A ‘painful’ budget for October expected plus a crackdown on illegal employment – is your business compliant?
Today we discuss Starmer’s plans for the October budget, with warnings that it could well be ‘painful’. The Prime Minister also intends to improve relations with Germany – could this lead to a more stable market?
October budget to be “painful”
The Prime Minister, Sir Keir Starmer, speaking from Downing Street last Tuesday, has said that the budget in October will be “painful” and the government would be making “big asks” of the country.
He said that the country would need to be prepared to “accept short-term pain for long-term good” and that those with the “broadest shoulders should bear the heavier burden”.
However, no details were given about what the measures would be, other than Sir Keir reiterated that national insurance, VAT and income tax would not go up.
What could change?
There are a number of areas of tax that may be increased, and these could include the following:
- Focus on tax thresholds: By freezing thresholds – the amount of money at which any tax starts to be paid – the government collects more tax as more people are caught by higher rates of tax as their wages rise. Income tax thresholds are already frozen until 2028 and this could be extended.
- Increases in capital gains tax – Capital gains tax rates are lower than income tax rates, so the government may look to increase these.
- Reduce pension tax relief – Currently pension savers receive tax relief at the same rate as their income tax. However, there has been speculation that a flat rate of pension tax relief could be brought in and this would raise funds for the government.
- Raise inheritance tax – The government could raise the rate of inheritance tax or remove some of the reliefs that are available.
If you are concerned about how the budget may affect your situation, please feel free to talk to us at any time and we would be happy to advise you. We will be monitoring the October 30th budget very closely and update you on all the changes!
See: https://www.bbc.co.uk/news/articles/clyn01p5npgo
PM aims to strengthen UK-Germany ties
Last week, Prime Minister Keir Starmer visited Berlin and Paris to boost UK economic growth and strengthen international relationships. The trip aimed to reset the UK’s post-Brexit ties with key European partners by launching negotiations for a new UK-Germany bilateral treaty, focusing on increasing trade, enhancing defence and security cooperation, and tackling illegal migration.
Germany, as the UK’s second largest trading partner, and France, as the UK’s fourth largest trading partner, are both vital to these efforts.
Boosting export opportunities could open up expanded markets for owner-managed and small businesses and may result in a more resilient and stable market generally for UK businesses.
Government crackdown on illegal employment: What business owners need to know
Last month, the Home Secretary, Yvette Cooper, announced a significant government crackdown on employers hiring migrants illegally.
Overview of the government’s crackdown
From Sunday 18 to Saturday 24 August, Immigration Enforcement teams carried out a series of targeted visits to businesses suspected of employing illegal workers, with a particular focus on car washes. Over this intensive week of action, more than 275 premises were targeted. Of these, 135 businesses were issued notices for employing illegal workers, and 85 illegal workers were detained.
Potential consequences for non-compliant businesses
The penalties for employing illegal workers are severe. Businesses found in violation can face substantial financial penalties. The maximum civil penalty for employing illegal workers is £45,000 per worker for a first offence and £60,000 per worker for repeat violations.
Key takeaway for business owners
In view of the potential penalties, it’s vital you ensure that your business is fully compliant with all employment laws. This includes conducting the necessary right-to-work checks on all employees to ensure they have the legal right to work in the UK.
If you have any concerns or need advice, please get in touch with us. We will be happy to help you.
See: https://www.gov.uk/government/news/hundreds-of-rogue-employers-targeted-in-illegal-working-crackdown