Our round-up of the key business updates affecting you
October 30, 2020
Welcome to our weekly wrap. This week we’ve rounded up the latest news and business insights, including the confirmed date for the Spending Review, Government updates on UK Covid support schemes, funding for businesses and employers, plus SME news.
Date confirmed for Spending Review
The Spending Review will take place on November 25
The Treasury has announced the 2021-22 Spending Review will be published on November 25, as the government prioritises its response to Covid-19 and strives to protect jobs.
Chancellor Rishi Sunak will set out the government’s one-year spending plans as he seeks to tackle the economic crisis caused by Coronavirus.
The Spending Review will prioritise the response to Covid-19, build upon job support and focus on three areas:
- Providing departments with the certainty they need to tackle Covid-19 and deliver the Plan for Jobs to support employment
- Giving vital public services enhanced support to continue to fight against the virus alongside delivering first class frontline services
- Investing in infrastructure to deliver ambitious plans to unite and level up the country, drive the economic recovery and Build Back Better
Chancellor Rishi Sunak said:
‘In the current environment it’s essential that we provide certainty. So we’ll be doing that for departments and all of the nations of the United Kingdom by setting budgets for next year, with a total focus on tackling Covid and delivering our Plan for Jobs‘
The Chancellor will also deliver the second economic forecast from the Office for Budget Responsibility, but no tax changes are expected to be announced until the spring.
Job Support Scheme to begin from Sunday
Announced by Chancellor Rishi Sunak as part of his Winter Jobs Plan, the Job Support Scheme increases support for employers whose businesses remain open but with reduced demand given Covid-19.
The scheme was also recently expanded to support businesses required to close, and will replace furlough from November 1
JSS Open – For employers facing decreased demand
The Scheme will give employers the option of keeping their employees in a job on shorter hours rather than making them redundant. Employees must be working at least 20% of their normal hours and be paid for that work as normal by employers.
The employer contribution will be 5%, and the government will now fund 62% of the wages for hours not worked. This more than doubles the maximum payment to £1,541.75 a month.
Employers will continue to receive the £1,000 Job Retention Bonus.
JSS Closed – Expanded scheme for employers who are legally required to close their premises
Each employee who cannot work due to these restrictions will receive two thirds of their normal pay, paid by their employer and fully funded by the government, to a maximum of £2,083.33 per month.
‘The expansion of the Job Support Scheme will provide a safety net for businesses across the UK who are required to temporarily close their doors, giving them the right support at the right time.‘
The scheme is UK wide and the UK Government will work with the devolved administrations to ensure the scheme operates effectively across all four nations.
The Support Scheme will be open from Sunday (November 1, 2020) and run for 6 months, until April 30, 2021. Employers will be able to claim in arrears from December 8, 2020, with payments made after the claim has been approved.
SMEs call for more Government support, including business rates reform
Businesses are calling for more Government support to stop increasing costs and further alleviate the business rates burden, according to the Federation of Small Businesses (FSB).
The FSB proposed lowering the costs of employer National Insurance contributions to help small businesses create jobs at a time when many firms are laying staff off.
The organisation polled 1,564 firms and found 25% of small firms reduced headcounts last quarter, while 29% expect to make redundancies over the next three months.
A study from the Institute of Chartered Accountants in England and Wales (ICAEW) also found 31% of businesses will need Government support to survive the winter.
Of those, 62% said a reduction in business rates would help the high street and therefore boost the economy.
More than half (51%) would prefer to see employer’s National Insurance contributions cut, while 37% want further reductions to VAT.
The latest business news in Scotland & Wales
Business grants available in Scotland from next week
From Monday, November 2, firms that are required by law to close will be eligible for grants every four weeks for as long as the restrictions last. Based on rateable values, awards will be for either £2,000 or £3,000.
Businesses which can remain open, but are directly constrained by the measures, will be eligible for grants worth £1,400 or £2,100, again based on rateable value.
This support is in addition to the UK Government’s revised furlough scheme launching on November 01.
£300m Economic Resilience Fund now open in Wales
Businesses can now apply for funding from the third phase of the Welsh Government’s Economic Resilience Fund (ERF).
Last week, the Welsh Government announced it was doubling this phase of the fund, making nearly £300m available to support businesses that continue to be affected by Covid-19.
The latest phase means that:
- Micro businesses, SMEs and larger firms are able to apply for funding from the £100m Business Development grant fund. £20m of this is ring-fenced for tourism and hospitality businesses.
- Payments of up to £5,000 for retail, hospitality and leisure businesses that are required to close and which occupy a property with a rateable value of between £12,001 and £51,000. Businesses will be automatically eligible for this funding, but will need to register and update their details via Business Wales or their Local Authority to receive it.
- Payments of £1,000 for businesses that are eligible for Small Business Rates Relief (SBRR) and occupy a property with a rateable value of £12,000 or less.
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 announcments 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.