As the Coronavirus pandemic continues to impact on UK businesses, chancellor Rishi Sunak has announced further measures, in the form of a £30 billion package to help secure jobs and to help British businesses bounce back and survive these challenging times.
The recent Summer Statement was a decisive move to get the economy moving, however, statistics show that less than half of businesses are interested in taking up a £1,000 furlough bonus scheme announced in the Statement.
Small and medium-sized businesses also now have access to a small business technology grant of between £1,000 and £5,000 to spend on new equipment and IT and professional advice.
We look at some of the initiatives in the Statement designed to help businesses survive the months ahead:
Several initiatives were announced in the Summer Statement including:
- A VAT cut from 20% to 5% for the hospitality industry including food, accommodation, and attractions.
- A Kickstart scheme aimed at 16-24 years olds. The government will pay the National Minimum Wage for 25 hours a week for six months, giving small business owners a £1,000 grant to cover admin costs.
- Small businesses which provide training for 16-24 years old will be given grants worth £2,000 per person up to a maximum of £10,000 per firm.
- The hospitality industry can take part in the ‘Eat out to help out’ scheme. The government subsidises up to £10 per person for customers dining out between Monday and Wednesday.
Furlough Bonus Scheme
The Furlough Bonus Scheme, part of the Summer Statement is designed to give employers confidence in retaining and hiring employees. The government will give small and medium-sized businesses a £1,000 grant for every furloughed employee they take back into employment and keep in employment until January 2021.
However, a British Chamber of Commerce (BCC) Coronavirus Business Tracker which gathered responses from more than 500 companies showed that more than half (56%) of businesses were not planning to use the scheme, 31% had not heard of it and 8% want to use it but are not eligible.
More than half of businesses tracked have reported a decrease in cash flow since June 2020. While almost a quarter said loan and grant schemes had improved their cash flow situation.
As an accredited provider of the government backed CIBLS loan scheme, V4B Business Finance has helped a significant number of businesses to access funding during the pandemic. Many firms requiring alternative finance are not eligible for the government schemes.
Small and medium sized businesses can apply for grants of between £1,000 – £5,000 to help them access new technology and other equipment as well as professional, legal, financial, or other advice to help them get back on track.
Simon Clarke, Minister for Regional Growth and Local Government, launched the initiative. He said: “We have always said that we would stand behind our businesses and communities as we rebuild following the coronavirus pandemic. This new funding does exactly that.
“Businesses will be able to use these new grants to pay for the expertise, equipment and technology they need to adapt, recover and rebuild.
“Small and medium sized businesses are the beating heart of communities; they provide employment and contribute significantly to local economies and we are determined to give them the support they need to continue to thrive.”
The additional package will be welcomed by many businesses, however, Yael Selfin, chief economist at KPMG UK believes more efforts should be directed at creating a national training scheme to equip the rising number of unemployed for future jobs.
He said: “Given the scale of unemployment expected in the second half of this year, a major ramp-up in training is required to help those affected find new opportunities.
“It will require a new approach, with a flexible national training programme set up to upskill and retrain large numbers of people. It also needs to be designed and delivered together with businesses across the regions and focused on equipping those who lost their jobs with the skills needed to go back to work in the growth sectors of the future.
“Many of the larger announcements have been put off until the Spending Review and Budget in the Autumn. An important omission was in relation to the most crucial infrastructure used during the lockdown and a vital component of the future growth of the economy. Even when restrictions are eased, demand for digital products and services will stay high and that requires investment in infrastructure to support it, accelerating the build-up of fast broadband and 5G.”
A full budget and spending review will follow in the autumn.
How we can help
V4B Business Finance is an accredited provider of the government backed CIBLS loan scheme and assists businesses with alternative finance. Some SMEs will not be eligible for the government initiatives and V4B Business Finance can advise on funding for:
- Corporation Tax
- Personal tax
- Short-term loans
- Professional Indemnity Insurance
- SRA Practising Certificate
For more information contact us:
Call 01978 668939