14th May 2021 – Hillmans Weekly Update

Below I have summarised all the main tax related updates we have seen this week.

• Business New Update
• HMRC Guidance on moving goods between GB and the EU
• Making Tax Digital Extended to More Businesses
• Making Tax Digital (MTD) for VAT – end of “soft landing”

If you have any queries about this week’s content, or if you need any assistance please do not hesitate to contact me.

I hope you have a good weekend.

Stay safe and well.

Cheers,

Steve

Steven Hillman BSc (Hons) ACA
Chartered Accountant
Tel: 01934 444100

Business News Update

This week we learnt that more than 35 million people have had at least one jab and following the recent elections, Prime Minister Boris Johnson, has called for a Covid recovery summit.  In letters sent to regional leaders, the Prime Minister highlighted the Covid vaccine rollout as an example of "Team UK in action", with the UK procuring doses at scale, and he urged them to continue the "cooperative spirit".

There is more unease over the India Covid variant in the UK which has been made a variant of concern. Scientists also believe it is at least as transmissible as the variant detected in Kent last year. The current vaccines used in the UK are thought to offer some protection against variants but can never completely stop all infections, particularly among the vulnerable or elderly. News of a booster jab, probably from September for the over 50’s is awaited.

Bank of England latest Monetary Policy Report

The latest Bank of England (BOE) monetary policy report published last week set out their economic analysis and inflation projections. Their initial analysis that Covid has hit spending, incomes and jobs in the UK, stating the Pandemic has put a big strain on UK businesses’ cash flow and is threatening the livelihoods of many people. This analysis is not unsurprising because all regions of the UK are still in some form of lockdown and have been for some time. The BOE then confirm vaccines are now helping the UK economy recover rapidly as more people are vaccinated, restrictions to control the spread of the virus are being lifted. They also comment that inflation is 0.7%, but they expect it to rise to around the 2% target this year as people may also become more confident about spending and as the high street opens back up. Interest rates remain at 0.1% to help keep inflation within target.

The good news in the BOE report!

The good news is the BOE predicts the economy to expand by 7.25% this year, with Government spending helping to limit job losses.  There is also the good news that fewer jobs are being lost and earlier predictions of 7.75% unemployment will not happen, and they predict around 5.5% later this year.

The Office for National Statistics (ONS) business impacts and insights report

The ONS latest figures show the percentage of businesses currently trading has increased from 77% in early April to 83% in late April 2021. This is now at a similar level to that seen in mid-December 2020 (Business Insights and Conditions Survey (BICS)).

In the period ending 3 May 2021, the proportion of working adults that had travelled to work (both exclusively and in combination with working from home) in the last seven days was 60%. This proportion has been gradually increasing since mid-February (44% in the period 10 to 14 February 2021).

Estimates for UK seated dinner reservations on Saturday 1 May 2021 were at 71% of the level seen on the same Saturday of 2019, up 9 percentage points from the equivalent figure in the previous week. This follows the reopening of restaurants, cafés and bars in Scotland and Wales on 26 April 2021, and Northern Ireland on 30 April 2021.

Are you ready for the “Bounce back”?

All of us must agree that the “Bounce back” in the economy is good news and many of our clients are reporting increased activity as the lockdown eases and economy returns to somewhere near normal over the next few months. Of course there are uncertainties about new virus variants, but all the indicators are pointing to a summer recovery, with the economy being repaired by the end of this year.

Please talk to us about planning for the future, we are here to help drive your business forward!

Business News Update

This week, there is more positive news on the vaccination front with more than 13 million people now having had their second jab and approximately 34 million their first.

UK Economy set to grow at its fastest level ever!

The good news this week is that EY item Club has improved its estimate of the UK’s economic performance in 2021 – and forecasts a rebound in growth over the next two years and predicts a return to growth for summer 2021 with GDP to rise by 5% in 2021 and 6.5% in 2022. 

The bad news is that Government borrowing hits record high. The cost of dealing with Covid-19 has meant UK borrowing is at its highest level since the Second World War. Public sector borrowing reached £303 Billion in the year to March the Office for National Statistics have reported. This borrowing will need to be addressed at some point in the near future and now may be a good time to take some time and plan a business strategy to keep you and your business flexible and resilient to changes in government taxation policy. 

29th January 2021 – Hillmans Weekly Update

Below I have summarised all the main tax related updates we have seen this week.

• Business News Update
• No Self-Assessment late filing penalty for those who file online by 28 February
• Deadline for claiming third SEISS grant - 29th January 2021
• Pay VAT deferred due to coronavirus (COVID-19)
• Making Tax Digital for VAT

If you have any queries about this week’s content, or if you need any assistance please do not hesitate to contact me.

I hope you have a good weekend.

Stay safe and well.

Cheers,

Steve

Steven Hillman BSc (Hons) ACA
Chartered Accountant
Tel: 01934 444100

Business News Update

The latest economic news and indicators for the UK make gloomy reading and as we are in lock down they will probably remain so for the foreseeable future. Remember though, they should be taken for what they are – a snapshot at a particular point in time, and once the vaccination programme fully kicks in and lock down restrictions ease, we should see an improvement in our lives and businesses.

Retailers had their worst annual sales performance on record in 2020, driven by loss of demand for fashion and homeware products, figures from the British Retail Consortium (BRC) show.

Food sales growth rose 5.4% on 2019, non-food fell about 5%, this is an overall fall of 0.3% in a year dominated by the Covid-19 impact.  This is the worst annual change since the BRC began collating the figures in 1995.

The latest Government surveys show for all businesses, excluding those who have permanently ceased trading, 11% of their workforce are on furlough leave, a decrease from 16% previously.

UK footfall overall is down by 38% compared to January 2020 and we can expect this to fall further as we stay in lock down.   

The Chancellor has stated that the UK economy “to get worse before it gets better” and that the new national restrictions were necessary to control the spread of coronavirus.

We expect to see further Government supports announced shortly and we will keep our clients fully informed of when and how these will be applied. 

See: https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/conditionsanddiseases/bulletins/coronavirustheukeconomyandsocietyfasterindicators/2021

What is interesting is that according to the most recent results from of the Business Impact of Coronavirus (COVID-19) Survey (30 November to 13 December 2020), 84% of UK businesses were trading, an increase from 80% in the last survey (16 to 29 November). Clearly this will fall in January, February and March as the lock down continues.

What these figures do show to us is that businesses are resilient and adapting to the changes caused by the Pandemic.

We are seeing some remarkable clients who have adopted new technologies to change the way they conduct business and distribute their goods or services. Talk to us about helping you pivot or repurpose your business and adapting for the future.       

Business News Update

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. 

Hillmans Business News Update

The main economic news at the start of this week is that the UK inflation rate fell to 0.2% as the Eat Out to Help Out scheme reduced restaurant prices. There is also speculation that the Government is looking at a new jobs scheme to replace the coronavirus job retention scheme (CJRS). If there are any announcements we will keep you informed. 

With Brexit looming the Government has stated that the new freight management system will be ready the 1st January 2021.  The “Smart Freight system” ensures that trucks are carrying the correct documentation before they travel to ports. The new system is designed to reduce delays and to better manage traffic into Dover and prevent queues of lorries building up along the M2 and M20 motorways. 

There are a number of changes to the CJRS including a new calculation from 14 September.

From 26 August 2020 you can claim Statutory Sick Pay (SSP) for employees who have been notified by the NHS to self-isolate before surgery. Further HMRC guidance on paying back CJRS grants made in error are given. Pubs, restaurants, hairdressers, cinemas and other venues across England and Wales are being urged to download QR codes to prepare for public rollout of new app.

It looks like we are in for a lot of changes to how we do things between now and the end of the year and our role is to support you through these and ensure your business takes actions to manage the changes.

Please talk to us about how we can help you plan forward. We are with you all the way! 

All the best,

Steve

Steven Hillman ACA
Chartered Accountant
Tel 01934 444100