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From diesel tax penalties and calls to rule out a further rise in insurance premium tax, to housing ambitions and planning laws, UK Chancellor Philip Hammond has faced a lot of pressure this week, ahead of the announcement due tomorrow.

Below Finance Monthly has heard from a number of source in the industry on what they expect, predict and would like to see come from the announcement, in this week’s Your Thoughts.

Adam Chester, Head of Economics, Lloyds Bank Commercial Banking:

Tomorrow’s budget will have to strike a difficult balance. Improvements to the public finances had given some room to ease policy, but that will be squeezed when the Office for Budget Responsibility revises down its growth forecasts on Wednesday.

The commitment to reducing the so-called structural budget deficit to below two% of national income by 2020-21, gives us a framework to assess how much room there is for any giveaways.

At the March Budget, the structural deficit was forecast to undershoot the two% target by £26bn. It’s now set to fall £6-8bn short of the March forecast, mainly due to stronger-than-expected tax receipts.

However, the OBR warned it will dial down its productivity forecasts, and we estimate a 0.4% downward revision would increase the structural budget deficit by around £15-£20bn.

On top of this, new funds are being sought for areas including Northern Ireland, public sector pay and the NHS, which would likely mean breaching the two% cap.

However, we suspect any available wiggle room would be used to fund a modest fiscal giveaway in order to keep borrowing and debt projections on track.

Matthew Walters, Head of Consultancy & Data Services, LeasePlan UK:

Fleets have been subjected to a lot of change in 2017. April saw the introduction of a new Vehicle Excise Duty system and new rules for Optional Remuneration Arrangements. July saw the publication of the Air Quality Plan, with its promise of Clean Air Zones around the country. And now it’s the turn of the Chancellor’s first Autumn Budget.

This Budget cannot add to the uncertainty facing fleets and motorists. In fact, it should provide clarity. The Chancellor must take the opportunity to reveal the rates of Fuel Duty for next year, as well as the rates of Company Car Tax for 2021-22 – and preferably beyond.

We’d like to see the Chancellor maintaining the freeze on Fuel Duty rates for another year – or perhaps even cutting them for the first time since 2011.

In addition, the UK Government is working hard to encourage the uptake of Ultra Low Emission Vehicles (ULEVs). We will have to see what incentives the Chancellor has up his sleeve.

Stephen Ward, Director of strategy, the Council for Licensed Conveyancers (CLC):

An Englishman’s home may be his castle, but purchasing that castle, family home or two bed flat is an archaic process that needs to be updated. The conveyancing market has never been in more need of attention and next Wednesday’s autumn budget presents Philip Hammond with a real opportunity to let the genie out of the lamp and demonstrate a real commitment to innovation in the property transfer process. We have three wishes for next week, namely:

James Hender, Partner, Saffery Champness:

Stagnating productivity means that any rabbits which the Chancellor wishes to pull out of his budget hat are not looking too healthy. OBR forecasts have eaten into the £26bn headroom the Chancellor thought he had, and though the expectation may be that Mr Hammond will spend to win some political capital, any tax gift will come at a price, and is likely to be subsidised at someone else’s expense.

The government is arguably stuck between a rock and a hard place on corporation tax. A fine balance will need to be struck between ensuring the UK demonstrates that it is open for global business, and being publicly seen to tackle any perception of big business not paying its way.

In this climate, the 2020 commitment to 17% Corporation Tax may be looked at again, and we can certainly expect rhetoric, if not concrete action, to further reinforce the government’s position in taking a central role on international tax transparency and anti-avoidance.

On appealing to younger voters: This is perhaps one of the most politically-charged Budgets of recent years, with many predicting that the Chancellor will use the occasion to try and appeal to a younger generation of votes. If Phillip Hammond is as bold as some have called for him to be, the implications of this political move on taxpayers could be significant.

Michael Marks, CEO, Smoothwall:

After Philip Hammond’s pledge in last year’s Autumn Statement to invest £1.9bn in cybersecurity, we can expect further funding (or at least reference) to this issue as the cybersecurity landscape heats up. Following a year that included the biggest cyberattack on the NHS and the Petya malware attack across the continent, cyber security needs to be an absolute priority for investment; without extra funding and protection, the Government risks undoing a lot of the hard work. So far, the near £2bn cyber windfall doesn’t seem to have had quite the desired impact.

Along with cyber security, I would like to see continued investment in the Enterprise Investment Scheme (EIS). It’s thought that the EIS investment may be reduced from 30% to 20%, thereby reducing entrepreneurial growth, and the UK could suffer consequently in the long term. As a country with a great track record of innovation, reducing investment in this scheme will have a detrimental impact on driving technology and business growth at a time when we need more people to ‘take that step’.

Stuart Weekes, Tax Partner, Crowe Clark Whitehill:

We would welcome a simplification of the rules and the removal of one of the two sets of Patent Box incentive rules as part of tomorrow’s announcements.

Very few companies are taking advantage of Patent Box incentives, which tax the profits from patented products at 10%, a nine-percentage point discount on the current 19% rate of tax. Many companies do not know about this and, for those that do, the complexity of the legislation has been a major barrier to making a claim. Once the UK exits the EU, will the government improve the benefit of the Patent Box, especially as the UK Corporation Tax rate will drop to 17%, making the margin for the Patent Box less attractive than it might otherwise be? Will this prompt a cut in the applicable Patent Box tax rate from 10% to 8%?

Chris Wood, CEO, Develop Training:

The UK Government has recently published an independent review concerning the increasing applications for artificial intelligence (AI). Its recommendations focus largely on the provision and development of training and education in academia and for master-level and PhD students. Support is recommended for organisations such as, and amongst other, the Royal Academy of Engineering, the Alan Turing Institute, and the Engineering and Physical Sciences Research Council. AI is likely however not only to influence academia but, over the next 10-30 years, affect almost all of the current activities we perform at work and at home.

The current skills shortage, felt most keenly in the utilities, construction and engineering sectors is the end-result of under-investment on the part of both government and industry over the last 30-40 years. It is inconceivable, and somewhat terrifying, that this will continue into the mid-21st century particularly against a backdrop of such monumental change. Therefore the 2017 budget should include provision not only for a greater understanding of AI from an academically-driven research perspective but also from that of every individual. Children, school-leavers and those who will be in employment for the next 30-40 years must be educated in how AI is likely to affect their jobs, careers and lives. To achieve this the government would do well to establish a national institute for the promotion, understanding and application of AI for the benefit of all.

Mark Palethorpe, CFO, Cox Powertrain:

There are Government incentives for small innovative businesses like ours, but the Patient Capital Review has promised to address the need to encourage long-term investment in step-change innovation. For some people, the investments required by smaller innovators are just too small to get excited about and, for others, investment levels are too big for the risk. You can get caught out whatever size you are. Results of the Patient Capital Review are expected to be announced as part of the Autumn Budget and we’d like to see more opportunities for investment in innovation. We’d welcome an increase in the cap that exists for tax relief investment schemes like EIS, which has worked really well for us but does limit the amount an individual company can invest.

Nigel Wilcock, Executive Director, the Institute of Economic Development:

For the good of the economy, in tomorrow’s announcement on the UK Autumn Budget we need clarity on the structures and budgets for elements of the Industrial Strategy; clarity on how Structural Funds will be replaced for regions and clarity on local authority funding – how the business rate retention mechanism and re-allocation system will work. Specifically, we are seeking commitments from the Chancellor to transport infrastructure that equalises expenditure per head between regions, greater recognition of the social care costs falling on local authorities and funding for state aid interventions for business. We also recognise that National Insurance contributions from employers need to be looked at – it is an important economic issue that variations in different types of employment contracts are allowing corporations to be avoiding contributions when the economy is at full employment. The tax take of the economy is increasingly disconnected from the level of activity.

Damian Kimmelman, CEO, DueDil:

The abnormally low level of interest rates could be weighing on productivity growth by allowing weak and highly indebted firms to survive for longer than they normally would, by alleviating the burden of servicing their debts. Better information is needed to identify these firms, understand their business and support those with potential.

We have seen the government put their full weight behind opening data initiatives, such as Open Defra, to huge effect. DueDil would like to see the government put their full weight behind Open Banking and ensure that all of the CMA 9 banks (and beyond) open up as much banking data as possible to stimulate innovation in financial services and put the UK at the fore-front of Open Banking globally.

The UKEF committee has pledged to continue supporting exports and export finance. More interestingly, they have pledged that they will digitalise and standardise the application and on boarding process for businesses applying for export financing. DueDil would like to see the government to fund a competition to build a solution that would support the digitalisation of UKEF, in order to ensure that SMEs can painlessly and efficiently access a market of export financing and to ensure the ongoing success of SMEs following Brexit.

William Newton, President & EMEA MD, WiredScore:

The UK has the largest digital economy of any G20 nation, but it is important that technological skills and innovation continue to be employed across a range of industries. The service sector, for example, currently accounts for the greatest share of hours worked at lower productivity levels in the UK. Therefore, digitising existing processes in this sector presents a massive opportunity to address this productivity concern.

If the Government is to enable increased productivity, it must ensure that the existing generation has the necessary skills to meet the demands of modern industry. We would like to see a policy on business rates incentives for organisations who can prove they are investing in their workforce's digital skills.

Earlier this year, the Government announced its intention to support business rate reliefs on new 5G Mobile and full fibre broadband in the Telecommunications Infrastructure Bill. This proposal was received favourably by network providers, and we are now witnessing commitments such as that made by Openreach chair Mike McTighe confirming a plan to bring fibre to 10 million premises before Christmas. As such, the impact of business rates incentives has already been shown to be successful in spearheading improvements to the country’s digital infrastructure. We now need to see digital skills getting the same treatment.

Katharine Lindley, Chartered Financial Planner, EQ Investors:

It could be a tricky Budget for the Chancellor with limited legislative time due to ongoing focus on Brexit. But first one of current Parliament so generally Chancellors like to increase taxes and hope people forget by the next general election. However, minority government makes controversial changes difficult:

Mark Tighe, CEO, Catax:

The UK’s reputation as a world leader in Research and Development is essential to the welfare of the British economy as the Brexit process gathers pace.

In order for these smaller firms to compete on the world stage they must be innovating - which can be expensive. As it stands, current R&D tax credit legislation allows SMEs to take the risk of developing a new product, service or process - without undue worry over the financial impact if it fails or is never used. This creates a fertile environment for businesses to experiment and grow and supports the economy moving forward.

Mrs May used her speech at the CBI earlier this month to call on business to innovate more. She’s absolutely right to do so. The key now is making sure Philip Hammond follows through and makes sure the Government properly supports the firms that do.

Ed Molyneux, CEO and co-founder, FreeAgent:

Assuming that the VAT threshold is lowered - as some reports are suggesting - a huge number of contractors, freelancers and micro-business owners would be faced with a significant new administrative and financial burden.

It’s very unfair to position freelancers and contractors as not being on a level playing field with those who are employed. These business owners have none of the employment rights or the security that employed workers have and there must be some recognition for that - unless the government wants to slow the growth of this very important part of the UK economy - representing more than 95% of the UK’s 5.5 million businesses.

We would like to see some positive news in the Budget for the micro-business sector; whether it’s new legislation to help them overcome the chronic issue of late payment, easier tax rules to navigate or simply recognition of the recent Taylor Review and the ongoing status of those working in the gig economy. Freelancers and micro-businesses play a huge role in our economy - it’s time the government started supporting them.

Steven Tebbutt, Tax Director, MHA MacIntyre Hudson:

There’s a growing expectation that Entrepreneurs’ Relief will be attacked as part of the Autumn Budget 2017, which will prove an unpopular move with business owners and aspiring entrepreneurs. Such a change might appeal however to younger generations who feel that wealthy business owners shouldn’t benefit from such a generous tax saving measure.

The Government has already introduced “anti-phoenixing” rules to combat business owners abusing the relief by extracting profits through liquidation, only to resume the same business, sometimes multiple times or even ad infinitum. However, there remains a number of planning opportunities which the Government could still look to limit or close.

For example, it would be relatively simple for the Government to amend the legislation so that qualifying conditions have to be met for, say, five years, rather than the current one year which generally applies. This would immediately make it more difficult to structure disposals in advance of a sale to secure Entrepreneurs’ Relief, as business owners looking to sell would have far less opportunity for eleventh hour planning. Such a change would help ensure that only business owners meeting the conditions over a substantial period qualify for relief.

Robert Gordon, CEO, Hitachi Capital UK:

We know that clean air is on the agenda, as we have seen the Government proactively move towards legislation aimed at tackling the UK’s pollution problem, therefore we fully expect that tomorrow’s announcement will include some form of punitive measure towards diesel vehicles.

Growing uncertainty from consumers around the future of diesel vehicles has already fuelled a rapid decline in the market, with October sales falling by nearly a third compared to last year and any additional deterrent could prove to be decisive, in encouraging a phasing out of diesel vehicles altogether.

If this happens, the Government must be prepared to outline how it plans to fund the infrastructure improvements required, to give businesses and consumers the confidence to make the transition to vehicles powered by alternative fuels at a faster pace than we have seen to date.

Jonquil Lowe, Senior Lecturer in Economics and Personal Finance, The Open University:

The Chancellor is expected to follow an Office of Tax Simplification (OTS) recommendation to reduce the VAT threshold, currently £85.000, possibly as low as £25,000. This must look tempting since it could bring up to £2 billion into the government coffers, sucking 1.5 million business minnows into the VAT system. Depending on whether traders can pass the tax on to customers and who their customers are, this extra tax will be paid partly by firms and partly by households through higher charges for their plumbers, builders, taxis and hairdressers.

Quite apart from paying the tax, HMRC has estimated the cost per business of dealing with the VAT admin is £675 a year. Moreover, if there is no change to the exemption level for Making Tax Digital, currently set at the VAT threshold, from April 2019 those small businesses will also suddenly find themselves sucked into mandatory quarterly digital accounting.

By extending the VAT base, cutting the threshold narrowly skates around the Conservative Manifesto promise not to raise the level of VAT. And, no doubt, it will be dressed up as a tax avoidance measure aimed at traders operating in the informal economy. But make no mistake: this will be a stealthy and substantial tax rise.

Martin Ewings, Director of Specialist Markets, Experis:

As we await the Chancellor’s Autumn Budget with anticipation, the focus must be on driving growth in key areas and ensuring the long-term economic prospects of a post-Brexit Britain. Increased infrastructure spending is expected to be one of the pillars of the budget, injecting regions around the country with much-needed jobs and investment. But we must have the skills in place if the nation is to deliver on such projects, both now and in decades to come. The recent announcement of £21m to boost regional tech hubs around the country is a positive step, but more needs to be done if we are to close the ever-widening skills gap.

Digital investment will be an important component of this, and new technologies could hold the key. Philip Hammond is poised to focus on AI (£75m investment), electric cars (£440m investment) and 5G (£160m investment), while also pledging £76m to improving digital and construction skills more widely. With so many different priorities, it’s important not to lose sight of nurturing future talent. The Cyber Discovery programme is a great example of what needs to be done. The £20m government initiative, announced on Saturday, will aim to encourage and inspire 15-18-year-olds to enter the cyber security industry via a comprehensive curriculum. There will be three million unfilled jobs in cyber-security by 2021, but investing in programmes like this could go a long way to help ministers and businesses plug the UK skills gap, both now and in the future.

Craig Harman, Tax Specialist, Perrys Chartered Accountants:

Following the introduction of the help to buy ISA, first time buyers could once again be one of the winners from the budget as the chancellor is expected to announce changes to Stamp Duty Land Tax. This could include either a reduction in the rate for first time buyers or even a ‘holiday’ period providing a complete exemption for those able to benefit. It has even been suggested that there could be a fundamental overhaul by making the seller liable for Stamp Duty instead of the purchaser. This would benefit any individuals moving to a more valuable property as the liability would be based on the lower value of their current home.

Tax relief on pensions has been a bit of an easy target over the past few years with both the annual and lifetime allowance significantly reduced. It is likely that we will see a further cut in the tax relief available on funding for retirement. Some have even suggested a complete change to an ‘ISA’ like system, however this may be a step too far.

Individuals with significant dividend income have been penalised heavily over the past couple of years and this may be set to continue with many predicting either a cut in the tax-free dividend allowance or an increase in the tax rate.

Aziz Rahman, Founder, Rahman Ravelli:

The Paradise Papers have placed the issue of non-payment of tax back on the news agenda at a time when the Chancellor is announcing his tax priorities.

A large part of the Chancellor’s job is to assess and determine what taxation can be brought in from business. And in the current climate, everyone in business is under scrutiny to ensure they are paying what they should. This scrutiny can only increase if new or heavier taxes are announced tomorrow.

This may seem alarmist. But the Criminal Finances Act, which only came into effect two months ago, makes companies criminally liable if they fail to prevent tax evasion by anyone working for them; even if they were unaware it was happening. They can face unlimited penalties.

If businesses are to avoid prosecution, they must be able to show they had reasonable measures in place to prevent such wrongdoing. To ensure this is the case, they must review their practices and procedures to minimise risks.

This means ensuring staff are aware of the legislation regarding tax offences, having procedures in place for monitoring workplace activity and introducing procedures so that suspicions of wrongdoing can be reported in confidence.

The government is under huge pressure to tackle the non-payment of tax. At a time when the government is outlining its tax priorities, it would be foolish for those in business to fail to make sure their tax affairs are legal and above board.

We would also love to hear more of Your Thoughts on this, so feel free to comment below and tell us what you think!

In an exclusive CNBC interview, Jack Ma, Alibaba executive chairman, talks to CNBC's David Faber about artificial intelligence and employment.

The robotic revolution is set to cause the biggest transformation in the world’s workforce since the industrial revolution. In fact, research suggests that over 30% of jobs in Britain are under threat from breakthroughs in artificial intelligence. Thanks to advances in technology, many jobs that weren’t considered ripe for automation suddenly are. Is your job next? Find out how many jobs per sector, are at high risk of being taken by robots by 2030.

(Source: RS Components)

Last week Governor of the Bank of England and Chairman of the G20's Financial Stability Board, Mark Carney said London is “effectively, the investment banker for Europe.”

Many believe companies and financial institutions should move their trading to the continent, while others believe this is non-sensical given London’s capital position globally and in the markets. Some companies, such as Goldman Sachs, HSBC and UBS, have already confirmed the eventual moving of staff and trade abroad, once the UK leaves the EU.

At the same time, the UK is faced with a lack of skilled labour, and due to the uncertainty surrounding changes in immigration law and the movement of employees or recruitment across the continent, bosses of big companies such as Barclays are calling for the freedom to recruit freely outside of the UK.

This week Finance Monthly hears Your Thoughts on the moving of business to the EU post-Brexit, and below are some comments from reputable sources within the business sphere.

Bertrand Lavayssiere, Managing Partner, zeb:

For those institutions with EU clients in their roster, it is more than likely that they will have to move to the EU post Brexit. However, there are a few buts…

One of the critical aspects is ‘passporting’. At present, banks can operate within the EU under UK regulations with relatively light approvals required from local regulators. This is of key importance for large sectors of the industry, such as asset management, where more than a trillion GBP is under management for EU-based investors, corporate lending, reinsurance and securities trading platforms, to name just a few. If this is maintained - which seems unlikely today - then the need to move is not crucial.

The long-standing cooperation between EU and UK regulators could ease some of the pain if governments agree that joint efforts to maintain alignment will help the overall goal of financial stability. Furthermore, many of the pertinent regulations are global anyway - those from the Basel Committee or the IASB, for example.

With regards to the London market, there are a number of platforms for specific product lines (foreign exchanges, swap contracts, equity derivatives, etc.) to facilitate compensation, settlements of trades among market players, and volumes to ensure liquidity. In simple terms: London is the place for such platforms. Disagreements have already taken place with regards to whether those platforms could remain in London. If the decision is yes, it will be business as usual. If, however, the answer is no (the most probable outcome), then the trading platforms and back offices of stakeholders have to move. This includes the day traders and market makers who are crucial for the liquidity of the market.

There is a whole list of further variations on this issue. But all in all, it is essential that a financial institution with clients based within the EU considers its strategic options as of now. Establishing a presence in the EU needs at least 18 months from a regulatory stand point. As many EU regulators require a fully-fledged decision making unit through proper governance, the analysis of the changes in delegation of authority schemes and the assessment of potential human resources impacts must be considered early on in the process.

Paramount in the decision-making process should be the institution’s business potential, to follow their customers, and ongoing requirements, rather than solely the regulatory aspects.

Ben Martin, Founder, The Brexit Tracker:

Moving your business away from the UK is a major undertaking. Perhaps you were considering this prior to the Brexit referendum or more likely, you believe leaving the EU will make your business operations untenable. But before taking action, we suggest you calculate and monitor the financial impact of Brexit on your firm and compare this to the emotional ‘pull’ of moving to the EU.

Here’s our 5-point plan:

  1. Calculate how Brexit has already impacted your firm. From over 390 economic indicators we’ve reviewed, the biggest market-related change has been GBP Sterling dropping 15% (now 12% weaker.)  How has this impacted your business?
  2. Continually assess and record how new facts surrounding the UK/EU relationship will impact your £ calculations
  3. On relocation – consider how you will continue to serve your UK customers.  With a weaker GBP, your UK sales are likely to be worth 12% less
  4. A move will impact your business banking.  UK banks/lenders will need convincing of the merits of a move (and the enforceability of their security) to continual their financing
  5. Consider your existing and new competitors – will a move provide an advantage to you or them?

In summary, firms need the full “Brexit facts” before undertaking a move to the EU – as the facts are in short supply, they should start their own Brexit monitoring system.

Oliver Watson, Executive Board Director for the UK and North America, PageGroup:

As is to be expected, multinational businesses are more cautious than UK SMEs when it comes to hiring in post-Brexit Britain – and, as I see it, there are two reasons for this.

With a variety of other investment opportunities elsewhere across the globe, large international businesses – who are under no obligation to invest in the UK – have the ready option to divert investment to other more certain markets. As a result, their talent acquisition will naturally become focused in a different direction or geographical location.

However, where SMEs generate the bulk of their revenues in the UK don’t have that option – they just have to get on with it. This means while multinationals are feeling cautious about UK hiring, for SMEs it is often business as usual. This is a pattern we’ve seen time and time again in the face of uncertainty.

Mary Wathen, Partner and Head of Agriculture and Rural Affairs, Harrison Clark Rickerbys:

The Agricultural sector relies heavily on EU workers. Around 15% of the total workforce is from outside the UK. The uncertainty around the status of EU workers threatens to hit the agricultural sector hard if the status of EU workers isn’t clarified.

Despite the uncertainty, there are steps which savvy agricultural employers can take now to minimise the disruption. Taking action ahead of time will help maintain the flow of workers for each harvest, protecting both the business and the livelihoods it supports.

Employers need to ask themselves some key questions about their workforce:

For smart agricultural employers, the so-called crisis provides an opportunity to build their employer brand.  Employers are enhancing their working relationships with key employees who meet the requirements for permanent residency and want to remain – introducing them to specialist agricultural immigration advisers and supporting employees through the application process.

But this isn’t the solution for the seasonal workforce shortage. The fruit-farming industry employs 29,000 seasonal workers, who go back to their home countries after six to nine months in the UK. They won’t be eligible to apply for permanent residency. Virtually all of them come from the EU, mainly Romania and Bulgaria, but also Poland and Hungary. If the Government ends freedom of movement, a return to the old-style permit scheme seems the only option to protect the harvest and UK agriculture.

Richard Thomas, Employment Partner, Capital Law:

One key issue for the forthcoming Brexit negotiations will be the issue of EU Immigration following our exit from the UK. There is no doubt that the UK Government will seek to put in place some form of “controls” on EU immigration after the UK leaves the EU but it is entirely unclear as to what form these controls will take and/or who they will apply to. Will the controls apply to unskilled, semi-skilled or skilled EU migrants? Who makes the decision as to what constitutes a semi-skilled or skilled role? Is there any appeal against this decision?

It has also been suggested that the UK will allow all current EU nationals working in the UK to remain in the UK after the UK leaves the EU but it is not clear whether this will be indefinitely and whether it will apply to non-working spouses and/or children. Ultimately no promises have been given and it is a matter for negotiation between the EU and the UK, although it is hoped that the issue will be resolved quickly.

In addition, in April 2017 the UK Government introduced the Immigration Skills Charge imposing a charge of £1,000 per year for employers sponsoring a worker from outside the EU. It is quite possible that the UK Government will extend this charge to EU workers who do not have rights of permanent residence once the UK leaves the EU.

Given the current uncertainty and potential cost the best advice to SME’s with EU workers who have been working in the UK for at least 5 years is to get them to make an application for Permanent Residence as this should provide a guarantee of an individual’s continuing right to work in the UK.

However, individuals making the application will have to complete an 85-page form and provide huge amounts of supporting documentation confirming what they have been doing in the UK for the last 5 years. This is an arduous process to say the least but there appears to be little alternative as (unlike some EU countries such as Germany) the UK has no central register of the identities or even the numbers of EU citizens currently working in the UK. The Home Office has stated that it is looking to use an online application process but there does not appear to be any additional funding for this.

Katherine Dennis, Associate in the Employment, Pensions and Immigration team, Charles Russell Speechlys LLP:

The EU referendum has caused a lot of uncertainty for EU nationals and their employers as to what their position is in the UK and what will happen when the UK exits the EU.  This is clearly an important issue for many SMEs, especially as sponsorship of overseas workers through the UK’s points-based system becomes increasingly expensive.

Importantly, free movement will continue to apply until the UK formally leaves the EU. This process was started on 29th March 2017 by the UK government giving notice under Article 50 of the EU treaty. There will now follow a two-year negotiation period, which could be extended by agreement of all member states. The earliest the UK would leave the EU is therefore the end of March 2019. Until then, EU nationals are still free to work in the UK.

The UK government has clearly stated that it wishes to control migration from the EU, while still attracting those whom it considers have the most to offer the UK. It is highly likely therefore that the UK will introduce measures to restrict free movement. It is also therefore likely that it will be harder for employers to recruit EU nationals and it may be difficult for EU nationals to work in the UK on a self-employed basis.

At the moment, there is no firm indication as to the type of system which might be put in place and much depends on what the UK government is able to negotiate with the EU.

Possibilities include a new work visa system for EU nationals or expansion of the current points based system, which enables employers to sponsor skilled workers in the UK (although it is currently limited to professional roles at a certain salary). It is unlikely visas will be required for short business trips. Other possibilities include retaining limited free movement with measures to cap numbers, such as quotas or temporary ‘cooling-off periods’. Concessions may be made for sectors where there is a recognised labour shortage.

The UK government has stated that it intends to consult with businesses and communities to obtain the views of various sectors of the economy and the labour market. It is therefore crucial that employers and business-owners who are concerned about the impact of Brexit on their workforce respond to the government’s consultation when it is issued.

In the meantime, EU nationals who are eligible to apply for permanent residence (i.e. those who have been resident in the UK for five years or more) or British citizenship should do so now to ensure their continued right to work in the UK.  EU nationals who have not reached the five year point when the UK exits the EU are in a more vulnerable position.  It is sensible for those EU nationals to apply now for an EEA Registration Certificate, which confirms that they are currently living and working lawfully in the UK under EU provisions, in case this fact becomes important in any future transitional arrangements.

We would also love to hear more of Your Thoughts on this, so feel free to comment below and tell us what you think!

Somalia faces numerous challenges on its quest for peace, stability, and economic prosperity. The recent drought and famine will test the country's resilience to provide humanitarian assistance and will require help from the international community. The government's recent policies demonstrate its strong commitment to improving the state of the country and Somalis' livelihoods.

Here are five things to know about Somalia's economy since the country resumed relations with the international community five years ago.

The drought is severely affecting vulnerable populations. The harsh impact of the ongoing drought on the agricultural sector has put about 6.2 million people (about half the Somali population) in need of assistance and at risk of food insecurity, prompting an urgent need for humanitarian and financial assistance from the government and the international community. The government will also need to better coordinate and monitor humanitarian aid distribution amid security challenges across some regions with a focus on the most affected regions.

Somalia is a fragile state, located in the horn of Africa, that has emerged from a two-decade-long civil war that caused significant damage to the country's economic and social infrastructures. In 2012, the Federal Government of Somalia was elected and recognized by the international community. Postwar conditions continue to be difficult, however, with poverty widespread and weak institutional capacity.

Donors' support is key. The Somali economy is sustained by donors' grants, remittances, and foreign direct investment mostly by the Somali diaspora. Since 2013, the donor community has given over $4.5 billion in humanitarian and developmental grants, which is essential in contributing to finance Somalia's trade deficit of nearly 55 percent of GDP (average during 2013-16). The current drought is expected to slow economic activity and raise inflation this year, thereby making donor support all the more critical to sustain growth.

Tackling unemployment is crucial for political stability. The unemployed youth population (about 67 percent) contributes significantly to irregular migration and participation in extremist activities, including Al-Shabaab—the militant jihadist group—which is viewed as another form of employment. With very high youth unemployment and low overall labor force participation (particularly by women), the Somali authorities established the National Development Plan that focuses on the following key areas: how to achieve higher economic growth, create jobs, and absorb the Somali refugees returning from Kenya; remittances flows; and prioritizing social safety nets and pressing humanitarian conditions.

Preparations for currency reform are under way to help strengthen governance . As part of a wider Somali reform initiative, the Central Bank of Somalia and the Federal Government of Somalia are preparing to reissue new Somali shilling banknotes—for the first time in 26 years—to combat the existing massive counterfeiting in the country, restore confidence in the national currency, and to allow the central bank to start implementing monetary policy. The IMF is helping the authorities to implement the measures that need to be in place for the launch of the new currency.

The IMF is working closely with Somalia. Since resuming its relationship with the country in 2013, the IMF has concluded two annual economic assessments—the first in 2015—marking the first IMF consultation with the country since 1989. Because Somalia is in arrears with the IMF it cannot benefit from IMF loans; however, the authorities have engaged with the IMF in the context of a 12-month staff-monitored program. This has helped create a framework to support Somalia's economic reconstruction efforts, rebuild institutional capacity, and establish a track record of policy and reform implementation. The first review of this program was completed in February 2017.

Technical assistance is helping. Somalia is among the largest beneficiaries of IMF technical assistance—which helps build institutional capacity—receiving over 70 technical assistance and training missions since 2014. Tangible progress is being made in budget preparation and fiscal reporting, currency reform, and financial sector reporting and licensing. For example, the authorities have been able to prepare a national budget for 2014-2017 and since January 2015, the government produced its first monthly fiscal reporting data. Starting from a very low capacity and a mix of Islamic and western accounting systems, central bank staff have developed a bank licensing framework, methods for periodic reporting by commercial banks, a system for bank financial analysis, and a supervisory scoring system that monitors the overall health of a bank. As Somalia continues to engage more with the international financial institutions, the IMF will deepen and scale up its capacity-building efforts as necessary.

(Source: International Monetary Fund)

Looking to start your own business? Maybe you’re a few steps in already? You feel like you’re treading on egg shells? Gary Turner, UK Managing Director of Xero, here gives a brief analysis of all that can go wrong, and how to avoid them!

Entrepreneurs deserve a huge amount of respect for taking the leap to start their own business venture as it’s no small feat. You just have to look at the troubling statistics which show 21% of SMBs don’t make it past their first year to realise the challenge that’s set before them. I’ve been vocal that 2017 will be an unpredictable year for the UK economy, and following last week’s budget it’s vital now more than ever that a new business starts with as few issues as possible.
Here are my 6 Don’ts to ensure success in your first year.

1. Don’t rush your dream team

You may have a small network, you may have never hired an employee, and you may have many family and friends happy to help out. This can lead to new business owners bringing in familiar faces to help get them off the ground – but while this is useful for some aspects of work like admin and delivery, external expertise are vital. It’s not advisable to bring in family just because they’re accessible, take the time to recruit people who belong in a small business. The key traits to look out for are ambition and initiative, and an innate ability to work in teams. Alongside a specific skillset for different aspects of the business such as marketing, IT, sales and the like, it will help frame your company as a professional one.

2. Don’t market your company before developing your brand 

The excitement of launching your own business is unparalleled, and naturally you’ll want to shout about it from the high heavens. However, before you go spending money on services claiming to boost the potential of your social media channels, you first need to create your own business identity. This includes creating your own brand values, distinguishing your unique selling point, identifying your tone, and keeping consistent messaging across all PR and marketing. No matter how someone hears about your business, it needs to be in line with where they may hear about you elsewhere.

3. Don’t lose sight of your personal life

Just because you’ve become a business owner doesn’t mean it should become who you are. You need to remember to keep you personal life separate from business. We need to respect ‘burnout’ as a real phenomenon, it’s not something only the weak experience, it’s human to feel run down and demotivated from a lack of enjoyment in life, so take the time to focus on you. A lot of this boils down to balancing work with play, and today’s technology makes accessibility to work a lot more possible. By using the cloud anywhere, you can cut commuting time and spend that time on extracurricular activities.

4. Don’t assume the role of an accountant

There are intelligent software tools that allow you to take your finances into your own hands. Online platforms can allow you to analyse your numbers, expenses, wages, POs/invoices and more. And while we believe this makes small business finance accessible and more easily digestible, nothing compares to the experience of an accountant. They’ll be able to monitor books for errors, use their knowledge to discover your eligible tax breaks, offer guidance and insight as a result of your numbers and more. Yes, accounting tools are important, but using someone’s expertise will help those numbers go that much further.

5. Don’t set yourself unrealistic goals

Ambition is important, but your first year should be the time to get your ducks in a row. Setting specific and high targets can be demoralising if you don’t hit your highest hopes, which is why you should set bronze, silver and gold targets. This will allow for a feeling of success, but it will also encourage you to push yourself to strive for gold – be it sales, exposure, clientele - targets will always be beneficial in building motivation and momentum.

6. Don’t go at it alone

Recent findings from Xero’s Make or Break report shows that, despite Brexit being a huge concern, 58% won’t be seeking help from a mentor. It’s unclear why, perhaps it’s from a lack of access to industry peers, perhaps it’s a strong sense of self-belief, but either way mentors can bring huge benefits . There is no shame in asking for advice, and most people will be happy to share their wisdom and experience. Don’t make a mistake that could have been easily advisable, hit the forums, attend networking events or even ask people in different industries – any knowledge you can soak up is vital to your future success.

Despite some positive economic data in the run up to today’s Budget, the Chancellor has reinforced his steady approach while making some small but significant pro-business adjustments, according to accountancy firm, Menzies LLP.

Business rates

The Chancellor has announced a £600 a year cap on business rates for smaller retailers that stand to lose the small business rate relief. Local authorities are also being given a £300 million pot to support local business.

“The Chancellor has acknowledged that the business rate systems needs fundamental reform and has promised to address this in time. However, in the short term, this cap is not enough and will only deliver limited savings for SME businesses. This will disappoint those expecting big rates increases.”


In the interests of ‘fairness’, the Chancellor has opted to increase National Insurance Contribution rates payable by self-employed workers to 11% by April 2019.

“Care needs to be taken to ensure that self-employed workers aren’t unduly disadvantaged. For this reason, the consultation announced to take place this summer is welcome. In particular, employers will also need to be reassured that they will still have access to this valuable and flexible employment pool.”

Tax-free dividends

The Chancellor has announced plans for the tax-free dividends allowance to reduce from £5,000 to £2,000 in April 2018.

“Before 2016, basic rate tax payers paid no tax at all on dividend payments. Since then, a tax liability has been introduced in stages; first with an exemption on the first £5,000. Now this exemption has been reduced to £2,000, which suggests it could even be removed altogether in time.

“This is a stealth tax on basic rate tax payers. It will also hit employees of companies that encourage wider share ownership and make it harder for employers to create meaningful incentives.”

Brexit negotiations

The Chancellor stopped short of doing anything further on Corporation Tax, which is planned to decrease to 17% by 2020.

“Corporation tax was mentioned several times in the Chancellor’s Statement and this is probably because the government is considering using it as part of Brexit negotiations. Further measures to reduce the administrative burden of R&D tax relief could also be used in this way.”

Apprenticeships and technology training

The Chancellor is intending to go ahead with the introduction of the Apprenticeship Levy in April 2018 in its current form. He also announced the introduction of T-Levels; new, skills-focused qualifications to be attained through the further education system.

“The introduction of T-Levels is good news but it will be some time before any benefit is felt by employers. It means that 13,000 qualifications will be replaced by just 15 and this will certainly bring greater focus, which will help employers to understand and recognise these new qualifications.”

(Source: Menzies LLP) 

One in six small businesses (17%) is planning to employ new staff by the end of April 2017 – with the IT & Telecoms sector leading the employment charge (27%) -– according to the new research from Hitachi Capital’s quarterly British Business Barometer.

The new Hitachi Capital Business Finance data comes as the Federation of Small Businesses has urged The Chancellor of the Exchequer Philip Hammond to boost jobs and long-term growth in the forthcoming Spring Budget. The new Hitachi Capital data suggests many SMEs already plan to hire new staff before April: the areas where they could do with Government support relate to keeping fixed running costs and business rates down.

Beyond being financial growth drivers for the economy at large - and an ongoing source of ideas and innovation - the UK’s small businesses are vital drivers for employment and training to the British economy. The new research by Hitachi Capital Business Finance revealed the younger the small business the more likely it was to be hiring. One in five SME decision makers (20%) from enterprises less than five years old plan to hire new people by April. In contrast, businesses over 35 years are the least likely to be hiring (13%).

For eight of eleven regions polled, typically around one in six small ventures were planning to expand their headcount in the next three months – with London, the South East, North West and Scotland driving activity.

Regional employment over the next three months

London 27%
North West 19%
South East 18%
Scotland 18%
West Midlands 17%
East 16%
East Midlands 16%
Yorkshire & Humber 15%
South West 10%
Wales 10%
North East 6%


By sector, the divergence between regions most and least likely to employ new staff were more pronounced – the biggest opportunity sectors being IT & Telecoms, Financial Services, Manufacturing and Medical.

Employment over the next three months by sector

IT & telecoms 27%
Financial Services 25%
Manufacturing 24%
Medical 23%
Media 22%
Real estate 20%
Transport & Distribution 18%
Construction 16%
Education 11%
Retail 9%
Hospitality & Leisure 7%
Agriculture 7%
Finance 6%


Gavin Wraith-Carter, Managing Director at Hitachi Capital Business Finance comments: “The Spring Budget is an opportunity for the Chancellor to openly support the growth ambitions of SMEs and the positive contribution they make to the UK economy at large. Many small business owners are concerned about the impact of a steep rise in business rates and have placed importance on cutting fixed costs and better managing cashflow and invoicing to keep their business plans on track.

 “On a positive note, our Spring research suggests that many SMEs are adjusting quickly to Brexit, looking for new markets to expand into and fresh methods to drive growth – and many intend to increase headcount to support these plans. This week’s Budget is a great opportunity for the Government to reaffirm its support for the sector at a critical time.”


(Source: Hitachi Capital Business Finance)

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