wider tax system and the sustainability of the public finances.’
Responding to the government’s decision to scrap the tax cut, Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), said: ‘The move is extremely disappointing and flies in the face of tax simplification.
‘Rather than hitting more than three million self-employed people with this levy, the Treasury should have worked harder to develop more effective ways to protect around 300,000 low-earners and maintain their contributions for the state pension.’
Think tank the Institute for Public Policy Research (IPPR) has called for a radical overhaul of the UK economy, stating that it ‘does not work well’ for most people.
A poll conducted by Sky Data on behalf of the IPPR revealed that 49% of respondents would describe the way that Britain’s economy operates as ‘unfair to some degree’. Just 22% believe that the way the economy works is fair.
The poll also revealed that 80% of those surveyed support ‘greater regulation’ of major digital companies; would welcome the introduction of a new corporation tax on multinational companies; and would like to see the National Living Wage (NLW) rise from its current level of £7.83 per hour to £8.75 an hour, to bring the NLW in line with the current Real Living Wage.
An additional 50% of individuals would support asking the Bank of England to ‘control house price inflation’, and advocate raising taxes on income from wealth to match taxes on income from work.
Commenting on the findings, Frances O’Grady, General Secretary of the Trades Union Congress (TUC), said: ‘It’s time for a once-in-a-generation rethink of our approach to the economy. Working people have had enough of stagnating living standards and massive inequality.
‘A better deal for working people is possible, and will allow us to build a stronger, fairer economy.’
In a new report, the Association of Accounting Technicians (AAT) has outlined a range of proposals designed to help raise funds for the NHS without instigating tax rises.
The publication of the report comes following the Prime Minister’s recent pledge to raise £20 billion per year for the NHS by 2023/24. In response to this, the Office for Budget Responsibility (OBR) warned that tax rises will be required in order to fund NHS budget increases.
According to the AAT, its proposals would ‘raise over £27 billion’ while protecting UK taxpayers from increased government borrowing or tax rises.
Within the report, the AAT has urged the government to simplify inheritance tax (IHT); abolish the Marriage Allowance; remove higher rate tax relief for pension contributions; and switch stamp duty liability from the buyer to the seller.
The AAT acknowledged that some of its recommendations would ‘raise significant political challenges’, but stated that the proposals ‘make financial sense’.
Commenting on the matter, Phil Hall, Head of Public Affairs and Public Policy at the AAT, said: ‘AAT’s recommendations will not clear the deficit or enable investment to be showered across the country, but they do identify over £27 billion of annual savings and deserve serious consideration as a worthwhile, credible and thought-provoking contribution to the UK taxation and investment debate.’
The report can be read in full here.
According to a report published by the Trades Union Congress (TUC), childcare fees have risen by 52% since 2008, while wages have risen by just 17%.
The TUC described the situation as being ‘even worse’ for lone parents, and stated that childcare costs for single parents working full-time have risen ‘seven times faster’ than earnings.
In England, average childcare fees have risen from £159 per week in 2008 to £236 per week in 2018 for a child aged under two; and from £149 per week in 2008 to £232 a week in 2018 for a child aged over two.
Despite government support, including free nursery hours for some working parents and the introduction of the Tax-Free Childcare (TFC) initiative, many families in the UK are ‘still being left with huge childcare bills’, according to the TUC.
It has urged the government to supply additional support, including subsidised, affordable childcare ‘as soon as maternity leave finishes’, and more government funding to enable local authorities to provide nurseries and childcare.
TUC General Secretary, Frances O’Grady, said: ‘Despite government support, families still face eye-watering nursery bills. Britain’s cost of living crisis is having a huge impact on working mums and dads.’
Research carried out by commercial law firm EMW has revealed that the number of data breach complaints made to the Information Commissioner’s Office (ICO) has risen by 160% since the introduction of the General Data Protection Regulation (GDPR).
The GDPR came into effect on 25 May 2018, and UK businesses were required to be compliant by this time. Under the Regulation, businesses that deal with individuals living in an EU member state must protect the personal information belonging to those individuals, and must have verified proof of such protection.
EMW’s research revealed that, between 25 May 2018 and 3 July 2018, 6,281 data protection complaints were made to the ICO. This represents a rise of 160% when compared to the same period in 2017, when 2,417 complaints were made.
According to the law firm, ‘increasing numbers’ of consumers are making complaints in regard to data breaches. EMW also suggested that a ‘heightened awareness of individuals’ new data rights’ now exists, partly due to ‘greater media publicity’ given to the GDPR, alongside considerable government advertising.
‘A huge increase in complaints is very worrying for many businesses, considering the scale of the fines that can now be imposed,’ said James Geary, Principal of EMW’s Commercial Contracts team.
‘The more data a business has, the harder it is to respond quickly and in the correct, compliant manner.’