Dear All,
Detailed below is the Weekly News/ Covid 19 Update for 29th June.
It includes updates from the CBI, HMRC and HSE.
Have a good week.
Gordon Polson
Chief Executive – Federation of Bakers Ltd
Chief Executive’s Weekly News for 29th June 2020
CBI Update: As the UK moves into economic recovery, policies and behaviours that reverse trends in injustice and inequality are essential. To that end, we were delighted to be joined, last Friday, by Miatta Fahnbulleh the CEO of the New Economics Foundation, Rachel Farr, Knowledge Lawyer at Baker McKenzie, and Sandra Kerr CBE, the National Campaign Director of Business in the Community. This was the second in our webinar series on the crucial issue of race and equality in the workplace. We discussed the practical steps businesses can take to ensure they are not discriminating against any part of their workforce when reopening, and the session also served as a timely reminder that diversity and inclusion is not just the right thing to do morally, but that it makes business sense too.
We’ve also had the opportunity to hear from many of you directly and are continuing to reflect your ideas and concerns in our daily conversations with government. Here is some of the progress we have seen over the course of the last week:
On Tuesday, we saw a landmark announcement from the Prime Minister on the next phase of reopening. Central to his announcement was the decision to amend social distancing guidance. The advice is to, if possible, keep 2 metres apart but, where it is not possible, you may keep a distance of ‘one-metre plus’, while taking steps to reduce the risk of transmission. This relaxation of the 2 metre social distancing rule will make a material difference to the viability of thousands of firms. The adjustment has a clear economic and productivity impact, particularly for certain sectors like manufacturing, the automotive industry, and hospitality who will now be able to operate close to full capacity.
The Prime Minister also announced that, from 4th July, pubs, hairdressers, and restaurants will be allowed to reopen in England provided they adhere to COVID-secure guidance. Alongside this, and from the same date, people will be able to stay overnight in self-contained accommodation, including hotels, bed and breakfasts, and campsites (provided that no more than two households stay together). We also heard that a number of leisure facilities and tourist attractions will reopen if they can do so safely. The list includes outdoor gyms and playgrounds, cinemas, galleries, theme parks and arcades, alongside libraries, community centres, social clubs, and places of worship. The safe reopening of these sectors marks a critical step forward in the recovery, meaning that millions will be able to return to work, and economic activity will resume.
Despite these positive steps forward, the Prime Minister was also clear that all new measures will be subject to constant review, and that the government will not hesitate to apply the handbrake or reverse the easing of the lockdown if the risk to public health increases.
While the Prime Minister’s announcement was hugely welcomed, on Thursday the CBI urged the government to get ahead of the economic curve with its next wave of business support. Firms across the UK recognise and appreciate the scale and speed of government schemes since the crisis – they have been a lifeline for many. But despite the gradual reopening of the economy, the survival of many firms in hard hit sectors hangs in the balance. Given the scale of existing initiatives, further action needs to be targeted and efficient. The CBI’s main proposals are to:
- Extend grant support schemes for SMEs via local authorities to help local businesses survive.
- Extend Business Rates relief in England to mid-sized businesses in all sectors for the next 3 months to help supply chains recover.
- Immediately defer VAT payments for businesses in 2nd quarter of 2020 to support cashflow and investment.
- Extend the deadline for the Coronavirus Business Loan Scheme beyond August for a further 3 months.
- Kick-start consumer demand through targeted VAT cuts in enabling sectors and reduce Stamp Duty for cheaper homes by increasing the tax-free allowance for 6 months.
- Accelerate local infrastructure upgrades in 2020/21 by increasing funding for local authorities so they can deliver shovel ready green projects and transport improvements.
This package of business support should be backed by a major Jobs Scheme focussed on helping young people into employment, delivered at speed and scale. The government has already shown its ability to be bold and decisive. By getting ahead of this tidal wave of economic damage with at scale, at speed, targeted support, it can help more businesses survive, protecting the jobs and life chances of a generation.
Barclays Economic Update: UK manufacturing pmi increased to 50.1 in jun’20
According to the data published by IHS UK flash manufacturing purchasing managers’ index (PMI) for jun’20 was 50.1. The manufacturing output index increased above neutral 50.0 value in jun’20, after a three-month period of decline. The recovery was supported by higher volumes of production due to a partial reopening of manufacturing plants in the country.
IHS flash composite output index, which includes manufacturing and services activity, increased to 47.6 in jun’20 from 30.0 in May’20. The jun’20 index indicated an improvement in the overall picture across the UK private sector, with the downturn in total business activity continuing to stabilise after the record decline due to lockdown during apr’20.
However, according to IHS survey, total new orders continued to decline in jun’20, with manufacturers indicating shortages of new sales to replace completed contracts. Survey respondents mentioned weak demand across the automotive and aviation sectors in jun’20.
In the following months, manufacturers indicated an improvement in business optimism to its highest since sep’18. businesses’ expectations of higher output in the next 12 months reflected hopes of a sustained recovery in manufacturing operations from the decline in production volumes witnessed during the initial phase of the covid-19 pandemic.
Eurozone Composite PMI increased to 47.5 in jun’20
According to data published by IHS flash eurozone PMI composite output index for jun’20 increased to 47.5 compared to 31.9 in May’20. The index in jun’20 has shown a consecutive monthly increase from 13.6 in Apr’20 through to 31.9 in May’20.
The 15.6-point increase over apr’20 to jun’20 was by far the biggest since the survey began with the exception of a record increase in may’20. The latest increase took the PMI to its highest since feb’20, though still indicated an overall decline in business output.
Output declined in both manufacturing and services, with the latter showing the slightly steeper rate of decline. However, both sectors reported reduced rates of contraction consequently for a second month the ongoing downturn in output was linked to a fourth consecutive monthly decline of inflows of new business, which in turn contributed to a further steep decline in backlogs of orders for companies to work through. However, rates of decline of both new orders and order book backlogs moderated considerably during jun’20.
In terms of regional output, France led the improvement with output returning to growth for the first time since feb’20, supported by an increase in manufacturing production. Germany lagged behind, reporting a steeper decline in output compared to the rest of the eurozone excluding France and Germany.
Food businesses guidance on Covid-19
Please find below a link to the latest coronavirus guidance from PHE, FSA and Defra, updated today (26 June) here. This is intended for all workplaces involved in the manufacturing, processing, warehousing, picking, packaging and retailing of food. It includes a new section on prevention of infection and a revised section on management of outbreaks, including contact details for health protection teams.https://www.gov.uk/government/publications/covid-19-guidance-for-food-businesses/guidance-for-food-businesses-on-coronavirus-covid-19
Questionnaire for businesses who move goods between Great Britain and Northern Ireland
Find out how you can help HMRC, and keep up to date with the changes due to the implementation of the Northern Ireland Protocol.
HMRC Update: We wrote to you recently to help you prepare for changes to the Coronavirus Job Retention Scheme (CJRS). This is a reminder that you can start to flexibly furlough eligible employees from 1 July onwards.
From 1 July, you can claim a more flexible grant for any employee you have previously received a CJRS grant for, and who now returns to work on reduced hours. You can also continue to claim for employees who stay fully furloughed.
You can find guidance on eligibility and how to claim for flexibly furloughed employees by searching for ‘Coronavirus Job Retention Scheme’ on GOV.UK.
What you need to do next
- claim for periods ending on or before 30 June, by 31 July – this is the last date you can make those claims
- agree the hours and shift patterns that you want your employees to work from 1 July
- pay your employees’ wages for the time they’re in work and apply for a job retention scheme grant to cover the remainder of their usual hours for which they are still furloughed
- claim for further furlough periods as needed – the first time you will be able to make a claim for days in July will be 1 July.
Live webinars offering more support on changes to the scheme and how they impact you are available to book online – go to GOV.UK and search ‘help and support if your business is affected by coronavirus’.
We’d be grateful if you don’t call us for more information. All details are on GOV.UK and in our webinars. This will leave our phone lines open for those who need them most.
What to do if you have overclaimed
Some employers have contacted us to let us know that they have claimed too much. If this applies to you, then all you need to do is tell us when you next claim so you can pay it back. You will be asked when making your claim whether you need to adjust the amount to take account of a previous error. Your new claim amount will be reduced to reflect this. You do not need to take any other action but should keep a record of this adjustment for six years.
If you’ve made an error in a previous claim but do not plan to submit further claims, you need to contact us to let us know, so that we can tell you how to repay the money.
Claiming for 100 or more employees?
Please use our new template to claim for periods starting on or after 1 July to ensure your claim is processed quickly and successfully.
You can find this template by searching ‘download a template if you’re claiming for 100 or more employees through the Coronavirus Job Retention Scheme’ on GOV.UK.
Updated guidance on military reservists
Our guidance now confirms you can furlough an employee who is a military reservist returning to work following a period of mobilisation ending after 10 June – even if they haven’t been furloughed before. Search for ‘Coronavirus Job Retention Scheme’ on GOV.UK to find out more.
Paying your employer National Insurance Contributions (NICs) and pension contributions
A condition of the CJRS grant is that you pay the related PAYE tax, NICs and pension contributions due on wages. Until 31 July you can continue to claim these for the hours the employee is on furlough. From 1 August employers will no longer be able to claim for NICs and pension contributions.
If you think you may struggle to pay your PAYE tax and/or NICs from August, please contact us as soon as possible, before we start action to recover the unpaid debt. We may be able to give you time to pay.
Protect yourself from scams
Stay vigilant about scams, which may mimic government messages as a way of appearing authentic and unthreatening. Search ‘scams’ on GOV.UK for information on how to recognise genuine HMRC contact. You can also forward suspicious emails claiming to be from HMRC to phishing@hmrc.gov.uk and texts to 60599.
I hope this information helps you and your business, and we’ll continue to keep you updated on scheme developments over the coming weeks.