Less than 30% of firms expect their workforce to fully return to the workplace over the next five years, according to research by the British Chambers of Commerce (BCC).

The survey of over 1,000 businesses found just 27% of respondents predict their employees will be fully physically present in the workplace over the next five years. In addition, 47% anticipate their staff will be mostly in-person, 16% expect mostly remote and 8% fully remote.

The research found a clear divide between different sectors. Only 17% of B2B services organisations expect fully in-person working, while the figure for manufacturers is 38% and B2C services 37%.

Jane Gratton, Deputy Director of Public Policy at the BCC, said:

‘Our data shows that hybrid working is now part of the fabric of the modern workplace. This flexibility is valued by employers and their teams. Less than 30% of firms expect staff to be working fully in-person over the next five years.

‘Flexible working makes good business sense. In a tight labour market where employers are competing for skilled workers, hybrid working and flexible working more generally have become important parts of staff benefit packages.’

Internet link: BCC website

The UK is at risk of recession after revised figures showed the economy shrank between July and September, according to data from the Office for National Statistics (ONS).

Gross domestic product, which measures the health of the economy, contracted by 0.1% after previous estimates suggested growth has been flat.

Meanwhile, there was zero growth between April and June, after it was first calculated to have risen by 0.2%.

A recession is typically defined as when the economy shrinks for two three-month periods – or quarters – in a row.

Meanwhile, the UK’s inflation rate fell to 3.9% in the year to November, the ONS confirmed.

The fall was bigger than the ONS had anticipated with lower petrol prices contributing to the reduction in the inflation rate.

Price increases for bread and cakes are also easing, according to the ONS.

David Bharier, Head of Research at the British Chambers of Commerce (BCC), said:

‘Today’s data showing the CPI rate grew at 3.9% in November, a greater slowdown than expected, is welcome confirmation that the headline rate of inflation is continuing to ease. However, prices are still rising from a very high base following multiple economic shocks and core CPI remains stubborn at 5.1%.

‘Persistent inflation and high interest rates are likely to remain a barrier to business growth for some time to come. Businesses are desperate for a clear, long-term plan for growth which sets out a vision for infrastructure, skills and green innovation.’

The fall in inflation followed the Bank of England’s decision to hold interest rates at 5.25%, marking the third time in a row that the Bank has left the rate unchanged.

Bharier said:

‘While a cut in the interest rate could have provided some relief for firms ahead of Christmas, [the] decision to hold at 5.25% was expected and allays fears of further rises.

‘UK businesses have been faced with the twin shock of an inflation crisis and increased borrowing costs.

‘The BCC’s latest Economic Forecast expects only a 0.25% point cut in the interest rate for the whole of 2024, although businesses need to be prepared for any unexpected changes given the uncertain policy landscape.’

Internet link: ONS website ONS website BCC website Bank of England website BCC website

The beginning of 2024 sees the start of new rules requiring websites such as Vinted, Etsy, Upwork, Uber, Fiverr, Airbnb, Deliveroo & Ebay to record how much money people are making through them and report it to HMRC. The new rules for these platforms are part of a wider crackdown on tax avoidance from people boosting their income through working side hustles, freelancing and self-employment.

In the UK, you can earn £1,000 in additional income each tax year alongside your regular job – known as your Trading Allowance. If you make more than this, then you will need to register yourself as self-employed and pay tax on these earnings.

If you have any queries regarding this or need additional help, please contact us at the office on 01492 593345.

The changes to National Insurance contributions (NICs) announced by Chancellor Jeremy Hunt in the Autumn Statement will help to ‘ease the burden on strivers up and down the country‘, according to the Federation of Small Businesses (FSB).

Mr Hunt used his Autumn Statement speech to cut the main rate of employee NICs from 12% to 10% for 27 million workers across the UK. This is set to take effect from 6 January 2024. The Chancellor said that, for the average employee earning £35,400 per year, the change amounts to a £450 annual tax cut.

For the self-employed, the Chancellor also abolished Class 2 NICs and cut Class 4 NICs from 9% to 8%, effective from 6 April 2024.

Tina McKenzie, Policy Chair at the FSB, said:

‘The Chancellor’s decision to reduce the rate of self-employed NICs and abolish the Class 2 element is extremely welcome, easing the burden on strivers up and down the country.

‘The FSB has long campaigned for the abolition of the Class 2 element of NICs and the reduction of Class 4, and we are therefore pleased that the Chancellor has acted.’

Internet link: GOV.UK FSB website