Infrastructure and digital economy
The Chancellor provided the National Infrastructure Commission with a fiscal remit that the government intends to spend 1.2% of GDP on economic (physical and digital) infrastructure to 2020.
There was also a significant comitment to spend £23bn on a new National Productivity Investment Fund for the purposes of furthering innovation and infrastructure over the next five years and to address the lingering productivity gap. Additionally there was a commitment for the UK to become a world leader in 5G, and to back that with a £1bn investment in digital infrastructure.
In terms of local funding, there were commitments to £1.1bn extra investment in English local transport networks, £220m for the strategic road network and £1.8bn from the Local Growth Fund to the English regions which will filter through to Local Enterprise Partnerships.
ACCA members will have a role in shaping the delivery of this through public-private-partnerships and similar financial and procurement arrangements. ACCA has a key role in ensuring that the public sector in particular has access to the right skills to manage the development of large scale capital infrastructure projects over the long term.
There is also an opportunity here for ACCA to further promote the relevance of the qualification offer through an added focus on digital skills and capabilities which are increasingly in demand by government and businesses alike.
Skills and devolution
English regions are set to grow in relevance particularly with the elections for City Region Mayors on the horizon in May 2017 for the cities of Manchester, Liverpool and Birmingham among others. This will have implications for local fiscal policy as fiscal devolution is rolled out in the years following the elections.
Local businesses will also be affected by changes to business rates, particularly in rural areas where Rural Rate Relief is to be increased to 100%, giving small businesses in the areas covered a tax break worth up to £2,900 per annum.
ACCA members can add value here providing support and expert knowledge of both their local markets and investor needs as cities and regions gain greater fiscal freedoms to raise and retain the taxes that are raised locally.
For ACCA, the changes outlined herein offer an opportunity to ensure that the qualification is offering the business-relevant skills required by the private and public sectors in the years ahead. The recent re-launch of the qualification is key in this regard, modernising future members to face professional ethical and governance challenges of the future.
Taxes and wages
Headline figures on taxation were around the income tax threshold which is to be raised to £11,500 in April, from £11,000 now, and a higher rate income tax threshold rising to £50,000 by the end of this Parliament.
Tax savings on salary sacrifice and benefits in kind are to be stopped and the National Living Wage is to rise to £7.50 in April next year from a current rate of £7.20. Also, employee and employer National Insurance thresholds are to be equalised at £157 per week from April 2017 and insurance premium tax is to rise from 10% to 12% next June.
There was also a commitment to end the abuse of the flat rate VAT scheme with penalties for tax avoidance schemes to increase.
ACCA and ACCA members will be well placed to ensure these changes are successfully implemented in the years ahead. Keeping members informed of these policy developments and adjusting accordingly is an important part of the ACCA offering. It is also key to ensuring a sustainable talent pipeline for those studying for the qualification and to boosting the recognition of the profession worldwide.
Article from ACCA In Practice