COVID-19 Business Update – 15 July 2020
Welcome back to our Weekly Update. We hope you and your family are safe and doing well. Read on for this week’s update.
Temporary VAT Cut for Food, Non-Alcoholic Drinks, Accommodation, and Attractions
The UK Government has announced that from 15 July 2020 to 12 January 2021, there will be a temporary reduction to the Standard Rate of VAT from 20% to 5% for supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafes, and the hospitality sector across the UK. This move is designed to increase customer demand in response to the economic crisis caused by the COVID-19 pandemic.
This is great news for the hospitality industry as they start to reopen, albeit on a reduced capacity basis. If you need some guidance on how to operate safely after a period of inaction, you may visit this resources page by the national tourism agency, which focuses on practical guidance for reopening during the pandemic. Meanwhile, if you need personalised advice for your business, feel free to drop us a message.
Running a Business in the a-Pandemic World
They say the worst of times can bring out the best in people– and this is also true for businesses. Last week, we put businesses showing resilience in the face of adversity in the spotlight, and shared the creative ways they serve their customers and communities amid the COVID-19 crisis.
This week, we talk about the hallmarks of an organisation designed for speed, as outlined by McKinsey & Company (see page 40). Below is a list of characteristics of operating models they’ve identified that result in faster speed to market, increased customer responsiveness, greater efficiency, and enhanced employee satisfaction. These characteristics will help companies stay competitive in the post-pandemic business environment:
- Flatter organisations with less hierarchy and streamlined decision rights
- Faster information flows and decision-making, powered by embedded data and analytics
- As number-crunchers – we love this one!
- Cross-functional teams collaborating to tackle common missions through test-and-learn approach
- Flexible ways of working, including affinity for hybrid remote/ in-person teams
- Dynamic allocation of talent deployed against mission-critical priorities
- Agile, resilient talent able to move fast, adapt to change, and continuously learn
This Forbes article also shares tips on how to future-proof your business for a post-pandemic workplace, including:
- Making flexibility as a core benefit
- Upgrading equipment and investing in technology
- Prioritising employee health and wellness
- Increasing communication
- Investing in management development
- Creating a sustainable company culture
The future of businesses will no longer be determined by what has worked, but instead, what will work in the post-pandemic world. While the “when” and “how” of the end of the pandemic remain unknown, reimagining your organisation and re-evaluating the way you work can help you rise to the occasion and lead your business as the “new normal” we hear so much about takes shape.
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.
What funding is available for my business?
You may be eligible for some grants made available by the government such as the 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. As of this week, a total of 429 convertible loans have already been approved, representing over £419 million, 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. Businesses in the retail, hospitality, and leisure industries that use premises with a rateable value between £15,000 and £51,000, and will therefore pay no business rates for the current year, will receive grants of £25,000 from their Local Authority. For further details on eligibility and payment arrangements, contact your local authority.
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. Approximately 1.05 million smaller businesses have received a total of £31.7 billion through this scheme so far.
As for the Coronavirus Business Interruption Loan Scheme, which offers a maximum loan of £5 million made available through commercial banks, lenders have provided £11.9 billion worth of facilities to 54,500 companies.
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. We can help you evaluate your options if you get in touch.
Get in touch
Contact us if you have any questions or would like to chat about the next steps for your business.