Measures Announced in the King’s Speech: How They Could Impact Your Practice

This week we have seen the State Opening of Parliament alongside the first King’s Speech since the Labour landslide. While this was not an announcement of tax or accounting change, it sets out the government’s plans and priorities for the coming year and so is useful information for accountants in practice providing business advisory services to their clients.

There is also important information for accountancy firms providing audit services, as well as plans to boost the UK economy.

In this article we look at measures announced in the king's speech, how they could impact your business.

If you're an accountant in practice or industry and you're looking to stay up-to-date with changes in taxation or finance then a 20:20 Innovation membership will be extremely valuable. To book a demo, contact the team today.

Top 5 points for business advisors

Identify private clients who may be paying private school fees – talk to them about the proposal to remove the VAT exemption.

Keep in touch with private clients and business owners on pension reform – change is on the cards and wealth management will be important.

Keep employers up to date with changes in employment law – employees will soon be receiving enhanced rights.

Keep your eyes peeled for an Autumn Budget – with the date expected to be announced this month.

Continue to support your team and clients with their mental health and wellbeing – a little encouragement goes a long way.

Date and purpose of the King’s Speech

The King’s Speech is delivered at the State Opening of Parliament and sets out the government’s plans and priorities for the coming year.

It outlines the legislation that ministers aim to pass and is drafted by the government of the day.

Overview of the legislative agenda

The speech King Charles III gave included mention of 40 new pieces of legislation that could have a direct impact on businesses and the financial security of individuals.

The Labour Government’s legislative programme will be mission led and based upon the principles of security, fairness and opportunity for all.

Economic Outlook

Economic growth and public sector debt

The government’s focus will be on economic stability. The Budget Responsibility Bill will ensure all significant spending and tax charges are subject to independent scrutiny by the Office of Budget Responsibility (OBR). In addition, the Draft Audit Reform and Corporate Governance Bill will be introduced to strengthen audit and corporate governance.

The King’s Speech outlined the government’s legislative agenda for the 2024-25 session, focusing on increasing economic growth, prioritising wealth creation for all communities and an improvement in living standards across all areas of the UK.

Impact on businesses and consumers

The government’s plans are intended to have a direct impact on businesses and consumers, helping them to move on from the cost of living crisis and help businesses fund new jobs and investment.

Trade agreements

The government intends to improve the UK's trade and investment relationship with the European Union.

Tax

The speech confirms that the government will introduce legislation to remove the VAT exemption from private school fees.

No further tax-related measures were included in the speech; a budget is set to take place in September or October 2024.

Business and Regulatory Reform

Audit and corporate governance reform

The Audit and Corporate Governance Bill will improve investor confidence in UK business by establishing the Audit, Reporting and Governance Authority (ARGA) and introducing more oversight of the audit market.

Interestingly, the bill plans to extend Public Interest Entity (PIE) status to large private companies, subjecting them to more rigorous audit requirements. However, there are also plans to remove unnecessary rules on smaller PIEs to reduce regulatory burden. The net impact on this for audit firms with large audit clients will need further clarification.

Artificial intelligence

Developers of the most powerful Artificial intelligence (AI) models will be subject to regulation and the government will seek to identify the most appropriate legislation to achieve this.

Employment and Pensions

Changes to pensions

The Pension Schemes Bill will reform the pensions system by driving investment in homegrown businesses to deliver greater returns for pension savers.

Employment

The Employment Rights Bill will legislate to enhance employment rights and ban exploitative practices.

The Draft Equality (Race and Disability) Bill will enshrine the full right to equal pay in law.

'Skills England', a partnership with employers, will be established.

The government intends to reform the Apprenticeship Levy.

Renters Bill

With the Renters’ Rights Bill, legislation will be introduced to give greater rights and protections to people renting their homes, including ending no fault evictions and reforming grounds for possession.

The Renters’ Reform Bill, introduced by the previous government contained such measures, but it experienced many delays during it’s passage through parliament and at the time parliament was prorogued for the general election, it was not advanced enough to receive Royal Assent as part of the ‘mopping up’ process.

If you've got clients looking for advice on new and existing properties then our Property Sector Groupcould be an ideal place to get information.

Leasehold bill

Draft legislation will also be published on leasehold and commonhold reform (the Leasehold and Commonhold Reform Bill). The previous government’s Leasehold and Commonhold Reform Act received Royal Assent during the mopping up process, but it did not contain a proposed cap on ground rents. In their manifesto, Labour pledged to “take further steps to ban new leasehold flats and ensure commonhold is the default tenure” as well as tackling ground rent charges and unfair maintenance costs.

Planning reform and infrastructure

The Planning and Infrastructure Bill will reform the planning process and accelerate the delivery of high quality infrastructure and housing. In Rachel Reeves’ first speech as Chancellor on 8 July, she said “Our antiquated planning system leaves too many important projects getting tied up in years and years of red tape before shovels ever get into the ground” before committing to “reform the National Planning Policy Framework, consulting on a new growth-focused approach to the planning system before the end of the month, including restoring mandatory housing targets.”

Energy

Chancellor Rachel Reeves has previously said that the government plans to end the ban on new onshore wind farms and consult on bringing onshore wind back into the Nationally Significant Infrastructure Projects regime, meaning decisions on large developments will be taken nationally not locally. The King's Speech confirms that the Great British Energy Bill will be introduced to set up Great British Energy, a publicly owned clean power company headquartered in Scotland, which will help accelerate investment in renewable energy such as offshore wind.

The Sustainable Aviation Fuel (Revenue Support Mechanism) Bill is intended to support sustainable aviation fuel production.

The Water (Special Measures) Bill will strengthen the powers of the water regulator.

Other proposed legislation

Devolution

A new Council of the Nations and Regions will be established to allow for collaboration between the Prime Minister, heads of devolved government and mayors of combined authorities.

The English Devolution Bill will give new powers to metro mayors and combined authorities, promoting local growth to benefit communities.

Public transport

The Rail Reform Bill will reform railway franchising and the Passenger Railway Services (Public Ownership) Bill will bring 8 train operators into public ownership.

The Better Buses Bill will allow local leaders to take control of their bus services.

Borders and security

The Border Security, Asylum and Immigration Bill will modernise the asylum and immigration system, establish a new Border Security Command and deliver enhanced counter terror powers to tackle organised immigration crime.

The Crime and Policing Bill and the Victims, Courts and Public Protection Bill will strengthen the police's powers to deal with anti social behaviour and improve support for victims of crime.

Health

Through the Mental Health Bill, the government will ensure mental health is given the same focus and attention as physical health.

The Tobacco and Vapes Bill will gradually increase the age at which people can legally buy tobacco and will impose restrictions on the sale and marketing of e-cigarettes.

Forthcoming legislation will regulate the marketing of junk food and restrict the sale of high-caffeine drinks to children.

Northern Ireland

The government will consult with all parties to bring forward measures to begin the process of repealing and replacing the Northern Ireland Troubles (Legacy and Reconciliation) Act 2023.

Education

The Children's Wellbeing Bill is intended to raise standards in education and promote children's wellbeing.

Modernisation of parliament

The House of Lords Hereditary Peers Bill will legislate to remove the right of hereditary peers to sit and vote in the House of Lords.

The government is to propose a modernisation committee for improving standards and procedures in the House of Commons.

Defence

The King's Speech confirms the government's commitment to the North Atlantic Treaty Organisation (NATO) and will conduct a Strategic Defence Review.

The government will continue to support Ukraine and is committed to a two state solution for Israel and Palestine.

Conclusion

The King's Speech contained no surprises and confirmed Labour's intention to deliver on many of their pre-election pledges. Whilst very few tax measures were mentioned, we expect these to be announced in the next budget, which should take place in September or October.

If you're an accountant in practice or industry and you're looking to stay up-to-date with changes in taxation or finance then a 20:20 Innovation membership will be extremely valuable. To book a demo, contact the team today by filling in the form below.