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BUSINESS UPDATE
Vital information, resources and support
LAW
Employer resources for new immigration routes
Th e Home Offi ce has published resources to help employers understand and prepare for the new points-based immigration system coming into eff ect from 1 January 2021. Anyone from the EU wanting to come to the UK for work will need to meet job and salary requirements.
Th e Home Offi ce previously revealed the core principles with a statement in February.
Th e key features are: Immigration routes for prospective employees from outside the UK Th e application process for becoming a Home Offi ce licensed visa sponsor Information on digital status and right to work checks Th e new global talent route; and intra-company transfers
Read more at bit.ly/2YJjiPp
INTERNATIONAL TRADE
New trade advisory groups launched
Th e Department for International Trade has established 11 trade advisory groups (TAGs) to provide knowledge, insight and experience from industry experts that will inform the UK’s negotiating position and deliver trade deals that benefi t the whole country.
Th e 11 TAGs are: agri-food; automotive, aerospace and marine; British manufacturing and consumer goods; investment; life sciences; tech and telecoms; chemicals; fi nancial services; professional advisory services; transport services; and creative industries. A list of members will be published on the gov.uk website.
Read more at bit.ly/2Qvd419
LAW
Covid-19 refund updates
Th e Competition and Markets Authority (CMA) has published its views on the law in relation to cancellations and refunds during the pandemic.
Th e CMA believes that a consumer will generally be entitled to a refund when they have paid in advance for services or goods that cannot be provided because of the pandemic. It has provided detail on the diff erence between lockdown laws and Government guidance, and their impact on refunds. Lockdown laws: If contracts cannot go ahead because of lockdown laws, the CMA would expect a consumer to be off ered a full refund. If contracts are partially aff ected then, depending on circumstances and impact, consumers may be entitled to a refund or a price reduction. Government guidance: As this is guidance and not law, whether a consumer is entitled to a refund will vary. For example, if a package holiday is cancelled in light of Foreign and Commonwealth Offi ce advice against travel to the country, there are protections that mean consumers should be entitled to a full refund.
It will not always be the case that a full refund is due as Government guidance does not create legal restrictions. However, it is important to follow Government guidance, and the CMA believes businesses should treat customers fairly.
Read more at bit.ly/34Kcnt0
FINANCE
New body to drive economic recovery
Th ree core missions for the new Scottish National Investment Bank have been laid before the Scottish Parliament for consultation.
Th e core missions focus the bank’s activities on addressing key challenges and creating inclusive, long-term economic growth. Th is will enable the bank to play a signifi cant role in supporting Scotland’s economic recovery from coronavirus. Th e proposed missions aim to support: Th e just transition to net-zero emissions by 2045 Creating opportunities and reducing inequalities Harnessing innovation.
Th e bank is on schedule to launch by the end of the year and the Scottish Government has committed to capitalising it with £2 billion over 10 years.
Read more at bit.ly/2QzYYeJ
TAX
Loan charge deadline passes
Th e deadline to apply to HMRC for a refund or waiver for the loan charge review has now passed. Following HMRC’s Independent Loan Charge Review recommendations, certain voluntary payments made as part of a disguised remuneration settlement with HMRC can be refunded.
Th e voluntary payments that can be refunded are those made on or after 16 March 2016, in relation to loans made in unprotected years. An unprotected year is one where HMRC did not take action to protect the year, for example, by opening an enquiry.
Read more at bit.ly/3i1yvTK
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ON THE RECORD NEED TO KNOW
FINANCE
Late payment crisis worsens
The majority of small businesses (62 per cent) have been subject to late or frozen payments in the wake of the Covid-19 outbreak, according to FSB’s latest study of more than 4,000 fi rms.
The report, Late Again: how the coronavirus pandemic is impacting payment terms for small fi rms, shows that only one in 10 (10 per cent) have agreed changes to payment terms with clients, meaning most of this poor practice has not been signed off by creditors or debtors.
The study shows that, despite concerted eff orts by government at all levels to improve
Pay restraint is order of the day
Businesses are implementing pay freezes and deferrals around awards as they attempt to weather the storm caused by Covid-19.
XpertHR’s research revealed there were around 20 per cent fewer basic pay settlements eff ective between 1 January and 31 July than at the equivalent stage last year. Where pay settlements were implemented, 43 per cent were freezes, meaning employees did not receive any rise.
Where businesses did implement pay increases, these were lower than the same period a year earlier in 56 per cent of cases, with just 16 per cent higher.
Overall, the median basic pay award in the three months to the end of July fell to 0.5 per cent, two percentage points lower than the median of 2.5 per cent recorded in the same period a year ago. This makes it the lowest fi gure for more than a decade. procurement practices, there is no discernible diff erence in late payment activity between public and private sector supply chains.
Around two-thirds (65 per cent) of small fi rms that supply to other businesses have suff ered late or frozen payments, and an almost identical number (63 per cent) in public sector supply chains have experienced the same treatment. Small fi rms in the wholesale (71 per cent), legal and accounting (62 per cent) and advertising and marketing sectors (62 per cent) have been hardest hit.
QUICK STATS
3% The amount by which UK retail sales were higher in July than they had been in February, before lockdown, the Offi ce for National Statistics says
69% The proportion of UK workers who take public transport, according to research from Insolvency Support
62% of all small businesses have experienced either an increase in late payments and/or had payments frozen completely as a result of Covid-19
10% of all small businesses have experienced a lengthening of payment terms from customers as a result of Covid-19
71% of small wholesale fi rms 62% of small legal and accounting fi rms
62% of small advertising and market research fi rms
have experienced either an increase in late payments and/or would rather cycle to work now than 65,000 The number of cyber-attacks on UK SMEs each day, according to recruiter Robert Walters. Around 4,500 are successful
had payments frozen completely as a result of Covid-19
Small fi rms still reeling from pandemic
Almost one in four (23 per cent) small business owners expect Q3 of 2020 to be “much worse” than Q2, with just 13 per cent expecting “much improved” prospects.
FSB’s Small Business Index found more than half (58 per cent) of fi rms expected their performance to remain stable or worsen over Q3. Four in 10 (42 per cent) expected a relative improvement as lockdown eased, while three quarters (75 per cent) said coronavirus was still having a negative impact. The fi gure stood closer to nine in 10 (88 per cent) in Q1.
There were diff erences across sectors: construction, accommodation and the food service sectors were most confi dent, and wholesale/retail and arts/ entertainment were least.
Three quarters (75 per cent) of smaller businesses reported a fall in profi ts in Q2 of this year, up 33 percentage points compared to Q2 in 2019. Most (82 per cent) said they were operating below capacity, and 65 per cent had seen a fall in international demand.
Small business confi dence by sector
Construction Accommodation and food service activities Manufacturing
Retail Information and communication Arts, entertainment and recreation -66 -23 +5
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