Business Update – 7 July 2021
Welcome back to our Weekly Digest. Read on for the latest updates and some ideas to help us all move forward.
PM Outlines End to England’s COVID-19 Restrictions
Prime Minister Boris Johnson set out his plans to end social and economic COVID-19 restrictions in England in two weeks, which will test whether the rapid vaccine rollout offers enough protection from the Delta variant.
The PM confirmed the government aims to lift restrictions on 19 July, with a final decision to be made next week. This would remove limits on social contact, instruction to work from home, and face mask mandates.
Nightclubs will be permitted to operate and there will be no limits on capacity of hospitality venues. According to government data, 86% of adults have received a first dose and 64% have received two doses as of Monday.
New Subsidy Scheme to Support UK Jobs and Businesses
The new UK-wide Subsidy Control Bill will provide quicker and more flexible support to UK businesses following Brexit. Previously, when the UK was a member of the EU, it followed the EU’s State aid regime which governed the awarding of grants, loans, and guarantees.
This is a lengthy bureaucratic process of being notified to and approved by the European Commission in advance. This delays these funds from being accessed by businesses in good time. However, with the new UK system, subsidies are permitted if they follow UK-wide principles.
These principles will allow authorities to award subsidies where they’re needed without so much red tape.
PMI: Business is Soaring for UK Services Firms, and so are Prices
The post-lockdown rebound for UK services firms eased slightly in June, but price pressures heightened by the most on record– adding signs of a further increase in inflation ahead.
The IHS Markit/CIPS Purchasing Managers’ Index for the sector was slightly higher at 62.4 compared to a preliminary June reading of 61.7, but edged down from 62.9 in May.
Job creation was the fastest for seven years, but staff shortages contributed to push up prices by the most on record for prices charged. While the UK’s economy declined by almost 10% last year due to COVID-19, it is expected to grow faster than the United States and other advanced economies because of the fast vaccination rollout as well as the huge monetary and fiscal stimulus.
COVID Local Support Grant Extended
The government’s COVID Local Support Grant has been extended until September, bringing it in line with the end date for furlough and other COVID-related support. The funding is ring-fenced so that 80% is used to support families with bills for food, key utilities and other essentials. Across England, the total new funding is £160 million.
Cash Boost For Apprentices Launched
Employers of all sizes in England can now apply for additional funding to help them take on new apprentices. The boost to the apprenticeship incentive scheme has been available to claim from 1 June. Businesses can apply to claim £3000 for each new apprentice hired as a new employee from 1 April until 30 September.
Debt Respite Scheme ‘Breathing Space’
Under the debt respite scheme called Breathing Space, those facing financial difficulties will be given 60 days to get their finances back on track, with most interest and penalty charges frozen, and enforcement action halted.
Professional debt advice will also be provided. Recognising the link between debt problems and mental health issues, these protections will be available for those in mental health crisis treatment for the full duration of their crisis treatment plus another 30 days.
Please get in touch with us if you need any help with your cashflow. We are here to help.
Over £150 Million Funding for New ‘Help to Build’ Scheme
The new £150 million ‘Help to Build’ scheme will make it easier and more affordable for people to build their own homes. New homes can be made to order or built from scratch, and will benefit small building firms as part of the government’s Plan for Jobs.
Also, a £2.1 million additional funding has been announced to help communities decide where they want new homes, shops, and offices to be built and what they should look like.
Recovery Loan Scheme Launched
The government has launched a new Recovery Loan Scheme to help companies access loans of £25,000 up to a maximum of £10 million. The loans will include 80% government guarantee and interest rate cap of 14.99%.
This is in addition to the extended furlough until 30 September and the New Restart Grants scheme.
Job Retention Scheme Extended Until End of September
The Coronavirus Job Retention Scheme has been extended until 30 September 2021. It will remain unchanged until the end of June, and a phased reduction in the level of funding will be implemented from 1 July 2021.
Currently, employers can claim grants equal to 80% of a furloughed employee’s reference pay. Grants for each worker are capped at £2,500 per month.
For claims starting 1 July 2021, the grant will be reduced to 70% of the reference salary and capped at £2,187.50 per month. It will be further reduced to 60% of the reference salary with a cap of £1,875 starting 1 August 2021.
You can read more about it here.
£20 Million SME Brexit Support Fund Launched
A £20 million SME Brexit Support Fund has been announced to help businesses adjust to new customs, rules of origin, and VAT rules when trading with the EU.
Traders will be able to apply for a grant of up to £2,000 to pay for practical support for importing and exporting. This fund will help businesses prepare for the implementation of import controls that will take effect from April and July.
More details can be found here.
Kickstart Scheme grant
- Provides funding to create new job placements for 16 to 24-year-olds on Universal Credit
- Covers 100% of the National Minimum Wage (or the National Living Wage) for 25 hours a week for a total of six months
- Also covers National Insurance contributions
- Employers can spread the start date of the job placements until the end of December 2021
More information can be found here.
Conduct a Mid-Year Business Review
Time flies! The year is halfway over and although the battle against COVID-19 is not completely over, a lot of things have changed since last year as countries ramp up their vaccination efforts.
Instead of waiting until the end of the year to do some business clean-up, why not conduct a mid-year review to evaluate your performance, boost your awareness of your business, and start corrective actions early?
This Forbes article provides an actionable checklist to help you look into your business more closely and knock off some tasks so you won’t get overwhelmed by the end of the year. These include:
- Get to a quiet place and check how you’re feeling. Block off a day or a few to reflect on how you’re feeling about your business. Are you living up to your purpose and vision? Do you feel you’re accomplishing your goals? Are you overwhelmed or anxious about the future of your business?
- Assess your cash flow. Regardless of your industry or size, cash flow is the life-blood of your business. Monitor how close you are to your targets for revenue and profits, and identify problems or potential issues. Some of the things you should look into include income, profit, owner’s compensation, tax, and operating expenses.
- Review your tax payments. Check in with your accountant to see if you’re on track with mid-year tax projections. Your accountant can look at your revenue, make a projection, and estimate how much you should owe during tax season.
- Conduct an expenses analysis. If you’re having cash flow troubles or you simply want to have more cash, you can review your expenses and either increase sales or cut costs. Cutting costs is usually quicker.
- Write down what’s next. Develop steps to accomplish new goals and write them down. What can you do about the obstacles you’re facing? How and when are you going to do it? How do you feel about it?
Remember, the purpose of this review is improvement or progress, and not perfection. If you need some guidance to push your business forward, get in touch with us today and let’s discuss how we can help!
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Contact us if you have any questions or want to discuss the next steps for your business.