We now realize we had it backward. If we put employees first, they in turn take care of our customers, and they in turn take care of our shareholders. An explosion of digital and mobile tools has emerged to help HR design and deliver a great employee experience:. While all these tools are valuable, the fact that each of these markets is separate illustrates that the focus on end-to-end employee experience is still new.
With few integrated toolsets on the market, organizations have to bring together independent HR and technology managers to build an employee experience strategy and program. High-performing companies have found ways to enrich the employee experience, leading to purposeful, productive, meaningful work. Innovative companies look to employees themselves for inspiration. Cisco, 8 IBM, GE, 9 Airbnb, 10 and many other companies have used hackathons to collect employee ideas and design new approaches to performance management, workplace design, benefits, and rewards.
Many leading firms are incorporating design thinking to improve the overall employee experience. Nike, Commonwealth Bank of Australia, Telstra, Deutsche Telekom, and several other companies have redesigned their onboarding, recruitment, and employee self-service applications. In each case, the company developed a new set of mobile apps, new user experiences, or new service delivery solutions to improve and simplify life at work.
Companies are now carefully studying the workplace itself, seeking a flexible, collaborative, humanistic environment. Ford Motor Co. With a focus on innovation, Ford is expanding its business model to fortify and transform its core automotive business while growing in the areas of electrification, autonomy, and mobility. These changes, driven by CEO Mark Fields, also require a change in the way executives think about their people. As the company moves from a product to consumer focus in its products and services, it is also moving from a product to employee experience focus in its workforce solutions.
For a company so established, global, and complex, this is not easy, and the only way to revolutionize the employee experience is to practice design thinking at scale. Over the last year, starting with a three-week global people strategy lab in which HR leaders from around the globe participated—and that included reviews with Fields and the executive team—Ford developed a new people strategy, HR vision, integrated plan, and business case. As part of its efforts to define its vision, the HR team deployed a companywide polling process that let employees contribute ideas, share their experiences, and rate and rank which HR products and services they felt were most important.
As a result of this broad and open feedback process this was the first time Ford had done this on such a wide scale , the HR team is learning about what employees really want, what problems and challenges they face at work, and how HR can better enable and empower them in their day-to-day work. Ford found that many employees felt that people processes were overly administrative, complex, and not always useful in getting their work done.
People leaders felt that HR business partners were overwhelmed by operational tasks, negatively impacting the time they could spend engaging and developing their teams. All of this is aimed at improving the employee experience and freeing HR professionals to support strategic business needs. Many complexities remain, of course. Since manufacturing plants and labor relations vary from location to location, designed solutions must be flexible and localized in many ways.
And of course, making processes simple is hard in itself when the company operates on multiple continents and develops a wide range of products, subassemblies, and electronic offerings. The lesson from the Ford experience is simple: By focusing on the employee experience, HR leaders can improve employee engagement, empower teams and leaders, and develop workforce solutions that will be useful and compelling to employees.
Just as companies now measure customer experience through net promoter tools, social media monitoring, and customer segmentation, so will HR rigorously monitor the health and productivity of its employees. Real-time feedback tools will explode as pulse surveys and always-on feedback systems become commonplace and the definition of employee expands.
We will design and monitor the experience of contractors, contingent, and gig workers too. Visit the Human Capital area of www. Cover image by: Lucie Rice. View in article. Bersin by Deloitte proprietary research with Glassdoor. Project Time Off, The state of American vacation How vacation became a casualty of our work culture , p. Executive conversations with authors. Todd C. Gensler, U.
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Steelcase, Boosting employee engagement , November 12, , www. Conversations with Ford senior management, November See something interesting? Simply select text and choose how to share it:. The employee experience: Culture, engagement, and beyond has been added to your bookmarks. The employee experience: Culture, engagement, and beyond has been removed from your bookmarks. An article titled The employee experience: Culture, engagement, and beyond already exists in the bookmark library. Social login not available on Microsoft Edge browser at this time.
Welcome back. Still not a member? Join My Deloitte. Article 28, February, Josh Bersin. Jason Flynn. Art Mazor. Veronica Melian. Introduction Lessons from the front lines Start here Fast forward. View in article Bersin by Deloitte proprietary research with Glassdoor. View in article Project Time Off, The state of American vacation How vacation became a casualty of our work culture , p. View in article Executive conversations with authors. View in article Todd C. View in article Gensler, U. View in article Steelcase, Boosting employee engagement , November 12, , www.
View in article Conversations with Ford senior management, November View in article Show more Show less. The unemployment rate stands at 4. The UK continues to be one of the most competitive economies in the world and remains an attractive destination for inward investment. The OBR expects the UK economy to continue to grow in every year of the forecast, and has revised up its forecast for cumulative growth compared to Spring Statement Productivity growth has picked up since Spring Statement and is rising at its fastest rate since , but remains below its average prior to the financial crisis.
The government has made substantial progress in improving the health of the public finances since , which have now reached an historic turning point. The underlying fiscal outlook shows significant improvement compared to Spring Statement Nevertheless, debt is still too high, leaving the public finances vulnerable to economic shocks and incurring significant debt interest costs.
In this parliament, levels of public investment will be at their highest consistently sustained levels in 40 years. Building more homes in the right places is critical to unlocking productivity growth and making houses more affordable. At Autumn Budget the government announced a comprehensive package of new policies and this Budget sets out further steps to deliver this ambition.
It sets the clear ambition of creating highly paid and highly skilled jobs, announcing further details on the National Retraining Scheme and action to increase the uptake of apprenticeships. The government is backing business and entrepreneurship by increasing access to finance for private sector investment and helping people who want to start and grow businesses. This includes action to unlock pension fund investment in growing firms and policies to raise business productivity. Fuel duty and duty rates for beer, cider and spirits will be frozen.
The Budget also delivers a more competitive tax regime for businesses. This further support can only be provided because the tax system is fair and people and businesses pay the tax they owe. So the Budget introduces a new digital services tax on large businesses who benefit from those who use them, extends reforms to the taxation of off-payroll working to the private sector, and continues to take action to prevent avoidance and evasion.
As part of its wider strategy on tackling single-use plastic waste, the government will introduce a world-leading new tax on plastic packaging. Subject to consultation, this will mean packaging that does not contain enough recycled content will be taxed. The Budget takes further steps to improve the services people care most about by setting out a path for future spending which implies day-to-day departmental spending growing at an average of 1. Budgets for mental health services will grow as a share of the overall NHS budget over the next 5 years.
The government remains committed to supporting the most vulnerable people in our society. This means making sure that the welfare system is simple and sustainable in the long term, and that work always pays. This means that 2. The government wants to see higher wages for those in work. Next year, the government will announce a remit for the Low Pay Commission for the years beyond In the coming months, it will consult on the remit, and as it sets policy it will take account of the potential impact on employment and economic growth.
To help families with the cost of living, this Budget also supports consumers to achieve better value for money and helps households manage unexpected costs by increasing access to fair and affordable credit. A summary of the fiscal impact of the Budget policy decisions is set out in Table 1. Chapter 2 provides further information on the fiscal impact of the Budget. Chart 1 shows public spending by main function.
Chart 2 shows the different sources of government revenue. The UK economy has solid foundations and a strong record to build on. It has grown every year since Since , there are 3. Pay growth excluding bonuses is at its joint strongest since and real wages have risen, as inflation has fallen from its peak. The unemployment rate has fallen further and at 4. The UK continues to be one of the top ten countries in the world for the competitiveness of its economy and remains an attractive destination for inward investment. In the long term, higher productivity remains the only path to sustainable growth and rising living standards.
The government has already taken significant steps to improve productivity with public investment set to average 2. The OBR expects the UK economy to continue to grow in every year of the forecast, and has revised up its forecast for cumulative growth compared with Spring Statement The OBR has revised up its estimate of the potential output of the UK economy slightly compared with Spring Statement , due to updated judgements on two of its components — revising up its expectations for labour market activity rates and revising down its assessment of the equilibrium rate of unemployment from 4.
Compared with Spring Statement , the level of employment is expected to be higher in every year of the forecast. Instead, it has made broad-brush assumptions, which have not changed since Autumn Statement However, the OBR has included a transition period in its forecast of exports and imports for the first time. This postpones the point at which EU exit affects imports and exports to Global growth remained solid in the first half of , with G20 GDP growth of 1. Momentum in the US economy remains strong, but growth in the euro area has moderated, and developments in emerging economies have been mixed.
The OBR forecasts that global growth will be 3. Growth slowed at the start of to 0. Q1 was weaker than the OBR expected in its Spring Statement forecast, but Q2 was in line with its expectations. GDP growth dips slightly to 1. Household consumption growth was 1. In the first six months of household consumption grew by 0. Consumption growth is expected to dip slightly from 1. Business investment grew by 1. The OBR expects business investment to grow by 0.
Thereafter, business investment is forecast to grow by around 2. In , export and import volumes grew by 5. Since export growth exceeded that of imports, net trade contributed positively to GDP growth, adding 0. In the first half of , both export and import volumes have declined, though imports have declined by less. As a result, net trade has made a negative contribution to quarterly GDP growth over this period.
The OBR has revised down its forecast for the contribution of net trade to GDP growth in the near term, although it still expects net trade to make a positive contribution to GDP growth in of 0. The OBR then expects net trade to subtract 0. Net trade makes no contribution to GDP growth in and , and then subtracts 0. CPI inflation fell at the start of ; was steady from April to June at 2. The government and the private sector make wide use of measures of inflation. The government uses measures of inflation to uprate some taxes and benefits; to determine changes in rail fares, reflecting industry costs; to uprate the rate of interest on student loans; when setting the inflation target for the Bank of England; and as the reference rate for government bonds linked to inflation.
In the private sector, inflation is used in some wage agreements; to uprate certain pension payments, particularly defined benefit pensions; and in financial markets. However, there is not a single measure of inflation and the quality of different measures varies. Despite measuring the same concept, they use different methodologies and produce different estimates of the rate of inflation. In , as a result of flaws in the way it is measured, RPI lost its status as a National Statistic. Since , the government has been reducing its use of RPI. Given the extensive use of RPI across the public and private sectors, moves away from RPI are complex and potentially costly.
At the same time, the prices statistics landscape has evolved. Therefore, it has at times been unclear which measure of inflation it would be appropriate to use. As previously stated, while all index-linked debt is currently indexed to RPI , the government keeps issuance of potential new debt instruments under review. Any changes will require an orderly transition, likely over an extended period of time. Until then, the government will not introduce new uses of RPI. UK labour productivity measured as output per hour has picked up recently and grew by 0. Productivity was subdued at the start of , falling in the first quarter, but rose in Q2 , due to higher output and a slight fall in hours worked.
Quarterly movements can be volatile and on a more stable quarter-on-year basis, productivity grew by 1. The OBR forecasts productivity growth of 0. Employment levels have continued to increase in , reaching a new record high in the three months to May , and have remained around this level since. Employment was The unemployment rate has fallen further and now stands at 4. The OBR has revised up its assumption for the trend labour market participation rate and revised down its estimate of the equilibrium rate of unemployment, both of which raise the level of potential output.
Taken together, potential output is higher across the forecast. With higher potential output, the OBR expects a higher level of employment in every year of the forecast, reaching The OBR has revised down the actual unemployment rate in every year of the forecast, which is expected to be 4.
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Total nominal wage growth including bonuses and regular nominal wage growth excluding bonuses were 2. Over the same period, real total pay growth increased slightly to 0. The OBR forecasts average earnings to grow by 2. In , income inequality was lower than it was in , and close to its lowest point since The current account balance consists of the trade balance, the primary income balance, which is mainly net investment income, and finally, other transfers.
In , the current account balance narrowed to a deficit of 3. The main reason for the narrowing in the current account deficit was the largest annual improvement in the primary income balance since records began in ; this narrowed to a deficit of 1. In Q2 , the current account deficit widened to 3.
The OBR expects the current account deficit to narrow to 3. The current account deficit then narrows to 3. Low and stable inflation supports living standards and provides certainty for households and businesses. This helps households and businesses make efficient decisions about saving, investment and spending. At its meeting concluding on 12 September, the MPC voted to maintain its policy rate at 0. The government has taken a balanced approach to the public finances since , focusing on getting debt falling, while supporting public services, investing in the economy and keeping taxes low.
This followed the necessary actions since to restore the public finances to health, and the deficit has been reduced by four-fifths from a post-war high of 9. The public finances have performed significantly better than forecast in March This stronger starting fiscal position coupled with higher forecast levels of employment has improved the fiscal outlook in every year of the forecast. Compared with Spring Statement, the main changes to the forecast are due to a combination of the following factors:. The lower spending is due to downward revisions to the forecasts for welfare spending due to lower unemployment , debt interest and tax litigation compared to Spring Statement.
Compared with Spring Statement, borrowing is lower in every year of the forecast and falls as a share of GDP from 1. Public sector net financial liabilities PSNFL is also forecast to continue to fall in every year from MFR highlights the range of policy and management reforms the government has introduced to reduce risks to the fiscal outlook. Governments with high levels of debt are more vulnerable to economic shocks and have less room to mitigate their impact on households and businesses, with consequences for the length and depth of the resulting recessions.
Compared with the Spring Statement, cyclically-adjusted borrowing is the same or lower in every year of the forecast. The government is committed to ensuring the welfare system is put on a sustainable footing. The cap limits the amount that government can spend on certain social security benefits and tax credits. Between and spending on working-age welfare trebled in real terms. The OBR judges that on current policy, welfare spending within scope is forecast to be within the welfare cap and margin in every year of the forecast. The government is providing additional support for Universal Credit in the Budget, as set out in Chapter 5.
Since , this has allowed the government to provide additional support to public services. Devolved administrations will benefit from Barnett consequentials. Chapter 5 provides further detail of the funding and financial tests the government has put in place to ensure the NHS spends this additional money effectively. Spending Review set individual budgets for all departments. Departmental capital totals CDEL , the money given to departments for investment, are set until , as shown in Table 1.
Departmental resource totals RDEL , the money given to departments to spend on day-to-day resources and administration, are set until , as shown in Table 1. The Budget also sets out the path of day-to-day spending by departments in aggregate for years beyond the current Spending Review period. These figures imply aggregate day-to-day spending outside the NHS will rise in line with inflation over this period.
Further details are set out in Table 1. This does not represent the final envelope for Spending Review , which will be set in due course. The government will use the Spending Review to ensure that funding is directed to its priorities within that overall envelope. From to , capital spending will grow at an average of 3. Ahead of that, the government has rebased the path of capital spending to reflect the latest expected spending plans over the Spending Review period to After adjusting for expected spend this change has not affected existing departmental capital allocations.
As a result of decisions taken by this Chancellor, in this Parliament, public sector net investment PSNI will average 2. Some policy measures do not directly affect PSNB in the same way as conventional spending or taxation. Table 1. Further information on the student loan sale programme can be found in this chapter at paragraph 1. Government spending as a share of GDP has been brought down from In conducting this review, the government will build on experience and lessons learnt from previous Spending Reviews.
It will aim to ensure that policy issues are considered across departmental boundaries, and that performance and outcomes achieved for the money invested in public services are tracked systematically. The government is seeking a deep and special relationship with the EU, encompassing economic and security cooperation. The government is confident of getting a good deal, but has a responsibility to plan for all scenarios, including the unlikely event no mutually satisfactory agreement can be reached with the EU.
The government, led by the Department for Exiting the European Union DExEU , continues to refine these plans ahead of March and has published a series of notices so that businesses and citizens are prepared. This funding will help departments manage pressures and contingencies arising from EU exit preparations which fall in the financial year, as well as ensuring that the UK is prepared to seize the opportunities available when we leave the EU.
The BSR has already made significant progress and the Budget provides an update on progress in the following areas:. The Budget announces government will no longer use PF2 for new projects. Reducing inflation exposure — The government is taking action to reduce its inflation exposure by looking to reduce the proportion of index-linked gilt issuance in a measured fashion over the medium term see Annex A for more detail. Contingent liabilities — In July , HM Treasury introduced stricter new controls over the issuance of guarantees and other contingent liabilities.
Asset sales and loans — HM Treasury will introduce stricter disclosure requirements for asset sales and revised budgetary treatment for financial transactions e. HM Treasury will publish the final conclusions from the BSR at Spending Review , setting out a strategy for the responsible management of public sector wealth.
The application of the Barnett formula to spending decisions taken by the UK government at the Budget will provide each of the devolved administrations with additional funding to be allocated according to their own priorities. This new budgeting treatment only affects the way Scottish Government spending is reported. All previous spending controls, including through the block grant and borrowing and reserve limits, remain unchanged, and the spending power of the Scottish Government is not affected. The government remains committed to returning the financial sector assets acquired in to to the private sector in a way that achieves value for money for taxpayers:.
Over the past year RBS has made significant further progress on resolving its legacy issues. The government now intends to undertake a full disposal of the RBS shareholding by , subject to market conditions and achieving value for money. The government will keep all disposal options under review and, as with previous disposal programmes, expects larger disposal values in later years when increased liquidity in the shares should enable higher volumes to be sold. There will be no changes to the terms and conditions of any of the loans that will be sold, and UKAR will require that the loans must be serviced by an FCA -regulated firm.
The government continues to explore options for the sale of wider corporate and financial assets, where there is no longer a policy reason to retain them and when value for money can be secured for taxpayers. Network Rail — Following a competitive bidding process, Network Rail agreed the sale of its commercial property portfolio on 10 September Public service pensions were reformed in and, as part of those reforms, an agreement was reached to maintain their value. Valuations of public service pensions are ongoing, and provisional results indicate that changes will need to be made from to make pension benefits more generous for public servants, including teachers, police, armed forces and NHS staff.
The Budget confirms a reduction of the discount rate for calculating employer contributions in unfunded public service pension schemes, to 2. The valuations indicate that there will be additional costs to employers in providing public service pensions over the long-term. The government is supporting departments to ensure that recognition of these costs does not jeopardise the delivery of frontline public services or put undue pressure on public employers. For state schools, the Department of Education are proposing to provide more funding to cover pension costs for the rest of this Spending Review period.
The Spending Review next year will settle the funding for costs beyond arising from the valuations. This coin will be available in Spring The following chapters set out all Budget policy decisions. Unless stated otherwise, the decisions set out are ones which are announced at the Budget. Table 2. The government is also publishing the methodology underpinning the calculation of the fiscal impact of each policy decision. The government is committed to keeping taxes low, to allow working families to keep more of what they earn and to provide businesses with an environment in which they can grow and create jobs.
The government is determined to support working people to keep more of what they earn. These thresholds will remain at the same levels in and then increase by CPI. It is important that the tax system works fairly and adapts to changes in the new economy. To reflect the value derived from UK users, the government is introducing a digital services tax, ensuring large multinational businesses make a fair contribution to supporting vital public services. To reflect environmental concerns, the Budget is taking action on single-use plastic waste, including announcing a new tax on plastic packaging which does not contain enough recycled content.
The government is committed to keeping taxes low to support working people to keep more of what they earn and to encourage individuals to progress.
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The threshold will remain at the same level in and then increase by CPI. The threshold will remain at the same level in Off-payroll working in the private sector — To help people comply with the existing rules and bring private sector organisations in line with public-sector bodies and agencies, the government will reform the off-payroll working rules known as IR35 in the private sector.
This follows consultation and the roll-out of reform in the public sector. Responsibility for operating the off-payroll working rules will move from individuals to the organisation, agency or other third party engaging the worker. To give people and businesses time to prepare, this change will not be introduced until April Small organisations will be exempt, minimising administrative burdens for the vast majority of engagers, and HMRC will provide support and guidance to medium and large organisations ahead of implementation.
Taxation of self-funded work-related training — Following consultation responses indicating that tax relief is unlikely to be effective in addressing the barriers to learning or incentivising training, the government is maintaining the scope of tax relief currently available to employees and the self-employed for work-related training costs.
Instead, the government is launching the National Retraining Scheme and skills pilots to help those in work, including the self-employed, develop the skills they need to thrive. The government will retain the existing qualifying test of letting in a main or only residence, and will work with stakeholders to ensure that the rules around the relief are clearly understood. National Insurance Contributions Bill — As previously announced in September, the government will not abolish Class 2 NICs during this Parliament, given the potential impacts on some of the lowest earning in society.
There are two remaining measures in the draft NICs Bill published on 5 December reforms to the NICs treatment of termination payments and income from sporting testimonials. The government still intends to legislate for these reforms, which will take effect from April Tax treatment of social security income — The government is legislating to confirm the income tax treatment of nine new and existing social security benefits. This will reduce administrative burdens on UK employers with effect from April Trusts consultation — As announced at Autumn Budget , the government will publish a consultation on the taxation of trusts, to make the taxation of trusts simpler, fairer and more transparent.
Reducing administrative burdens on charities — From April , the government will introduce a package of measures to reduce administrative burdens on charities. These will:. Child Trust Funds — The government will publish a consultation in on draft regulations for maturing Child Trust Fund accounts.
The government is committed to creating a tax system which secures business investment and the location of business activity in the UK. Technology is changing many aspects of the economy — including the vehicles we drive — and the government is considering how the tax system will need to adapt to manage those changes. Further information on this measure is available in a supplementary document published alongside the Budget. The tax will:. The government remains committed to G20 and OECD discussions on potential future reforms to the international corporate tax framework, and will only apply the DST until an appropriate long-term solution is in place.
Corporate capital loss restriction — To ensure that large companies pay tax when they make significant capital gains, the government will bring the tax treatment of corporate capital losses into line with the treatment of income losses. The measure will be subject to anti-avoidance rules that are to apply with immediate effect.
Amendments to reform of loss relief rules — With effect from April , the government reformed the rules on how carried-forward corporate losses can be set against taxable profits of a company and its group members. The government will make amendments to the loss relief legislation to ensure that it works as intended and prevents relief for carried-forward losses being claimed in excess of that intended.
Intangible fixed assets regime — In early , the government reviewed how the tax treatment of acquired intangible assets could be made more competitive and administrable. Following a short consultation, the government will seek to introduce targeted relief for the cost of goodwill the amount paid for a business that exceeds the fair value of its individual assets and liabilities in the acquisition of businesses with eligible intellectual property from April With effect from 7 November , the government will also reform the de-grouping charge rules, which apply when a group sells a company that owns intangibles, so that they more closely align with the equivalent rules elsewhere in the tax code.
Hybrid Capital Instruments — Certain corporate debt instruments known as hybrid capital have some equity-like features. The government will introduce new rules for the taxation of such instruments, to ensure that they are taxed in line with their economic substance, taking into account new Bank of England requirements for loss absorbency. The new rules will also eliminate mismatches between the tax treatment of instruments used to raise funds externally and those used to lend funds internally within a group.
The rules will cover issues by companies in any sector and replace current rules covering regulatory hybrid capital instruments issued by banks and insurers. Offshore receipts in respect of intangible property previously Royalties Withholding Tax — As announced at Autumn Budget , the government is introducing legislation in Finance Bill to tax income from intangible property held in low-tax jurisdictions to the extent that it is referable to UK sales. This measure will come into effect from April Following consultation, the government is making changes to ensure that the measure is effective, appropriately targeted and robust against abuse.
These include:. High streets — High streets and town centres are crucial parts of communities and local economies, but the government recognises the challenges they face from changing consumer behaviour and is taking action to help them to evolve. Local authorities will be fully compensated for the loss of income as a result of these business rates measures. To ensure that second properties are subject to the appropriate tax, the government will consult on the criteria under which self-catering and holiday lets become chargeable to business rates rather than council tax.
Stamp Duty Land Tax SDLT and first-time buyers relief — The government will extend first-time buyers relief in England and Northern Ireland so that all qualifying shared ownership property purchasers can benefit, whether or not the purchaser elects to pay SDLT on the market value of the property. This change will apply to relevant transactions with an effective date on or after 29 October , and will also be backdated to 22 November so that those eligible who have not previously claimed first-time buyers relief will be able to amend their return to claim a refund.
Capital gains tax — To better target private residence relief at owner occupiers, from April the government will reform lettings relief so that it only applies in circumstances where the owner of the property is in shared occupancy with the tenant. The final period exemption will also be reduced from 18 months to 9 months. The government will consult on these changes. There will be no changes to the 36 months final period exemption available to disabled people or those in a care home.
Alternative fuels — Following review, the government will maintain the difference between alternative and main road fuel duty rates until to support the de-carbonisation of the UK transport sector, subject to review in The response will set out proposals to introduce environmental incentives from April Bands and rates will be set out ahead of Finance Bill Vehicle Excise Duty VED : Blood Bikes — To align the tax treatment of the transportation of blood and medical supplies by the national charity Blood Bikes with other emergency vehicles, the government will introduce an exemption for the purpose-built vehicles operated by Blood Bikes from April Carbon pricing following EU exit — The government continues to plan for all scenarios as it prepares for EU exit.
The government is also legislating so it can prepare for a range of long-term carbon pricing options. The electricity rate will be lowered in and Other fuels, such as coal, will continue to align with the gas rate. These ECAs add complexity to the tax system and the government believes there are more effective ways to support energy efficiency. The savings will be reinvested in an Industrial Energy Transformation Fund, to support significant energy users to cut their energy bills and transition UK industry to a low carbon future.
This will address the current situation where recycling rates of plastic are too low, plastic producers use little recycled plastic and some problematic items are rarely recycled and often end up in the natural environment. The Budget also announces funding for plastics and waste innovation. Plastic packaging — To reduce the problem of excessive and environmentally harmful plastic packaging, and incentivise manufacturers to use recycled plastic, the government will:.
This system will provide an incentive for producers to design packaging that is easier to recycle and penalise the use of difficult to recycle packaging, such as black plastics. To ensure a coherent approach, the government will consult on both of these together in the coming months. The government recognises the important role incineration currently plays in waste management in the UK, and expects this to continue.
However, in the long term the government wants to maximise the amount of waste sent to recycling instead of incineration and landfill. Disposable cups — The government recognises the problems caused by disposable cups, which are difficult to recycle and often littered. The government has concluded that a levy on all cups would not at this time be effective in encouraging widespread reuse.
Businesses are already taking steps to limit their environmental impact, but the government expects industry to go further and will return to the issue if sufficient progress is not made. In the meantime, the government will look in the Resources and Waste Strategy at the best way to tackle the environmental impact of cups.
Aggregates Levy Rates — The government will freeze Aggregates Levy rates for , but intends to return the Levy to index-linking in future. Alcohol duty rates and bands — Duty rates on beer, most cider and spirits will be frozen. Duty on most wine and higher strength sparkling cider will rise by RPI inflation from 1 February The government will review the current Small Brewers Relief to ensure it is supporting growth in the sector.
Alcohol structures consultation — As announced at Autumn Budget , the government will introduce a new duty band for still cider and perry from 6. Post duty point dilution — Following a review by HMRC launched at Autumn Budget , and in order to ensure a level playing field with other duty regimes, the government will legislate to ban post duty point dilution from April Tobacco duty rates — Duty rates on all tobacco products will increase by two percentage points above RPI inflation until the end of this Parliament.
Hand rolling tobacco will increase by an additional one percentage point. These changes will come into effect from 6pm on 29 October To signal its intent to put an end to the illicit trade in all its forms, the government will act on the recommendations of the recent All Party Parliamentary Group report by supporting the creation of a UK-wide Anti-Illicit Trade Group. This will bring together senior officials, representing each of the four parts of the United Kingdom, to share best practice and develop a national strategy for tackling this criminal activity and the societal ills that it fuels.
This will take effect from 6pm on 29 October Tobacco for heating — As announced at Spring Statement , the government will legislate in Finance Bill for a new duty rate for tobacco for heating. In these products processed tobacco is heated but not burned like conventional tobacco to produce, or flavour, vapour. This will be set at the same level as hand rolling tobacco and take effect on 1 July The return period for gaming duty will remain 6 months.
The bands to determine payment of gaming duty will be frozen from April , while the changes to gaming duty accounting periods are implemented. Both the reduction in maximum stake and increased duty rate will come into effect in October VAT registration threshold — Alongside the Budget, the government is publishing a response to the call for evidence on the design of the VAT threshold.
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The responses to the call for evidence did not provide a clear option for reform. The government will look again at the possibility of introducing a smoothing mechanism once the terms of EU exit are clear. VAT and vouchers — Following consultation, the government will legislate in Finance Bill to implement EU legislation which ensures that the correct amount of VAT is charged on what the customer pays, irrespective of whether payment is with a voucher or other means of payment.
This will shift responsibility for paying VAT along the supply chain to remove the opportunity for it to be stolen by those traders. The new rules will have effect on and after 1 October and the government is publishing secondary legislation alongside the Budget to implement this change. VAT and higher education — The government will amend VAT law to ensure continuity of VAT treatment for English higher education providers under the Higher Education and Research Act by enabling bodies registered with the Office for Students in the Approved fee cap category to exempt supplies of education.
Following the consultation launched at Spring Statement , the government is publishing a response at the Budget.
An Industry Working Group will also be established to address some of the main challenges associated with this policy through close cooperation with stakeholders. Consequential minor amendments to tax legislation to reflect EU exit — The government is responsible for preparing for all possible outcomes to EU negotiations.
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This power will allow the government to make small, essential changes to UK tax law to maintain the effect of tax legislation if the UK leaves the EU without a deal. Changes made under this power will maintain current operation of the tax law in essential areas, including changes in line with no deal legislation in other parts of the law.
The government remains committed to tackling tax avoidance and evasion, aggressive tax planning and non-compliance.
This is to address an identified abuse of the current rules. Profit fragmentation — As announced at Autumn Budget , the government will legislate in Finance Bill to introduce targeted legislation that aims to prevent UK businesses from avoiding UK tax by arranging for their UK-taxable business profits to accrue to entities resident in territories where significantly lower tax is paid than in the UK. The taxable UK profits will be increased to the actual, commercial level.
Reforming Stamp taxes on shares consideration rules — The government will consult on aligning the consideration rules of Stamp Duty and Stamp Duty Reserve Tax and introducing a general market value rule for transfers between connected persons. Reforming consideration rules will simplify Stamp taxes on shares and prevent contrived arrangements being used to avoid tax.
From 29 October , a targeted market value rule will be introduced for listed shares transferred to connected companies to prevent forestalling. In addition, revised VAT grouping guidance will be issued to:. Unfulfilled supplies — The government will amend rules from 1 March to bring consistency to the VAT treatment of prepayments. This change will bring all prepayments for goods and services into the scope of VAT where customers have been charged VAT but have failed to collect what they have paid for and have not received a refund.
Regulation 38 — The government will introduce stricter rules for how and when adjustments to VAT should be made following a reduction in price. Secondary legislation will tighten definitions for Regulation 38 and ensure a credit note is issued to customers. This will guarantee businesses are transparent and do not benefit from VAT that is due to the consumer or the Exchequer. ESS refers to the misuse of electronic point of sale functions i.
Protecting your taxes in insolvency — From 6 April , when a business enters insolvency, more of the taxes paid in good faith by its employees and customers, and temporarily held in trust by the business, will go to fund public services rather than being distributed to other creditors. The rules will remain unchanged for taxes owed by businesses themselves, such as Corporation Tax and employer NICs.