July 2021 Update – featuring additional news developments from our newsletter series. Stay informed with the latest news in business support and financial affairs.
Key Dates Coming Up
Payment on Account Due – 31st July
If you have a tax payment on account, remember to make your payment on time, which is due by midnight on 31st July
Employee Furlough Contributions Rise – 1st August
From 1st August employers of furloughed staff will have to contribute 20% of employees’ unworked wages until the scheme ends completely on 30th September. This is up from the 10% employers have to contribute for unworked hours during July, and in addition to National Insurance payments and pension contributions. The government will continue to top up employees’ wages, so they should still receive up to 80% of their pay for unworked hours up to a maximum of £2,500.
Deadline for Starting Collective Consultation – 16th / 31st August
Employers must start their collective consultation by 16th August if making 100+ redundancies on 30th September. For employers making 20 – 99 redundancies, the deadline for starting the collective consultation is 16th August.
What’s Happening This Month
Self Employed Tax Reform Announcement
This month HM Treasury has announced a simplification to tax reporting for self-employed workers and small businesses. Reforms to the tax system aim to make it easier and faster for small businesses to fill out their self assessment tax returns and avoid costly mistakes. Enforceable from 2023, new measures are designed to clamp down on promoters of tax avoidance. The changes will mean businesses will be taxed on profits arising in a tax year, rather than profits of accounts ending in the tax year. Under the current system, tax returns filed by the self-employed, sole traders and partnerships are based on a business’s set of accounts ending in the tax year (5 April). The government says that the new system is easier for businesses to understand and will prevent thousands of errors every year.
HMRC Crackdown on Fraud
In the 2021 budget announced in March, Mr Sunak promised tax reform and to sharpen up on fraud, tax avoidance and tax evasion, hoping to raise £2.2 billion over five years. We are now seeing more details emerge from talks about how the government plans to enact these measures. Members of the G7 signed a breakthrough tax reform deal in June, to establish a minimum global corporation tax, for the first time. Announced in July we are also seeing a crackdown on furlough fraud taking place, whilst there are also concerns about abuse of bounce back loans, of which 35-60% are estimated to not be repaid. Additionally HMRC has reported record high volumes of scams against taxpayers. Reports of suspicious activity to HMRC have risen by a staggering 70% + in a year. If you have received a suspicious communication, you can report it to HMRC here.
Dozer, Vice President of the UK and President of Central Chapter of Bikers Against Child Abuse kindly spoke to Sam and Prestige Business Management clients via zoom, about the work they do protecting and supporting children who are survivors of child abuse. This can vary widely and they offer support uniquely devised for each child and their personal situation. This was a valuable opportunity to find out more about the amazing and life changing care for children who so desperately need it, which has been supported in huge part by Prestige Business Management Clients. Huge thanks to you all for this and to those who attended.
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Spike in Inflation Will be Temporary – 19th July 2021
Inflation has risen sharply this year, driven in part by price rises in products like cars, chips and furniture, plus disruption to the supply chain. The rate of inflation increased from 1.5% to 2.1% in May, which is the highest it has been for nearly two years. So consumers are currently paying higher prices for new and used cars, consumer electronics, computer chips, furniture, appliances and sports equipment. According to the BBC “Some firms are struggling to secure summer items like garden furniture, picnic baskets and outdoor toys, as consumers prepare to holiday in the UK.” Lockdown dramatically changed many people’s spending habits. However it’s not yet clear whether this spike in inflation is part of a permanent, new trend in spending being ushered in, or a temporary disruption emerging now in relation to changes in spending behaviour during lockdown phases. Some experts think this could signal forthcoming economic instability, whereas others say that a current spike in inflation will be temporary and can be explained by the economy bouncing back. Read the article here.
Falling Demand for Office Space – 12th July 2021
The impact of the safety measures introduced to combat the spread of COVID-19 has dramatically changed working practice, not least the market and value of commercial property. A workforce well adjusted to remote working, digital workflow management platforms and uncertain futures are all driving businesses to restructure and consider flexible office working. An aftershock of the stay at home order enacted on 23rd March 2020, is a slump in demand for permanent office space. Some businesses have found their remote workers adjusted so well that they no longer want to pay expensive office rent, where they could alternatively be subletting desk space. Especially considering the ‘spacing out’ required to entice workers back into the workplace. Social distancing measures, increased need for ventilation and workforce nervousness about spending extended periods in shoulder rubbing distance with a large group of other people, means that traditional office space can only effectively welcome back fewer than half of its occupants, at any one time. Find out more here.
A return to office working 5 days a week is predicted to become the standard model within two years. This return to office working is being driven by the disruption to creative problem solving, but new working trends may also feature more prominently than we were used to pre-2020. Flexible office spaces offer trendy, ready-to-go workspaces, networking events and stocked kitchenettes, paving the way for a new world of work; one that celebrates the productivity power of a breakout space – and a weekly calendar of networking events. Flexible offices give you the agility to move straight in, shrink and grow your space depending on your headcount, budget accordingly with an all-inclusive cost and stay flexible with a monthly rolling contract. Flexible working seems to be the prevailing choice from workers and managers alike so far. There are a host of apps and online management tools to help streamline management processes and team working. Some industries have even seen an uptick in productivity from their workforce. Read more here.
B.A.C.A. – 1st July 2021
At Prestige Business Management, we strive to collaborate with ground-breaking partners that can provide real value for our customers. In this spirit of this ethos, we activly support and raise funds for Bikers Against Child Abuse (B.A.C.A.) as our charitable partner. So far Prestige has donated £6,154, added to that are other donations that Sam has managed to secure for B.A.C.A, totaling over £10,000 altogether. On Saturday 26th June, Sam was invited to the first BACA Central Chapter social event to take place since 2019. Where Dozer (Vice President of the UK and President of Central Chapter) awarded Sam & Prestige Business Management a certificate and special badge for all the work he has done in promoting the charity. Find out more here.
Client Referral Programme
We pride ourselves in treating our loyal clients with top notch perks and services. Our client referral programme is one way that we like to give back and reward you for doing business with us. You can recommend a friend to receive, up to £100 cash reward, per referral! All you have to do is recommend us – and make sure they tell us you sent them. We’ll do the rest
July Top Tips
The current spike in inflation is likely to peak before the end of the year. This could have a more pronounced effect on low income families combined with the planned withdrawal of the £20 universal credit boost and a potential third wave of the virus peaking in early autumn. Here are our top tips to prepare for possible price rises.
Think about how these events will impact the winter holiday season and plan ahead. Try to pay off any debt while your pounds have more power and that way you will have more credit to use if you get caught in a pinch. Increased inflation rates are predicted to be temporary.
If you have the storage space, buy non-perishable items in bulk while prices are lower. Toilet paper, tinned and dried foods and shampoo. When prices peak, consider purchasing loss leader products. These are items that are typically sold at discounted prices to draw customers to the store, where they will also buy plenty of regular priced items. Typically milk, eggs and toilet paper. Make use of offers and discount outlets. Those living on a fixed income, primarily retirees, and a proportion of students, will need to take more care than others over their spending.
Stick or Twist Bigger Purchases
If you are thinking about buying a big purchase item like a home or a car, you’re better off taking on the debt when rates are lower, rather than waiting until they rise along with inflation. Equally if you are not sure, it would be best to wait until rates stabilise. This is also true if you are considering refinancing your home. Do so sooner rather than later, when interest rates are low and you can lock in a low fixed rate. Responsible borrowing can help you prepare for inflation rate rises.
It is best not to set up new borrowing when inflation rates are high. If you can, build an emergency fund worth at least six months of your expenses regardless of where savings yields or inflation stand. But after that, higher inflationary environments are a particularly important time to make sure that you start searching for a better return.
Ensure a Diversified Portfolio
If you invest, there is no real need to adjust your strategy, particularly if you’re in it for the long haul. A diversified portfolio will work for you. Ensuring you have at least some components of a portfolio that typically perform well in inflationary environments is good enough. These are typically commodities and metals.
Invest in real estate
Real estate is a popular choice not only because rising prices increase the resale value of the property over time, but because real estate can also be used to generate rental income. Just as the value of the property rises with inflation, the amount tenants pay in rent can increase over time.
Invest in Yourself
Be prepared for an uncertain financial future by increasing your earning potential. Study, learn new skills and stay on top of business’s changing needs to not only inflation-proof your salary, but also recession-proof your career. Take care of your health and well-being while you have the opportunity. We don’t know what the outlook on the virus, tourism and entertainment will become in Autumn, so choose to enjoy good health and relative freedom during the summer months.
Prestige Business Management Works for You
At Prestige Business Management we can help your business understand the best solutions for the success of your business. Find out what we can do for you. Call us today on 0203 773 2927.