This will be our last business newsletter before Christmas and the New Year break so let us wish you a happy Christmas and a more stable New Year.
We think most clients will be glad to see the
back of 2020. Let us have hope that later in 2021 we return to a more normal
way of life.
How do we make sense of what’s happened this
year?
This year will be remembered for the
destruction Coronavirus has caused to our lives, especially the 79,000 who died
from the virus. We have had to change the way we work and communicate. One of
the greatest costs has been the restrictions on civil liberties in peacetime.
We now wear face masks and socially distance. Schools have been closed and
pupils now learn part of the time remotely and in some areas of the country,
attendance has been below 80%. There are nearly 1.5 million patients waiting
more than six months from appointment to referral for hospital treatment. The
criminal court backlog has grown significantly and mental health amongst all
elements in our population has worsened.
Economically, the country has been devastated
and sectors such as hospitality, travel, the Arts and high street retail hit
hardest. The number of people claiming Universal Credit has doubled to 5.7
million people. For many business
owners, 2020 has been the worst of the worst years, and the UK economy is
expected to shrink by 11.3% this year and not return to its pre-Covid size
until the end of 2022. Government borrowing will rise to its highest outside of
wartime to deal with the economic impact.
A “No Deal” Brexit will have a further
negative impact on the economy in early 2021 and any recovery will take longer
as a result. The Confederation of British Industry (CBI) predict the UK won’t
get back to its pre-pandemic level until the end of 2022 and if there is “No
Deal” this could take up to 2024.
We are “Where we are”
The pandemic happened and now is not the time
to reflect how it happened or judge how it was managed. We need to take
precautions individually to prevent the virus entering a third wave and we must
continue to take responsibility in the community to socially distance and help
prevent the spread.
2020 – A year of resilience
This year, we have been amazed at the
resilience of clients and how they have energetically repurposed or pivoted
their businesses into new areas, products and services. Businesses have
redesigned delivery and payment systems, moved their entire processes digital,
accepted remote working or new safe working environments and adopted to new
technologies to survive and indeed prosper in this Covid-19 era.
Clients have demonstrated to us how we can all
readily adapt to a change in circumstances and have given us inspiration and
optimism for the future. We believe that by this time next year we will be back
to where we want to be and more of our daily lives will resemble some kind of
normality again. Do not give in to the virus, stay strong, be resilient and
together we will move forward!
We can also reflect on the good news of the first
vaccines arriving, being distributed and administered to people in the UK. The
Government plans state the aim of the COVID-19 vaccination programme is to
protect those who are at most risk from serious illness or death. More vaccines
have and are continuing to be developed and we can expect more of us to be
vaccinated in 2021. Let’s hope that sometime next year we have broken the back
of this virus!
COVID-19 Government support and Grants
available in 2021
Government grants will continue for the
foreseeable future and certainly until 31 March 2021. The main grants and
supports available now are outlined below. Please contact us if you need help
in claiming any of these.
Coronavirus Job Retention Scheme (CJRS)
The CJRS will remain open until 31 March 2021.
From 1 November 2020 employers can claim 80% of an employee’s usual salary for
hours not worked, up to a maximum of £2,500 per month. Employers can claim for
employees who were employed on 30 October 2020, as long as they have made a
PAYE RTI submission to HMRC between the 20 March 2020 and 30 October 2020,
notifying a payment of earnings for that employee. This may differ where they
have re-employed an employee after 23 September 2020. All employers with a UK
bank account and UK PAYE schemes can claim the grant.
Employers can furlough employees for any
amount of time and any work pattern, while still being able to claim the grant
for the hours not worked. Employers might need to contribute towards the cost of
their furloughed employees’ wages for these periods. For periods from 1
November 2020, they will need to pay for the cost of employer NICs and pension
costs.
Self-Employment Income Support Scheme Grant
Extension (SEISS)
SEISS is available in the form of 2 further
grants, each available for 3-month periods covering November 2020 to January
2021 and February 2021 to April 2021.
To be eligible for the grant extension,
self-employed individuals, including members of partnerships, must:
- have
been previously eligible for the Self-Employment Income Support Scheme
first and second grant (although they do not have to have claimed the
previous grants)
- declare
that they intend to continue to trade and either:
1.
are currently actively
trading but are impacted by reduced demand
2.
were previously
trading but are temporarily unable to do so
The extension will last for 6 months, from
November 2020 to April 2021. Grants will be paid
in 2 lump sum instalments, each covering a 3-month period. The third grant will
cover a 3-month period from 1 November 2020 until 31 January 2021. The
Government will provide a taxable grant calculated at 80% of 3 months average
monthly trading profits, paid out in a single instalment and capped at £7,500
in total.
Coronavirus Business Interruption Loan Scheme
The scheme helps small and medium-sized
businesses to access loans and other kinds of finance up to £5 million. The
government guarantees 80% of the finance to the lender and pays interest and any
fees for the first 12 months. The scheme has been extended and is open until 31
January 2021.
The Coronavirus Large Business Interruption
Loan Scheme
The Coronavirus Large Business Interruption
Loan Scheme (CLBILS) provides financial support to larger businesses affected
by coronavirus (COVID-19). The scheme helps medium and large sized businesses
to access loans and other kinds of finance up to £200 million. The government
guarantees 80% of the finance to the lender and is open to applications until
31 January 2021.
Bounce Back Loans
The scheme helps small and medium-sized
businesses to borrow between £2,000 and up to 25% of their turnover. The
maximum loan available is £50,000. The government guarantees 100% of the loan
and there won’t be any fees or interest to pay for the first 12 months. After
12 months, the interest rate will be 2.5% a year. The scheme is open to
applications until 31 January 2021.
The Future Fund
This scheme will issue convertible loans,
between £125,000 to £5 million, to innovative companies which are facing
financing difficulties due to the coronavirus outbreak.
The Future Fund provides government loans to
UK-based companies ranging from £125,000 to £5 million, subject to at least
equal match funding from private investors.
These convertible loans may be an option for
businesses that rely on equity investment and are unable to access other
government business support programmes because they are either pre-revenue or
pre-profit.
The scheme is open for applications until 31
January 2021.
Regional and local supports
There are regional and local supports also
available and you can find details of these on the Government website. When you
click the “Start now” button you are immediately asked whether you are based in
England, Scotland, Wales or Northern Ireland.
Business Planning for 2021
Business planning for 2021 is more difficult
as we cannot predict the date of a return to normality or what will happen with
Brexit just yet, but there are some practical steps you can take to minimise
potential disruption to your business:
1. Review your
Budgets and set realistic and achievable targets for 2021.
2. Get your
employees involved in a discussion of likely trading conditions and get their
input on reducing costs and maintaining revenues.
3. Review and flow
chart the main processes in your business (e.g. Sales processing, order
fulfilment, shipping etc.) and challenge the need for each step.
5. Encourage team
members to suggest ways to streamline and simplify processes (e.g. sit down and
brainstorm about efficiencies and cost reduction).
6. Put
extra effort into making sure your relationships with your customers are solid.
7. Review your list
of products and services and eliminate those that are unprofitable or not core
products/services.
8. Review
efficiency of business processes and consider alternatives such as outsourcing
certain activities locally or overseas.
9. Agree
extended payment terms (if applicable) with all suppliers in advance.
10. Pull
everyone together and explain the business strategy and get their buy-in.
11. Remember to spend
some quality time with the people that matter to you, especially family and
friends!
12. Use the holiday
period as an opportunity to reflect on the exceptional challenges you have
faced as a result of Covid-19 over the last 12 months. What were your most
significant accomplishments? Have you encountered any setbacks or
disappointments? Consider what you have learned from your experiences to
improve your prospects for 2021.
13. Send notes to
colleagues, customers and contacts to thank them for their support during such
a difficult year.
14. Your final task
is to set yourself and the business some specific goals for 2021. Make sure to
keep them visible and share them.
Please talk to us about cash flow planning for
the next six months, we can help with a template so you can do this yourself or
work together to produce estimates for a variety of scenarios.
Brexit planning for 1 January
Whether or not there is a trade deal with the
EU, there are new rules for businesses and citizens from 1 January 2021.
There is a Government Brexit checker to assist
with the planning for business, family, and personal circumstances. Use the
Brexit checker to get a personalised list of actions. You can also sign up for
emails to get updates for what you need to do.
See: https://www.gov.uk/transition
Recent Government activity
The Government focus this week has been on
controlling the spread of the virus nationally and specifically the South East
as there has been a spike in cases and a new variant announced. Several of the
recent guidance changes we have reviewed are about the reduction in
self-isolation from 14 to 10 days and these have been widely reported already
so we have not included them in our newsletter.
Below is a roundup of other relevant news.
Test and Trace Support Payment scheme: claiming financial support
If you have been contacted by NHS Test and
Trace and told to self-isolate on or after 28 September 2020, you are under a
legal obligation to do so, and could be eligible for a £500 Test and Trace
Support Payment. This guidance sets out who can claim support and explains how
to apply.
Travel corridors - England
The list of countries, territories and regions
from where you can travel to England and may not have to self-isolate has been
updated.
Test to Release for international travel -
England
Details have been released about paying for a
COVID-19 test to find out if you can reduce the self-isolation period after
international travel. The Test to Release for International Travel scheme is
for people who need to self-isolate on arrival in England. Under the scheme you
can choose to pay for a private COVID-19 test. If the result is negative, you
can stop self-isolating. The earliest you can take the test is 5 full days
after you left a place not on the travel corridor list. The scheme is voluntary
and applies to those self-isolating in England only. If you do not want to opt
into the Test to Release scheme, you will need to self-isolate until 10 full
days have passed since you were last in a place not on the travel corridors
list.
The Government states the move will give
passengers the confidence to book international trips in the knowledge that
they can return home and isolate for a shorter period if they receive a
negative result.
List of private providers of coronavirus
testing
The Department of Health and Social Care is
aware of the following private sector (non-NHS) providers who may be able to
conduct tests for the presence of coronavirus.
These are listed in alphabetical order. They
have declared that they meet the government’s minimum standards for providers
of Test to Release for international travel or minimum standards for private
sector providers of general COVID-19 testing (the Declaration). Both lists are
continually updated by the Department of Health and Social Care as providers
declare that they meet the required standards and are reviewed by UKAS.
Income Tax and National Insurance contributions exemption for employer-reimbursed coronavirus antigen tests
This Tax Information and Impact Note is about
an exemption from Income Tax and NICs for employer-reimbursed coronavirus
antigen tests. This measure aims to make sure the use of relevant antigen
testing procedures by employers are not subject to an Income Tax and National
Insurance contributions charge.
Coming to the UK for seasonal agricultural
work on English farms
Advice for seasonal agricultural workers
coming to England to pick fruit and vegetables on farms, and their employers.
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