Government needs to provide a stable environment for 2021 and British Business needs to have a clear plan
Government and Business have to work together if Britain is to get back on its feet in 2021, say leading tax and advisory firm, Blick Rothenberg.
Richard Churchill, business advisory partner at the firm said: “The key resolutions for business is to have a clear plan. Many businesses were forced to be reactive in 2020 and whilst the road ahead will still contain changes as the Covid restrictions ease it is essential to have a clear plan and forecast for 2021.
“Cashflow forecasting will remain vitally important for many businesses who exhausted their reserves in 2020 and are simply surviving. Ensuring forecasts include the impact of the Brexit deal, deferred tax liabilities from 2020 and current support measures ceasing in spring 2021 is critical for businesses.”
Richard said: “Government can play their part by providing medium to long term support and guidance as part of their fiscal policy.”
He added: “ A major criticism of the Government in 2020 was that too often the measures introduced were short term and constantly changing. The Government needs to provide a stable economic environment in which business can operate and then stimulate investment and growth.
“ This can be by Government alone or by encouraging investment in UK business from the private sector. Also, the level of debt taken on by businesses in 2020 needs to be addressed in order that future growth can be shared equitably between the Government, business owners and work force.”
Richard said: “ As 2020 thankfully draws to a conclusion our attention now turns to 2021. With a deal on Brexit finally done and vaccinations against Covid-19 accelerating the outlook is much brighter and we take the opportunity to look at what businesses and government should consider as part of their New Year resolutions when 2021 dawns:
“ For Business
Review their business plans and forecasts. Stress test assumptions as to when lockdowns will end, and contingencies might be needed
Make sure all previous tax deferrals and payment holidays are captured in financial forecasts. With furlough extended and applications still able to be made for government supported bank funding, make sure all these are utilised where appropriate
Take time to reinvigorate your culture and values as a business. 2020 was tough for many but as workforces come back together make sure they are fully inclusive
Retail sales methods have changed. Embrace multiple methods of distribution including bricks and mortar, online and third party market places
Use social media to connect with customers and build brand experience
Those with premises, work with landlords to agree a rental model that is fair to both parties
Embrace and invest in agile working to maximise output from your workforce
Review supply chains to become more flexible. Have the ability to switch suppliers if needed as there is still some uncertainty ahead
If you can pay suppliers including landlords, then pay. Treat all your suppliers with respect. Confidence in your own business will then grow.
Build on the solutions found in 2020 – Have you found a new, better way of doing business, just don’t revert to old habits
Be proactive and look to the future, many measures in 2020 were reactive and did not provide the business community with certainty for the future to make strategic decisions
Consider now what the end of the furlough scheme looks like and tell business owners, will it be phased out, sector specific, or based on which Covid tier you are in?
Acknowledge that there are gaps in the support. Reconsider measures to provide assistance to the 3m workers who were ineligible for support in 2020 to avoid a large, disenfranchised community.
Provide news on the successor loan scheme, many businesses took on large amounts of debt to survive. Greater debt is not the answer but an investment scheme for the private sector and government to share in future success would be an equitable solution
Provide clarity on business rates, many businesses including those most impacted by Covid-19 in retail, hospitality and leisure face a rates bill from April 2021. Further targeted assistance is clearly needed and must be advised early in 2021.
Incentivise investment from the private sector. Provide increased relief under the EIS/SEIS schemes or widen the net of companies that are eligible to receive this investment
Be imaginative and allow businesses to surrender their losses for a cash payment now. This will be recovered as the company becomes profitable, as it will start to pay tax sooner as it comes back into profit.
Continue to create funds and work with local authorities and businesses to repurpose town centres
Investment in training for technical colleges to develop courses that meet the needs of industries now, throughout the country to redeploy youth into skilled jobs with a long-term future
Ensure the large commitments made to infrastructure become a reality and get the simple projects underway as soon as possible. Post Brexit ensure that UK SMEs and genuine UK companies are the majority of contractors.”
Richard said: “ 2020 was an unprecedented year for both businesses and government. Many of the changes, including the manner and where we work and shop, will form part of our society going forward. However, the financial damage caused will take time to heal and it is important that business and government work together to rebalance the UK budget and reduce the deficit caused.
“Fiscal and investment decisions by government need to reflect the long-term solutions required to reduce this deficit. Ensure social gaps are not widened, resulting in an inclusive society and maximising the potential of everyone in the UK.”