Sunak urged to support manufacturing – business news 24 February 2021.
James Salmon, Operations Director.
Sunak urged to support manufacturing in budget, CBI survey shows fall in retail, wholesale and motor trades employment, new wave of £7,500 grants for self-employed planned, extension to furlough scheme urged as unemployment hits 5.1% and more.
Sunak urged to support manufacturing in Budget
Crowe is calling on Chancellor Rishi Sunak to support the manufacturing sector in his March Budget. Johnathan Dudley, partner and head of manufacturing at Oldbury-based firm, said: “The Government has secured billions in COVID-19 corporate debt, most of which is at least a medium term risk to the Exchequer. To reduce and manage this risk, it is important for manufacturers to be productive and competitive and for the original equipment manufacturer supply chains to be secure for the former to survive and the latter to have the incentive to stay around. This requires investment and simple tax relief alone will not justify it.”
CBI survey shows fall in retail, wholesale and motor trades employment
The CBI’s distributive trades survey has revealed that employment levels in the retail, wholesale and motor trades declined at a record pace in the year to February. CBI principal economist Ben Jones commented: “With lockdown measures still in place, trading conditions remain extremely difficult for retailers. Record growth in internet shopping suggests that retailers’ investments in on-line platforms and click-and-collect services maybe paying off, but the re-opening of the sector can’t come soon enough to protect jobs and breathe life back into the sector.”
New wave of £7,500 grants for self-employed planned
Rishi Sunak is preparing to offer self-employed workers grants of up to £7,500 in next week’s Budget, the Telegraph reports. People who meet the criteria can claim 80% of average monthly profits up to a maximum of £2,500 a month. However, the scheme will probably end at the end of April reflecting the fact that many self-run businesses will have to remain shut until then. Andy Chamberlain, director of policy at the Association of Independent Professionals and the Self-Employed, welcomed the proposals but cautioned against pulling support from self-employed workers too soon. “Throughout the coming months, where there are still restrictions on the economy and businesses, Government must ensure there is proportionate support for this country’s freelancers and self-employed,” Mr Chamberlain said.
Extension to furlough scheme urged as unemployment hits 5.1%
Chancellor Rishi Sunak has been urged by the CBI to extend furlough and other support programmes amid fears that the unemployment rate could grow. CBI figures show that it has already reached 5.1%. Matthew Percival, director of People and Skills at the CBI commented: “With tough decisions on jobs being taken daily, employers need the Budget to provide further business support until the economy is fully reopen,” while Julian Jessop, economist at the Institute of Economic Affairs said of the furlough scheme: “It would make sense for the Chancellor to extend this scheme in next week’s Budget, but only for as long as substantial COVID restrictions remain in place.”
Business urged to prepare for increased tax enforcement
Research carried out by EY shows business leaders expect greater tax enforcement from governments over the next three years as countries look to rebalance their books following the pandemic. Europe was seen as the region representing the highest tax risk to businesses in the coming three years, with the Americas and Asia-Pacific close behind. Workers stranded overseas, the treatment of financial losses linked to the pandemic, the claiming of tax refunds and even the receipt of stimulus measures were seen as the top pandemic-related tax risks. Kate Barton, EY’s global vice chair of tax, said COVID-19 had “greatly amplified the tax risk profile” of organisations. “As governments look to balance budget deficits, tax authorities are resuming suspended tax audits and litigation. Meanwhile, the digital transformation of the global economy – and the increasing volume of data and compliance requirements from tax administrations – means that organisations will inevitably face more risk for tough audits,” she said. “Without a change in approach today, organisations face a real risk of financial penalties and reputational damage tomorrow.”
Vaccine passporting
PM Boris Johnson has promised a review into the use of vaccine passports, but said there were “deep and complex issues” to consider. He said the idea of Covid status certificates – having to show something to go to a pub or the theatre – was a “novelty” for the UK. Cabinet Office Minister Michael Gove will lead the vaccine passport review.
Brexit
The United Kingdom has agreed to a request by the EU to extend the date of its parliament’s ratification of the Brexit trade deal until 30 April. The trade deal was provisionally approved by the 27 EU ambassadors in December to ensure it came into place on 1 January when the UK left the single market and customs union, removing the prospect of extra friction at the border.
Housing sales
UK Housing Transactions slumped last month due to the impact of national lockdown restrictions, according to the latest figures. HM Revenue and Customs data showed the provisional seasonally adjusted estimate of UK residential transactions in January was 121,640, a drop of 2.4 per cent compared to the previous month.
Insolvencies
Insolvency practitioner Begbies Traynor reported that it expected annual results ‘at least’ in line with expectations as momentum continued in the third quarter of the year. In the third quarter ended 31 January 2021, the group had continued its strong trading performance since the half year across both of its operating divisions, the company said.
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