Business News Northern Ireland - 21 November 2022

Business News Northern Ireland – 21 November 2022

Welcome to our round-up of the latest business news for our clients. Please contact us if you want to talk about how these updates affect your business. We are here to support you!

 

Chancellor Steps into the Fiscal Storm and Pulls More People into the Top Income Tax Band

On Thursday 17 November, the Chancellor presented the government’s Autumn Statement in which he told the House of Commons his plans to tackle the cost-of-living crisis, “rebuild our economy” and significantly reduce borrowing over the coming years.

The Chancellor said that global factors are the primary cause of current inflation and that most countries are still dealing with the fallout from the pandemic. He stated that the measures taken to combat Covid-19 in the UK must be paid for. He also acknowledged that the UK is in recession and that things will have to get worse before they get better.

His measures on taxes mean that tax as a percentage of national income will increase by 1% over the next 5 years and this is now amongst the highest proportion of income going to HMRC for at least 70 years.

The key taxation points made by the Chancellor include:

  • The highest rates of income tax (45% or, in the case of dividend income, 39.25%) will apply to those with incomes of more than £125,140 from April 2023. The threshold is currently £150,000.
  • Other income tax thresholds are being frozen until 2028, effectively meaning higher tax each year on earnings that increase with inflation.
  • NIC bands and rates remain as they are, following the reversal of the 1.25% percentage point increase on 6 November 2022. Like income tax, the NIC bands/thresholds will also be frozen until 2028.
  • The dividend allowance, which determines the amount of dividend income subject to 0% income tax each year, will reduce from its current level of £2,000 to £1,000 in the 2023/24 tax year and to just £500 in 2024/25.
  • The current £12,300 annual tax-free capital gains tax (CGT) allowance will be reduced to just £6,000 in 2023/24 and to only £3,000 in 2024/25.
  • The VAT registration threshold will remain at £85,000 until April 2026.
  • Electric vehicles will no longer be exempt from vehicle excise duty from April 2025 and, for employer provided company cars, benefit in-kind rates will start to increase.
  • Tax reliefs for Research and Development (R&D) are being ‘re-balanced’ meaning increased rates for some (usually larger companies) and reduced rates for others (usually small or medium sized enterprises).
  • The increased Stamp Duty Land Tax starting thresholds that were brought in from 23 September 2022 will now be treated as a temporary change, with the thresholds reverting to their original levels from 1 April 2025.

Some of the key spending statements made include:

  • Government departments will be subject to tighter controls to tackle waste and inefficiency, except for the department for Health.
  • The NHS budget will be increased in each of the next two years by £3.3bn.
  • Education will have an additional £2.3bn for schools.
  • Additional funding will be available for the devolved administrations for the NHS and schools.
  • Overseas aid spending remains at 0.5% for the forecast period.
  • A commitment to the climate pact agreed upon at COP26, including a 68% reduction of emissions by 2030.
  • Northern Powerhouse rail, the HS2 and the East West Rail will go ahead as planned.

In other announcements, help for energy bills will be extended, but it will be less generous. There will be targeted support with the cost of living for those on low incomes and disability benefits, as well as for pensioners. These include £900 to be paid to those on means-tested benefits, £300 to pensioner households and £150 to people on disability benefits. The National Living wage will be increased from £9.50 an hour for over-23s to £10.42 from April 2023.

Pensions and means-tested benefits, including Universal Credit, will also rise in line with September’s inflation figure of 10.1% from April 2023. Rent increases in the social sector will be capped at 7% from the same date.

Immediately after the Autumn statement, the Office for Budget Responsibility (OBR) released its November 2022 economic and fiscal outlook. Forecasts predict the economy will shrink by 1.4% next year.

Their summary makes grim reading. They state that inflation is set to peak at a 40-year high of 11% in the current quarter, and the peak would have been a further 2½ percentage points higher without the energy price guarantee (EPG), limiting a typical household’s annualised energy bill to £2,500 this winter and £3,000 next winter.

Rising prices will erode real wages and reduce living standards by 7% in total over the two financial years to April 24 (wiping out the previous eight years’ growth), despite over £100billion of additional government support. The squeeze on real incomes, rise in interest rates, and fall in house prices all weigh on consumption and investment, tipping the economy into a recession lasting just over a year from the third quarter of 2022, with a peak-to-trough fall in GDP of 2%. Unemployment rises by 505,000 from 3.5% to peak at 4.9% in the third quarter of 2024.

See: Overview of the November 2022 Economic and fiscal outlook – Office for Budget Responsibility (obr.uk)

Some businesses are more likely to be affected by the downturn and get into cash flow problems, while others will be more resilient. If you are a business owner, you might be wondering which category your business falls into. No matter how inventive or simple your business model is, you can still have problems with cash flow. Here are our thoughts on managing the flow of cash in your business:

  • The first stage of understanding and predicting how funds flow is to perform a health check on your accounts. Look at your latest profit and loss statement and check that your income is sufficient to cover your expenses. If your income is falling behind your expenses and cash flow is slowing down, you might need to act. Prepare a funds flow statement so you know where the money goes.
  • Next, create a yearly budget and look at where cash could become tight and months where you can save to cover the quieter times. Look at those quieter months and think about flexible work scheduling, new products or services or other activities to tide you over.
  • Finally, make sure to collect your money quickly from those who owe you. Reward customer loyalty by offering early bird discounts and set credit limits and payment terms to ensure customers follow the rules. If you take on new customers, make credit checks. Penalise late payers and request upfront deposits or payment.

Talk to us about preparing a funds flow statement and annual budget so that you can work on your business for maximum success!

 

Get Ready for New VAT Penalties From 1 January 2023

For VAT periods starting on or after 1 January 2023, HMRC is replacing the default surcharge with separate penalties for late returns and late payment of VAT. At the same time, HMRC is introducing a new approach to charging interest on late-paid VAT.

The new points-based system for late submissions is designed to be more lenient for the occasional slip-up, whilst still penalising those who repeatedly fail to comply. It will operate in a similar way to the penalty points system for motoring offences. Also, like the system for motoring penalties, the points expire after a period of time.

If your business submits its return late (which also applies if you submit a nil or repayment return late), you could face penalty points and a £200 fine. ​

See the attached for details of the new points-based system: Prepare for upcoming changes to VAT penalties and VAT interest charges – GOV.UK (www.gov.uk)

 

Ten Years of Automatic Enrolment Achieves Over £114bn in Pension Savings

Automatic Enrolment has helped millions put more into their pension pots than ever before, according to new figures released to mark 10 years since the policy was introduced.

In 2021, employees across the UK saved £114.6 billion in their pensions. This is a real terms increase of £32.9 billion compared to 2012 when Automatic Enrolment was introduced.

The figures reveal how the policy has transformed pension saving over the last ten years by normalising workplace pension saving, establishing a culture of retirement saving for a new generation, and helping foster a greater sense of security in later life.

More than 10.7 million employees were paying into a workplace pension in 2021. The proportion of women saving into a workplace pension, be it in the public or private sector, jumped by about 50% since 2012. Furthermore, young people have benefitted, with those aged 22 to 29 saving into a workplace pension more than doubling in the same period.

See: Ten years of Automatic Enrolment achieves over £114bn pension savings – GOV.UK (www.gov.uk)

 

The Green Alley Award 2023

The Green Alley Award is Europe’s first start-up competition focused on the circular economy. Green Alley is looking for great green ideas, new services, products, and technologies that can turn waste into a resource.

In return, they offer strategic support, networking opportunities, expertise in entering the circular economy across Europe, and a prize of €25,000.

Startups applying for the Green Alley Award have to fit into one of the following categories:

  • Recycling
  • Waste prevention
  • Digital solutions

The closing date for applications is today, 21 November 2022.

See: Green Alley Award | Apply in 2023 | Application process (green-alley-award.com)

 

Old-Style Stamps will Soon Be Out of Date

Royal Mail are adding barcodes to their regular stamps. After 31 January 2023, regular stamps without a barcode will no longer be valid. You can either use up these stamps before the deadline or swap them for the new barcoded ones.

The stamps that are changing are the stamps that will be very familiar to you. They feature the profile of Her Late Majesty The Queen on a plain-coloured background.

Your non-barcoded stamps can be exchanged for the new barcoded version through the Stamp Swap Out scheme.

See: Discover our new barcoded stamps | Royal Mail Group Ltd

 

Shetland Enters New Frontier as UK Space Industry Leader

Shetland is set to be at the heart of Scotland’s – and the UK’s – space industry success story, UK Government Minister for Scotland John Lamont said as he visited the Saxa Vord spaceport on Unst last week.

Saxa Vord is on track to launch its first satellites in 2023 – part of UK-wide efforts to gain up to a £4bn share of the global space market by the end of the decade. The minister visited the site’s first, newly completed concrete launch pad, one of three orbital launch pads that will support up to 30 vertical launches a year from the former RAF station site, employing up to 200 people in connection with each launch.

See: Shetland enters new frontier as UK space industry leader – GOV.UK (www.gov.uk)

 

First Satellite Launch from the UK

The first ever orbital satellite launch from the UK is happening soon, marking a new era in the UK’s space history. The first launch will take place from Spaceport Cornwall in the southwest of England. It will be what is known as a ‘horizontal launch’.

A specially modified Boeing 747 from Virgin Orbit called Cosmic Girl, with a rocket attached under its wing, will take off from a runway. In flight, the LauncherOne rocket will launch from the wing, taking multiple small satellites into orbit. The plane will then return to the Spaceport, able to launch more satellites in future.

Spaceport Cornwall is situated at Newquay Airport, near the coast of Cornwall. The 747 will fly out over the sea and launch its rocket far away from populated areas.

The UK has a growing space sector, which employs 47,000 people. UK space companies have a track record in satellite manufacturing, spacecraft design and data applications. In fact, Glasgow builds more satellites than anywhere outside of the United States.

The UK is also located relatively far north, which means it’s perfect for launching satellites into polar and Sun-synchronous orbits, which go over the north and south poles. These orbits are ideal for satellites that monitor the Earth and provide telecommunications.

With a long coastline and many islands, the UK offers a range of suitable locations for launching rockets safely out over the sea – away from settlements and people.

See: First launch from the UK – Case study – GOV.UK (www.gov.uk)

 

UK Sanctions on Russia Top £18 Billion for the First Time

Data released last week reveals the full effect of UK sanctions on Russia – with £18.39 billion of Russian assets frozen and reported to the Office of Financial Sanctions Implementation (OFSI).

The figure, released for the first time in OFSI’s Annual Review, demonstrates the key role the UK has played in standing up to Russia following their illegal invasion of Ukraine. It is nearly £6 billion pounds more than reported across all other UK sanctions regimes.

In conjunction with its allies, the UK has imposed the most severe sanctions Russia has ever faced, designating more than 1,200 individuals and 120 entities, and freezing the assets of 19 Russian banks with global assets of £940 billion since they began their illegal invasion.

See: UK sanctions on Russia top £18 billion for the first time – GOV.UK (www.gov.uk)

 

UK Signs Science Co-Operation Agreement with Switzerland

The UK and Switzerland have signed a Memorandum of Understanding, deepening the relationship between the two countries’ research and innovation communities.

The agreement was signed by UK Minister of State for Science, Research and Innovation, George Freeman MP, alongside Federal Councillor Parmelin, Head of Switzerland’s Federal Department of Economic Affairs, Education and Research, at a ceremony in London.

Switzerland – placed top of the global rankings for innovation for the past 10 consecutive years, as well as being home to 2 of Europe’s top 10 universities, a number of world-class research laboratories and companies such as Roche and Novartis, and commercial space and satellite technology companies – is a natural partner for the UK.

Together, the 2 nations have 10 of Europe’s top 20 research universities, and this agreement will deepen an ambitious bilateral relationship in areas of mutual interest across 3 key pillars: deep science, industrial commercialisation and international standards and regulation.

The UK, with 7 universities in Europe’s top 10, and a larger share of its own research among the world’s most highly cited than any other G7 country, brings its own unique research and innovation strengths to the table. The memorandum outlines the principles of the relationship, and specific forms of cooperation, including:

  • Coordinated or joint initiatives, programmes or projects.
  • Meetings, workshops, conferences or symposia.
  • Exchange of information and documentation.
  • Mobility, visits and delegations.
  • Strategy and coordination meetings.
  • Plans for ministers to convene a regular annual Anglo-Swiss Research Collaboration Council to oversee activities.

See: UK signs major science co-operation agreement with Switzerland – GOV.UK (www.gov.uk)

 

New British Standard on Modern Slavery

The British Standards Institution (BSI) have published a national standard, giving organisations guidance on how to manage modern slavery risks in their operations, supply chains and wider operating environment.

BS 25700 provides organisations with guidance for addressing the risk of modern slavery, including prevention, identification, response, remediation, mitigation, and reporting.

The benefits to businesses include:

  • Effective management of the risk of modern slavery in a way that supports human rights due diligence.
  • Positive business reputation.
  • Increased sales and customer loyalty, as consumers seek businesses with higher ethical standards.
  • Greater ability to attract talent and retain staff.
  • Improved investor confidence.
  • More responsive and stable supply chains.

See:  BS 25700:2022 Organizational responses to modern slavery – Guidance | BSI (bsigroup.com)

 

Supply Chain Resilience and Development Solutions – Call for Applications

Invest Northern Ireland (Invest NI) have issued a call for applicants to the Supply Chain Resilience and Development Solutions (SCRDS). This scheme supports businesses to improve their supply chain resilience and competitiveness.

What support is available?

The framework primarily provides specialist advisory support to help businesses:

  • Identify supply chain risks and appropriate mitigations
  • Reduce costs
  • Improve competitiveness
  • Identify supply chain opportunities
  • Develop supply chain capability

Depending on a business’s circumstances, financial assistance towards the salary costs of a dedicated supply chain worker may also be available.

See: Supply Chain Resilience and Development Solutions – call for applications (nibusinessinfo.co.uk)

 

AI Con 2022

The fourth annual artificial intelligence (AI) conference takes place on Thursday 1 December 2022 in Titanic Belfast and online.

This year’s AI Con will examine the application of technology in society and its role in securing a healthier, safer and more sustainable future.

Specifically, it will explore the continued evolution of AI as it heads towards mainstream adoption, and ways to responsibly and sustainably harness its potential to support progress across all areas of business and public life.

Hosted by Kainos and supported by Ulster University, Digital Catapult, Matrix NI, Allstate NI and Innovate UK, the conference will take place in person, at Titanic Belfast, and will also be broadcast live to over 300 attendees including those involved in AI application, policy and regulation across Europe, the UK, and the US.

Offering expert insight and engagement from the wider AI community, the event will be the perfect platform to bring debate, discussion, and ideas to a large audience on how best to ensure the ethical development and deployment of AI products and services.

See: AI Con 2022 | 1st December 2022 | Titanic Belfast and Virtual (ai-con.ai)

 

New Planning Portal Due to Launch on 5 December 2022

A new online planning portal will be launched in December 2022 that will cover all Northern Ireland council areas except for Mid Ulster District Council.

The new planning portal will be launched on Monday 5 December 2022 for 10 out of the 11 councils in Northern Ireland and the Department for Infrastructure (DfI).

See: New planning portal due to launch on 5 December 2022 (nibusinessinfo.co.uk)

 

Webinar: Effective Supplier Sourcing

This is an Invest NI webinar on supplier sourcing and how it can be implemented within your own organisation.

Recent disruptions in the global supply chain have caused many uncertainties around the guarantee of supply and planning for predictable costs. As a result, many businesses are turning to sourcing to expand their options, and often to bring the supplier base closer to home.

As with most new business processes, sourcing can be difficult and time-consuming to execute but can cause additional disruption if executed poorly.

This webinar will provide an overview of what is considered best practice for sourcing, as well as how it can be implemented within your own organisation, including:

  • Identifying your requirements.
  • How to define and document the scope of your requirement.
  • Searching for new suppliers.
  • Creating a request for quotation document.
  • Auditing potential new partners.
  • How to protect yourself – contracts and service level agreements.
  • How to plan for the long term – Supplier Relationship Management.

Date: Thursday 24 November 2022, 2pm to 3pm –  Online and free.

See: Registration (gotowebinar.com)

 

Opportunity for NI Tech Founders to Pitch at Techinvest Event

If you are actively raising investment and using tech as a core part of your business, you may be able to apply for a chance to join the TechInvest investment series in London.

The initiative involves four separate showcase events, each spotlighting a different UK region. Ten ground-breaking tech founders from each region will get a chance to join a showcase and pitch for investment from a group of industry-leading early-stage investors.

From fintech, medtech, 5G and sustainable tech, to creative tech, govtech, cyber security and more, this event series is set to connect the dots from fundraising to securing investment.

Who should apply?

Businesses looking to apply should be:

  • Based in Northern Ireland (other regions are South West, Midlands, Yorkshire and the Humber).
  • Investment ready and raising equity investment in the range of £250,000 to £3 million.
  • Meeting/solving a clear market need.
  • Demonstrating the potential to scale/possibility of disruption in their sector.
  • Utilising technology as a core part of their solution/service.

See: Opportunity for NI tech founders to pitch at TechInvest event (nibusinessinfo.co.uk)

 

Fully Funded Course to Help You Master Customer Experience

The Professional Certificate in Customer Experience course is part of the Voice For Locals wider business programme to help level up local businesses in Northern Ireland. The programme is a fully funded initiative of the UK Government. The programme helps local businesses to develop and grow through innovation and to introduce new customer experiences.

Get Certified in Customer Experience.

The Professional Certificate in Customer Experience is a 90-minute online course assured by City and Guilds. It is aimed at entrepreneurs, small business owners, job seekers and employees in a marketing or customer-facing role. This course will help you learn how to design and execute high-impact customer experience strategies to drive results.

The course is free of charge and consists of seven lessons and assessments to become a Customer Experience Expert (CXpert). There is also the opportunity to take up practical on-the-job training and assessment to gain a CXpert Plus status.

See: Fully-funded course to help you master customer experience (nibusinessinfo.co.uk)

 

Agri-Food Businesses: Sale of Defrosted Poultry-Meat

Following the recent outbreak of avian influenza in Great Britain, the Department for Environment, Food and Rural Affairs (Defra) and their counterparts the Welsh devolved Government have announced a period of pragmatic enforcement relating to the sale of defrosted poultry-meat.

This means that, subject to certain conditions, poultry-meat producers in England and Wales will be permitted to slaughter and freeze poultry so that it can be defrosted and sold again for a time-limited period between 28 November and 31 December 2022.

See: Agri-food businesses: Sale of defrosted poultry-meat (nibusinessinfo.co.uk)

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