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COVID-19 CORONAVIRUS – HEADLINES AND HOW CAN WE CAN HELP

Firstly, all my thoughts and well wishes are with you all, and hope you all keep safe and be sensible to avoid catching the Coronavirus. We have been taking a number of calls with regards to the current situation and apologises for not being able to get round to all of our clients. As a result, we have drafted the following brief note to keep you updated.

Since last week the Chancellor made announcements to help small and medium sized businesses. Many of these announcements have been extremely encouraging, however, the way to get help is still somewhat unclear.

On 20 March 2020, Boris Johnson  took the extraordinary step of ordering pubs, clubs and restaurants across the UK to close that night. This has affected a large number of our clients who operate as restaurants and take-aways but also shop-keepers and those supplying to the retail industry.

Please note, restaurants and take-aways can, for now, can remain open only if they are providing take-out food.

The Chancellor’s speech of 20 March 2020 announced an unprecedented wage-support scheme to try to prevent thousands or millions of job losses.

WHAT CAN WE DO

I am here to assist and help you to access what ever grants and loans there are available under the various Government Schemes and together we can get through these very troubling and difficult times for all our businesses.

At this moment in time, the various schemes are not accessible and when these various portals to access the schemes are available, I will contact you at that stage.

SCHEMES AND GRANTS AVAILABLE

The following is a summary of what is the current position based on the Chancellors speech on 20 March 2020 and information on the GOV.UK webpages on 20 March and this includes a package of measures to support businesses including:

  1. Coronavirus Job Retention Scheme (CJRS)
  2. Deferring VAT and Income Tax payments
  3. HMRC Time To Pay Scheme
  4. Statutory Sick Pay relief package for SMEs
  5. Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
  6. Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
  7. the Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank – https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/

CORONAVIRUS JOB RETENTION SCHEME (CJRS)

The Coronavirus Job Retention Scheme will be a government grant – employers can claim for 80% of furloughed workers wage costs, up to a cap of £2,500 per month.

The scheme will be:

  • Backdated to March 1st March 2020
  • Claimed initially for at least three months but could be extended ‘for longer if necessary’

Who is eligible for the CJRS scheme?

All UK businesses are eligible (or in the Chancellor’s words “Any employer in the country – small or large, charitable or non-profit – will be eligible for the scheme.”)

When will you be able to make a claim under the CJRS scheme?

No date has been set as yet, but the following are indications it will not be immediate:

  • “HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.”
  • “HMRC are working night and day to get the unprecedented Coronavirus Job Retention Scheme up and running and we expect the first grants to be paid within weeks.”
  • “If your business needs short term cash flow support, you may be eligible for the Coronavirus Business Interruption Loan Scheme”

What is a furloughed worker?

We understand that a furloughed workers are “workforce who remain on payroll but are temporarily not working during the coronavirus outbreak” per GOV.UK news story.

It is noted that employers will need to notify employees of this change in employment status to furloughed, but that changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.

OTHER GOVERNMENT ASSISTANCE

On 18 March 2020, the Scottish Government (https://www.gov.scot/news/gbp-2-2-billion-for-business/) support relating to business rate.

Economy Secretary Fiona Hyslop has addressed the Scottish Parliament on the economic impact of COVID-19 in Scotland.

In her statement she warned that as a result of coronavirus, the Scottish economy is facing an immediate collapse in demand.

She outlined the actions being taken by the Scottish Government to support businesses including a package of measures worth £2.2 billion from 1 April:

  • a full year’s 100% non-domestic rates relief for retail, hospitality and tourism
  • £10,000 grants for small businesses in receipt of the Small Business Bonus Scheme or Rural Relief
  • £25,000 grants for hospitality, leisure and retail properties with a rateable value between £18,000 and £51,000

Self employed

Sadly, with the exception of the VAT and 31 Jul income tax deferral payments and applying for Universal credit there is currently no income support as is the case for employees. The Government has stated that it is looking into the position with regards to the Self Employed and will make further announcements in due course.

Sources of further information

I would expect HMRC’s and the gov.uk websites will be updated to provide additional information on the CJRS scheme, Small Business Interruption Loans and grant claims for rates relief.

Once more information is available, I will contact you at that time. But for now please keep safe and follow all the Government guidance on social distancing.

PracticeWEB No Comments

Employers fret over future of economy

31% of employers expect the economy to worsen in the coming months as business confidence fell in July 2017, according to a study.

601 employers were polled by the Recruitment and Employment Confederation (REC), who also found 28% still expect the economy to improve.

40% need to take on more permanent staff to meet additional demand, while 19% said they were planning to hire new workers in the next 3 months.

Confidence in hiring and investment decisions remained at 10%, its lowest for the past 12 months.

The biggest concern among employers was the lack of skilled candidates available, particularly in the construction industry.

Kevin Green, chief executive of the REC, said:

“Businesses are continuing to hire to meet demand, but issues like access to labour, Brexit negotiations and political uncertainty are creating nervousness. 

“The government must do more to create an environment where businesses have clarity. 

“That means clearly laying out what Brexit plans look like and how employers can keep recruiting the people they need from the EU.”

Get in touch to discuss your business concerns.

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Unemployment rate falls to 4.4%

Unemployment fell to 4.4% in the 3 months to June 2017 – down from 4.9% to its lowest rate since 1975.

Figures from the Office for National Statistics (ONS) show unemployment fell by 57,000 between April and June 2017, while 338,000 more people were in employment than the same period last year.

However, with inflation remaining at 2.6%, real wage earnings fell by 0.5% (including any bonuses).

Average weekly earnings for employees in nominal terms increased by 2.1% compared to a year ago.

Productivity was 0.1% lower than in Q1 2017, with the ONS saying it remains “around the same level as its pre-downtown peak”.

Matthew Percival, head of employment at the Confederation of British Industry, said:

“Continuing strong employment growth is tainted by falling real wages, reducing household spending power.

“Productivity has been falling throughout 2017 – this matters as rising productivity is the only sustainable route to higher wages and better living standards.

“It’s therefore incumbent upon the government to work with businesses to protect the flexible labour market and design an industrial strategy that will drive productivity and wage growth.”

Discuss your business obligations with us.

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Bank of England cuts growth forecast

The Bank of England (BoE) has cut its growth forecast to 1.7% – down from 1.9% previously forecast in May 2017.

The BoE also reduced its growth forecast for 2018 from 1.7% to 1.6%.

This news comes as interest rates were held at 0.25% to stay in line with the 2% inflation target set by the Monetary Policy Committee.

Dr Adam Marshall, director general at the British Chambers of Commerce, said:

“In our view, the BoE forecasts are still slightly optimistic about the near-term outlook for the UK economy. We expect inflation to rise by more than the central bank is currently predicting, peaking at 3.4% this year. 

“Businesses continue to report rising prices at factory gates, which are squeezing profit margins and investment intentions.”

Mike Cherry, chairman at the Federation of Small Businesses, added:

“With inflation set to pick up again towards the end of the year, our entrepreneurs need support. Many are paying themselves less and further increasing prices in an attempt to handle the squeeze. 

“The last thing they need is hikes to stealth taxes, particularly fuel duty and insurance premium tax, as part of attempts to paper over gaps in the public finances.”

Contact us about how inflation could affect your business.

PracticeWEB No Comments

UK inflation drops to 2.6%

The Consumer Prices Index (CPI) measure of inflation unexpectedly fell to 2.6% in June, down from 2.9% in May 2017.

The rate of inflation fell for the first since April 2016, although it remains higher than the rates seen over the last 4 years.

Last month’s fall was largely down to a further drop in fuel prices, which fell for the fourth month in a row according to the Office for National Statistics.

Suren Thiru, head of economics at the British Chambers of Commerce, said:

“With UK economic conditions softening, it is crucial the Monetary Policy Committee holds its nerve on interest rates, particularly during this period of heightened political uncertainty. 

“Raising rates too early could undermine consumer and business confidence, stifling UK growth further.”

Mike Cherry, national chairman at the Federation of Small Businesses, added:

“Confirmation that rates bills will rise in line with CPI rather than RPI from 2020 will go some way to supporting small firms that are struggling against sharp hikes in the future.

“Given that operating costs are now at their highest in 4 years, and against a backdrop of unprecedented political and economic uncertainty, help is needed now.” 

Contact us to discuss your business.