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News - 11 October 2024

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Accounting News - 11 October 2024

In this week’s Enews, as the Autumn Budget draws closer, we look at what small businesses want from the Chancellor. There is also news on the Growth and Skills Levy and new tipping law to update you on.

Photo by Dan Smedley on Unsplash

Chancellor must tackle barriers to growth in Budget

Chancellor Rachel Reeves must tackle barriers to growth in the Autumn Budget, says the Federation of Small Businesses (FSB).

The FSB is calling on the Chancellor to deliver a decisively pro-small business Budget, saying SMEs are ‘sick of stagnation’.

The business group wants measures to ease employment costs, remove barriers to access finance for investment, and lift more small firms out of business rates.

It also wants to see an increase in the Employment Allowance so it automatically rises in line with the National Living Wage (NLW) and the reintroduction of a Statutory Sick Pay small employer rebate.

The Chancellor should also take action to give small businesses confidence to invest by increasing protection for those who put their houses on the line to grow their business, by stopping the unscrupulous blanket use of personal guarantees on loans, the FSB adds.

Tina McKenzie, Policy Chair of the Federation of Small Businesses, said:

‘For small businesses, the barriers to investment are very personal. To help small businesses invest, employ and grow, we are asking the Chancellor to tackle the barriers that dissuade small businesses from growth.

‘Whether that’s the huge personal risks entrepreneurs take – often putting their house on the line – to secure finance; committing tens of thousands of pounds to give someone a job; or signing the contract for new premises knowing that business rates bills will land immediately. It’s by making these decisions easier for small businesses that Rachel Reeves can help small firms generate the growth we need.’

Internet link: FSB website


New Growth and Skills Levy must end ‘cycle of failure’

The new Growth and Skills Levy must end the ‘cycle of policy failure’ in addressing Britain’s chronic skills shortages, according to the Resolution Foundation.

The think tank says the government must get its design and implementation right if it’s to boost the number of apprenticeships after years of decline and ensure that Levy funds go to young people who need it most.

The Foundation says that Britain’s chronic skills shortages are underlined by the fact that the share of job vacancies caused by firms finding it hard to recruit people with the right skills or qualifications has more than doubled over the past decade from 16% in 2011 to 36% in 2022.

Skills shortages aren’t just preventing firms from recruiting either: an increasing share of workers are judged by their current employers to not have the right level of skills required to do their job.

Louise Murphy, Senior Economist at the Resolution Foundation, said:

‘For too long, well-intentioned reforms have failed to end the cycle of failure when it comes to addressing chronic staff shortages across Britain.

‘One-in-three vacancies today stem from firms not being able to find people with the right skills, while too many young people struggle to find a route into skilled work that doesn’t involve university.

‘The new Growth and Skills Levy offers a fresh chance to break this cycle. But the government must get the detail right if it’s to avoid repeating the same policy mistakes.’

Internet links: Resolution Foundation website


New tipping law comes into force

Businesses have been banned from withholding tips or service charges from their staff under new rules that came into force on 1 October.

All tips, whether in cash or by card, must now be shared between workers by law in Britain, with millions of workers such as those working for cafes, pubs, restaurants, taxi companies and hairdressers most likely to benefit.

If an employer breaks the law and retains tips, a worker will be able to bring a claim to an employment tribunal.

The law means tips must be passed to employees by the end of the following month from when they were received.

The Department for Business and Trade has predicted the new law will mean a further £200 million will be received by workers rather than their employers.

Minister for Employment Rights Justin Madders said:

‘When you tip someone for good service, you expect them to keep all their tip. They did the work - they deserve the reward.

‘This is just the first step of many in protecting workers and placing them at the heart of our economy. We will be introducing further measures on tipping to ensure workers get their fair share of tips.

‘Britain’s outdated employment laws require an urgent update. This Government will ensure they are fit for the modern economy and deliver on our plan to Make Work Pay.’

Internet link: GOV.UK



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