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- Written by COREcruitment
Today marks the announcement of the Autumn Budget, announced by Chancellor Philip Hammond, which will set the tone for the coming year. Hammond will be under an intense amount of pressure as he presents his statement in the Commons this afternoon, following uncertain financial outlooks and increased public-sector net borrowing.
So, what can you expect to see from the Budget? We’ve listed several predictions, and comments from industry leaders, below.
Investments in skills
Poor performing managers costing the UK economy £84billion in lost productivity every year. As such, industry leaders are calling on the Chancellor to invest more money into training and management development. Ann Frank, CEO of the CMI, commented: “If the Chancellor is serious about tackling the productivity puzzle, then his Budget must focus on closing our workforce’s professional skills deficit. Two in five workers are in jobs for which they’re under-skilled or are working in fields different to those in which they first trained. This is most pronounced among the management ranks, with poorly performing managers costing the UK economy £84billon in lost productivity every year. Further investment in professional skills would build on existing government productivity policies to close the gender pay gap and the steps forward made by the Apprenticeship Levy.”
Self-Employed VAT Changes
Changes to the growing number of self-employed workers, and their taxes, is thought to be talked of in the Budget. Hammond is expected to lower the threshold at which those who set up as a business themselves must pay VAT – currently set at £85,000. However, IPSE’s Economic Advisor Tom Purvis, explained the danger that this could bring, in a statement: "Lowering the threshold for VAT registration would be a disaster for self-employed people, who have been the backbone of the UK economy in recent times.
“If the Chancellor adopts the OTS’s proposals, it would be seen as just another cash grab – part of a sustained attack on the self-employed. It would follow harmful changes to IR35 in the public sector, the introduction of dividend taxes and, most recently, the delay to scrapping Class 2 NICs. At a time when the UK flexible labour market is one of our biggest competitive advantages, we should be looking to promote self-employment, not stifle it.”
After a massive backlash to business rates earlier this year, the Government is thought to be shaking up the logistics of how firms pay. City AM reports that Hammond has considered a range of solutions, including a self-assessment style approach in which companies submit their own valuations. Speaking to the publication, Mike Cherry, Chairman of the Federation of Small Businesses, warned: “Moving to a self-assessment model for business rates would mean a huge additional admin burden for small firms that could spell the end for some.”
After a year in which gig economy workers have been at the forefront of many a review, the Budget is expected to lay out firmer rules and protections for employees working in this sector. In July, the Taylor Review looked at how current regulations could be changed in order to help an emerging gig economy, and address the so-called “£60billion elephant in the room”. Most recently, an adjudication from a court case, that has rumbled on for months, has ruled that Deliveroo will not have to pay its couriers minimum wage or holiday pay. The case, which was brought by the Independent Workers Union of Great Britain, was unsuccessful in trying to get Deliveroo riders workers’ rights. The legal ruling said the food delivery firm’s drivers were self-employed as they had the right to allocate a substitute to do the work for them.
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