What next for businesses?

For the last year, large parts of the UK economy have received support from the Government through its range of financial support packages. 
However, the Government has now started winding down much of the financial assistance available to businesses as the nation leaves lockdown. 
In the weeks ahead, many of the essential mechanisms that have kept businesses going will be withdrawn or whittled away.
While the hardest hit sectors will receive help for longer, many sectors will see the majority of support packages removed. 
To complicate things further, many of the previous loans and tax deferrals offered by the Government are now due, creating a challenging time for businesses struggling to remain viable. 
To give some scale to the winding down of financial support to businesses, here are some of the key mechanisms being scaled back or withdrawn in the months ahead:
July

• Employer’s furlough contributions start at 10 per cent of the cost of unworked hours plus total costs of all employer NICs and auto-enrolled pension contributions. The Government will pay a grant of up to 70 per cent of an employee’s regular salary (capped at £2,187.50) to ensure furloughed workers continue to receive 80 per cent of their regular wage for hours not worked.
• Business rate relief for retail, hospitality and leisure is reduced to a two-thirds discount.
• Many Coronavirus loans must begin to be repaid.
• Tax and VAT payments from deferrals are now due for many and businesses and individuals may need to consider a Time to Pay arrangement.

August 

• Employer’s furlough contributions rise to 20 per cent of the cost of unworked hours, plus total costs of all employer NICs and auto-enrolled pension contributions. The Government will pay a grant of up to 70 per cent of an employee’s regular salary (capped at £1,875) to ensure furloughed workers continue to receive 80 per cent of their regular wage for hours not worked. This rate will remain in place until the scheme ends. 

September 2021

• The furlough scheme ends on 30 September 2021.
• On 30 September 2021 winding-up petitions and statutory demands return. 
• From 30 September Hospitality VAT rate moves from five per cent to 12.5 per cent
• Just as the country begins its recovery, many businesses face additional costs and pressures. 

It is, therefore, essential that distressed businesses seek advice and support during the challenging times ahead. 
We have helped hundreds of businesses during the pandemic and remain ready to assist many more as support is withdrawn. To find out how we can assist you, please contact us.