Weekly Digest – 17 February 2021
Welcome back to our Weekly Digest. Read on for the latest updates and some ideas to help us all move forward.
Over 15 Million Already Vaccinated in the UK
The national vaccination programme continues to surpass the target set 6 weeks ago with over 15 million people vaccinated across the UK.
More than 90% of those over 70 years old have already been vaccinated, but it is important to note that 60% of hospital patients with COVID-19 are aged under 70. They are now offering appointments to the over-65 years old and are contacting those aged between 16 and 64 years old with underlying conditions.
If this pace is maintained everyone in the first nine priority groups, including those above 50 years old will be vaccinated by the end of April.
UK Suffers Worst Slump in 300 Years
The UK’s economy shrank by the most in 300 years in 2020 due to the COVID-19 pandemic but has avoided a double-dip recession, according to official figures.
The Office for National Statistics reported gross domestic product (GDP) fell by 9.9% in 2020 as no sector was left unscathed by lockdowns and falling demand due to the pandemic. However, the latest figures showed the economy has narrowly avoided a double-dip recession, with growth of 1% in the final quarter of the year.
How is your business doing with these changes? Get in touch with us if you would like to chat about your future plans.
Survey: Brexit Causing Supply Problems for Small UK Manufacturers
New post-Brexit trade restrictions have caused an increase in cost of parts and raw materials for two thirds of small British manufacturers surveyed by consultants South West Manufacturing Advisory Service (SWMAS) and the Manufacturing Growth Programme.
About 65% of the 300 firms surveyed reported higher costs, and 54% said they had greater difficulties exporting goods to the EU.
According to a forecast by the Bank of England earlier this month, Brexit-related trade disruption would decrease economic output by 1% during the current quarter and expects trade to decline by 10% in the long term.
Changes to the Construction Industry Scheme Effective April 2021
On November 2020, the government published draft legislation making changed to the Construction Industry Scheme (CIS) to ensure that rules apply fairly to everyone who is liable and HMRC can act quickly when rules are being broken.
Some of the key changes that will be implemented from 6 April 2021 include:
- Under existing rules, a person is a deemed contractor when expenditure on construction operations is at an average of 1 million a year over the last three years. Under the amendments, a person will be a deemed contractor when their expenditure on construction operations exceeds £3 million within the previous 12 months.
- It is only where a CIS subcontractor directly incurs the cost of materials purchased to fulfil a construction contract that the cost of those materials is not subject to deduction under the CIS.
- HMRC will now have the power to correct the amount of CIS deduction a CIS sub-contractor has claimed on their employer payment return where they identify that the amounts which have been claimed are inaccurate.
- Penalty rules will be extended such that penalties may also be charged on a second person. To be liable, the second person must be in a position to exercise influence over the person making the application and either make a false statement or provide a false document themselves or encourage the first person to make the offence.
You can read more about these changes here. You may also get in touch with us if you have any questions.
New £20 Million SME Brexit Support Fund Launched
The Chancellor of the Duchy of Lancaster Michael Gove has announced a £20 million SME Brexit Support Fund to support small- and medium-sized businesses (SMEs) 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.
Funding Top-up for Wales, Scotland, and Northern Ireland
Government funding support for countries in the UK:
£650 Million Funding Boost for Wales
The UK Government has provided the Welsh Government with an additional £650 million to support people, businesses and public services affected by coronavirus. This is in addition to the £5.2 billion already provided for this year through the upfront Barnett guarantee, bringing the total to £5.85 billion.
£1.1 Billion Funding Boost for Scotland
The UK Government has provided the Scottish Government with an additional £1.1 billion to help tackle the coronavirus. This funding brings the total allocated through the Barnett formula to the Scottish Government since the start of the pandemic to £9.7 billion.
£300 Million Funding Boost For Northern Ireland
The UK Government has provided the Northern Ireland Executive with an additional £300 million to support businesses and individuals impacted by the pandemic. This funding brings the total allocated through the Barnett formula to the Northern Ireland Executive since the start of the pandemic to £3.3 billion.
Ongoing COVID-19 Business Support From the Government
After almost a year of lockdowns and COVID-19 restrictions, many firms in the UK are still in need of business support to stay afloat. Below is a comprehensive list of government support programmes that are available to your small business.
Bounce Back Loan Scheme
Deadline: 31 March 2021
- Loans of between £2,000 and £50,000, up to 25% of turnover
- The government guarantees 100% of the loan with no fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year
- You can now apply for a top-up if you initially didn’t borrow the full amount available
More information can be found here.
Coronavirus Business Interruption Loan Scheme (CBILS)
Deadline: 31 March 2021
- Offers access to loans of up to £5m
- 80% of the loan is guaranteed by the government.
- Government pays interest and any fees for the first 12 months
- Available for businesses with annual turnover of up to £45m
More information can be found here.
Business Rates Holiday
Deadline: 6 April 2021
Businesses in the retail, hospitality, and leisure sectors will not have to pay business rates for the 2020-2021 tax year.
More information can be found here.
Coronavirus Job Retention Scheme
Deadline: 30 April 2021
- 80% of employees’ monthly salary covered for hours not worked, up to a maximum of £2,500
- Employers will have flexibility to use the scheme for employees for any amount of time or shift pattern, furloughing employees on either a full-time or part-time basis
- No employer contribution for hours not worked, employers only have to cover National Insurance and employer pension contributions
More information can be found here.
New Deadlines for Job Retention Scheme Claims
Use this list of monthly deadlines to help you submit before it’s too late.
15 February 2021– Final date to submit claims for January 2021 by 11:59pm
15 March 2021– Final date to submit claims for February 2021 by 11:59pm
14 April 2021– Final date to submit claims for March 2021 by 11:59pm
14 May 2021– Final date to submit claims for April 2021 by 11:59pm
Corporation tax filing extension
Deadline: Apply for the extension before your normal filing deadline
You can apply for a three-month corporation tax extension to the deadline of filing your accounts, as long as your deadline falls between 27 June 2020 to 5 April 2021.
More information can be found here.
Kickstart Scheme grant
Deadline: Not specified
- 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.
Self-employed Income Support Scheme
Deadline: Fourth round yet to be announced
- The fourth round of SEISS which will cover February-April 2021 is yet to be announced
- The third round was calculated at 80% of three months’ average monthly trading profits, paid out in a single instalment and capped at £7,500
More information can be found here.
Statutory Sick Pay refund
Deadline: Not specified
- Companies with fewer than 250 employees can apply for a full refund for staff who take statutory sick leave due to Covid-19
- You must set up PAYE in your business by 28 February 2020
More information can be found here.
Top-up grant for retail, hospitality and leisure
Deadline: Not specified
- A one-off top-up grant has been allocated for the struggling retail, hospitality, and leisure industries
- The grant is available to rateable businesses:
– Small businesses with a rateable value of £15,000 and under will receive £4,000
– Medium businesses with a rateable value of between £15,000 and £51,000 will get £6,000
More information can be found here.
Flick us a message if you need our expert assistance on your applications and so we can help you evaluate your options.
Did you defer your VAT last year?
Due to COVID-19, last year it was possible for businesses to defer their VAT payments between 20 March and 30 June 2020 to help cashflow. This was a welcome relief for many businesses, but the time has now come to pay that VAT.
HMRC’s guidance says there are three options:
- pay the deferred VAT in full on or before 31 March 2021
- opt in to the VAT deferral new payment scheme when it launches in 2021
- contact HMRC if you need more help to pay
To access the new payment scheme, businesses must opt into it – this process will be launched soon.
The new payment scheme means businesses can make up to 11 smaller monthly instalments interest free. All instalments must be paid by the end of March 2022.
Now is the time to plan ahead. Get in touch with us if you’d like a cashflow forecast to plan your repayments.
For more information about the new scheme, check out the gov.uk website for guidance.
5 Key Ways to Boost Your Revenue This Year
2020 has been a difficult year for business owners. Now that a new year is upon you, it’s time to put your foot on the gas pedal and make 2021 the year for your business. Here are some ways you can grow your revenue this year and beyond:
Review your business and address blind spots. The first thing you can do is to look at your current situation and identify blind spots that keep your business from growing. This could be anything from lack of the right staff, your management style, or untapped potential revenue.
Make sure you’re reaching the right target market. Get clear on your target market and make sure you are selling to the right people. Once you know your target, you will also be able to design your marketing campaigns better.
Create a growth plan. Evaluate where your business is standing and where you want it to be by the end of the year. Set clear and realistic goals on how much you want to grow, create an action plan, and communicate your growth plan with the rest of your team.
Improve you and your team’s sales skills. Brush up on your sales skills and train some of your employees on how to sell in their particular area of expertise. Identify sales opportunities within your business and hire additional sales staff if necessary.
Increase your prospecting efforts. Assume that your target market won’t find you. Think of ways to find quality leads instead, whether this is through social media or cold-calling.
Want more tips to stay ahead of your competition? Get in touch with us to book a one-on-one business consultation.
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Contact us if you have any questions or want to discuss the next steps for your business.