Welcome to the second issue of “In a nutshell”, which, as you know, has been written against the backdrop of a much improved landscape compared to my first edition some four weeks ago.
The future is looking so much brighter, now that some normality is being restored to everyday life, the schools and nurseries are starting to reopen for some year groups at least, and friends and relatives are able to meet once again and share valuable time with each other.
Shops and showrooms are reopening, tradesmen are back on site and the hospitality and leisure businesses are figuring out how they can work in a new “socially distant” world.
However, it is the lasting impact that Coronavirus has on the economy which concerns me most.
- Even if businesses can reopen safely, will consumers continue to spend as they used to?
- Will the public have the confidence to book events and holidays whilst a proven vaccine fails to exist?
- Will some businesses be able to pay even part of their employees’ wages, and if not, will redundancies need to be considered?
These are all questions which business owners are right to ask, especially as the Government are looking to reduce the cost of their support interventions.
There are many businesses who will find it difficult to return to normal, with barbers, hairdressers and beauticians immediately springing to mind, but, with a sensible approach, there will be a way through.
One lesson we can all learn from the Coronavirus outbreak is the importance of good hygiene, and especially in these ‘up and close’ businesses, hygiene standards will never have been so important.
In general, the Chancellor’s financial interventions have been well received but the real test of the economy will come as they are slowly withdrawn.
Announcements made last week included detail of how the furlough scheme will work between August and October to make it more flexible for employers and how support for the self-employed will be extended into August after which both schemes will be removed.
The price of making the furlough scheme more flexible to employers which will allow them to furlough staff part-time effectively, is to require an increasing contribution towards staff costs during the furlough period, starting at covering the national insurance and pension in August, adding 10% of the gross salaries in September rising to 20% in October.
Self-employed workers will be able to claim a second grant in August equivalent to 70% of their average earnings capped at £6,570.
So until the next time, please Stay Alert so we can control this virus and return to normal as quickly as possible.