1stJul
News article

Government expands Future Fund for start-ups

The government has expanded its Future Fund scheme, which aims to support start-up businesses not eligible for other coronavirus (COVID-19) rescue measures.

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The government has expanded its Future Fund scheme, which aims to support start-up businesses not eligible for other coronavirus (COVID-19) rescue measures.

The change will ensure that firms which have moved their headquarters abroad can still access the scheme.

This means that UK companies who have participated in accelerator programmes and were required, as part of the programme, to have parent companies outside of the UK will now be able to apply for investment.

Companies in accelerator programmes are often required to set up a non-UK parent company in order to participate, which means some did not have a UK parent company when Future Fund applications opened in May.

The Future Fund offers government loans of between £125,000 and £5 million to UK-incorporated companies, provided private investors at least match the funding supplied by the state. The package is aimed at innovative start-up businesses not eligible for existing COVID-19 support.

Commenting on the matter, Business Secretary Alok Sharma said: 'As we restart our economy, it is crucial that our innovators and risk-takers get all the support they need to flourish.

'Our decision to relax this rule recognises the importance of many of the UK's most cutting-edge start-ups as we bounce back from coronavirus.'

Find more guidance on the Future Fund here.

30thJun
News article

UK mortgage approvals slump during pandemic

UK mortgage approvals slumped to a record low during May as the COVID-19 pandemic took its toll on the housing market, according to data from the Bank of England.

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UK mortgage approvals slumped to a record low during May as the COVID-19 pandemic took its toll on the housing market, according to data from the Bank of England.

The number of mortgage approvals fell to 9,273, the lowest number since comparable records began in October 1997, down from 15,851 in April.

New mortgage approvals collapsed by 90% compared to pre-pandemic levels and represent just a third of the lowest level seen during the 2008 financial crisis.

The data also showed a net repayment of consumer credit of £4.6 billion pounds in May as people remained largely stuck at home and spent less.

The Bank of England also reported a further big rise in the amount of money households and companies hold in their bank accounts, which increased by £52 billion.

Commenting on the data, Hina Bhudia, a Partner at mortgage broker Knight Frank Finance, said: 'The Bank of England data reveals the unprecedented impact of the property market shut down when many surveyors were unable to visit properties to conduct valuations in-person.

'Leading indicators suggest lending has been picking up since May, but it's clear there is still a long way to go before many borrowers experience anything resembling pre-pandemic conditions.'

30thJun
News article

Business warned about rise in impersonation fraud

Businesses have been told to stay vigilant against the rise in impersonation fraud during the coronavirus pandemic, by trade credit insurer Atradius.

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Businesses have been told to stay vigilant against the rise in impersonation fraud during the coronavirus pandemic, by trade credit insurer Atradius.

The insurer says the increase in impersonation fraud is result of opportunistic fraudsters seeking to take advantage of disruptions to normal business patterns during lockdown.

Impersonation fraud occurs when a fraudulent party presents themselves as if representing a reputable business. The impersonator approaches other businesses under the guise of looking for new suppliers.

Believing the enquiry is from a legitimate and recognisable customer, the supplier progresses with the order and unwittingly makes the delivery to a rogue trading address. Once the impersonator obtains the goods, they quickly disappear, leaving invoices unpaid and the supplier out of pocket.

Simon Rockett, Head of Risk Underwriting at Atradius UK, said: 'Impersonation fraud is a common occurrence in the business world but what's different just now is the significant increase we are seeing.

'Lockdown measures have changed normal operations for many businesses – including shutdowns, a sudden drop in demand and supply chain interruptions. As a result, businesses are actively seeking new customers for their goods and services and will increasingly do so as the country emerges from lockdown.

'The concern is that the eagerness to resume trading will mean businesses could become less cautious in their approach to due diligence and so more likely to get caught out – which is exactly what fraudsters are hoping for.'

29thJun
News article

Coronavirus lockdown puts focus on UK skills gap

The COVID-19 lockdown has served to highlight the widening UK skills gap and the government must now act, warns the Chartered Institute of Management Accountants (CIMA).

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The COVID-19 lockdown has served to highlight the widening UK skills gap and the government must now act, warns the Chartered Institute of Management Accountants (CIMA).

CIMA has called on the government to look beyond the short-term and focus on future investments in skills.

It also warned that workers in the service industries hit hardest by the lockdown restrictions will be vulnerable despite the government's support packages.

CIMA said that while the government must tackle immediate issues such as restoring jobs and increasing consumer spending, it must also put great emphasis on creating long-term recovery including boosting social mobility.

CIMA believes investing in education and skills development in sectors such as digital technology,

education technology, healthcare, financial services, engineering and construction.

Prior to the pandemic, a 2019 report by the Industrial Strategy Council already estimated that 20% of the workforce will be significantly under-skilled for their jobs by 2030.

Andrew Harding, Chief Executive at Management Accounting, said: 'By creating rapid and profound shifts in our economy and the labour market, the pandemic has exacerbated some of the UK's prevailing issues such as faltering productivity, widening skills gap and failing social mobility.

'A new, post-lockdown reality is now sinking in, we must not fall into the trap of believing in a return to business as usual.

'If we are to get the economy back on its feet, remain competitive on the global scene and sustain growth, we must now foster both capital investment in business and invest wisely into developing a skilled, motivated workforce. That provides the opportunity to advance social mobility through creating quality jobs and real wage growth.'

29thJun
News article

Job retention scheme closing to new entrants

HMRC is reminding businesses that Coronavirus Job Retention Scheme (CJRS) will close to new entrants on 30 June.

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HMRC is reminding businesses that Coronavirus Job Retention Scheme (CJRS) will close to new entrants on 30 June.

In addition, From 1 July, employees will no longer have to be furloughed for a minimum period of three weeks.

From this date the CJRS will have more flexibility to allow claims on a pro rata basis. Employers will be able to permit employees to work some of the week and be furloughed for the rest.

An employee needs to have been furloughed for at least three consecutive weeks between 1 March and 30 June to be eligible for furlough from 1 July. Additionally, after 1 July, employers will be subject to a cap on the number of CJRS claims they are able to make.

The CJRS changes have effect from 1 July until the closure of the scheme on 31 October.

Parents returning from statutory maternity leave, paternity leave, adoption leave, shared parental leave and bereavement leave are exempt from the CJRS changes. The Treasury recently announced that parents who are returning to work over the coming months will be eligible for the CJRS despite the scheme closing to new entrants on 30 June.

Additionally, from 1 August, the level of the grant will be reduced each month.

More information on the changes can be found here.

26thJun
News article

PMI data points to improved picture for UK economy

The latest purchasing managers' index (PMI) data from the UK's manufacturing sector suggests that the country's economy stabilised in June, according to an IHS Markit survey.

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The latest purchasing managers' index (PMI) data from the UK's manufacturing sector suggests that the country's economy stabilised in June, according to an IHS Markit survey.

The composite PMI reading came in at 47.6 in June, up from 30.0 in May and just 13.8 in April.

PMIs are an indicator of private sector activity and are given on a scale of 1 to 100. Because anything below 50 signals a decline, the figure indicates that the UK economy contracted once again in June, although the pace slowed significantly from previous months.

IHS Markit reported figures of 47.0 figure for the services sector and a 50.1 figure for the manufacturing sector with survey respondents noting that the easing of coronavirus restrictions had a favourable impact on activity.

Chris Williamson, Chief Business Economist at IHS Markit, said: 'June's PMI data add to signs that the economy looks likely return to growth in the third quarter, especially given the further planned easing of the lockdown from 4th July.

'June saw a record rise in the PMI for a second successive month, confirming that the economy is moving closer to stabilising after the worst of the immediate economic impact from the COVID-19 pandemic was felt back in April.

'Uncertainty over recovery prospects and job prospects also mean demand for many goods, especially non-essential big-ticket items, is likely to remain weak for many months, with Brexit uncertainty also continuing to cast a shadow over the economy.'

26thJun
News article

Overseas VAT claims subject to COVID delays

VAT claims submitted under the Overseas Refund Scheme will be subject to delays due to changes in HMRC's working practices during the COVID-19 pandemic, the tax authority has stated.

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VAT claims submitted under the Overseas Refund Scheme will be subject to delays due to changes in HMRC's working practices during the COVID-19 pandemic, the tax authority has stated.

The delays relate to payments due to overseas businesses that are not established in the EU.

The affected claims are those within the prescribed year 1 July 2018 to 30 June 2019, submitted on or before 31 December 2019.

HMRC says the move to working from home, in line with government guidance on 23 March, has affected some of its operational processes.

As a result, while its objective is to process and refund overseas VAT claims within six months of the submission deadline of 31 December the changes mean the department is unable to meet this deadline for some of the 2018/19 claims.

HMRC now expects to pay valid 2018/19 claims by 30 September.

Further information on the delayed repayments can be found here.

25thJun
News article

IoD urges government to support jobs and investment after coronavirus lockdown

The Institute of Directors (IoD) has called on the government to act to support jobs and investment once the coronavirus lockdown ends.

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The Institute of Directors (IoD) has called on the government to act to support jobs and investment once the coronavirus lockdown ends.

In a submission to the Treasury, the IoD has urged the government to act now in order to reduce the cost of employing people as the Coronavirus Job Retention Scheme (CJRS) comes to a close.

The IoD recommends increasing the Employment Allowance and raising the threshold for employers' national insurance contributions (NICs).

Within the submission, the Institute also proposed widening the scope of Research and Development (R&D) tax reliefs to support investment in technology and training.

Jonathan Geldart, Director General of the IoD, said: 'The government may want to hold back some ammunition until the autumn, but directors have to make hiring and investment plans ahead of time.

'Now is the moment for the Treasury to reduce the cost of employment so companies can retain staff. As the furlough scheme winds down, jobs are at risk, so it will be crucial to soften the blow.'

25thJun
News article

FSB outlines recommendations to Chancellor ahead of expected fiscal event

In a letter to Chancellor Rishi Sunak, the Federation of Small Businesses (FSB) has outlined a series of recommendations designed to support small businesses once the COVID-19 lockdown ends.

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In a letter to Chancellor Rishi Sunak, the Federation of Small Businesses (FSB) has outlined a series of recommendations designed to support small businesses once the COVID-19 lockdown ends.

The Chancellor is expected to deliver an economic statement early next month.

The FSB stated that the majority of businesses will face 'significant costs' when they reopen. 86% of businesses polled by the FSB said they'll need to make changes to their premises to allow for social distancing measures. 60% said it will cost up to £1,000 to reopen in line with government guidance, whilst 28% believe it will cost more than £1,000.

Additionally, in order to protect livelihoods as the government's Coronavirus Job Retention Scheme (CJRS) comes to an end, the FSB recommends that the Chancellor consider reducing employers' national insurance contributions (NICs) or uprating the Employment Allowance.

The business group has also called for a full statutory sick pay (SSP) rebate for those who need to self-isolate over the coming weeks.

Commenting on the letter, Mike Cherry, National Chairman of the FSB, said: 'The fundamental question facing small businesses today is: can I open in a way that's both commercially viable and safe?

'Among those for whom the answer is yes, the majority will face additional costs as they adjust their operations. The government should step in with back to work vouchers so firms doing the right thing can recover this expenditure.'

The FSB's list of recommendations can be found here.

24thJun
News article

ABI calls for overhaul of pensions tax relief system

The Association of British Insurers (ABI) has called for an overhaul of the UK pensions tax relief system following the publication of research which suggested that basic rate taxpayers are missing out on vital tax relief.

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The Association of British Insurers (ABI) has called for an overhaul of the UK pensions tax relief system following the publication of research which suggested that basic rate taxpayers are missing out on vital tax relief.

The ABI's research showed that the lower paid and the young are missing out on pensions tax relief despite more saving for retirement. A Defined Contribution (DC) pension scheme provides retirement income that is based on the amount paid in and the investment growth of the money.

Individuals receive tax relief from the government when contributions to a DC pension scheme are made. The research found that, in 2018, DC contributions represented 17.5% of the total amount spent on tax relief. This was despite an increase in the number of people contributing to workplace pensions, which rose from 55% in 2012 to 87% in 2018.

The ABI revealed that basic rate taxpayers make up 83.4% of all taxpayers, but they only receive 26% of the pensions tax relief related to DC pension contributions.

It also highlighted that more young people are paying into their pension, but the tax system benefits older people.

Commenting on the issue, Yvonne Braun, Director of Long-term Savings and Protection at the ABI, said: 'Pensions tax relief plays a vital role in encouraging people to save, but also supporting the adequacy of that saving. However, the distribution of pensions tax relief under the current system exacerbates existing inequalities, particularly between men and women.'