October 16, 2020
Trying times are what bring out the best and worst in people. Perhaps the current economic situation has never been hit this bad. With the world hiding behind its doors due to the virus and people being forced to leave shelter and battle the odds there has been a sinister significance added to the old phrase. The show must go on. Indeed, it appears that now that we will have to prepare to live with the virus, we need to have a clearer view of the reality of the scenario. Business accounting has never been this challenged as it has in this one year where maximum use has been made to the resource and monies allocated to welfare funds.
It has been estimated that 9.6 million of people have benefited from their furlough wages under the Coronavirus Job Retention Scheme. Apart from this focus on employees, the government has also been backing up businesses with grants as well as loans that have been worth over £25,000 on a per property basis. Now the government has anticipated the need of new funding this time centered towards businesses that have been forced to shut down so as to contain the virus situation. Lockdowns while not well received are a crucial process in prevention of further contamination but they have a jeopardizing effect on the economy. Wanting to irradiate to some extent the pressure on the businesses that are forced to temporarily draw their shutters, there are to be now grants of up to three weeks’ worth £1,500, which implies £1500 per week.
Basically, it is open for business that have been forced to shut down operations due to the Covid 19 pandemic.
No, the £1,500 is for larger businesses while smaller businesses will be offered £1000. Thus, small business accountants will need to consider who to best treat the same.
This is all a part of the Plan for Jobs as set about by the Chancellor. Apart from this, the hospitality sector has seen a boost due to the ‘Eat Out to Help Out’ scheme that was introduced. There has been a reduction in the VAT imposed on tourism as well as hospitality by a stunning 15% plus not to forget the Kickstart scheme which was for £2 billion. The government has also invested heavily in new types of infrastructure, maintenance projects and also decarbonization up to £8.8 billion.
Businesses that still will be remaining closed at a national level such a night clubs; will not receive the benefit of this scheme.
Actually, the real profiteers will be only those business who are forced to shut down due to local Covid 19 related restrictions like lock downs. As mentioned earlier, the nationally restricted business will not stand to gain.
The total size of this new grant goes to £60 million which is towards the ‘Local Lock down Fund’. The maintain thrust seems to be again on salvaging the situation by saving the job loss which such a nose dive in business would be bound to prove. The back lash of the lockdowns after all, is a crippled economy and stunted economic growth. Tax services and savings will now probably be the thrust.
The government is preparing for future chances of lockdowns due to the pandemic and so is trying to minimize the business loss that the owners of businesses will face. Containment areas are closed to help everyone and so the government cannot help but feel that businesses that are trying their best to do the right thing should not be penalized.