Half of London SME’s hiring – business news 25 August 2021

James Salmon, Operations Director.

Nearly half of London SMEs plan to hire this year. Retailers report higher sales, prices also rise. HMRC issues reminder for fifth SIESS grant claims. Demand for workers remains strong and lots more business news.

Nearly half of London SMEs plan to hire this year
Research by Barclaycard shows that 42% of London SMEs plan to hire in the next 12 months, more than anywhere else in the country bar the North West (54%). Firms are looking forward to a sales boost this bank holiday with 19% of London businesses expecting to see growth in revenue this weekend. Rob Cameron, CEO of Barclaycard Payments, said: “Small and medium sized businesses hold such a significant position in the UK, accounting for around three fifths of the nation’s employment and half of the turnover in the UK private sector. The success and optimism we are seeing from this segment is an excellent gauge of how the wider economy is performing – and from that it’s terrific to predict that a bumper August bank holiday looks set to be on the cards.”

Retailers report higher sales, prices also rise

UK Retail Sales surged at their fastest pace in nearly seven years this month highlighting that the wave of consumer spending unleashed since the initial Covid unlocking still has legs, according to fresh figures released yesterday.

New data from the Confederation of British Industry shows retail sales swung to their highest growth rate in August since December 2014, rising to 60 per cent from 23 per cent in July.

The CBI’s latest distributive trades survey has found that a net balance of 60% of retailers reported higher sales in the year to August, up from 23% in July and the highest reading since December 2014. However, labour shortages continue to affect supply and are also creating inflationary pressure in the sector. A net balance of 73% of businesses said that prices were up compared with the same month a year ago. This was up from 53% in May.

Alpesh Paleja, economist at the CBI, said: “A ramping up in retail sales growth in the year to August shows just how much consumer demand continues to spur economic recovery. While sales growth is set to remain strong, a more definitive shift in household spending towards consumer services is anticipated later in the year, leading to greater normalisation of growth in the retail sector.”

HMRC issues reminder for fifth SIESS grant claims
HMRC is reminding the self-employed to apply for the fifth SIESS grant through the coronavirus Covid-19 support scheme before September 1st, the Express reports. The size of grant will be dependent on business turnover during the 2018 to 2021 tax years. Research by The Association of Independent Professionals and the Self-Employed (IPSE) found that 67% of freelance businesses were negatively affected by the pandemic, which translated into a drop in turnover for 60% of all freelancers. HMRC says the  fifth grant will need to be accounted for in 2021/22 financial reports and is subject to Income Tax and Class 4 National Insurance contributions.

Demand for workers remains strong
A survey by  the Recruitment & Employment Confederation reveals that a net balance of 29% of businesses plan to expand their workforce in the months ahead, with 22% saying they plan to take on permanent staff and 26% looking for more temporary staff. Neil Carberry, chief executive of the REC, said: “We’re well into the recovery now and our surveys show that demand for labour remains high. Even with a large number of people coming off furlough in August and September, it’s likely that high demand for workers will continue to cause shortages through the autumn.” He added: “There will be particular pressures in logistics, food manufacturing and hospitality as we gear up for Christmas, and hiring for this period has already started.”

Amazon offers £1,000 bonus to new workers
Amazon is offering new warehouse recruits a £1,000 bonus as the US tech giant urgently seeks to fill roles at its sites across the UK, including Darlington, Dartford, Swansea, Redditch and Coventry. The move comes as UK companies struggle with staff shortages caused by a combination of Brexit, the coronavirus and self-isolation rules. Official data last month showed the number of UK job vacancies passed one million for the first time ever in July.

London markets track global gains
Wall Street rallied on Tuesday amid suspicions that the US Federal Reserve will row back on plans to begin winding down its asset purchase programme. Analysts said concerning economic data and the surge in delta cases in the US may lead the central bank to take a more cautious position. London markets also rose, led by travel stocks including IAG, Rolls-Royce and Whitbread, as investors took note that the resurgence in new Covid cases globally has failed to trigger a severe crackdown on international travel restrictions.

UK bank account and loan fraud soars in pandemic
Fraudulent activity soared during the course of the pandemic with loan fraud up 40% in Q2, according to Experian, with criminals opening bank accounts at five times the rate of the same quarter last year.

A health and social care levy would be better than raising NI
David Smith suggests in the Times that with borrowing lower than expected so far this year, perhaps Rishi Sunak can put aside plans to increase national insurance to pay for the Government’s social care reforms. Smith hopes that there may even be moves afoot to introduce a new hypothecated tax to fund health and social care, pointing to an argument in favour of the idea put out on Twitter by former health secretary Jeremy Hunt. A health and social care levy set at 1% of income would raise about £6bn a year, Hunt said, and the attraction of such levy would be that it “would fund the NHS backlog in the short term and desperately needed improvements in the social care system in the medium/longer term.” Additionally, the Conservative manifesto would not be broken as it did not explicitly state that there would be no new taxes.

HMRC issues 3rd IR35 tax penalty to the HM Courts & Tribunal Service
HM Courts & Tribunal Service is now the third public body to be issued with a penalty for IR35 failings with HMRC issuing the department with a £12.5m tax bill. In late July, the DWP were issued with a £87.9m bill for incorrectly determining the IR35 status of contractors since 2017. Following this, the Home Office was also issued with a £33.5m penalty for “careless” IR35 failings. Seb Maley, the CEO of IR35 expert Qdos, said that given HMRC’s “fundamentally flawed IR35 tool, CEST, was used to decide the IR35 status of contract workers, I’m not in the least bit surprised that mistakes have been made.” He continued: “Here we have proof yet again that the taxman’s very own IR35 tool threatens compliance rather than ensuring it. Businesses should avoid it altogether or at the very least get a second opinion on every answer it provides.”

Young people drive web publishing sales up by third
Digital publishing sales jumped 31.9% to £152m in the first three months of this year, according to data from the Association of Online Publishers (AOP) and Deloitte. The majority of revenue came from display advertising, rising by 4.7% to £53.6m, but subscription revenues surged by 49% compared to the first quarter of last year, driven by young people signing up for online subscriptions to newspapers and magazines. Business confidence remained strong across the industry, as total digital sales rose 10% to £517m over the past year.

UK house sales plunge in July after stamp duty holiday ends
Property sales fell sharply last month following a spike in June when buyers rushed to complete before the end of the stamp duty holiday. HMRC said 73,740 homes were sold in July on a seasonally adjusted basis – 63% fewer than the previous month which saw 213,120 sales. The figure was 4% up on July 2020 but down 24% compared with the same month in 2019. The full tax break on homes up to £500,000 finished at the end of June but the stamp duty threshold will remain at £250,000 until the end of September when it will revert to £125,000.

UK start-up wins EU blockchain contract
British start-up iov42 has been chosen by the European Commission to help design and develop European blockchain capabilities. The firm beat corporate giants including EY, Vodafone and Deloitte to become one of seven companies to secure an EU contract. Commenting on the news, the CEO of iov42, Dominic von Trotha Taylor, said: “We are delighted to have been selected by the European Commission to work on [European Blockchain Infrastructure Services], which is made even more special for us as the only UK-based start-up to have been chosen.”

Runaway VAT fraudster jailed
Mohammad Tanwir Khan, a VAT  fraudster who fled the country eight years ago to escape justice has been jailed for four years. An investigation by HM Revenue and Customs (HMRC) revealed he used more than 350 false invoices linked to fictitious exports to pocket £817,000 in VAT repayments he was not entitled to.


Ryanair boss Michael O’Leary today said that the budget airline was recovering at a faster rate than its European competitors after a surge in passenger numbers in August. The Irishman said that passenger numbers for this month were on track to hit 10.5m, up from 9.3m in July, and double the 5m the carrier flew in June.

US Budget

US Congress has approved a $3.5 trillion budget blueprint to expand the social safety net and address climate change. It also agreed to vote no later than September 27th on a separate infrastructure bill, worth $1trn, that has already cleared the Senate.  Thus setting the stage for Democrats to enact President Biden’s ambitious economic agenda. The rule that passed on Tuesday allows Democrats to move ahead with key policy proposals. Mr Biden’s party hopes to devote significant resources to family support, health and climate schemes.

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