Welcome back to our Weekly Digest. We hope you and your family are safe and doing well. Read on for this week’s update.
UK to Map Out Next Steps in COVID-19 Recovery Plan
On 8 July Chancellor Rishi Sunak delivered a Summer Economic Update, which outlined measures designed to boost the UK economy following the coronavirus (COVID-19) lockdown.
A new Job Retention Bonus was announced, which will provide employers with a one-off £1,000 bonus for each furloughed employee who is still employed as of 31 January 2021. The government hopes the Job Retention Bonus will incentivise firms to retain furloughed workers rather than making redundancies.
VAT will be reduced from 20% to 5% for the next six months for businesses in the hospitality and tourism sector. The VAT reduction will take effect from 15 July, and will apply to eat-in or hot takeaway food from restaurants, accommodation, cinemas, theme parks and zoos.
The Chancellor also announced a temporary increase to the nil-rate band of residential Stamp Duty Land Tax (SDLT) from £125,000 to £500,000 until 31 March 2021. This takes effect immediately and will be in place until 31 March 2021. Please note this only applies in England and Northern Ireland.
Meanwhile, a new Eat Out to Help Out discount scheme will provide a 50% reduction for sit-down meals in cafes, restaurants and pubs across the UK from Monday to Wednesday every week throughout August 2020.
Announcing the measures, the Chancellor said: ‘Our plan has a clear goal: to protect, support and create jobs. It will give businesses the confidence to retain and hire. To create jobs in every part of our country. To give young people a better start. To give people everywhere the opportunity of a fresh start.’
Businesses Showing Resilience in the Face of Adversity
Businesses have taken a hit over the previous months due to COVID-19, but some innovative companies in the United Kingdom found the silver lining. Below are some of the most creative ways businesses adapted to this unprecedented crisis:
- A Shropshire-based fashion boutique has diversified its business model through virtual shopping experiences, contactless local delivery, and free UK delivery.
- Cornwall’s only mobile zero waste shop that helps reduce everyday consumption of single-use plastic packaging by selling loose, package free food and home products is now offering home delivery too.
- A platform connecting barbers with customers to avoid DIY disaster has been launched.
- Because the pop-ups of a small fashion, beauty, and lifestyle omnichannel startup supporting independent brands have been out of action, it launched a shoppable window on South Molton Street.
You can read their inspiring stories here. If you want to talk about your specific situation, please get in touch with us and we’ll help you work out a strategic plan to come through stronger than ever and build a successful future-proof business.
What funding is available for your business?
To cover the impact of the crisis, there are grants made available by the government such as the £1.25b Future Fund and R&D rescue package for fast growth businesses and smaller businesses with a Research & Development focus. The UK government has recently expanded this rescue package for start-ups to include those whose parent companies are based abroad. So far, start-ups have received £320 million through the Future Fund, and the government says it is willing to increase the fund’s size if necessary.
There is also the Small Business Grant Fund, which is a one-off grant of £10,000 that supports small businesses that pay little or no business rates as a result of small business rate relief (SBBR), rural rate relief (RRR), and tapered relief.
If your business has been severely hit by COVID-19 and you need more support, the government is giving small- and medium-sized businesses access to financial support through various initiatives such as the Bounce Back Loan Scheme (BBLS), where you can get up to £50,000 no-interest loans for the first 12 months, and the Coronavirus Business Interruption Loan Scheme, which offers a maximum loan of £5 million made available through commercial banks.
You can also claim for 80% of your employee’s wages plus any employer National Insurance and pension contributions if you have put them on furlough because of COVID-19 under the Job Retention Scheme, which has been recently extended until the end of October. You can check your eligibility here.
With all the financial assistance schemes available for businesses, it can be difficult to assess which one is suitable for your business. Let us help you evaluate your options by leaving us a message.
What’s next?
Please feel free to get in touch with us if you have any questions.
