Pension auto-enrolment delayed for small firms
Small firms will be given longer to comply with the new pension auto-enrolment rules because of the tough economic climate, the Government has announced.
Publishing a revised implementation timetable, the Pensions Minister, Steve Webb, revealed that the scheme will not be fully phased in until 2018 - two years later than originally planned.
It is hoped the delay will ease the burden on small businesses during what he described as ‘exceptionally tough economic times.’
Auto enrolment will commence in October 2012 and will be phased in on a staged basis, starting with larger employers.
While the staging dates for firms with 250 or more employees will remain unchanged, smaller firms have now been given until April 2017 to implement the scheme.
Furthermore, new businesses which begin trading between April 2012 and September 2017 will have from between 1 May 2017 and 1 February 2018 to comply.
Under the amended timetable, employers with fewer than 30 qualifying workers will have implementation dates ranging from between 1 January 2016 and 1 April 2017, and those with 30 to 49 staff have from 1 August 2015 to 1 October 2015. Firms with 50 to 249 staff must implement the scheme between 1 April 2014 and 1 April 2015.
Clarifying the new timetable, the Pensions Minister, Steve Webb, said: ‘Automatic enrolment will begin on time this October, taking up to 10 million people into pension saving, many for the first time ever, and all employers will be part of it.
‘We have done all we can to ease any burden on business the reforms will bring and employers of all sizes now know the date they need to start enrolling their staff.’
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Think tank wants further corporation tax cuts in upcoming Budget
The Chancellor George Osborne is being urged to consider further cuts to corporation tax in a bid to boost economic growth.
The Centre for Policy Studies is calling on the Chancellor to slash corporation tax to 20% in this year’s Budget, claiming that it is the ‘only source of a viable economic recovery’.
‘A cut in the rate to 20% would be a quantum leap towards encouraging the enterprise economy which this country needs. It would be a wake-up call to business both domestic and international. It would also be a significant simplification of the tax system,’ it said.
In the 2011 Budget Osborne revealed that the main rate of corporation tax would fall to 26% for the financial year beginning April 2011, and to 25% for the financial year beginning April 2012.
This is due to be followed by two further cuts, to take the main rate to 23% by April 2014.
However, the Centre for Policy Studies has warned that a more ‘dramatic’ approach is required, and even suggests that corporation tax should be cut to just 10%.
Tim Knox, director of the Centre for Policy Studies, said: ‘Profitable businesses are the only source of a viable economic recovery, the Chancellor should reduce the rate of corporation tax in the 2012 Budget — and also announce his intention to reduce it even further to 15% or even 10% once the appropriate anti-evasion measures are in place.’
The research adds: ‘The UK is facing the possibility of a double dip recession. Demand in the economy is weak. Business confidence is low. Politicians of all parties are looking for ways to encourage growth. Bold steps should be considered.’
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Web economy 'will double by 2016'
The value of the web economy in G20 member countries is set to almost double by 2016, a new report has suggested.
According to the study, nearly 50% of the world’s population will be using the internet in four years’ time, leading to a surge in the current £1.5 trillion value, to £2.7 trillion.
Rising levels of mobile internet access are expected to account for much of the increase, with around 80% of internet users expected to access services via a mobile phone by 2016.
The research also suggests that the UK currently has one of the most advanced e-commerce economies, although over the coming years the majority of internet users are expected to be living in emerging markets.
Business owners are being urged to embrace the digital economy, with the study predicting that the internet will increasingly change the nature of relationships between businesses and customers.
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Government launches multi-million pound retirement campaign
The Government has launched a multi-million pound media campaign to encourage individuals to save more for their retirement.
The campaign comes ahead of the introduction of a new system of automatic enrolment into workplace pensions, which will begin to take effect from October 2012.
From this date, larger employers will have to enrol all eligible workers into a qualifying pension scheme, whether this is an existing company scheme (if it meets the necessary criteria) or the National Employment Savings Trust (NEST), a new pension scheme being introduced by the Government.
Small businesses have been granted additional time to comply with the requirements of the new system, with the starting deadline for employers with fewer than 50 workers now deferred until the start of the next Parliament.
Launching the campaign, the Minister for Pensions commented, ‘As we head into the final stretch before millions of people begin to be enrolled into a workplace pension, it is vital that we make sure that individuals and employers know what to expect’.
‘Automatic enrolment will transform this country, putting an end to the decline in pension saving, and setting millions on course for a more prosperous retirement.’
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Government 'must do more' to boost small business job creation
Some of the UK’s leading business groups are urging the Government to take action to help small businesses to create job opportunities, as recent research suggests that firms are looking to shed further positions.
With the latest figures from the Federation of Small Businesses (FSB) showing that small businesses are looking to cut staff in the first three months of this year, the organisation is urging the Government to be ‘bolder’ in its changes to existing employment law.
The survey from the FSB reveals that a net balance of 6.5% of small firms are planning to lay off workers in the first quarter of 2012, representing the highest level since the survey began.
The business group is calling for a number of measures to be implemented in order to help incentivise employment, including exempting the smallest firms from the extension of flexible working rights to all employees.
John Walker, FSB National Chairman, said, ‘The beginning of 2012 is beginning to look bleak with confidence incredibly low and businesses looking to shed staff. However, if the Government makes the right choices and puts action into words we can turn this around’.
The British Chambers of Commerce (BCC) has joined the call, highlighting the fact that unemployment increased by 118,000 in the three months to November 2011, but that employment also increased by 18,000 in the same period.
David Kern, BCC Chief Economist, said, ‘The welcome increase in employment in the last three months was largely due to an increase in people becoming self-employed, while the number of people in full time work fell. This highlights the importance for small businesses and the self-employed to create new jobs. Cutting red tape and making it easier for people to acquire the right skills is vital’.
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'There's a business in everyone', says Cameron
The Government has unveiled a new campaign aimed at encouraging people to start or grow their own business.
The ‘Business in You’ initiative is designed to inspire would-be entrepreneurs to realise their ambitions whilst highlighting the support that is available to SMEs.
Launched in partnership with StartUp Britain, the scheme is supported by a variety of business groups, including the Confederation of British Industry and the Federation of Small Businesses.
Based on the concept that there is ‘a business in everyone’, it will attempt to boost entrepreneurship by showcasing real life business success stories. Some of the campaign partners will also be offering free workshops and seminars as part of the programme.
Launching the campaign, the Prime Minister David Cameron said: ‘Small businesses and entrepreneurs are the lifeblood of the British economy and I am determined that we, working with the private sector, do everything we can to help them to start up and to grow in 2012.
‘I want to encourage people to go for it and make this the year of enterprise – whether that is fulfilling their dream of starting a new business or taking the leap to grow their business, to employ more staff, or to start exporting.’
In addition, the Prime Minister has announced plans to make vacant Government offices available to new and existing small businesses.
The Government hopes to offer more than 300 Government buildings premises at low rates for one year to help small businesses get started.
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