Sirius News Bulletin - 11th January 2021
This bulletin provides a summary of topical news, announcements and policy developments affecting business across the UK.
Covid-19
New lockdown grants to support businesses
Businesses in the retail, hospitality and leisure sectors that have been forced to close due to Covid-19 restrictions will receive a one-off grant worth up to £9,000. Businesses in other sectors which have been affected by the restrictions may also be eligible for local authority grants.
Read more about the grants at: https://www.gov.uk/government/news/46-billion-in-new-lockdown-grants-to-support-businesses-and-protect-jobs
Extension of the Trade Credit Reinsurance Scheme
The Trade Credit Reinsurance Scheme has been extended for six months until 30 June 2021. The scheme ensures that trade credit insurance coverage and credit limits are maintained during the Covid-19 pandemic to help UK businesses trade with confidence.
Read more about the scheme at: https://www.gov.uk/government/publications/trade-credit-reinsurance-scheme
UK economy likely to be 6% smaller
Tight social-distancing restrictions to slow the spread of the new variant of coronavirus could result in the economy being 6% smaller by Easter than the forecast by the Office for Budget Responsibility in November 2020.
Read more about the forecast at: https://www.resolutionfoundation.org/publications/macroeconomic-policy-outlook-q4-2020/
Brexit
Agreement still required on a number of issues
Agreement with EU member states is still required on a number of issues including security, data and the services sector even though a trade agreement between the UK and the EU has been reached.
To read more, go to: https://www.theguardian.com/politics/2020/dec/27/the-brexit-deal-is-done-but-many-crucial-issues-are-unresolved
VAT guidance published
HMRC has published guidance on the VAT treatment of ongoing transactions and goods that were in transit between Great Britain and the EU when the Brexit transition period ended on 31 December 2020. The guidance also confirms that goods received in Great Britain on or after 1 January 2021 will be subject to UK customs procedures and import duties, including import VAT.
To read more, go to: https://www.icaew.com/insights/tax-news/2020/dec-2020/clarity-over-vat-on-transactions-spanning-31-december
UK will take part EU research schemes
The UK will continue to pay into and participate in five EU research programmes, including Horizon Europe, which will succeed the current Horizon 2020 programme.
Read more about the research programmes at: https://sciencebusiness.net/framework-programmes/news/uk-eu-research-deal-glance
New scheme to support students to study and work abroad
A new scheme has been announced to replace the UK’s participation in Erasmus+ from September 2021. The £100 million Turing scheme will provide grant funding for 35,000 students in Universities, colleges and schools to go on placements and exchanges overseas.
Read more about the scheme at: https://www.gov.uk/government/news/new-turing-scheme-to-support-thousands-of-students-to-study-and-work-abroad
Workers rights could be weakened
The Institute of Public Policy Research has warned that the UK EU trade agreement could threaten workers’ rights and environmental protections.
Read more about the warning at: https://www.ippr.org/research/publications/the-brexit-eu-uk-trade-deal-a-first-analysis
International Agreements
UK signs trade deal with Turkey
The UK and Turkey have signed a tariff-free trading agreement to support the trading relationship between the two countries which was worth £18.6 billion in 2019.
Read more about the deal at: https://www.gov.uk/government/news/uk-and-turkey-sign-trade-deal
Brazil and UK to cooperate on digital innovation
An agreement has been signed between Brazil and the UK to accelerate digital transformation and innovation in public services delivery in the Latin American country.
Read more about the agreement at: https://www.zdnet.com/article/brazil-and-uk-to-cooperate-on-digital-transformation-and-innovation/
Retail
Increase in consumer spending at independent retailers
Research by Barclaycard has revealed that spending at specialist food and drink stores including off-licences, butchers and bakeries increased by 28.6% in 2020. The increase has been attributed to Covid travel restrictions and more consumers shopping locally.
Read more about the research at: https://www.retailtimes.co.uk/barclaycard-consumer-spending-fell-7-1-in-2020-amidst-a-year-of-restrictions-yet-lifestyle-changes-and-shifting-consumer-habits-led-to-growth-for-some-sectors/
UK shopper numbers fall by 23%
Footfall was down 31.8% in shopping centres, 21.9% in high streets and 16.8% in retail parks in the week to 2 January 2021 according to research by Springboard. Footfall across the UK was also 55.7% lower than in the first week of January 2020.
Read more about the research at: https://www.reuters.com/article/britain-retail-springboard-idUKL8N2JF265?edition-redirect=uk
Motor Industry
Carmakers have three years to source local electric car batteries
UK carmakers face a three-year scramble to source electric car batteries locally or from the EU to avoid tariffs on exports following the Brexit free trade deal, according to industry analysts.
Read more about the issue at: https://www.theguardian.com/politics/2021/jan/03/uk-carmakers-have-three-years-to-source-local-electric-car-batteries
Tax
Land transaction tax to increase in Wales
The Welsh Government has confirmed that residential land transaction tax (capital gains tax) will increase by 1% in 2021/22. The commercial land transaction tax threshold will also increase by 50% to £225,000, to help businesses recover from the pandemic.
Read more about the increases at: https://www.publicfinance.co.uk/news/2020/12/welsh-government-increase-land-tax
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