A survey carried out by the Institute of Chartered Accountants in England and Wales (ICAEW) has revealed that confidence levels amongst UK businesses are below zero, despite an increase in profit growth.
In the fourth quarter of this year, profit growth rose to 4.1%, up from 3.4% in the previous quarter. Such growth is expected to increase to 4.7% in 2018 as a result of rising sales and a slowdown in input cost inflation.
However, business confidence levels were low, peaking at -3.4 on the ICAEW’s Business Confidence Monitor, although confidence levels did pick up within certain industries. Confidence in the IT, energy and construction sectors rose significantly.
Commenting on the findings, Michael Izza, Chief Executive of the ICAEW, said: ‘While businesses are struggling to be confident in the current environment, there are reasons to be more optimistic.
‘Businesses are controlling costs, and there is finally some improvement, though small, in export sales growth. These findings highlight the cliff edge that the UK economy is on at the moment.’
Mr Izza went on to say that whilst the recent rise in interest rates was not unexpected, any ‘sudden shocks’ from Chancellor Philip Hammond in the upcoming Autumn Budget could potentially have a ‘serious impact’.
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 Chartered Accountants in England and Wales (ICAEW) has suggested that the number of businesses declaring insolvency could potentially rise as a result of the impact of Brexit on the UK economy.
The survey revealed that 73% of individuals working in the insolvency and business restructuring industry believe that Brexit poses the ‘biggest threat’ to businesses over the coming years. Meanwhile, 56% of those surveyed also believe that a rise in interest rates presents a risk to UK businesses.
The survey suggested that the retail sector could be the worst affected by insolvency, with 77% of respondents believing that it would be the sector most likely to experience ‘increased financial difficulty’.
Affected firms should seek early help in a bid to restructure their finances, business processes or management, the ICAEW stated.
Reflecting on the issue, Bob Pinder, Regional Director at the ICAEW, said: ‘We are in no doubt that businesses in the UK face difficult times ahead. A sharp and unexpected rise in the cost of doing business can make managing liquidity tough.
‘We believe that a change in attitudes is critical in order to successfully avoid substantially increased corporate insolvencies – confronting business issues, rather than being ashamed of them.’
Research carried out by domain registrar GoDaddy has suggested that a significant number of UK workers are considering setting up a business in addition to working their usual day job.
Nearly a fifth of those surveyed have contemplated starting up a business on the side, GoDaddy revealed.
The survey found that ‘side businesses’ help individuals to top up their income, with some entrepreneurs reportedly earning between £500 and £5,000 on top of the salary from their day job.
48% of those who start up a side business do so to make money from a passion or a hobby, the research revealed.
However, some experts have warned that many have set up side businesses in order to make ends meet. Annie Quick, Subject Lead in Inequality and Wellbeing at think tank the New Economics Foundation, commented: ‘For many more people, this is something they’re being forced to do.
‘We’ve had a decade now of stagnating wages, benefit cuts and increasing prices, so many people are finding that a full-time job is no longer enough to put food on the table and are often having to turn to often poorly paid, insecure employment to top up their income.’
The British Chambers of Commerce (BCC) has urged UK businesses to prepare for the implementation of new data protection regulations.
Starting from 25 May 2018, businesses that hold personal information will be required to ensure that their data procedures are adequate and that these comply with the new General Data Protection Regulation.
The BCC has recommended that businesses make a record of what personal data the firm holds, where it came from and who it has been shared with.
It also urged firms to review how the company ‘seeks, obtains and records consent from individuals’, ensure that appropriate procedures are in place to detect a breach in personal data and determine whether the business requires a Data Protection Officer.
David Riches, Executive Director at the BCC, commented: ‘Businesses need to be proactive about ensuring they are ready for the new data protection regulations when they come into force this time next year, and not leave preparations until the eleventh hour.
‘Those firms that don’t fulfil the necessary responsibilities leave themselves vulnerable to tough penalties, not to mention public scrutiny.
‘The General Data Protection Regulation is intended to reflect modern working practices in the digital age, and will strengthen consumer trust and confidence in businesses.’
In its final pre-referendum poll, the British Chambers of Commerce (BCC) found that the majority of senior businesspeople surveyed intend to vote to remain in the European Union (EU), but that the gap between the Remain and Leave campaigns has narrowed.
Some 54% of the 2,200 BCC members surveyed in April said that they would vote to remain on 23 June. This was down from 60% in February’s survey, while the percentage intending to vote to leave was up from 30% to 37%.
Dr Adam Marshall, BCC Acting Director General, said: ‘As the EU referendum campaign enters the final straight, the race for the business vote has clearly tightened. Although a clear majority of the businesspeople we surveyed continue to express a preference to remain in the EU, the gap between Remain and Leave has narrowed significantly in recent weeks.’
Those trading with other EU markets expressed the strongest support for the Remain campaign, with the strongest levels of support for the Leave campaign among those that do not. Businesspeople representing large firms were found to be significantly more likely to vote Remain than those in micro-businesses.
The BCC’s survey also showed that individuals are now strongly committed to their voting preferences. Just 0.3% of respondents said that they were uncommitted, and only 10.8% said that they could change their mind between now and the day of the referendum.
Other findings included:
- The majority of business leaders reported that the referendum has had no impact to date on various aspects of their business, from orders and sales (71.3%), recruitment (87.1%) and investment (79.6%), to total costs (80.3%).
- If the UK were to leave the EU, 35.9% currently expect that this would have a negative impact on their overall growth strategy, whilst 36.3% feel that this would have no impact, and 15.9% believe that it would have a positive impact.
- Asked about the impact of the UK remaining a member of the EU, 12.8% currently expect this to have a negative impact on their overall growth strategy. Almost half (49.4%) feel that it would have no impact, while nearly a third (30.1%) believe that it would have a positive impact.
Dr Marshall added: ‘While only a minority of businesspeople report that the referendum campaign has had a material impact on their firms to date, significant numbers say that they expect significant impacts in the aftermath of the vote – particularly if Leave carries the day.
‘Whichever outcome prevails, Westminster must shift its attention back to the economy on June 24 without delay. Growth is softening, and Westminster’s referendum ‘tunnel vision’ over the past year has meant that far too many key economic issues have been given short shrift or delayed altogether.’
23 May 2014
The new Intellectual Property Act received Royal Assent on 15 May, better protecting the rights of UK businesses.
New powers now allow the UK to implement the Unified Patent Court Agreement, which is the central part of introducing a single patent across most EU countries. It is thought this could lead to collective business savings of up to £40 million per year.
Protection for designers is also included, removing red tape and uncertainties for businesses when protecting their designs. Online services will be launched to help with the management of intellectual property.
Lord Younger, Minister for Intellectual Property, said: ‘Continued investment in intellectual property is vital to all businesses, as it contributes £16 billion to the UK economy each year. It is essential that we continue to work hard to create the right environment for them to flourish so we can benefit from their creative designs, inventions and ideas.
‘I am confident that this Act will further strengthen our world-class Intellectual Property system – from research to market – and to help businesses of all sizes continue to thrive’.
The key policies set out in the Act include: providing new protections for pre-publication research; the introduction of a criminal sanction for intentional copying of registered designs; measures to help businesses assess the strength of their case before going through legal proceedings; expansion of existing patent opinions services; and an exemption to the Freedom of Information Act to better protect pre-publication research.
The measures are expected to come gradually into force from October 2014 and later into 2015.