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The Latest Support for Businesses Affected by COVID-19 or Trading with the EU

Welcome to our round up of the latest business and Covid-19 news for our clients. Please contact us if you want to talk about how these updates affect your business. We are here to support you!

Covid-19 update

The current guidance from the 17 May is to continue to work from home where you can and when travelling within the UK, you should aim to do so safely and plan your journey in advance.

After some confusion last week, there is also revised government guidance if you live in an area where the new COVID-19 variant is spreading. The government advises that you should try to:

  • meet outside rather than inside where possible
  • keep 2 metres apart from people that you don’t live with (unless you have formed a support bubble with them), this includes friends and family you don’t live with
  • minimise travel in and out of affected areas 

The current restrictions that remain in place can be seen here: (COVID-19) Coronavirus restrictions: what you can and cannot do – GOV.UK (www.gov.uk)

This month we await news whether from 21 June all legal limits on social contact will be removed, although the government has warned that outbreaks of the Indian variant could disrupt further easing, and “make it more difficult to move to step four in June”.

The cost of Covid-19

The ONS has published its latest paper on how the relationship between UK public sector monthly income and expenditure leads to changes in deficit and debt for the financial year ending 31 March 2021. The figures are subject to adjustment but show the stark reality of the effect of Covid-19 on the UK economy and the extent of government support

  • Public sector net borrowing (excluding public sector banks) in the financial year ending (FYE) March 2021 is estimated to have been £303.1 billion, £246.1 billion more than in the year to March 2020 and the highest nominal public sector borrowing in any financial year since records began in 1947.
  • Expressed as a ratio of gross domestic product (GDP), public sector net borrowing (excluding public sector banks) in the FYE March 2021 was 14.5%, the highest such ratio since the end of World War Two, when in FYE March 1946 it was 15.2%.
  • Public sector net borrowing (excluding public sector banks) in the FYE March 2021 is estimated to have been £24.3 billion less than the £327.4 billion expected by the Office for Budget Responsibility in their Economic and Fiscal outlook – March 2021 on a like for like basis.
  • Central government tax receipts are estimated to have been £523.6 billion in the FYE March 2021 (on a national accounts basis), £34.2 billion lower than in the FYE March 2020, with notable falls in taxes on production such as Value Added Tax (VAT), Business Rates and Fuel Duty.

The full report can be seen here:  Public sector finances, UK – Office for National Statistics (ons.gov.uk)

How will this affect your business?

We saw in the last budget the steps the government is taking to support the recovery with new incentives for business investment and help for businesses to attract the capital, ideas and talent to grow. Once economic recovery is durably underway, the recent budget stated that the public finances must be returned to a sustainable path and sets out the size of the challenge and steps to deliver more sustainable public finances. So in March we saw Chancellor Rishi Sunak freeze income tax thresholds and announce an increase in Corporation tax rates from 2023.

The government has chosen a fine line between raising taxes to start paying down the massive government borrowings but at the same time stimulate economic recovery and save jobs. 

Most businesses will be focussing short term on their recovery and in the medium term on being resilient, improving profitability and growing turnover. If taxes do rise to fund government spending, we recommend all businesses should map out a range of scenarios with “what if” analysis to understand their available future strategies for success. For example, here is a smaller business’s “what if” scenario planning results:  

Please talk to us about scenario planning – we have the tools to help you prepare for the future and set realistic and achievable targets.    

Are you trading with the EU? 

If your business moves goods between the UK and countries in the EU, they will need to follow new customs and tax rules.

Their business will be affected by the new rules if they:

  • buy goods from an EU seller and bring them into the UK
  • send goods they’ve sold to a buyer in an EU country
  • have not exchanged money, but need to move equipment they use for their business, between the UK and the EU.

You can now apply for the SME Brexit Support Fund. Smaller businesses can get up to £2,000 to pay for practical support, including training or professional advice to adjust to new customs, rules of origin and VAT rules when trading with the EU. Applications must be received before 3‌‌0th June.

See: Apply for a grant to help small and medium-sized businesses new to importing or exporting – GOV.UK (www.gov.uk)

HMRC Webinars

You can attend HMRC webinars to help you adjust to the new rules. HMRC webinars explain existing ‌‌ guidance and give you the opportunity to ask general questions. You will also be able to see responses to other peoples’ questions and the guidance HMRC signpost to for extra help and support. 

Importing – actions you need to take before making your supplementary declaration

To support those who have delayed their customs import declarations, HMRC explain the actions you need to take before you can make a supplementary declaration and how intermediaries can help you do this.  Please register to take part if your clients have imported goods since 1 January 2021 and not yet completed a customs declaration for them.

See: Registration (gotowebinar.com)

Customs Import Declarations: an overview.

If you are planning to import and you want to understand the full declarations process, please register for this webinar: Registration (gotowebinar.com)

Exporting: what you need to do to keep your goods moving.

 A webinar with an overview of the actions to take now when exporting goods from Great Britain to the EU and moving goods between Great Britain and Northern Ireland.

Key processes include – zero-rated VAT, customs declarations, using an intermediary as well as licences, certificates, and authorisations.

See: Registration (gotowebinar.com)

Trader responsibilities when using an intermediary.

This webinar explains your responsibilities as a trader if you choose to use an intermediary to complete import or export declarations for their business. These are complex and an intermediary can save them a lot of time.

Please register here:  Registration (gotowebinar.com)

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