What you need to know this week

Our round-up of the key business updates and insights for you.

November 20, 2020

Welcome to our weekly wrap. This week we’ve rounded up the latest news and small business insights, including the latest with Brexit and UK trade deals, MTD for corporation tax and a round-up of UK headlines.

Brexit: More business support needed for small firms

More support is needed for small firms as the EU transition ends, but the COVID-19 pandemic continues, according to the Federation of Small Businesses (FSB).

New figures from the Office for National Statistics (ONS) reported a 1.1% growth in September and a 15.5% increase in Q3, which both remain down on February’s figures.

Mike Cherry, national chair of the FSB, said small firms still have little idea about their future trading relationship with the EU, and it is hugely important that they can prepare.

To help small businesses across the UK, the organisation is calling for support measures such as UK transition vouchers to support the new trading relationship, alongside a reduction to national insurance contributions to lower the cost of employment.

The FSB is also calling for further support for those setting up their own firms and self-employed individuals.

Cherry added:

The weeks and months ahead are set to remain difficult with many unknowns, so it’s never been more important for the public to get out and support their local businesses, either in person where it is safe to do so, or online

UK and Canada ‘on the brink’ of agreeing a trade deal

The UK is reportedly close to signing a trade agreement with Canada to replace the existing deal it has through EU membership.

The UK currently trades with Canada under the EU-Canada economic and trade deal signed in 2016, which removes tariffs.

A Number 10 spokesman said: ‘We’re committed to securing a continuity trade deal with Canada before the end of the transition period. Talks are at an advanced stage and are progressing well.’

An agreement is crucial for both sides — the UK is Canada’s fifth biggest trading partner after the US, China, Mexico and Japan.

Last month the UK signed its free trade agreement with Japan, the first deal to be signed since Britain left the EU. International trade secretary Liz Truss hailed the agreement as a ‘historic’ moment for both countries and said the agreement was expected to boost UK trade by an estimated £15.2bn.

MTD for corporation tax to be implemented from 2026

HMRC has confirmed that Making Tax Digital (MTD) for corporation tax will not be implemented until 2026 ‘at the earliest’.

In a consultation document, HMRC revealed potential designs of the MTD for corporation tax system, and provided businesses with information on what might be required from them under the scheme.

The document considers how the principles established for MTD could be implemented for organisations that pay corporation tax.

HMRC is also seeking feedback from agents and companies regarding the plan.

VAT-registered businesses with a taxable turnover above the VAT threshold of £85,000 are currently required to follow the MTD rules by keeping digital records and using software to submit their VAT returns.

HMRC has also announced self-employed businesses and landlords with business or property income over £10,000 will need to follow the rules for MTD for income tax for their first return period starting on or after April 6, 2023.

Small businesses in England feel ‘more prepared’ for second lockdown

Two-thirds (66%) of small and medium-sized businesses in England feel more prepared for the current national lockdown than they did for the first lockdown in March, new research reveals.

Barclaycard Payments’ latest SME Barometer has found the top reasons given for this positive outlook are: mental preparation (36%), the changes they’ve made to their business to make it more resilient (32%), and government support (14%).

The research shows that 45% of respondents have increased their online presence since March, with website improvements (67%), putting services online (66%) and social media advertising (64%) cited as the measures which have had the most positive impact. Half of the respondents also reported investing in improving digital skills, either for themselves or their staff.

Welsh businesses urged to prepare for the end of the EU Transition period

Secretary of State for Wales Simon Hart recently met with more than 130 Welsh businesses to urge them to prepare for the end of the EU Transition period.

Forming part of the UK-wide Check, Change, Go campaign, the Welsh Secretary hosted a live virtual event and highlighted the need for preparedness by December 31 for any business which trades with the EU.

Welsh businesses must be ready to move people, data, goods and services between the UK and the EU as smoothly as possible.

Businesses will need to take action now if they are:

  • Importing goods into the UK
  • Exporting goods from the UK
  • Travelling to the EU
  • Living and working in the EU
  • Staying in the UK if you’re an EU citizen

Due to the fast moving nature of the current Covid-19 pandemic, we are endeavouring to cover as much of the critical news as possible. If you are self-employed or run a business and need assistance and advice on how the recent announcements could make a difference to you or your business, feel free to get in touch with the experts at Morgan Reach. Our business growth experts at Morgan Reach will guide you through what support is available for you or your business as well as the latest news that may affect you.