Hayvenhursts Accountancy News June 2021
Hayvenhursts Accountants have compiled the most relevant news stories relating to accounting and business that were published in June 2021 including cash available for businesses to fund apprenticeships and the Government tracking down fraudulent furlough claims.
HMRC to Recover £1 Billion in Fraudulent Furlough Claims
HMRC has outlined its intention to investigate and recover over £1 billion in fraudulent furlough claims over the next 2 years.
Since the start of the coronavirus pandemic and the introduction of the Coronavirus Job Retention Scheme (CJRS) by the UK government, UK employers have claimed more than £60 billion in furlough funds since it was launched in March 2021. The CJRS scheme closes on 30th September 2021.
The Office for National Statistics (ONS) recently published that hospitality sector employees were the most likely employees to still be furloughed and other sectors and businesses will no longer be as reliant on the scheme as the restrictions ease.
HMRC has said they intend to launch criminal investigations into suspected cases of serious CJRS fraud by businesses in the UK.
A spokesperson for HMRC said: ‘The CJRS has provided a lifeline to millions of people across the UK and fraudulent claims are unacceptable. It is taxpayers’ money and fraud limits our ability to support people and deprives public services of essential funding.
‘We’d ask anyone concerned that an employer might be abusing the scheme, or anyone with information about suspected fraud, to please contact us. All information is assessed and the most appropriate course of action taken.’
https://www.gov.uk/government/organisations/hm-revenue-customs
Cash for Apprenticeships launched
The government has announced that employers, however big or small, can now apply for £3,000 of extra funding to support them when taking on new apprentices.
Chancellor Rishi Sunak announced the cash boost to the apprenticeship incentive scheme in the March Budget.
Businesses in England can apply for the £3,000 extra funding for every new apprentice they hire as a new employee from 1st April 2021 until 30th September 2021.
The cash incentive is designed to help more employers invest in the skilled workforce they need for the future as part of the government’s Plan for Jobs.
There are extensive plans in place already to protect, support and create more jobs whilst aligning our skills and education system to the employer market and increasing the available opportunities as we build back better from the pandemic.
Chancellor Rishi Sunak said:
‘Young people have been hit especially hard by the crisis – which is why our Plan for Jobs launched last year is focused on helping them get the skills they need to get the jobs they want.’
‘By boosting the cash incentives for our apprenticeship scheme we’re improving opportunities for young people to stay in and find work – this could not be more important in our economy’s recovery.’
Gillian Keegan, Minister for Apprenticeships and Skills said:
‘Apprenticeships are a fantastic way for employers large and small to grow their businesses and will continue to play a key role in our economic recovery.’
‘This cash boost will help even more employers to invest in their future workforce, creating more high-quality apprenticeship opportunities so that businesses have the skilled talent pipeline they need to thrive, not just today but also in the future.’
Already thousands of businesses in the UK have taken advantage of the original incentive scheme which was first launched in July 2020 by the Chancellor.
Employers can choose how to spend the cash, for example, covering uniform or travel costs for the apprentice.
You can find out more about the extra funding here:
https://www.gov.uk/government/news/cash-boost-for-apprenticeships-launched
Welsh businesses can get more relevant information and apply here:
https://www.gov.uk/employing-an-apprentice/get-funding
You can apply for the apprenticeship funding here.
The Governments Bounce Back Loan Schemes Payments are Now Due
Lots of small businesses will soon need to start to repay the loans they took out under the government’s Bounce Back Loan Scheme (BBLS).
The BBLS was created to support businesses during the coronavirus pandemic. The scheme allowed them to apply for loans of anything from £2,000 up to a maximum of £50,000, or 25% of business turnover with the interest being paid by the government for the first 12 months of the loan.
There are lots of businesses who have asked their banks for more time to pay back their BBLS loans. There are some businesses that have extended their loan terms from 6 to 10 years. If you haven’t extended your terms then you are required to start repaying when your 12-month payment holiday finishes.
There are options available to businesses:
- use the government’s Pay as You Grow initiative (gives the option of extending the loan period from 6-10 years)
- make interest-only payments for six months
- pause repayments entirely for up to six months
The FSB (Federation of Small Businesses) has asked for banks to get in touch with their BBLS loan customers to make them aware of the ‘Pay as You Grow’ scheme and how to make best use of it.
You can find out more here:
UK Economy Set to be Back to Pre-Covid Levels by the End of 2021
The rise in COVID-19 cases and the subsequent delay on the lifting of all lockdown restrictions for another month hasn’t damaged the outlook for the UK economy. According to the latest figures from the Confederation of British Industry (CBI) we are still set to see a bounce back to pre-covid levels by the end of the year,
Their latest forecast shows the easing of some COVID-19 restrictions, our successful roll-out of vaccines and the pent-up spending means it is very likely that the UK economy will grow over the summer months for those sectors now working with no restrictions.
They are forecasting GDP growth of 8.2% this year, and 6.1% in 2022 following a historically large fall of 9.9% in output over 2020.
Their forecasts show that business investment remains 5% below its pre-covid level at the end of 2022, which reflects the sheer scale of the decline during the pandemic, along with businesses being cautious with some lingering uncertainty for the future.
CBI Director-General, Tony Danker, said: ‘The imperative now must be to seize the moment to channel this investment into the big drivers of long-term UK prosperity. That’s why it’s the right time for the Government to come forward with far more detailed plans on everything from decarbonisation, to innovation to levelling up.
‘Clearly, this does not apply to the hardest-hit sectors from the pandemic who even now face continued delays and genuine challenges to stay viable. Extending the commercial rent moratorium will help keep some firms’ heads above water, but the Government must also do the same on business rates relief.’
Looking to put a plan in place to grow your business? Or a health check of your business finances? Hayvenhursts can help. Telephone 02920 777 756 to find out how we can help.
UK Business Infrastructure Bank Opens
In the March 2021 budget, Chancellor Rishi Sunak announced the UK’s Infrastructure Bank’s launch.
He marked the Bank’s opening with a visit to its new office in Leeds, meeting senior leadership including the Bank’s Chair, Chris Grigg, as well as hosting a roundtable with local infrastructure and business leaders.
The aim of the first ever UK Infrastructure Bank is to invest billions of pounds into sectors such as, clean energy and transport which will support local growth and tackle climate change.
The bank has an initial £12 billion of capital to use and can issue £10 billion of government guarantees, which will help to unleash more than £40 billion of overall investment.
The bank will be working in partnership with local government and the private sector and has been tasked with accelerating investment into ambitious infrastructure projects, reducing emissions and levelling up each part of the UK. Helping finance important projects in every region and nation of the UK in sectors such as clean energy, transport, digital, water and waste. They will be offering a range of financing tools including debt, equity, and guarantees.
Chris Grigg, Chair of the UK Infrastructure Bank, said: ‘The new UK Infrastructure Bank is open for business. I am delighted to be leading this institution, which will be a catalyst for investment to support regional economic growth and net zero ambitions.
‘I look forward to building strong partnerships with project sponsors, institutions and local leaders.’
You can find out more here:
https://www.gov.uk/government/news/uk-infrastructure-bank-opens-for-business
Cash Payments Fall by Over One Third during 2020 in the UK
According to the latest figures from banking trade body UK Finance, the number of cash payments made in the UK in 2020 fell by 35%.
Cash however, still accounts for 17% of all payments, remaining the second most frequently used payment method behind debit cards.
Not surprisingly, the number of contactless payments made in the UK increased to 9.6 billion payments, an increase of 12%. In the last four years contactless payments have jumped from being 7% of all payments to 27%.
The coronavirus pandemic drastically slowed down the UK economy in 2020 and the total number of payments declined by 11% to 35.6 billion transactions. It was the first decline of its sort in 6 years.
David Postings, Chief Executive of UK Finance, said: ‘The pandemic resulted in some marked changes in payments behaviour and while it’s too early to say whether they are permanent changes, we did see an acceleration in some existing trends such as the reduction in cash usage and the growth in contactless and mobile payments.
‘The increase in the contactless limit to £45 coupled with retailers encouraging its use meant that more than a quarter of all payments in 2020 were made via contactless. The use of cash fell, reflecting the fact that large parts of the economy were closed during the year, although it still remained the second most popular payment method behind debit cards.’
Hayvenhursts: For the latest guidance and advice for your business finances please contact a friendly and approachable member of our team on 02920 777 756