Last week saw the Prime Minister tighten the Covid-19 restrictions and the Chancellor announce his Winter Economy Plan. Covid-19 infection rates are rising, concern is growing over returning University students and almost a third of the UK is facing additional local lockdown measures.
Add to this the cancellation of the Budget and increasing concerns regarding the critical 9th and final round of Brexit negotiations and you can see why the business community is anxious.
But, amid the unease, there are reasons for optimism.
- The Job Support Scheme is a successor to the Coronavirus Job Retention Scheme. It offers support to viable SMEs, albeit less generous and more targeted than the CJRS. The Self-Employment Income Support Scheme (SEISS) was also extended.
- The introduction of “Pay as you Grow” for Bounce Back Loans and the extension of the repayment terms for Coronavirus Business Interruption Loan Scheme and Bounce Back Loans to 10 years, attempts to make repayments more manageable for businesses.
- VAT for the hospitality and tourism sectors will remain at 5% until the 31 March 2021 and businesses that deferred VAT due in March to June 2020 will have the option to spread their payments over the financial year 2021-2022, again making payments more manageable.
- Within the new updated online guidance, office workers who can work from home effectively should do so. The word “effectively” gives businesses the flexibility to allow for mental health concerns, logistics and collaboration in their plans to encourage working from home.
- There is mutual benefit for the EU and the UK to agree a deal, even if it is a so called “skinny deal” to avoid further economic damage.
There is always room for improvement and the CBI is vocal in calling for clarity and explanations for further Covid-19 restrictions, suggesting that table service only and the 10.00pm closing time for the hospitality sector, would be far more readily accepted if the government’s messaging were clearer and it explained the rationale for its decisions.
There are calls for further support packages to be considered for businesses that the Job Support Scheme does not help, further help with business rates relief and a focus on business and FE college partnerships to deliver retraining programmes in digital and technical skills. (An announcement on the expansion of post-18 education and training is expected on 29 Sept.)
On Brexit, the CBI continues to encourage all businesses that trade with the EU to prepare for the end of the transition period on 31 December. Regardless of the type of deal, including no deal, many firms who have traded seamlessly with the EU will face paperwork at the borders. There will be no extension to the transition period, so it is important to prepare for these inevitable border checks.
Wayne Thomas, partner at Bates Weston comments:
“The economic outlook is uncertain, the progress of the virus is at a tipping point, and patience and compliance seem to be wearing thin. It is all too easy to be swept into the negative narratives. We prefer to take a constructive approach. We deal with the day to day issues as they are, prepare where it is possible, and make sure we and our clients are aware of all available support.”
If you need our help in understanding the Job Support Scheme, SEISS extension, VAT deferral or preparing to trade with the EU post 31 December 2020, please do get in touch.