EY launches free Brexit App

EY has launched a free Brexit App, designed to help businesses access government notices, regulatory updates and guidance, as well as providing updates with key developments.

Designed to help businesses prepare for the end of the transition period and beyond, the app provides access to:

  • The latest UK Government and EU guidance.
  • Direct links to the Brexit webpages of key UK trade bodies (British Chamber of Commerce, Confederation of British Industry, Federation of Small Businesses, Institute of Directors, TechUK).
  • News updates from EY on significant Brexit developments.
  • The latest thinking from EY’s Brexit teams on actions for business.

Catriona Campbell, EY Client Technology and Innovation Officer, said: “There is simply no way that businesses can be fully prepared for what’s coming as they don’t know what they are preparing for. Therefore, they need to take all steps possible to game the odds in their favour, and one crucial step in doing this is having access to the right information sources that are going to help navigate some of the complexities that Brexit will bring. The app contains all the key information sources in one user friendly, easy to navigate place.”

The free app can be downloaded from Play Store for Android and the App Store for iOS.

Commercial tenant eviction ban extended to March

The UK’s ban on commercial property eviction has been extended to March 2021, the government has confirmed. It also said that this will be the final extension of the initiative, which was originally supposed to end in September.

A government statement said the move “will give landlords and tenants three months to come to an agreement on unpaid rent”.

Robert Jenrick, the Secretary of State for Housing, Communities and Local Government. Said: “This support is for the businesses struggling the most during the pandemic, such as those in hospitality – however, those that are able to pay their rent should do so.

“We are witnessing a profound adjustment in commercial property. It is critical that landlords and tenants across the country use the coming months to reach agreements on rent wherever possible and enable viable businesses to continue to operate.”

The eviction ban extension was welcomed by British Retail Consortium chief executive Helen Dickinson, saying that it came “in the nick of time”.

She said: “This extension will give hard-pressed retailers breathing space to trade their way out of rent arrears that may have built up during lockdown.”

New lockdown grants of £4.6 billion unveiled

Businesses in retail, hospitality and leisure impacted by the new lockdown will be able to access additional grants of up to £9,000 per premises – with £4.6 billion being made available across the UK.

This support comes in addition to business rate relief and the furlough scheme, which has been extended until the end of April.

Local authorities have also been given another £594 million to help affected firms outside these sectors.

The cash will be provided on a per-property basis to support businesses through the latest restrictions, and is expected to benefit over 600,000 business properties, worth £4 billion in total across all nations of the UK.

Chancellor Rishi Sunak said: “The new strain of the virus presents us all with a huge challenge – and whilst the vaccine is being rolled out, we have needed to tighten restrictions further.

“This will help businesses to get through the months ahead – and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen.”

‘Wave of business insolvencies’ to hit Britain

Britain will be engulfed by a wave of insolvencies once government furlough schemes come to an end, business rescue specialists Begbies Traynor is warning.

“There is very significant distress out there, there is a bow wave of problems,” Begbies Traynor chairman Ric Traynor told the London Evening Standard.

He said that once Chancellor Rishi Sunak pulls back on support, wave of business failures will crash on to the economy, with tens of thousands of firms going under.

“There are plenty of companies that are just avoiding insolvency to claim furlough money to protect staff,” he said. “Once furlough ends they will have to go down the insolvency root.”

The recession will be at least as bad as the 2008/2009 financial crash, the company said.

Janet Jack’s Blog – Spending Review

The Chancellor Rishi Sunak delivered his Spending Review to the House of Commons this lunchtime. The Spending Review is a more low key event than the budget and the things that really interest us – like who will end up paying more tax and how much – aren’t part of the Spending Review.

What we do know is that we will be paying for the unprecedented government borrowing for many years to come.

For anyone who was still in any doubt about the grave state of the economy, Rishi Sunak was clear that the UK’s “economic emergency” had “only just begun”, with the government expected to borrow £394bn this year. In fact, the UK has seen the largest fall in economic output for 300 years.

Mr Sunak predicted that unemployment will rise to 2.6 million by the middle of next year – up from the current figure of 1.62 million.

Two of the big announcements today were that public sector pay would be frozen, except for the lowest paid. Nurses, doctors and other NHS staff will receive a pay rise.

The chancellor also said spending on overseas aid, as a proportion of national income, would be 0.5% in 2021-22 – down from the 0.7% currently set in law.

The Spending Review confirmed that the government will spend a further £55bn next year as part of a package of measures to support the recovery. This includes billions of pounds to help people find jobs.

In terms of financial services Mr Sunak announced £519m of funding in 2021-22 to support the continued delivery of COVID-19 loans, including paying for the 12-month interest free period on the BBLS and the CBILS.

There was also an additional £56.5m in 2021-22 to support the vitality and entrepreneurship of the UK by expanding the British Business Bank’s Start-Up Loans to meet the increase in demand and support entrepreneurs to start and grow their business.

He announced a freeze of the business rates multiplier in 2021-22, saving businesses in England £575m over the next five years.

Mr Sunak said he was also considering options for further COVID-19 related support through business rates reliefs and HMT will outline plans for 2021-22 reliefs in the New Year and we will bring you the details as soon as they are announced.

Bounce Back Loan Scheme could lose taxpayers £26b

The government faces a potential loss of £15 billion to £26 billion through businesses not being able to repay the loans made through the Bounce Back Loan Scheme and fraud.

That’s the conclusion of a National Audit Office (NAO) report into the Bounce Back Loan Scheme, launched in April to provide loans of up to £50,000 to small businesses to support their financial health during the Covid-19 pandemic.

The Department for Business, Energy & Industrial Strategy (BEIS) and the British Business Bank (BBB) expect the scheme to lend £38 billion to £48 billion by 4 November 2020, substantially exceeding the assumed £18 billion to £26 billion when it launched.

As of 6 September, HM Treasury data shows that the scheme has delivered more than 1.2 million loans to businesses, totaling £36.9 billion. Around 90% of the loans have gone to micro businesses with a turnover below £632,000.

The loans were delivered through commercial lenders such as banks and building societies, with the government providing lenders a 100% guarantee against the loans. Businesses are expected to repay the debt in full.

As a result of credit and fraud risks, BEIS and the BBB have made a preliminary estimate that 35% to 60% of borrowers may default on the loans, based on losses observed in previous programmes similar to the scheme.

This has led the NAO to call for the government to implement a thorough debt-recovery process with lenders and consider how it might better prevent fraud in any future schemes.

Gareth Davies, head of the NAO, said: “With concerns that many small businesses might run out of money as a result of the Covid-19 pandemic, government acted decisively to get cash into their hands as quickly as possible.

“Unfortunately, the cost to the taxpayer has the potential to be very high, if the estimated losses turn out to be correct. Government will need to ensure that robust debt collection and fraud investigation arrangements are in place to minimise the impact of these potential losses to the public purse. It should also take this opportunity to consider now the controls it would put in place to protect against the abuse of any future such schemes.”