24thSep
News article

Chancellor outlines Winter Economy Plan

A new emergency jobs scheme will be introduced to protect jobs during the coronavirus (COVID-19) downturn this winter, Chancellor Rishi Sunak has announced.

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A new emergency jobs scheme will be introduced to protect jobs during the coronavirus (COVID-19) downturn this winter, Chancellor Rishi Sunak has announced.

The Jobs Support Scheme, which will replace the furlough scheme when it ends on 31 October, will see workers get up to 77% of their normal salaries for six months.

It aims to stop mass job cuts after the government introduced new measures in its Winter Economy Plan to tackle coronavirus.

The Chancellor said that employees will have to be working for at least a third of their normal hours to qualify for the new scheme, which begins on 1 November.

Between them, the government and the employer will then cover part of their salary for the remaining hours not worked.

The government will cover a third of this sum, capped at £697.92 per month, while firms cover a further third.

The Jobs Support Scheme is designed to sit alongside the Jobs Retention Bonus.

In addition, the Government is extending the Self Employment Income Support Scheme Grant (SEISS). A third grant will cover three months' worth of profits for the period from November to the end of January 2021. This will be worth 20% of average monthly profits, up to a total of £1,875.

Mr Sunak also announced that businesses that have borrowed money through the government's coronavirus loan schemes will be given more time to repay the money.

And a VAT cut for hospitality and tourism companies will also be extended until March. The cut from 20% to 5% VAT - which came into force on 15 July - had been due to expire on 12 January next year.

Mr Sunak said: 'The resurgence of the virus, and the measures we need to take in response, pose a threat to our fragile economic recovery. Our approach to the next phase of support must be different to that which came before.

'The primary goal of our economic policy remains unchanged - to support people's jobs - but the way we achieve that must evolve.'

24thSep
News article

UK economic recovery slowing even before new Covid-19 curbs

The UK's recovery from the Covid-19 lockdown was losing momentum even before the announcement of new restrictions to control the spread of the virus, according to the latest data.

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The UK's recovery from the Covid-19 lockdown was losing momentum even before the announcement of new restrictions to control the spread of the virus, according to the latest data.

The IHS Markit/CIPS flash composite Purchasing Managers' Index (PMI) dropped to a three-month low of 55.7 in September after hitting a six-year high of 59.1 in August.

The survey showed strong growth in Britain's services and manufacturing sectors but also reflected a slowdown in new orders and the weakest confidence about future output since May.

Businesses in the survey said they were reducing staff numbers for a seventh consecutive month - the longest such run since 2010.

Commenting on the data, Chris Williamson, Chief Business Economist at IHS Markit, said: 'It was not surprising to see that the slowdown was especially acute in services, where the restaurant sector in particular saw demand fall sharply as the eat out to help out scheme was withdrawn.

'Demand for other consumer-facing services also stalled as companies struggled amid new measures introduced to fight rising infection rates and consumers often remained reluctant to spend.'

23rdSep
News article

Business groups call for more support following new restrictions

Following Prime Minister Boris Johnson's speech in which he outlined new coronavirus (COVID-19) restrictions for businesses in England, business groups have called for further government support.

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Following Prime Minister Boris Johnson's speech in which he outlined new coronavirus (COVID-19) restrictions for businesses in England, business groups have called for further government support.

Commenting on the new measures, Adam Marshall, Director General of the British Chambers of Commerce (BCC), said: 'Businesses, their employees and customers need to see a clear road map for the existing restrictions and those that may be introduced in the future. This must include transparent trigger points and clarity about the support available to protect jobs and livelihoods.

'The government should waste no time in setting out a comprehensive support package for firms forced to close or reduce capacity through no fault of their own.'

Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), said: 'While it's encouraging to see the government striking a balance between protecting public health and protecting the economy, this fresh round of restrictions will cause significant disruption for thousands of small firms.

'It's important to remember that small firms have already spent thousands on putting safety measures in place but received no funding to support their efforts to do the right thing.'

Meanwhile, the Confederation of British Industry (CBI) said a national effort to increase testing capability will be vital. Carolyn Fairbairn, Director General of the CBI, said: 'A second national lockdown would be devastating for our economy, so it's right to prioritise bringing infections under control.

'A clear timetable is welcome, but six months will come as a shock to many. Every possible step should now be taken to bring that horizon forward. This requires a turbo-charged testing regime to help control the virus quickly.'

22ndSep
News article

NAO calls on Treasury to safeguard access to cash

The National Audit Office (NAO) has called on the Treasury to safeguard access to cash after the coronavirus (COVID-19) pandemic accelerated the transition to cashless payments.

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The National Audit Office (NAO) has called on the Treasury to safeguard access to cash after the coronavirus (COVID-19) pandemic accelerated the transition to cashless payments.

The NAO has warned that without co-ordinated effort there is a risk that vulnerable people who rely on cash will be excluded from the economy. A decade ago, cash was used in 60% of transactions, but that number fell to less than 30% by 2019, according to the NAO's data.

The data suggested that the COVID-19 outbreak may have accelerated this trend further, as market demand for notes and coins declined by 71% between early March and mid-April during the lockdown.

According to the NAO, the decline in the use of cash in transactions is putting pressure on the cash system. Commercial operators who distribute cash rely on high demand to maintain the attractiveness of their business models and cover large fixed costs, such as bank branches and ATMs.

In March 2020, the government announced that it would be bringing forward legislation to protect access to cash and address the sustainability of the cash infrastructure.

However, the NAO said it cannot currently see a clear link between the government's aim to safeguard the consumer's ability to use cash, and the responsibilities of the five public bodies in the cash system.

21stSep
News article

UK businesses voluntarily return £215 million in furlough funds

HMRC data has revealed that UK businesses have voluntarily returned more than £215 million in overclaimed Coronavirus Job Retention Scheme (CJRS) payments.

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HMRC data has revealed that UK businesses have voluntarily returned more than £215 million in overclaimed Coronavirus Job Retention Scheme (CJRS) payments.

Around 80,433 firms have returned furlough funds they were given to help cover employees' salaries.

Commenting on the issue, HMRC stated: 'HMRC welcomes those employers who have voluntarily returned CJRS grants to HMRC because they no longer need the grant, or have realised they've made errors and followed our guidance on putting things right.'

The government believes as much as £3.5 billion in CJRS funds may have been paid out in error or to fraudsters.

Launched in April, the CJRS was designed to support businesses during the coronavirus (COVID-19) pandemic. Initially furloughed workers received 80% of their pay from the government, up to a maximum of £2,500 a month. Under the scheme, employers are now having to make contributions to employees' wages.

The CJRS will finish at the end of October, and will be followed by the Job Retention Bonus, which aims to encourage employers to keep employees on the payroll until the end of January 2021.

18thSep
News article

MPs urge Chancellor to extend job retention scheme

MPs have urged Chancellor Rishi Sunak to extend the Coronavirus Job Retention Scheme (CJRS) to help avoid mass redundancies.

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MPs have urged Chancellor Rishi Sunak to extend the Coronavirus Job Retention Scheme (CJRS) to help avoid mass redundancies.

The CJRS is set to be wound down in October and changes were implemented to reduce the amount paid by the government from August. From the first week of August, employers had to start paying national insurance and pension contributions. For September and October, government contributions will be reduced to 70% and 60% respectively.

Experts have warned that there are a number of characteristics of the coronavirus (COVID-19) pandemic which indicate that unemployment is going to rise higher than it did at the time of the previous recession in 2008.

MPs recognised that the government faces 'a daunting challenge' in maintaining a balance between preventing a rise in unemployment but allowing labour market flexibility to enable workers to move from shrinking to growing sectors of the UK economy.

Commenting on the issue, former Chancellor Philip Hammond said: 'There is always a tension with the desire to protect employment, so there will be a tremendous political pressure in this recovery to not let people become unemployed and to not let companies fail.'

17thSep
News article

FCA confirms support for mortgage borrowers

The Financial Conduct Authority (FCA) has confirmed future support for mortgage borrowers if they continue to face payment difficulties due to the coronavirus (COVID-19).

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The Financial Conduct Authority (FCA) has confirmed future support for mortgage borrowers if they continue to face payment difficulties due to the coronavirus (COVID-19).

The regulator has published finalised guidance to ensure support for consumers who have taken payment deferrals and still face financial difficulties, as well as those whose financial situation may be newly affected by the pandemic after 31 October.

Under the FCA's current guidance, borrowers can take a first or second payment deferral, which does not have a negative impact on the borrower's credit file.

However, under additional guidance published, any further support from lenders can be reflected on credit files. Firms are required to be 'clear' about the credit file implications of any support offered.

According to UK Finance, lenders have granted more than two million mortgage payment deferrals since the scheme came into effect in late March.

Commenting on the changes, Eric Leenders, Managing Director of Personal Finance at UK Finance, said: 'Lenders understand that many households will continue to see their finances squeezed as the pandemic continues and will be offering a range of support for those who need it. It is essential that customers speak with their lender to discuss the best solution for them.

'Firms will be communicating with customers whose mortgage payment deferral is coming to an end to discuss the options available. Those who can afford to resume payments should do so, as it will always be in their best interests in the long run.'

16thSep
News article

HMRC urges VAT-registered businesses to prepare for Brexit trading changes

HMRC has written to VAT-registered businesses that trade with the EU outlining how they should prepare for Brexit trading changes set to take effect from 2021.

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HMRC has written to VAT-registered businesses that trade with the EU outlining how they should prepare for Brexit trading changes set to take effect from 2021.

The letters have been sent to VAT-registered businesses in Great Britain trading with the EU, or with the EU and the rest of the world.

From 1 January 2021, the UK will operate a full, external border with the EU. From this date, businesses will be required to submit declarations when importing and exporting goods that are categorised as 'controlled'.

The letters outline what businesses need to do to prepare for new processes for moving goods between the UK and the EU from 1 January 2021. Businesses are urged to ensure they have a UK Economic Operator Registration and Identification (EORI) number, and have been advised to decide how they will make customs declarations.

HMRC has also urged businesses to check if their imported goods are eligible for staged import controls.

Further advice on how to prepare can be found here.

15thSep
News article

Private pension withdrawal age to be raised

The Treasury has confirmed that the minimum age for private pension withdrawals will increase from 55 to 57 in 2028.

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The Treasury has confirmed that the minimum age for private pension withdrawals will increase from 55 to 57 in 2028.

Pension reforms made under Chancellor George Osborne meant private savers could access their savings pots before State Pension retirement age.

At the time it was intended that the age restriction should be linked to be ten years behind the State Pension age, which is currently 65 but is rising to 66 this October and to 67 between 2026 and 2028.

In a statement to Parliament, John Glen, Economic Secretary to the Treasury, said: 'In 2014 the government announced it would increase the minimum pension age to 57 from 2028, reflecting trends in longevity and encouraging individuals to remain in work, while also helping to ensure pension savings provide for later life.

'That announcement set out the timetable for this change well in advance to enable people to make financial plans, and will be legislated for in due course.'

Currently, savers can take some or all of the cash held in private pension pots at age 55, including taking 25% of their savings tax-free.

14thSep
News article

CBI warns of rocky road despite July economic growth

The Confederation of British Industry (CBI) has warned that the UK economy still faces a 'rocky road back to normality' despite GDP growth in July.

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The Confederation of British Industry (CBI) has warned that the UK economy still faces a 'rocky road back to normality' despite GDP growth in July.

The UK economy grew by 6.6% in July but remains far below pre-pandemic levels, according to the latest figures from the Office for National Statistics (ONS).

Hairdressers, pubs and restaurants contributed to the economic growth after businesses were allowed to reopen in July. It is the third month in a row that the economy has expanded.

However, the ONS warned that the UK has still only recovered just over half of the lost output caused by the coronavirus (COVID-19).

Commenting on the data, Rain Newton-Smith, Chief Economist at the CBI, said: 'As more businesses were able to open their doors, the economy grew further in July. But economic growth lost some steam on the previous month, illustrating the continued uncertainty over the shape of an economic recovery ahead.

'The prospect of a second wave is restraining consumer and business confidence, and firms continue to face cashflow difficulties. With government support schemes coming to an end and renewed uncertainty over Brexit, clearly the road back to 'normal' is going to be a rocky one.'