12thMay
News article

UK economy shrank 1.5% in first quarter of 2021, data reveals

The UK economy shrank by 1.5% in the first quarter of 2021 as the country underwent a COVID-19 lockdown, according to the Office for National Statistics (ONS).

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The UK economy shrank by 1.5% in the first quarter of 2021 as the country underwent a COVID-19 lockdown, according to the Office for National Statistics (ONS).

School closures and a large fall in retail sales earlier in the quarter dragged down economic growth, said the ONS. The economy is now 8.7% smaller than before the pandemic.

However, the ONS revealed that there was a strong recovery in March, with the economy growing 2.1% as a result of increased retail spending and the return of schools.

Commenting on the figures, Alpesh Paleja, Lead Economist at the Confederation of British Industry (CBI), said: 'While latest data confirms the economy was hit once again by a renewed lockdown at the turn of the year, the fall in activity was much smaller compared with Spring 2020. Households and businesses have clearly adapted better to working and living under COVID restrictions, despite the brutal cost of doing so.

'A range of indicators, including CBI business surveys, point to a rebound in activity heading into summer – with the economy opening up and pent-up demand waiting to be unleashed. But this is a recovery that will be felt more by some. Undoubtedly, hardest-hit sectors and households have a longer road ahead.'

11thMay
News article

Record level of Apprenticeship Levy funds expired in 2020, research finds

Research carried out by manufacturers' organisation Make UK has revealed that a record level of Apprenticeship Levy funds expired in 2020 without being spent by businesses.

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Research carried out by manufacturers' organisation Make UK has revealed that a record level of Apprenticeship Levy funds expired in 2020 without being spent by businesses.

The research revealed that £1,039 million in Levy funds expired in the nine months from May 2020 without being spent by firms. Expired funds cannot be used.

Make UK has urged the government to extend the lifetime of the funds from 24 to 36 months for a period of one year in order to help businesses recover from the coronavirus (COVID-19) pandemic.

'For many manufacturers, apprenticeships are key to unlocking our recovery and building a strong industrial base in the UK,' said Bhavina Bharkhada, Senior Campaigns and Skills Policy Manager at Make UK.

'But they need more flexibility to do this effectively as they themselves are struggling to recover from the COVID crisis.

'With so many manufacturers looking to recruit an engineering or manufacturing apprentice in the next 12 months, apprenticeships in the UK manufacturing sector can address the yawning skills gap we face, and aid the government in its ambition to level up.'

10thMay
News article

Next step of roadmap out of lockdown to take effect from 17 May

From 17 May, indoor hospitality businesses are permitted to re-open and households will be allowed to mix as the next step of the government's roadmap out of the latest coronavirus (COVID-19) lockdown takes effect.

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From 17 May, indoor hospitality businesses are permitted to re-open and households will be allowed to mix as the next step of the government's roadmap out of the latest coronavirus (COVID-19) lockdown takes effect.

Under the next stage of the government's roadmap for lifting England's lockdown, pubs, restaurants and other hospitality venues are set to be permitted to re-open indoors.

People will be able to meet in groups of up to 30 outdoors, while six people or two households can meet indoors. Individuals are also likely to be allowed to stay overnight with those not in their household or support bubble.

Commenting on the changes, John Foster, Director of Policy at the Confederation of British Industry (CBI), said: 'It's encouraging to see the roadmap remains on track, with the certainty it's provided businesses so far already appearing evident in recent economic data. All firms should be commended for their continuing efforts in keeping staff and customers safe.

'The government can inject further momentum into the economic recovery by providing companies with clarity on outstanding issues, including social distancing, COVID status certificates and the future of workplace testing beyond June 21.

'Getting answers will help business cement the gains so far, laying strong foundations for the recovery and supporting the planned full re-opening of the economy without delay.'

7thMay
News article

UK economy set to grow rapidly once COVID restrictions are relaxed

In its latest report, the Bank of England (BoE) has predicted that the UK economy will grow at its fastest rate in more than 70 years in 2021 as coronavirus (COVID-19) lockdown restrictions are eased.

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In its latest report, the Bank of England (BoE) has predicted that the UK economy will grow at its fastest rate in more than 70 years in 2021 as coronavirus (COVID-19) lockdown restrictions are eased.

The Bank expects the economy to grow by 7.25% this year. At their latest meeting, bank policymakers voted to hold interest rates at a record low of 0.1%.

The BoE's report outlined that UK GDP is expected to rise by around 41/4 % in the second quarter of 2021 as more people are vaccinated and COVID restrictions are relaxed. The Bank stated that high-frequency indicators of economic activity, including motor vehicle traffic, retail footfall and restaurant bookings, have picked up over recent weeks.

However, the Bank also revealed that the economy shrank by almost 10% in 2020, marking the sharpest decline in 300 years.

Its report stated: 'GDP is expected to rise sharply in 2021's second quarter, although activity in that quarter is likely to remain on average around 5% below its level in the fourth quarter of 2019.

'GDP is expected to recover strongly to pre-COVID levels over the remainder of this year in the absence of most restrictions on domestic economic activity.'

6thMay
News article

Optimism amongst SME manufacturers has risen significantly, survey suggests

A survey carried out by the Confederation of British Industry (CBI) has revealed that optimism amongst small and medium-sized enterprise (SME) manufacturers rose considerably in the quarter to April 2021.

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A survey carried out by the Confederation of British Industry (CBI) has revealed that optimism amongst small and medium-sized enterprise (SME) manufacturers rose considerably in the quarter to April 2021.

The survey, which polled 260 SME manufacturing firms, found that optimism rose at the fastest pace in seven years.

The CBI revealed that the volume of total new orders grew, but export orders were flat. Manufacturers expect output and domestic orders to bounce back in the next quarter, the CBI said.

Alpesh Paleja, Lead Economist at the CBI, commented: 'SME manufacturers are poised for strong growth and are sunnier in their outlook, consistent with the overall picture for the economy over quarter two.

'But not all is rosy: companies clearly remain under the cosh, with cost pressures mounting and raw materials shortages persisting thanks to COVID-related supply chain disruption.

'As the end of the re-opening roadmap hoves into view, manufacturers need clear guidance from government on the state of play beyond June, so they can plan, prepare and strengthen their supply chains – ensuring they can continue to operate safely and profitably.'

5thMay
News article

Businesses planning to adopt 'hybrid' working after easing of COVID restrictions

A survey carried out by the Institute of Directors (IoD) has found that businesses are planning to adopt so-called 'hybrid' working once the coronavirus (COVID-19) lockdown restrictions are fully lifted.

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A survey carried out by the Institute of Directors (IoD) has found that businesses are planning to adopt so-called 'hybrid' working once the coronavirus (COVID-19) lockdown restrictions are fully lifted.

The survey of 600 business leaders revealed that 63% of firms intend to shift towards one to four days of remote working per week. One in ten businesses are planning to permit employees to work from home entirely, whilst one in five are not planning to introduce any form of remote working.

Four in ten business leaders feel that remote working is more productive for their firm, the survey found.

'As the economy re-opens, business leaders are grappling with the best working models going forward,' said Joe Fitzsimons, Senior Policy Adviser at the IoD.

'The flexibility of remote working has improved work-life balance for employees and cut down commuting expenses. In many cases it has also boosted inclusivity and hiring from different parts of the country.'

The IoD has suggested that a hybrid working model is likely to 'provide the optimum balance for business leaders as the economy re-opens'.

4thMay
News article

CBI calls for more clarity on COVID-19 roadmap

The government must provide further details on its roadmap out of lockdown to bolster the economic recovery, says the Confederation of British Industry (CBI).

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The government must provide further details on its roadmap out of lockdown to bolster the economic recovery, says the Confederation of British Industry (CBI).

At present, social distancing guidelines mean only two-thirds of employees can physically work on premises, and firms are operating at 81% of pre-pandemic capacity, according to a CBI survey.

Consequently, without clarity on the future direction of travel for some of the big decisions remaining as we progress through the roadmap, the government risks stalling business plans. Questions remain on COVID-status certification and its use to re-open global travel and whether such a scheme will extend to certain domestic activities. Questions also remain on the future of social distancing in England.

Lord Bilimoria, President of the CBI, said: 'The ongoing success of the vaccination roll-out and government roadmap have provided firm foundations for the safe and gradual reopening of the economy. The indicative timings have been invaluable in helping businesses to forward plan and develop contingencies with confidence.

'Firms are anxiously awaiting big decisions from government that will impact the way they run their businesses over the coming months.

'The future of social distancing in England and COVID certificates will affect all of our lives, so it's important to start building consensus among businesses and the public for the way forward.'

30thApr
News article

HMRC sets out penalty regime for SEISS abuse

The fourth Self-Employed Income Support Scheme (SEISS) grant is now live and HMRC has set out the penalties for abuse.

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The fourth Self-Employed Income Support Scheme (SEISS) grant is now live and HMRC has set out the penalties for abuse.

An overclaimed SEISS grant includes any amount of grant which the self-employed were not entitled to receive or was more than the amount HMRC said the applicant was entitled to when the claim was made.

Overpayments must be notified to HMRC within 90 days of receipt of an SEISS grant.

When deciding the amount of any penalty, HMRC will take account whether the taxpayer knew they were entitled to the SEISS grant when they received it and when it became repayable or chargeable to tax because the individual's circumstances changed.

The HMRC guidance states: 'If you knew you were not entitled to your grant and did not tell us in the notification period, the law treats your failure as deliberate and concealed. This means we can charge a penalty of up to 100% on the amount of the SEISS grant that you were not entitled to receive or keep.

'If you did not know you were not entitled to your grant when you received it, we will only charge you a penalty if you have not repaid the grant by 31 January 2022.'

Applications for the fourth grant can be made here.

If you would like further advice or require a compliance review on your eligibility, please contact us.

29thApr
News article

Industry groups say more work needed after UK-EU trade deal ratified

Industry groups have called on the government to take further steps to normalise trade with the EU after the European Parliament voted to ratify the post-Brexit trade deal.

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Industry groups have called on the government to take further steps to normalise trade with the EU after the European Parliament voted to ratify the post-Brexit trade deal.

EU lawmakers cleared the Trade and Co-operation Agreement (TCA) by 660 votes to five, with 32 abstentions.

Now, trade groups say the government must urgently address the 'teething problems' that have arisen since the UK left the EU in January.

Tony Danker, Director General of the Confederation of British Industry, said: 'Ratification of the TCA is a decisive step forward, but it's far from the end of the process for business.

'The next phase is normalising relations between the UK and EU, in order to smooth trade and maximise the benefits of the new economic partnership.'

Hannah Essex, the British Chambers of Commerce's Joint Executive Director, said: 'It is now vital that both the UK and EU work together to alleviate the significant disruption and difficulty which many firms continue to report, especially with further changes still to come.

'The UK and the EU must now get back around the table and continue talks so they can build upon the arrangements set out in the TCA to deliver long-term improvements to the flow of trade between them.'

28thApr
News article

Pandemic caused biggest annual employment fall for older workers

Research carried out by the Resolution Foundation has found that the coronavirus (COVID-19) pandemic has caused the biggest annual employment reduction for older workers since the 1980s.

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Research carried out by the Resolution Foundation has found that the coronavirus (COVID-19) pandemic has caused the biggest annual employment reduction for older workers since the 1980s.

In a new report, the Foundation revealed that the pandemic has created 'a U-shaped employment shock', affecting younger and older workers more than those in the middle of the age distribution.

The fall in employment among workers aged 50 to 69 has been twice as big as those aged 25 to 49 (1.4% compared to 0.7%).

The report found that when older workers return to employment following a period of unemployment, they face the highest income hit of all age groups. The Resolution Foundation has urged the government to tailor employment support to the needs of older workers.

Nye Cominetti, Senior Economist at the Resolution Foundation, commented: 'The COVID-19 crisis has had a U-shaped effect on people's employment prospects. While the youngest workers have been hardest hit by the crisis, older workers have also been badly affected, experiencing the biggest annual fall in employment since at least the 1980s.

'The cost of unemployment for older workers is particularly high. They take the longest to return to work – with fewer than two-in-three returning within six months – and experience the biggest earnings fall when they finally to return to work.'