The job support scheme, starting on November 1 will help protect livelihoods, allow businesses to hold onto valued and skilled employees and ease cash flow concerns going into the winter months. Action was needed from government as researched from the latest Coronavirus Economic Impact Report, showed a third of Herefordshire and Worcestershire businesses were planning to reduce the size of their workforce within the next 3 months. We hope that the new Job Support Scheme will reduce this figure but businesses still have a long road ahead.
The Pay as you Grow lending schemes announced by the chancellor is welcomed news, certain schemes are now being held open until November 30 to give other businesses time to apply and also allows businesses to pay back loans as businesses grow and in increments as profits increase.
The Loan Schemes will give businesses more flexibility and provide reassurance for businesses who have reported a lack of cash reserves, allowing businesses breathing room going into the winter months. Businesses reporting an increased cashflow decreased from 10% (Q1) to minus 51% (Q2).
This extra income will allow those businesses who expected their turnover to decrease within 12 months (59%) breathing room and a much-needed cash injection.
The tax reliefs also announced by the Chancellor, which include the 15% VAT reduction for tourism and hospitality businesses and the VAT deferral for the next 12 months are also a welcome addition to the support package.
We know that 6 months goes fast, so we will be looking for the government to give sight of their longer-term plan so that businesses are not working ‘hand to mouth’ and unable to plan further
The Chancellor must also be open to taking any additional measures and introduce increased support if needed by businesses over the coming months with possibly more sector specific schemes introduced to those businesses seeing their industries disappearing before their eyes such as the hospitality and aviation sectors.
As more detail emerges, we will update our articles so please check back regularly for additions.
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