COVID-19 Business Update – 21 April 2021
Welcome back to our Weekly Digest. Read on for the latest updates and some ideas to help us all move forward.
10 Million People Receives Second Dose of COVID-19 Vaccine
Over 10 million people in the UK have already received their second dose of a COVID-19 vaccine. This means over 19% of all UK adults have received two doses of a vaccine.
The government’s vaccination programme is on track to offer a jab to all adults by the end of July. Approved vaccines are available from thousands of NHS vaccine centres, GP practices, and pharmacies.
UK Jobless Rate Drops to 4.9%
The UK jobless rate has dropped for the second month in a row, but more workers have left company payrolls in March, according to new data from the Office for National Statistics.
This 4.9% decline in the three months to February shows that the jobs market has been broadly stable in recent months. However, there has been a 56,000 decline in the number of employees on company payrolls between February and March. Total hours worked fell too, as some companies were forced to temporarily shut down to prevent the spread of the virus.
Exporting Boost to UK FinTech Sector
The Department for International Trade (DIT) has announced a package of export support for the FinTech industry to boost trade, jobs, and economic growth. This includes FinTech Export Academy and FinTech Champions scheme to provide sector-specific advice. Ultimately, these measures should help boost the UK’s presence in overseas markets and establish the country as a global hub for FinTech and digital service.
Britcoin Digital Currency Being Considered by UK Authorities
The Bank of England and the Treasury are exploring the possibility of creating a new digital currency that could be known as ‘Britcoin‘. They will assess the benefits of a central bank digital currency, at a time when cash payments are declining due to the pandemic.
While digital currencies are being explored and implemented in several other countries, many of which drawing inspiration from Bitcoin’s success, this is different in a key sense to cryptocurrencies as they are issued by state authorities.
Once launched, this should pave the way for a more open, greener, and more technologically advanced financial services sector in the country.
Support for Disabled Jobseekers
The government will boost the number of specialist advisers dedicated to helping disabled jobseekers to secure and stay in work, with an additional 315 Disability Employment Advisor (DEA) roles to be in job centres across the UK by May 2021. This will bring total numbers to 1,115 once the process is complete.
With the government’s Plan for Jobs underpinned by the Access to Work scheme, those with disabilities are already benefiting. This scheme includes grants worth up to £62,900 and can cover the cost of necessary workplace adjustments.
Recovery Loan Scheme Launched
The government has launched a new Recovery Loan Scheme to help companies access loans of £25,000 up to a maximum of £10 million. The loans will include 80% government guarantee and interest rate cap of 14.99%.
This is in addition to the extended furlough until 30 September and the New Restart Grants scheme.
Ban on Commercial Evictions Extended to 30 June
Business owners are being given further support after the government extended the ban on commercial evictions to 30 June. Meanwhile, the bailiff-enforced eviction ban was also extended to 31 May to protect residential tenants.
These extensions should help those badly hit by the pandemic, such as bars and restaurants. With around 49% of hospitality workers and 36% of retail workers currently renting, the new measures will protect jobs as businesses reopen and many more renters can return to work.
Job Retention Scheme Extended Until End of September
The Coronavirus Job Retention Scheme has been extended until 30 September 2021. It will remain unchanged until the end of June, and a phased reduction in the level of funding will be implemented from 1 July 2021.
Currently, employers can claim grants equal to 80% of a furloughed employee’s reference pay. Grants for each worker are capped at £2,500 per month.
For claims starting 1 July 2021, the grant will be reduced to 70% of the reference salary and capped at £2,187.50 per month. It will be further reduced to 60% of the reference salary with a cap of £1,875 starting 1 August 2021.
You can read more about it here.
Guidance on the Reopening of Businesses
Online VAT Deferral Payment Scheme
Businesses that deferred VAT payments last year can join the new online VAT Deferral Payment Scheme to pay it in smaller monthly instalments.
To take advantage of this new payment scheme, businesses will need to have deferred VAT payments between March and June 2020 under the VAT Payment Deferral Scheme. These businesses will be given the option to pay their deferred VAT in 2 to 11 equal monthly instalments starting in March, April, May, or June 2021, with no interest.
The new scheme will be open until 21 June 2021. Further details can be found here.
£20 Million SME Brexit Support Fund Launched
A £20 million SME Brexit Support Fund has been announced to help businesses 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.
Doing business with Europe has changed. You need to follow new rules on exports, imports, tariffs, data and hiring. The GOV.UK website has detailed guidance on what the new rules mean for your business. You can also use the Brexit checker to get a personalised list of actions for you.
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 support to stay afloat. Below is a comprehensive list of government support programmes that are available to your small business.
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.
The deadline for the submission of claims for April 2021 is on 14 May 2021 (11:59pm).
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: Online claims service for the fourth grant will be available from late April 2021 until 31 May 2021.
- The fourth grant will be calculated at 80% of 3 months’ average trading profits and will be paid out in a single instalment capped at £7,500 in total.
- The fifth and final grant covering May to September can be claimed from late July. The amount will be determined by how much your turnover has been reduced in the year April 2020 to April 2021.
- The fifth grant will be worth 80% of 3 months’ average trading profits, capped at £7,500, for those with a turnover reduction of 30% or more.
- For those with a turnover reduction of less than 30%, the fifth grant will be equivalent to 30% of 3 months’ average trading profits, capped at £2,850.
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.
What Does It Take to Grow Profitably?
When you ask entrepreneurs what their business goals are, one of the most common answers will be something to do with growth. However, the real challenge is achieving both growth and profitability.
This Forbes article discussed how to grow profitably based on the model by Daniel Marcos of The Growth Institute. According to this model, different strategies are required depending on where a business is at in its development.
Startup stage (1-5 employees)– Focus on total revenue. Prove the business model and reach breakeven first. Learn who your more profitable customers are and build systems around delivering your products and services.
Grow up stage (6-15 employees)– Add the right revenue. Conduct an analysis of your gross profit to determine the customers you want to build processes around. It may be a difficult mind shift, but learn to say no to the customers that are not a good fit for your business.
Scale-up (16-100 employees)– Concentrate on the cash flow aspect of your business. Many companies grow too fast and flame out. So in order to not outrun your cash flow, you should know the cost of acquiring a new customer.
Ideally, you’d want the revenue generated by new customers to offset the cost of acquiring them. You want to have net cash flow from growth that you can fund through your operating profit.
Besides working on your cash flow, you must also continue refining the processes you started in earlier stages, growing your people, and adding talent with new skills that can help you in scaling up.
Need personalised business advice? Get in touch with us and tell us more about your business.
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