The UK is on course to leave the EU single market at the end of the year, which means the end of free movement of people too. Despite this, the Government has stated its commitment to protecting the rights of EU nationals and their family members who want to remain in the UK after Brexit.
It is in businesses best interests to take proactive steps in advance to ensure their employees retain the right to work in the UK and avoid business interruption.
EU Settlement Scheme
The EU Settlement Scheme (Scheme) has been set up to create a mechanism to support employees and requires UK based EU nationals to register to preserve their rights under UK law. This includes the rights to work, pensions, and healthcare.
It is vital that businesses assess whether, and to what extent, their workforce will be affected by the Scheme. EU, EEA or Swiss citizens and their family members who are living in the UK before 1 January 2021 need to apply to the EU Settlement Scheme to continue living in the UK after 30 June 2021.
How to assist your EU national employees
Make sure your workforce understands the steps they are required to take to lawfully be entitled to remain in the UK. This will depend on how long the employee has lived in the UK at the time they register.
Settled Status
EU nationals residing in the UK on or before 31 December 2020 with five years of continuous residence in the UK can apply for a new ‘settled status’ which will be similar to ‘indefinite leave to remain’ under current UK immigration law as it applies to non-EU nationals.
Pre-Settled Status
EU nationals residing in the UK on or before 31 December 2020 with less than five years of continuous residence in the UK must apply for a ‘pre-settled status’ to remain in the UK after 31 December 2020.
Non-EU Family Members
Non-EU family members of EU nationals who are residing in the UK before 31 December 2020 must apply for ‘pre-settled status’ or ‘settled status’ to protect their continuing rights to live in the UK after ‘exit’ day. It is also possible to bring non-EU family members living abroad to the UK provided that the relationship exists on 31 December 2020 and continues to exist when applying.
Beauhurst published results of a survey on the feelings of the Startup ecosystem in the UK with regards to possible government plans to overhaul CGT (Capital Gains Tax) on share disposal.
Currently, when a founder exits a business the first £1m of the proceeds is only subject to 10% tax, with the rest subject to 20% in most cases.
The government is proposing a 45% tax on disposal of those assets.
This would make it the highest in Europe, with all of the consequences that entail.
1. 85% of those surveyed said that they’d set up in another, more favourable location (in tax terms).
2. 88% said that jobs would move abroad.
3. 90% said that it would be harder to attract top talent.
4. 72% of Angels said they would be less likely to continue to invest in UK companies.
All of these scenarios would be catastrophic for the UK at at time when financial stimulus and innovation is needed most.
The high growth sector of the UK economy employs 3.5m people, all paying income tax, national insurance and VAT on whatever they buy.
Those companies would definitely have brought a proportion of inward investment to their businesses throughout their growth (which is then spent on staff, services provided by UK companies, etc.).
Let’s use back of a napkin maths. Let’s say that each person working for a high growth company (mostly well paid jobs) pays £16666 through the year in income tax, NIC and stuff like VAT.
That’s worth £58bn to the economy annually.
That doesn’t account for those fast-growing companies that have been acquired and now form part of a larger corporate machine.
This doesn’t account for the increase in spending a tech platform may encourage, or business efficiencies and productivity gains it may provide.
What none of these things mention is the risk that founders take to gain the potential high rewards that a tech platform scaling and then being acquired or going to IPO can bring.
Quite apart from the toll on mental health, it causes relationship break ups, debt, sleepless nights. It’s not a 9-5 job. People are putting their reputation, savings and everything else on the line (and the burden of responsibility that any good founder feels when they are invested in by outsiders).
To try and bracket that risk and the tax on the reward on the same level as an employee in a well paid 9-5 job is an insult, a deterrent and could stifle an entire generation of innovators (or force them to another country to try their luck).
Look across the pond to the US.
A tech founder could realistically exit their business and not pay a dime in tax on the first $10m of the sale of their shares in their own company. They’d pay 20% on the rest. That incentivises both investors and founders to innovate and scale a business.
Having the highest CGT in Europe does not.
It will harm more than just this current generation too.
Every founder I’ve ever met on my journey that’s made it to a pre-seed investment has a purpose of some kind. Ultimately, every single one of them wants to be an Angel investor themselves one day and ‘pay it forward’. That paying it forward is critical to the circular economy within the tech landscape. People get invested in, they grow a company, and if they have enough money they become an investor themselves to seed the next generation of tech companies.
Living in Norfolk, one of the things that caused a lag in the growth of the tech Startup scene here initially was the lack of exits. An ecosystem cannot exist without successful ex-founders who choose to reinvest in that cycle.
80% of the people surveyed by Beauhurst said that they would be unlikely to reinvest. Liquidity on disposal of a Startup is critical to the growth of further innovation and Startups in the UK.
We’ve already lost jobs from large companies due to Brexit, we’ve lost entire companies due to Brexit. If the government thinks it can rely on those corporates to maintain the country in a post-Brexit, post-Pandemic world, it’s deluded and smacks of the same overconfidence of many high street retailers who failed to change the way they do things and adapt to the new behaviours of its’ consumers.
We get that we have to reduce the borrowing that has spiralled thanks to the pandemic to offset the measures put in place to keep people in jobs. That money shouldn’t have been spent propping up ailing, dying giants in the form of large high street retailers that were going to die anyway. It should have been spent upskilling or helping people transition into better paid jobs in the digital sphere, for employers that would truly value them.
If anything, we need to seed the environment to create more high growth companies and the jobs that go with them. Imagine if we could double the amount of high growth companies in the UK over the next 5 years?
That would look like over £100bn in tax revenue for the UK, jobs created, inward investment pouring into the company paying for the growth of those companies, more confidence from the investment community to invest in those companies, more people paying it forward, more Angels, more people able to invest in VC funds and lending…
We also have to remember that a lot of the Angels that have helped grow the sector until now have been ex-corporates and landowners who’ve levied their assets to invest. That can’t go on forever, especially as we’re seeing more people turn to spread betting lower amounts via crowdfunding rather than getting involved.
The alternative is dwindling confidence that the UK is a hotbed of innovation that attracts more inward investment into Startups than any other country in Europe. People start to switch off, people lose the aspiration to do things that could improve processes, governance, the climate, stimulate consumer spending.
Don’t raise CGT.
Offer high growth companies (up to) the first £5m of their disposal free of ANY tax (on a disposal of £50m). Tax them at 20% for the rest. Sure, put a caveat in that the £5m is only tax free because it’s ringfenced for reinvestment.
If we tiered (the government likes loads of tiers, I’ve noticed that) that tax so that it represents 10% of the value of that disposal to an individual it means they’re likely to either start a new company with money behind them or invest in others.
At the bottom end, even if someone benefited from the sale of a company to the tune of £5m, they’d be tax free on the first £500k, with 20% being levied on the rest. The total tax to pay would be £900,000 (instead of £2,250,000). Would that encourage an entrepreneur to start again or invest in others at £25k a pop? Don’t sit there scratching your arse and thinking because the answer is yes.
The other thing that needs regulation is the amount of founder equity that some universities are taking in the UK. They should be capped at a maximum amount of 25% of dilutable equity. There is so much IP floating around the Universities that’s been left to rot due to ignorance/greed of Universities. No-one will invest in a startup that has 50% of the IP and founder equity belonging to a non-active partner. Stop it.
In our latest white paper speak to those involved in our online work experience. A programme devised by the team in our East region, when their latest group of work experience placements were unable to begin their placements due to the Covid-19 pandemic.
By moving the programme online, the students were still able to gain valuable experience and learn new skills.
Find out more about the programme as we hear from the students, their parents, their teachers and the Morgan Sindall Construction team, download the report here.
The research tells us that pre-Covid, 90% of startups fail (that includes all startups).
There’s a nice, confidence raising figure for you eh.
20% in Year 1, 30% in Year 2 and the rest in years 3-5 (if you can’t do the maths on the last bit then you should definitely get a CFO as your first co-founder).
What those stats don’t tell us is ‘why’?
WHY?
There’s a myriad of reasons, but the most common are:-
Poor management
Cash Flow
Lack of Funding
Poor market/product fit
Founding team implosion
Covid (and an inability to pivot to the ‘new normal’)
Some of that stuff is surmountable, some of it not.
Fintech for instance has had a huge focus in the post-Covid world, so I could just tell you to go build a fintech platform because investors are desperate for deal flow in that area. You may get money but still fall foul of all of the other reasons above, so let’s tackle those in brief.
Poor Management
The stats tell us that a startup with more than one founder is more likely to gain funding and it’s more likely to succeed. Accept your limitations and try and find a team to fit around you that make up for the skills you don’t have or could improve upon your ‘gifted amateur’ skills. I know this because I’ve been a lone founder and it’s (as the name would suggest), lonely. It also means that you don’t have a ton of cash for experts to do the stuff you’re rubbish at (at least at the start). It’s taken me time but diarising stuff and to-do lists really help to motivate you do the stuff you hate doing. I still push stuff down the list, but I’m getting better at it. You also need to remember that as you build a team, you need those people to buy into your vision. If you’re talking to prospective co-founders or employees, really dig into what they want now and in 3 years (don’t necessarily give them your vision in any detail beforehand, you want to hear who they are).
Cash Flow
Getting a good cashflow template is a real boon. Sticking to it is another, but you have to own it, particularly with a high growth tech startup. Once you get that first £100k+ of funding, people are going to want to know what you’re spending money on and that you’re sticking to the plan for it. Test your assumptions by dropping your revenue by 1/3rd and 2/3rds to see what effect it has on your burn rate (your investors certainly will). Don’t use hiring costs for people way before you’ll need them, think lean.
Lack of Funding
Well, that’s most startups in honesty. To give yourself the best chance possible, you either need to research the hell out of how to raise money and spend time building relationships with the kind of investors you want involved in your business. Otherwise, try and get onto an acceleration programme, into an accelerator, or onto programmes that can deliver the help you need. Only around 3% of startups end up actually attending an accelerator and not many more get invested in (something Magic Sauce is trying to change by making acceleration and investor visibility accessible to a larger audience).
Poor Market/Product Fit
It’s something we try and address with our free canvas available on the Magic Sauce site. Some investors say they aren’t swayed by market size (and it’s right, that’s not important on its’ own). Your product has to be compelling and able to solve problems for its’ audience. History is littered with startups that built something without first checking the size of the potential audience, whether a problem actually needed solving (that had a price ticket attached), or whether their product was usable by the target audience. Identify your audience, talk to your audience and keep them involved. Test and iterate. I have a motto that goes, “you can kick seven shades of shit out of an idea, but it’s illegal to do it to a founder”. Founders that can adapt their vision and product to meet the need of an audience succeed (with a ladle of resilience and ability to listen).
Founding Team Implosion
Horrible to witness and some good startups have fallen by the wayside, usually because of dollar signs in someone’s eyes. Protect the company, look to have solid “bad leaver” clauses in your Shareholders Agreement and robust Articles. Make sure that you’re all clear on vision and who should get what from the outset. Foundrs.com has a great (and simple tool) to give you a ballpark of who should get what to get the conversation rolling.
Covid
Covid has shot many a tech startup down in the last year, while others have thrived (see health/med/pharma/fintech). It doesn’t mean your idea isn’t investible, but it means you may be a bit less “sexy” right now if it’s not ready for market or already building traction/sales. Look at how you can pivot into different markets or adapt your platform. Investors like more than one revenue stream and potential audience (as do lenders) as it can provide an additional revenue stream and may bring forward the potential to step into a market you planned to hit in a few years. An example is one startup I helped last year. Their proptech business was focused on residential house checks. We had a chat and they pivoted into commercial property checks (properties were empty, they needed checking over).
That lot sounds simple, and it’s deliberately broad and high level. Each startup is unique and has its own advantages and disadvantages. Experience and good advice for your own situation is the best remedy and proactive path.
Feel free to add opinions, evidence or questions of your own.
Kris Jones
CEO, Techvelocity/Magic Sauce, Advisor, Mentor and Speaker
If you want a chat in confidence then get in touch here
Starting a new business can be a daunting process for both beginners and experienced individuals. Infrastructure, contacts, marketing, employees and supplies are all things you could easily lose sleep over. Then there is the most important thing, where are you going to get your business from?
In some cases an organic process of building the new business through word of mouth and a good marketing strategy will be enough to get regular enquiries and generate income. However, in some industries there will be a regular requirement to obtain formal contracts in order to secure the short and long term sustainability of the business. In all cases, winning a valuable contract can not only help sustain the business but allow it to grow and thrive.
How can a bid writing company help?
That’s where a good bid writing company can make the difference. By engaging the services of an experienced bid writer, you can find suitable tenders available in your industry that match your specific requirements. Contract values can range from a few thousand pounds to a few million, so there is a contract available for all business sizes and experience levels. All tenders are not made equal, with some being more suited to new companies than others.
What a bid writing company like Tenderhelp will do is consider many factors, including: your business aspirations, current situation (including resources and previous experience), competitiveness of the industry, desired geographic area etc. and advise which tenders are the most appropriate for you and would give you the very best chance of being successful.
HMRC are sending ‘Nudge letters’ recently to individuals to check that their personal tax affairs are up to date and have been correctly disclosed on their UK tax returns. HMRC have issued these letters to taxpayers where via automatic exchange of information from other countries that the individual may have offshore income or gains. HMRC do not indicate which tax year it relates to, therefore it could be multiple.
HMRC generally give 30 days from the date of the letter to respond to these letters.
What action should I take?
There is no need to panic if you receive one of these letters, as HMRC have various reasons for sending them to individuals:
Discrepancies in the data received from overseas tax authorities which HMRC is unable to reconcile may be a reason for the request.
Changes to the individual personal circumstances or tax laws which have resulted in earlier advice obtained being out of date.
New information may be supplied to HMRC (e.g property purchases etc.) and this needs clarifying with them.
If you do receive a letter, we would recommend that you contact your usual tax advisor for support.
Disclosures
If you do have income and or gains to declare there are a variety of HMRC campaigns potentially available to you:
A disclosure can be made via the Worldwide Disclosure Facility, Let Property Campaign, and any Digital Disclosure Service or Contractual Disclosure Facility (deliberate omission) if there are income and/or gains to declare.
HMRC usually impose a 30-day timescale, however, if it is not practical to respond in this time, an extension will be required.
Tax consequences
There may be tax consequences of not providing a response to HMRC if later untaxed income and or gains are discovered:
HMRC may open an enquiry into an individual’s tax returns for specific tax years
HMRC can impose penalties for failure to notify based on Potential Lost Revenue depending on the individual’s behaviour. Penalties may vary but this can be up to 200% if it involved an offshore matter.
False statements could result in criminal prosecution
Price Bailey can take the burden of the HMRC enquiry from you by:
Preparing and filing of any undisclosed income and gains to HMRC
Responding to HMRC on your behalf if you receive such a letter.
If information does need to be disclosed to HMRC, we would be happy to discuss with you the various disclosure methods available and submit the disclosure for you
For any assistance needed please contact Nikita Cooper or Jay Sanghrajka.
This article was written by Nikita Cooper, Tax Director at Price Bailey. If you have any questions and would like to speak to Nikita, please contact us on the form below.
We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide, and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.
You can view this article in its original setting with Price Bailey Here
Individual savings accounts (ISAs) and their various predecessors offer savers the ability to hold cash or a wide range of investments with no tax due on returns. However, for some, the complexity around some of these vehicles has inhibited their full use within their financial plans.
When were ISAs introduced?
The first precursor to ISAs were Personal Equity Plans (PEPs), which were introduced by former Chancellor Nigel Lawson in 1986 to encourage wider ownership of equities. At its peak the annual allowance was limited to £3,000 into one single company or £6,000 into a collective investment. However, some savers were put off by the restriction of only being able to hold equities. Accordingly, Tax-Exempt Special Savings Accounts (TESSAs) were introduced by the then Chancellor John Major in 1990 to provide an alternative of holding cash.
Neither of these vehicles would survive the new Labour government of 1997 with Individual Savings Accounts introduced in 1999 and further contributions to both PEPs and TESSAs stopped. However, the tax advantages of any existing savings continued with TESSAs able to roll into ISAs on maturity and PEPs converted to ISAs in 2008.
Why the history lesson?
As neither vehicle has been available for new funds for more than 20 years the precise detail of each is somewhat redundant. However, those savers who did make use of these early iterations of the ISA will have been able to make substantial funding into tax-free vehicles as well as enjoying anywhere up to 34 years of growth on their savings!
This is highlighted by the increasing number of ‘ISA millionaires’ in the UK who have managed to save at least £1m in ISAs with the majority having started this before ISAs even existed. While there have been several formats and even more changes to restrictions, rules and funding limits, those that navigated these will have benefited hugely.
The most flexible ISA ever!
In 2013 the option to hold shares listed on the Alternative Investment Market was introduced, giving savers the option to build an ISA portfolio qualifying for inheritance tax exemptions for the first time.
Following this, ISAs were launched with a separate contribution allowance for stocks and shares (£7,000) and cash (£3,000, if used reduced stocks and shares allowance), which prevailed until 2014 when savers were given the option to utilise the full allowance (£15,000) in either a stocks and shares or cash ISA, or a combination of both. This provided much more flexibility to amend the way ISAs were used as life changers, such as moving investment ISAs to cash to reduce risk or to invest cash ISAs to achieve higher growth.
From 2016 Flexible ISAs were introduced allowing savers to make withdrawals and return these funds to the ISA in the same tax year without it counting as a new subscription; however, caution was needed as not all ISAs were flexible ISAs.
Who does not love an acronym?!
In recent years, further iterations of the ISA have been introduced:
IFISAs – innovative finance ISAs providing access to peer-to-peer lending
LISAs – lifetime ISAs to encourage saving for house purchase or retirement with government ‘top-up’ of 25%
JISAs – junior ISAs allowing savings for children up to age 18
HTBISA – help to buy ISAs to assist savers from age 16 in the purchase of a first home (no longer available)
While most of these products have helpful applications, it has been suggested that the increase in options has led to perceived complications with ISAs. Previously, relative simplicity compared to other options such as pensions had been a strength of ISAs.
What does the future hold?
While there was no specific mention at the recent spending review, the consensus is that the UK is likely to face increased taxation in the near future to repair the damage done to public finances by the COVID-19 pandemic. Nevertheless, it is clear this will be a difficult balance as direct increases to taxation could well derail a potential economic recovery.
It is relatively likely that at least part of the burden will fall on savers and investors, in particular much has been made of the disparity between rates of income tax and capital gains tax (CGT). If we do see increases to CGT, this will make ISAs even more attractive in allowing investors to build a portfolio free of CGT (as well as income tax).
However, with the exception of the government incentive on lifetime ISAs there are no initial tax reliefs for investing in ISAs and therefore they are typically funded from taxed income, which can be inefficient for higher and additional rate taxpayers (assuming 45% tax and 2% National Insurance on the full amount, an additional rate taxpayer would need to earn £37,735 to fund their £20,000 ISA allowance).
Therefore, ISAs are likely to retain their current role as an extremely valuable and flexible part of an overall financial strategy, but for many they will work particularly well alongside other tax-efficient methods of saving such as pensions and venture capital trusts.
Start a conversation today
Get in touch with a member of the Mattioli Woods team below. We’re always on hand to assist.
This article has been produced for information purposes only. It is not intended to be an invitation to buy or act upon the comments made. All investment decisions should be taken with advice, given appropriate knowledge of the investor’s circumstances and one must satisfy certain investor criteria before being considered eligible to invest. Any forward-looking statements and forecasted returns represent the current views of Mattioli Woods plc and may be subject to change. Your capital may be at risk and past performance is not a guide to future returns. Mattioli Woods plc is authorised and regulated by the Financial Conduct Authority.
“I set up The Engaging People Company in 2017 because I know that engaging people is key to success.
I have seen first-hand how powerful it is when we engage people. My background is in communications and engagement and I have over 20 years’ experience working in this area. Prior to setting up The Engaging People Company up I was the director of engagement for a not-for-profit housing provider, responsible for both staff and customer engagement. During my time there, I was so proud to lead the organisation’s successful entry onto the Times Top 100 list three years in a row.
Over the last two decades, I’ve worked in-house and within consultancies in Norfolk and Newcastle-upon-Tyne for a range of organisations operating in social housing and the public sector as well as the private sector too. I have always taken a focused and targeted approach to engaging people, depending on the needs and priorities of the different people we are engaging. In this way, we can reach more people.
I’m also a qualified coach and mentor and over the last decade, I’m had the opportunity to support many different coaches to achieve their goals. I’m an experienced facilitator too and I like to lead sessions in an inclusive and empowering way so that everyone gets a say.
I’m passionate about supporting and empowering wellbeing and I’ve worked with a number of clients to develop and embed wellbeing plans. I also get to work with some amazing colleagues to deliver wellbeing themed training.
I have founded the company on my own personal values and these underpin how I live and work.
Aside from The Engaging People Company, I write – fiction, poetry, prose, shopping lists….anything and whenever I can. Most recently, I have been curating ‘When The World Paused’, a diary of lockdown featuring 76 voices. (The book is coming soon).
And, I spend time with my amazing family. In everything that I do, I’m driven to be an empowering role model for my daughter Thea. I want to inspire her to fulfil her own ambitions, whatever they may be. As a motto that I live by goes:
Can we help? We’d love to hear from you. Please do get in touch:
This week, NAAME coordinator, James was lucky enough to catch-up with Rachel Littleboy, Marketing Executive at Fix-a-Form International and Db Engineering Services. Conversations of course lead down the path of how Lockdown had treated Rachel and the company. The conversation alluded to the group’s great resilience and intuition to diversify their production to support the ventilator challenge.
Db Engineering Background
Db Engineering is a family-owned business, part of the Denny Bros Group and has been manufacturing Fix-a-Form® leaflet label machinery since 1982. They have an international reputation for their bespoke machines made at Denny Bros Group headquarters in Bury St Edmunds, which is then shipped all around the globe.
Industry Diversification / Demand Valve Diversification
Rachel Littleboy, Marketing Executive at Fix-a-Form International/Db Engineering told me:
Due to the nature of our industry and the fact that our engineers have to travel abroad to install the machinery, coronavirus halted our plans for 2020. We were supposed to be exhibiting at a leading trade show in the label world in Chicago this September, and all plans of engineers travelling to make amendments or servicing to machines had to be cancelled. If staff could work from home they have been, I was luckily enough to be able to do this, which has seen its own challenges but has generally worked very well.
Ever the optimist amidst a global pandemic, I started to think of other industry sectors we could help out whilst we were technically all ‘grounded’. I saw on the local news that local firm Meditech, in Halstead, who manufacture medical equipment were switching their production lines to help make ventilators, I contacted Meditech to see if there was anything we could do to help with the demand. They placed an order for ‘Entonox demand valves’ so we stopped the manufacturing of our parts and switched production. The parts were produced and delivered all within a few days. Our work tends to be one-off parts or low quantity runs, meaning our engineers work to very fine tolerances. Meditech was pleased with the work and gave special thanks to our engineers that produced them. We have completed subsequent orders for Meditech since and have now produced over 1200 demand valves for them.
Reduced Lead Times
Looking at the global pandemic from the label’s perspective, I created a white paper on the effects Covid-19 has had on the label printing industry. You can download the white paper for free via this link – https://fix-a-form.com/covid-19/
Luckily, we are in a position to be able to switch production and prioritise new work at short notice at the moment, meaning parts can generally be ordered and produced within days rather than weeks. Our team at Db Engineering have worked throughout the pandemic and it is pleasing that in these difficult times we are able to use our lathes and milling machines to help sectors with an increased demand.
If you require any parts manufactured or would like any further information on the services we offer, please email enquiries@db-engineeringservices.co.uk or call us on 01284 723144
With special thanks to Rachel Littleboy, Marketing Executive at Fix-a-Form International & Db Engineering for sharing their fantastic diversification story with us. A true example of British Manufacturing stepping up to meet the demands and challenges that the pandemic surfaced.
This week, NAAME Project Manager, James was lucky enough to catch-up with Sunil Vara, Business Engagement Manager for UK Centric Supply Chains. Aston Univeristy’s UK Centric Supply Chain Programme is a fully funded consultancy support package to further investigate your supply chain.
UK Centric Supply Chain Programme
Aston University’s UK Centric Supply Chain Programme still have availability and can help you investigate your supply chain! There are still places left for their fully funded 1-2-1 consultancy-based support and open, interactive workshops.
The programme will asssit companies in the manufacturing, engineering, food & drink sectors to strengthen the supply chain through mapping assessment and improve existing capabilties. Firms will gain a better understanding of their business in terms of customer, geography, locations and relationships with suppleirs.
In addition, the programme offers expert advice and will assist your business to devleop an action plan to improve and strengthen your suplpy chain moving forward.
Why Should Businesses Apply?
The programme is fully funded and therefore has no cost. Allowing all buisnesses access to free, expert advice.
There is support to identify issues withinteh business
An action plan will be produced to supoprt de-risking o the supply chain
Support to develop a strategic plan will also be offered
Enables businesses to have a more overarching/strategic view on associated processes
What is the Value to Businesses?
Outside perspective in and provides non-biased view on the supply chain from Aston University
Provides a holistic, validated and verified road map of the supply chain
Provokes thoughts and questions surrounding unknowns within the business
Fully tailored and adaptable to most business both SME and large businesses
High level view to support strategic planning
Potential for cost and risk reduction
1st Tier and lower Tier assessment and visibility
Who’s eligible?
This programme is free to SME’s with a minimum of 12 hours of bespoke support to look at your supply chain. This proejct is funded by the European Regional Development Fund and has certain restrictions with postcodes. Please review the diagram below for a rough guidance on eligible areas. If you require any further information, assistance or guidance, please don’t hesitate to get in touch and James will make formal introductions to the project lead.
With special thanks to Vara Sunil from UK Centric Supply Chains who took the time to inform us on this great fully funded programme for SMEs across various sectors. If you would like to find out more information, please don’t hesitate to get in touch.
With government advice and support changing rapidly as the Covid-19 pandemic evolves, it’s hard to keep up with the latest news in business support. From closures, furloughed staff, huge drops in productivity and increased remote working, your business or organisation is most definitely not the only one facing uncertain times, as every sector faces immense pressure in knowing what to do next.
Here at Hethel Innovation, we’re still offering our support to businesses the best we can and understand our role is more important than ever as businesses start to adapt to new ways of working. So we’ve put together this live blog to feature all of the funding newly available for small businesses and start-ups during Covid-19, updating any changes as they happen. Whether you’re unsure if your business is eligible for any funding or need more information on how to apply, these direct links will take you straight to where you can find out more and get started.
Our entire team are always on hand to offer free support with funding bids, such as proof-reading, critiquing or any other queries. Get in touch with us regarding your Coronavirus concerns and any other questions by giving us a call or sending over an email.
For Businesses:
(Scroll down for the latest funding for charities)
Latest Funding Opportunity: Power To Change Community Business Renewal Initiative
Power To Change has launched a new £3million support package providing grants, 2 match funding programmes and tailored support to help communities protect their assets. The renewal fund offers unrestricted grants of between £10,000 and £20,000 in order for community businesses to adapt, renew and rebuild, with areas of priority being those in England with high levels of deprivation and organisations led by disabled people, Black, Asian and Minority Ethnic (BAME)-led or BAME-supporting businesses.
Round Two – NOW OPEN closes Tuesday 12th January 2021 4pm
Round Three – Tuesday 2nd March 2021, 10am-1pm
Social investment Business: Resilience & Recovery Loan Fund
The £25million fund for emergency loans to social enterprises and charities is closing for new applications on the 31st March. Social Investment Business has already approved loans of £100,000 – £1.5million with no fees or interest for the first 12 months to over 50 social enterprises and charities, which are unable to trade normally and face financial difficulty.
The scheme which saw many businesses through the first lockdown was due to end on the 1st of November, with the Job Support scheme taking its place. However due to further lockdowns in England through the end of 2020 and into 2021, the scheme has been extended to cover the period from 5th November all the way through until spring 2021. Employees will receive 80% of their current salary for hours not worked up to a maximum of £2,500. Businesses will still have the option to bring back furloughed worked on a part-time basis, or continue on a full -time furlough basis. The cost to employers retaining employees has also been reduced for this extended period, as they are only asked to cover National Insurance and employer pension contributions.
With the Job Retention Scheme (Furlough) now set to end in March 2021, the Chancellor Rishi Sunak may still bring in the new Job Support Scheme to replace it in the spring, to further support individuals and businesses. It holds string of different support solutions for businesses which are forced to close due to local lockdowns and those businesses who are open but struggle to bring in custom, to receive a percentage of their income paid by the government strictly depending on whether they meet the requirements.
Businesses instructed to close during local lockdowns and the national lockdown (5th Nov-2nd Dec 2020) are able to receive financial support from their local councils. For every 3-week lockdown period, businesses that occupy a premises with a rateable value of less than £51,000 will receive £1,000 safety net to help protect them. Businesses with a rateable value of £51,000 or more will receive £1,500 for every 3-week lockdown period. Local authorities will receive a 5% top-up of funding to support other businesses affected by closures.
The new £2billion scheme to help young people into work will feel like a life-line for many 16-24 year olds who are deemed to be at high risk of long-term unemployment. For businesses who are seeking to create job placements for young people, the funding received for employer applicants could help make the decision a lot easier. Employers who are able to create 30 or more 6-month job placements can apply and receive 100% of the relevant National Minimum Wage for 25 hours a week per job, plus National Insurance and funds for uniforms and other enrollment costs. The creation of 30 placements without replacing existing vacancies is a tough ask for some, therefore the scheme allows organisations to partner with others, in order to create the minimum 30 placements.
The scheme is open until December 2021 with the possibility of extension. Find all of the information through the link above.
A new £20 million funding scheme launched by the Government is set to help smaller businesses recover from the effects of Covid-19. Small and medium sized businesses in England will be able to apply for between £1,000 – £5,000 to help them access new technology and other equipment to aid recovery and growth. The funds can also be used for legal, financial or other types of advice to help during this period. Funding has been spread between Growth Hubs within each Local Enterprise Partnership (LEP), with a minimum of £250,000 for all LEP areas. So, for businesses in our region, contact New Anglia Growth Hub on how to access the funds.
The BT Small Business Support Scheme is designed to build recovery and growth for SMEs following COVID-19 and features a range of support aimed at boosting connectivity, cash flow and confidence. Ultra fast business connections, mentoring services and bursaries of £1,000 for UK tech start-ups are all readily available by connecting BT Group directly.
Future Fund- For Innovative Businesses
https://www.gov.uk/guidance/future-fund
In the works for UK businesses driving innovation and development, the new billion-pound support package named Future Fund, could be a saviour for keeping afloat in order to come out the other side of current lock-down. With the government announcing more ways that businesses can access this funding in the coming weeks, so far we know it can help SMEs focusing on research and development, as long as the business is an unlisted UK registered company that has previously raised a certain amount in equity investment from third party investors. The scheme has bee extended and will now close Monday 30th November 2020.
Helping SMEs bounce back, this loan scheme launched at the beginning of May, offering between £2,000 – £50,000. The length of the loan can extend up to 6 years, with the government guaranteeing 100% of the agreed loan amount, with no fees or interest to pay for the first 12 months, but with interest rates rising to 2.5% after that. With 11 lenders participating in this scheme, look to approach the most suitable lender for your business. If the first choice declines your bid, there is always the option to apply with another one. If your business needs more support with this, get in touch and we can lend a hand.
Here’s a different type of scheme for smaller businesses to access loans and other kinds of finance of up to £5 million. The government promises 80% of the finance to the lender and will pay the interest and any fees for the first 12 months. There are over 50 lenders supporting this scheme, however businesses will need to show that they have been greatly impacted by Covid-19 and that the business would be viable were it not for this.
This funding is targeted at front-line charities delivering vital work throughout Coronavirus, to which the government promises a £750 million pot. £370 million of this pot is allocated for small and medium sized charities making an impact during lock-down by delivering food, essential medicines, providing financial support, to name some. It is thought this funding will be delivered via means such as the National lottery Community Fund grant and government departments. Information states that departments are currently working to determine priority charities, with the aim to distribute the funding in the coming weeks.
For all available government support and advice during Coronavirus, visit the main government guidance page here. Or if you need more help finding which financial aid from this list is best suited for your business, give this Gov Financial Support finder a go.
With government advice and support changing rapidly as the Covid-19 pandemic evolves, it’s hard to keep up with the latest news in business support. From closures, furloughed staff, huge drops in productivity and increased remote working, your business or organisation is most definitely not the only one facing uncertain times, as every sector faces immense pressure in knowing what to do next.
Here at Hethel Innovation, we’re still offering our support to businesses the best we can and understand our role is more important than ever as businesses start to adapt to new ways of working. So we’ve put together this live blog to feature all of the funding newly available for small businesses and start-ups during Covid-19, updating any changes as they happen. Whether you’re unsure if your business is eligible for any funding or need more information on how to apply, these direct links will take you straight to where you can find out more and get started.
Our entire team are always on hand to offer free support with funding bids, such as proof-reading, critiquing or any other queries. Get in touch with us regarding your Coronavirus concerns and any other questions by giving us a call or sending over an email.
For Businesses:
(Scroll down for the latest funding for charities)
Latest Funding Opportunity: Power To Change Community Business Renewal Initiative
Power To Change has launched a new £3million support package providing grants, 2 match funding programmes and tailored support to help communities protect their assets. The renewal fund offers unrestricted grants of between £10,000 and £20,000 in order for community businesses to adapt, renew and rebuild, with areas of priority being those in England with high levels of deprivation and organisations led by disabled people, Black, Asian and Minority Ethnic (BAME)-led or BAME-supporting businesses.
Round Two – NOW OPEN closes Tuesday 12th January 2021 4pm
Round Three – Tuesday 2nd March 2021, 10am-1pm
Social investment Business: Resilience & Recovery Loan Fund
The £25million fund for emergency loans to social enterprises and charities is closing for new applications on the 31st March. Social Investment Business has already approved loans of £100,000 – £1.5million with no fees or interest for the first 12 months to over 50 social enterprises and charities, which are unable to trade normally and face financial difficulty.
The scheme which saw many businesses through the first lockdown was due to end on the 1st of November, with the Job Support scheme taking its place. However due to further lockdowns in England through the end of 2020 and into 2021, the scheme has been extended to cover the period from 5th November all the way through until spring 2021. Employees will receive 80% of their current salary for hours not worked up to a maximum of £2,500. Businesses will still have the option to bring back furloughed worked on a part-time basis, or continue on a full -time furlough basis. The cost to employers retaining employees has also been reduced for this extended period, as they are only asked to cover National Insurance and employer pension contributions.
With the Job Retention Scheme (Furlough) now set to end in March 2021, the Chancellor Rishi Sunak may still bring in the new Job Support Scheme to replace it in the spring, to further support individuals and businesses. It holds string of different support solutions for businesses which are forced to close due to local lockdowns and those businesses who are open but struggle to bring in custom, to receive a percentage of their income paid by the government strictly depending on whether they meet the requirements.
Businesses instructed to close during local lockdowns and the national lockdown (5th Nov-2nd Dec 2020) are able to receive financial support from their local councils. For every 3-week lockdown period, businesses that occupy a premises with a rateable value of less than £51,000 will receive £1,000 safety net to help protect them. Businesses with a rateable value of £51,000 or more will receive £1,500 for every 3-week lockdown period. Local authorities will receive a 5% top-up of funding to support other businesses affected by closures.
The new £2billion scheme to help young people into work will feel like a life-line for many 16-24 year olds who are deemed to be at high risk of long-term unemployment. For businesses who are seeking to create job placements for young people, the funding received for employer applicants could help make the decision a lot easier. Employers who are able to create 30 or more 6-month job placements can apply and receive 100% of the relevant National Minimum Wage for 25 hours a week per job, plus National Insurance and funds for uniforms and other enrollment costs. The creation of 30 placements without replacing existing vacancies is a tough ask for some, therefore the scheme allows organisations to partner with others, in order to create the minimum 30 placements.
The scheme is open until December 2021 with the possibility of extension. Find all of the information through the link above.
A new £20 million funding scheme launched by the Government is set to help smaller businesses recover from the effects of Covid-19. Small and medium sized businesses in England will be able to apply for between £1,000 – £5,000 to help them access new technology and other equipment to aid recovery and growth. The funds can also be used for legal, financial or other types of advice to help during this period. Funding has been spread between Growth Hubs within each Local Enterprise Partnership (LEP), with a minimum of £250,000 for all LEP areas. So, for businesses in our region, contact New Anglia Growth Hub on how to access the funds.
The BT Small Business Support Scheme is designed to build recovery and growth for SMEs following COVID-19 and features a range of support aimed at boosting connectivity, cash flow and confidence. Ultra fast business connections, mentoring services and bursaries of £1,000 for UK tech start-ups are all readily available by connecting BT Group directly.
Future Fund- For Innovative Businesses
https://www.gov.uk/guidance/future-fund
In the works for UK businesses driving innovation and development, the new billion-pound support package named Future Fund, could be a saviour for keeping afloat in order to come out the other side of current lock-down. With the government announcing more ways that businesses can access this funding in the coming weeks, so far we know it can help SMEs focusing on research and development, as long as the business is an unlisted UK registered company that has previously raised a certain amount in equity investment from third party investors. The scheme has bee extended and will now close Monday 30th November 2020.
Helping SMEs bounce back, this loan scheme launched at the beginning of May, offering between £2,000 – £50,000. The length of the loan can extend up to 6 years, with the government guaranteeing 100% of the agreed loan amount, with no fees or interest to pay for the first 12 months, but with interest rates rising to 2.5% after that. With 11 lenders participating in this scheme, look to approach the most suitable lender for your business. If the first choice declines your bid, there is always the option to apply with another one. If your business needs more support with this, get in touch and we can lend a hand.
Here’s a different type of scheme for smaller businesses to access loans and other kinds of finance of up to £5 million. The government promises 80% of the finance to the lender and will pay the interest and any fees for the first 12 months. There are over 50 lenders supporting this scheme, however businesses will need to show that they have been greatly impacted by Covid-19 and that the business would be viable were it not for this.
This funding is targeted at front-line charities delivering vital work throughout Coronavirus, to which the government promises a £750 million pot. £370 million of this pot is allocated for small and medium sized charities making an impact during lock-down by delivering food, essential medicines, providing financial support, to name some. It is thought this funding will be delivered via means such as the National lottery Community Fund grant and government departments. Information states that departments are currently working to determine priority charities, with the aim to distribute the funding in the coming weeks.
For all available government support and advice during Coronavirus, visit the main government guidance page here. Or if you need more help finding which financial aid from this list is best suited for your business, give this Gov Financial Support finder a go.
Well, it was certainly a very busy last quarter to cap off what has been an extremely tumultuous year!
Financial markets were jittery during October as the ‘2nd wave’ of COVID-19 infections really took hold in Europe and the US. Thankfully, November saw the arrival of viable vaccines and a Biden win in the US elections which helped fuel a remarkable bounce in markets. The month of December was far quieter for markets despite the news that a Brexit deal had been agreed and a new far more infectious variant of the virus had been discovered in the UK.
Despite the disruption caused by the virus, the World’s financial markets have had a strong year with most markets finishing the year in positive territory. However, the UK market has been the ugly duckling among international markets in 2020 largely due to its heavy exposure to oil companies, which have had a terrible year as demand for oil dropped off a cliff when countries across the World implemented draconian measures to suppress the transmission of the virus.
With all that has happened during 2020 it is an appropriate time to reflect and consider the lessons we can take from this, and past experiences.
Learning from history and experience
Without a doubt the pandemic is the biggest world event for at least a generation, posing possibly the sternest challenge the world has faced since World War II. Fortunately, the news that highly effective vaccines have been developed means that we should now be at the beginning of the end in terms of the pandemic upending our lives. This short note is intended to highlight just some of the lessons we should look to take from history’s big events.
Be prepared for the highly improbable
In the UK death from infectious disease went from the most common cause of death in 1915 to one of the rarest by 2015. The dramatic decline in the number of people dying from infectious diseases in the 20th Century was driven by factors such as mass vaccination programmes, rising living standards, and improvements in nutrition and hygiene.
Over the last century we have become so good at preventing pandemics that few people before January 2020 assumed an infectious disease would ever impact their lives. Many epidemiologists have consistently warned that we have been overdue a pandemic and that it was only a matter of time until one would befall us. However, as a society we became complacent and began to believe that pandemics were a historical malady or something that happened in less developed countries.
It is therefore arguable that if COVID-19 had happened in the early to mid-20th Century society would have been much better prepared as our collective understanding of the danger presented by disease outbreaks would have been far fresher in our minds. Moreover, as we have become further and further removed from past events, we no longer have a grasp of the risk posed by a pandemic striking, consequently we have been content in seeing our taxes diverted from funding medical advances aimed at tackling infectious diseases into other areas that could be perceived as being more deserving and in need of immediate attention.
More than 100 years of ‘calmness’ in relation to infectious diseases has understandably bred complacency. We see the same type of thing happen to economies and financial markets. When there are no recessions or market crashes people take on more and more risk, then when financial meltdown does occur the impact tends to be far worse than if people had been cognisant to the actual risks and behaved in a more responsible manner.
Good times come and go, as do the bad times. Whilst history may not repeat itself it does at least rhyme, however, we as humans have a habit of forgetting this.
Buy and hold: Save like a pessimist but invest like an optimist!
Human progress and the improvements that we enjoy as a society are a slow and gradual process, taking far too long for anyone to notice let alone make the evening news. The stories that grab people’s attention tend to be the bad news stories that happen instantly. History has shown us time and time again that in the long run things are generally pretty good however, in the short run it is usually pretty bad.
Investors require a great deal of skill and patience to reconcile the internal conflict of being a short-term pessimist but an optimist in the long run. For at times investors’ can just feel that they simply lurch from one setback or crisis to the next without ever growing their wealth. However, these short-term problems in fact work in the favour of the patient and disciplined investor with a long-term view. As the glorious effect of compound investment returns only really kick in over the long run. Compounding simply means the ability of a sum of money to grow exponentially over time by the repeated addition of earnings to the principal invested. This effect is so powerful that Albert Einstein once described it as the 8th wonder of the World. The skill lies in being able to stick to the plan long enough for compounding to work its magic.
Large events have several causes
The world is an incredibly complex place and is thankfully stable enough so that one person or company cannot in isolation cause an event that impacts the whole world. However, what does happen is that unrelated things collide all the time to shape the world we live in. The film director and documentarian Oliver Stone described history ‘as the story of lots of things happening at the same time’. If we think about the year just gone for example there has been the perfect storm of events that culminated in the pandemic. A virus jumps from an animal to a human, that human then mixes with other people, as the virus spreads among a small group of people it remains a mystery for a while, once authorities realise that it is a new virus, they try to suppress the news at first in the hope that the outbreak would be contained. Unfortunately, other countries believed it would be contained and failed to act fast enough in dealing with the virus.
It would be fair to characterise the initial response from the major developed countries as over optimistic and even arrogant. As evidenced through the lack of preparedness and denial that the developed world would be affected by the virus. There was a belief that we would come through this episode relatively unscathed. Yet, when the first wave hit it became abundantly clear how unprepared we were, leaving panicked Governments with only one option left to respond to this new threat: lockdowns.
Be careful not to dwell on past events
It is important not to be defined by our bad experiences. Whilst it is vital to learn lessons from powerful and extraordinary experiences, we must be careful not to learn too much from the unusual nature of these experiences. Events like the 2008/09 financial crisis and current pandemic are so rare that most of us will never go through anything like it again. When discussing the stock market crash of 2008/09, the investment consultant Charles Ellis put it best when he said that ‘you don’t want to be so well prepared to go through it again that you lose the chance to have positive experiences for the more normal part of life’. This applies even more so to today’s present situation.
Many investors learnt valuable lessons the hard way during the Global Financial Crisis. The magnitude of the financial crash and widespread bank failure understandably shook many people’s confidence in the global financial system to such a point that many investors were so exhausted by the unrelenting stock market losses that by March 2009 they sold their investments and put their money into cash, but by doing so they turned a temporary loss in to a permanent loss. The lesson from this is not to let our current experiences disrupt our long-term plans.
Predicting the future is a fool’s errand: Flexibility is your friend
Most of time the biggest risk to our way of life is from the risks we do not see coming. At the start of 2020 if you had asked any economist or investor to list the main risks to the economy, they would likely have said trade wars, Brexit and tightening monetary policy (increasing interest rates too fast). Yet, it was a virus that no one saw coming, which ended up causing havoc to the global economy on a scale that would have been scarcely believable back at the start of 2020.
The way to approach an uncertain future is with a plan flexible enough to react to the changing environment. We find it useful to build financial models for clients that help give us a guide to what the future may look like. We build these models using a set of macro-economic assumptions about economic growth, investment returns, interest rates and inflation rates. We then overlay this with assumptions about tax, life expectancy and household expenditure. However, none of this can ever take account of the possibility, however remote, of outlier events like wars or political crises or natural disasters or pandemics.
With vaccine rollouts gathering pace we are hopeful that 2021 will be a far better year than 2020.
