COVID-19 Business Update – 7 October 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.
New Three-Tier Lockdown Planned for England
Last week, restrictions were tightened in northeast England due to the increasing rate of COVID-19 cases in the region.
Now, leaked government documents reveal tougher COVID-19 measures that could be implemented locally or nationally. This may include the closure of pubs and a ban on all social contact outside household groups.
Details of this three-tier system aimed at improving people’s compliance with the rules have yet to be announced. We will keep you posted as soon as further information has been revealed
UK Construction Boomed in September
The UK’s construction industry has reported its biggest jump in new business since the lockdown was lifted.
However, despite this recovery in September which was supported by housebuilding, building firms are still cutting jobs. Some are releasing employees who had been moved onto the furlough scheme (which ends this month).
If your construction business is still struggling amid the pandemic, don’t hesitate to drop us a message so we can work out a plan for your recovery.
New Grants for Northern Ireland Businesses
Two new schemes that will help businesses in Northern Ireland to recover have been announced. These schemes will be administered by Tourism NI and Invest NI, and will provide £8,000 grants for businesses.
The Invest NI scheme contributes toward the cost of an adviser to carry out an analysis and strategic review of businesses. It is targeted at manufacturing, construction, professional services, information and communication, and technology businesses.
To be eligible for this grant, you must be a micro or small to medium enterprise with annual turnover of at least £500,000 that experienced a decline of 40% in turnover between April-June due to Covid-19.
Meanwhile, existing tourism businesses operating in Northern Ireland are eligible for the Tourism NI scheme. This grant is intended to support such businesses and help them survive the winter period.
If you need guidance with your application or would like to know about other funding assistance programmes, book a consultation with us so we can help you assess your options.
New Job Support scheme set to replace furlough
Last week, Chancellor Rishi Sunak announced the government’s plan to protect jobs and support businesses in the coming months. Key parts of the announced Winter Economy Plan include:
- a new Job Support Scheme,
- an extension of Self-Employment Income Support Scheme,
- an extension of the VAT cut for hospitality and tourism sectors,
- and help for more than 1 million businesses in repaying government-backed loans.
Job Support Scheme Wage Subsidy
The Job Support scheme will be introduced from 1 November 2020 to protect viable jobs in businesses who are facing lower demand over the winter months due to COVID-19. The aim is to help businesses keep their employees attached, and will run for 6 months.
The company will continue to pay its employee for time worked, but the cost of hours not worked will be split between the employer, the Government (through wage support) and the employee (through a wage reduction), and the employee will keep their job.
The Government will pay a third of hours not worked up to a cap, with the employer also contributing a third. This will ensure employees earn a minimum of 77% of their normal wages, where the Government contribution has not been capped.
Employers using the Job Support Scheme will also be able to claim the Job Retention Bonus if they meet the eligibility criteria. You can see more details including eligibility requirements here.
VAT cut extended for Hospitality and Tourism sectors
Part of the Chancellor’s announcement includes an extension of the VAT cut for the hospitality and tourism sectors. The temporary reduction of VAT rates from 20% to 5% will remain in place until 31 March 2021 instead of January.
The cut applies to food and non-alcoholic drinks, accommodation and admission to tourist attractions across the UK.
Nvidia Building UK Supercomputer to Boost COVID-19 Research
Nvidia is building the UK’s most powerful supercomputer, which will use artificial intelligence to help researchers in critical healthcare and drug discovery, including those related to COVID-19.
Cambridge-1 computer is expected to come online by the end of the year in Cambridge, East England. GSK and AstraZeneca, which are both involved in the development of a coronavirus vaccine, will be two of the first pharma companies to harness the power of the supercomputer.
Giving businesses flexibility to pay back loans
More than a million businesses who took out a Bounce Back Loan will be given flexibility with repayments through a new Pay as You Grow system. We’ll keep you informed as we get more details.
What funding is available for your business?
While many businesses are in a state of financial distress, the government continues to provide support for business recovery.
To cover the impact of the crisis, there are grants made available by the government such as the £1.25b 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.
If your business has been severely hit by COVID-19 and you need more support, the government is giving businesses access to financial support through various initiatives such as the Bounce Back Loan Scheme, where you can get up to £50,000 no-interest loans for the first 12 months.
The Business Interruption Loan Scheme offers a maximum loan of £5 million made available through commercial banks, lenders have provided £12.2 billion worth of facilities to 55,674 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 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. Get in touch if you need some help.
The Future of Work in the Post-Pandemic World
With social restrictions intended to curb the spread of COVID-19 still in place, the way we work and conduct business have changed significantly.
Here are some of the most notable ways COVID-19 can shape the future of work temporarily or for the long term, according to Gartner.
- Increase in remote working
Companies will shift to more remote work operations and will collaborate digitally.
- Expanded data collection
Remote workers will be monitored more in terms of productivity, employee engagement, and well-being.
- Contingent worker expansion
Companies will expand their use of contingent workers to maintain more flexibility in workforce management in the post-pandemic world. Other job models such as talent sharing and 80% pay for 80% work will also be introduced.
- Expanded employer role as social safety net
Employers will play a greater role in their employees’ financial, physical, and mental well-being. Support includes enhanced sick leave, financial assistance, adjusted hours of operation and child care provisions.
- Transition from designing for efficiency to designing for resilience
There will be greater emphasis on building a more resilient business which is flexible and can respond or correct course quickly with change.
Get in touch
Contact us if you have any questions.