Over half of businesses set to increase prices
hree out of five companies expect to increase their prices in the next three months due to the continuing supply chain disruption, soaring inflation, and rising energy costs
The 58% of businesses that reported the price increase in the British Chambers of Commerce’s (BCC) Quarterly Economic Survey (QES) is the highest proportion on record.
The survey, which features responses from 5,500 businesses reported that two-thirds, 66%, cited inflation as their main concern, which is also a record high, while one in four, 27%, were worried about rising interest rates which is up from 19% from the last quarter.
The percentage expecting an increase rose dramatically to 77% for production and manufacturing firms, 74% for retailers and wholesalers, 72% for construction firms, and 69% for transport and distribution firms.
The BCC said its survey showed that the recovery had ‘stalled’ in recent months, with businesses facing ‘unprecedented inflationary pressures’.
Manufacturers surveyed also stated that they faced pressure to raise prices because of the cost of raw materials, other overheads, pay settlements, or finance costs with some businesses still struggling to recover from large-scale losses incurred since the start of the pandemic.
The survey also found that 23% of businesses reported a decrease in cash flow with nearly half, 46% reporting no change. The BCC stated that as these figures were reported before the full impact of Omicron variant and the introduction of the government’s Plan B, the metric is a ‘cause for concern’.
Suren Thiru, head of economics BCC said: ‘Our latest survey suggests that UK’s economic recovery slowed in the final quarter of 2021 as mounting headwinds increasingly limited the key indicators of activity. The persistent weakness in cash flow is troubling because it leaves businesses more exposed to the economic impact of Omicron.
‘The record rise in price pressures suggests that a substantial inflationary surge is likely in the coming months. Rising raw material costs, higher energy prices and the reversal of the VAT reduction for hospitality are likely to push inflation above 6% by April.
‘The UK economy is starting 2022 facing some key challenges. The renewed reluctance among consumers to spend and staff shortages triggered by Omicron and Plan B may mean that the UK economy contracts in the near term, particularly if more restrictions are needed.
‘Rising inflation is likely to limit the UK’s growth prospects this year by eroding consumers’ spending power and squeezing firms’ profit margins and their ability to invest.’
Last week high street giant Greggs and Next announced that they were raising prices as they seek to offset higher wage and manufacturing costs. Next, which reported strong sales over Christmas, said its prices would increase by up to 6% next year while the UK’s biggest bakery chain announced that it would raise prices between 5p and 10p.
Shevaun Haviland, director general BCC said: ‘With companies now having to grapple with the impact of Omicron and further changes to the rules on imports and exports of goods to the EU, there are significant hurdles for businesses in the months ahead.
‘The government has listened to our previous calls for support, and it must do all it can to steady the ship and steer the economy through these uncertain times. If the current restrictions persist or are tightened further then a more comprehensive support package that matches the scale of any new measures, will need to be put in place.’
The BCC stated that the government’s focus needed to be on creating the ‘best possible environment for businesses to grow and thrive’ as by doing this would generate wealth, create jobs and support communities.
Haviland concluded: ‘That is by far the best way to sustainably deliver the tax revenue the government needs to support public services and the wider economy.’
- Published in Uncategorized
Merry Christmas from all the team at RMI Accountancy.
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Bank of England raises base rate to 0.25%
The Bank of England has raised the bank base rate for the first time in three years to 0.25%, despite concerns over omicron variant
At its meeting ending on 15 December 2021, the Monetary Policy Committee (MPC) voted by a majority of 8-1 to increase Bank Rate by 0.15%, to 0.25%.
This is the first increase in the base rate since 2018 and marks increasing pressure on the Bank as the inflation rate rises to 5.1%, with energy, food and second hand car prices, forcing up the cost of living.
The Committee voted unanimously for the Bank of England to maintain the stock of sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, at £20bn.
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown, said: ‘’The Bank of England has thrown out an anchor to try stop the fast currents of inflation taking the economy into more dangerous waters.
‘The rate rise to 0.25% which increases the cost of borrowing, is aimed at dampening down demand and does risk sending already weak sectors further off course. But policy makers clearly see rampant inflation as an even more treacherous tide to deal with, with the CPI reading this week showing prices are already accelerating at levels not predicted until next spring.
‘Instead of battening down the hatches and waiting for the latest covid storm to subside, they are taking action now to prevent an even sharper spiralling upwards of prices.
The rise in interest rates had an immediate impact on the value of sterling.
Jay Mawji, managing director of global liquidity provider IX Prime said: ‘For the Bank’s rate setting committee to have voted so convincingly – by 8 to 1 – to press ahead with a significant rate rise has sent sterling soaring.
‘Earlier Bank predictions talked about interest rates climbing steadily during 2022, hitting 1% by this time next year.
‘While the Bank reserves the right to slow the pace of the rate rises if the current wave of Covid-19 infections and restrictions hammer economic growth, today’s decision is a big statement of intent.
‘With consumer inflation at 5.1%, a 10-year high and two and half times greater than the Bank’s target, it is acting decisively to get inflation under control. For months the Bank has been hinting that rate rises were coming, and despite the Omicron fears, it has clearly concluded that it is now or never.’
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Guidance on managing coronavirus issues at work
The risks from Covid-19 are still very much present in the workplace and it is important to remember that employers have a duty of care towards their employees to protect the health and safety of their workforce. This information is being continually checked and updated.
Coronavirus (Covid-19)
The World Health Organization (WHO) explains that coronaviruses are a large family of viruses that cause illness ranging from the common cold to more severe diseases such as SARS (Severe Acute Respiratory Syndrome). This particular episode has been named “Covid-19” and appeared in December 2019 in Wuhan, China.
The symptoms
The symptoms include a fever, cough, shortness of breath and loss or change of sense of smell or taste. Some people may suffer from a mild illness and recover easily, while in other cases, infection can progress to pneumonia. Reports suggest that the elderly, those with weakened immune systems, diabetes, cancer and chronic lung disease are the most susceptible to serious illness and death. Symptoms can appear in as few as two days after infection or as long as 14 days.
The virus
The virus is said to most likely spread from person to person through:
- direct contact with a person while they are infectious
- contact with droplets when an infected person coughs or sneezes
- touching objects or surface that were contaminated by droplets from secretions coughed or sneezed from an infected person with a confirmed infection.
Employer considerations
Latest Government guidance
The advice is under constant review and is subject to change. You can keep up to date on latest Government developments here.
Duty of care
Employers have a duty of care towards their employees which includes not exposing them to unnecessary risk. In this case, that may include not putting them in a position in which they could become infected by the virus without taking all reasonable precautions.
Your duty of care, where coronavirus is concerned, may differ depending on an employee’s specific circumstances, for example, if they are in the risk category, for example over 70 or if they have underlying conditions.
Wellbeing
In addition to having a duty of care to protect health and safety, you also need to consider their wellbeing. Consider any wellbeing initiatives you have and remind employees of them, for example, an Employee Assistance Programme.
Give employees the facts
The risk of becoming infected will differ depending on personal circumstances but it is important to convey to employees the reality of the situation to keep concern proportionate to the risk and encourage good hygiene.
Travel advice
For the latest travel advice, you can keep up to date with the latest Government guidance here.
If an employee has a confirmed case of coronavirus
Your normal sickness absence and pay policy will apply to employees who have coronavirus, as will payments of SSP. For sickness absences related to Covid, there are no waiting days so payments can be made from day one, where a period of incapacity for work is created.
See our Statutory Sick Pay topic for further details.
If an employee has returned from an affected area, then develops symptoms and stays at home
This is best treated as sickness absence due to the display of symptoms and your normal policies will apply. You may wish to consider other options such as working from home as a temporary measure while the employee self-isolates (see above).
Employers who have concerns about an employee’s exposure
Where you have concerns about a non-symptomatic employee (for example, it is known or suspected that the employee has had contact with someone known to have the virus but does not live with them) then the best advice is to follow the Government and NHS advice and advise the employee to self-isolate as needed.
Self-isolation, shielding and pay
The Government is advising that certain people should self-isolate for certain periods.
Those who experience even minor symptoms should self-isolate for 10 days; those who live with someone who develops symptoms should self-isolate for 10 days, unless they have been double vaccinated, are under 18, or are medically exempt from vaccination (unless the contact is with the Omicron variant, in which case these exemptions do not apply). If they experience symptoms, they must comply with a further 10-day period from the point their symptoms start..
Those who receive a notification from a track and trace service that they have been in close contact with someone who has tested positive for coronavirus are also required to self-isolate for 10 days, unless they have been double vaccinated, are under 18, or are medically exempt from vaccination, although they are recommended to take a PCR test as soon as possible. That is, unless the contact is with the Omicron variant, in which case these exemptions do not apply
In addition, those who have been advised by a registered medical practitioner (or other person or body permitted to make the notification) that they are to undergo a surgical or other hospital procedure and have been advised to self-isolate for a period of up to 14 days before their hospital admission, should do so.
On 28 September, the Health Protection (Coronavirus Restrictions) (Self-isolation) (England) Regulations 2020 came into force which introduced various criminal offences in respect of self-isolation. It is now an offence for an employer to knowingly allow a worker to attend any place for any purpose relating to their employment during the designated period of self-isolation. Breaches of this law can result in a fixed penalty notice of £1000 for the first offence increasing to £10,000 for repeated offences.
The terminology here is important; a breach is not restricted to an employer’s requirement for the employee to attend the workplace, or even a request. It is also not restricted to attendance at the workplace, but covers attendance at any place for any purpose relating to their employment.
The employer must be aware of the employee’s need to self-isolate, and of any breach of the self-isolation requirement by the employee. Workers are now under a legal obligation to inform their employer of the need to self-isolate; however, this only applies where the employee is not already working from the place they are self-isolating which is likely to be their home. Therefore, this will not apply when the employee is already working from home.
Employers may wish to confirm this stance to their employees by reminding them of the need to inform the employer of the requirement to self-isolate, and that they are prohibited from attending the workplace, or any other place for the purposes of work, during the self-isolation period.
Emergency legislation put in place requires statutory sick pay (SSP) to be paid to those self-isolating as described above in order to prevent the infection or spread of the virus in accordance with public health guidance, who is then unable to work as a result, providing they meet the other eligibility criteria.
Where the first day of absence was 13 March 2020 or later, SSP is payable from day one for anyone self-isolating, provided that other eligibility criteria is met including that the employee earns at least the lower earnings limit, and has been absent for at least 4 days in order to create a “period of incapacity for work”.
Those advised to shield on or after 16 April 2020 were entitled to SSP. Shielding was paused in August and officially brought to an end on 15 September 2021. Moving forward, centralised guidance on isolation for clinically vulnerable people will not be issued.
In addition, measures have been put in place for employees to obtain medical evidence from NHS 111 rather than their own GP. “Isolation notes” will provide you with evidence that your employee has been advised to self-isolate. You may ask for this document to evidence absence of over seven days, in the same way as with a normal “fit note” from the GP. As with normal sickness absence, no isolation notice will be issued for the first seven days, during which employees can self-certify.
The notes can be accessed through the NHS website and NHS 111 online. The note will be emailed to the employee, or in some cases, directly to you.
In respect of those who have received a notification informing them of close contact with someone who has tested positive for coronavirus, the notification they received can be used as evidence.
Employers may be able to agree a period of homeworking during self-isolation or shielding provided the employee remains fit for work, or annual leave, in which case full pay will be maintained.
Employees who are pregnant
Current guidance outlines that pregnant employees should be considered as clinically vulnerable. Employers already have a legal duty to assess the risks that the workplace could pose to pregnant employees and must take steps to mitigate these. The threat of the coronavirus must therefore also be taken into account when decisions are made regarding whether pregnant employees can continue to conduct their role safely.
Employees who refuse to come to work due to concerns
From 13 December 2021, Government advice is that those who can work from home, should do. For those who cannot, if an employee is worried about catching the virus and refuses to attend work, Acas suggests listening to the employee’s concerns and offering reassurance. Your response to this will depend on the actual risk of catching the virus at work. It will be different for every employer and will depend on specific circumstances including whether anyone in the workforce has already been diagnosed or there is another real risk of exposure. You may decide to offer a period of paid annual leave or unpaid leave or allow the employee to work from home where this is feasible. Your response should be reasonable to the specific situation.
Government advice in Scotland and Wales is now to encourage businesses to allow staff to work from home where necessary and appropriate. In England, the Government stance from 13 December is that employees should work from home where they are able to do so, unless physical or mental difficulties mean this is deemed inappropriate, or where there is a particularly difficult home environment.
Foreign travel and quarantine
The rules for international arrivals into the UK are being regularly reviewed and updated by the Government, and the most up-to-date information is available on the Government website.
As it stands on 9 December 2021, the following rules apply.
Red list countries
Only the following may enter England from a red list country (or where the traveller has been in a red list country within 10 days of arrival):
- a British or Irish National
- those with residence rights in the UK.
The list of countries on the red list is regularly reviewed and updated. The most up-to-date list is available on the Government website.
The rules for red list countries apply to all travellers, regardless of vaccination status.
Before arrival from a red list country
- take a Covid-19 test in the two days before travel to England
- book a quarantine hotel package, including two Covid-19 tests
- complete a passenger locator form.
On arrival
- Quarantine in a managed hotel, and take two Covid-19 tests.
Travelling with children
- Children aged 12 to 17 must take a Covid-19 test in the two days before travel to England.
- On arrival in England children aged 5 to 17 must quarantine in a managed hotel for 10 full days and take two Covid-19 tests.
- Children aged 4 or under do not have to take any travel tests but must enter managed quarantine.
Transiting through a red list country on the way to England
Whether the red list rules need to be followed as a result of a transit stop in a red list country depends on what happens during the stop.
Air passengers
Where border control is passed at the airport during the transit stop.
Ship passengers
Where:
- the traveller disembarks from the ship
- other passengers disembark then re-board the ship
- new passengers get onto the ship.
Train passengers
If the traveller leaves the train.
Private vehicles or coaches travelling through red list countries or territories
The rules of the countries and territories driven through apply. Where the traveller has driven through a red list country, then the red list rules must be followed on arrival in England, whether the vehicle stops or not.
All other countries
Fully vaccinated
Before travel to England:
- take a Covid-19 test — to be taken in the two days before travel to England
- book and pay for a Covid-19 PCR test — to be taken after arrival before the end of day 2
- complete a passenger locator form — to be completed in the 48 hours before arrival.
Even where the stay in England is for less than two days, a test must be booked and paid for on day 2. Travellers must quarantine until either they leave England or receive a negative test.
On arrival, all vaccinated travellers must quarantine at home or other accommodation until a negative test result is received (or 14 days, whichever is sooner). If a positive result is received, a full 10-day quarantine must be completed.
The fully vaccinated rules apply for:
- under 18s
- those taking part in an approved Covid-19 vaccine trial in the UK or the USA (US residents only for USA trials), or a phase 2 or 3 vaccine trial that is regulated by the EMA or SRA
- those unable to have a Covid-19 vaccination for a medical reason which has been approved by a clinician under the medical exemptions process, and resident in England.
Proving vaccination status
- NHS Covid Pass for England and Wales
- NHS Scotland Covid Status app
- CovidCert NI in Northern Ireland.
Paper certificates are also available.
There are different ways to prove vaccination status for vaccinations outside of the UK.
Not vaccinated
Before travel to England:
- take a Covid-19 test — to be taken in the two days before travel to England
- book and pay for day 2 and day 8 Covid-19 PCR tests — to be taken after arrival in England
- complete a passenger locator form — to be completed in the 48 hours before arrival in England.
After arrival:
- quarantine at home or in the place they are staying for 10 full days, regardless of test results
- take pre-booked Covid-19 PCR tests on or before day 2 and the second test on or after day 8.
Even where the stay in England is for less than two days, a test must be booked and paid for on day 2 and day 8.
Test to Release scheme
It is possible to pay privately for a test and be released from quarantine early.
Travelling with children
Children aged 4 and under do not have to take any Covid-19 travel tests.
Children aged 12 to 17 must take a Covid-19 test in the two days before travel to England.
Children aged 5 to 17 have to follow the testing and quarantine rules for people who qualify as fully vaccinated on arrival in England.
This means that they have to quarantine on arrival and take a PCR test on or before day 2.
Ireland, the UK, the Channel Islands and the Isle of Man
The following does not apply when travelling from the above:
- complete a passenger locator form
- take any Covid-19 tests
- quarantine on arrival in England.
Statutory sick pay is not payable to those who self-isolate on return from overseas.
Closure of business
Various lockdowns and business closures were in effect for much of 2020, and into 2021.
From 10 December 2021 “Plan B” is applied in England. This means that with effect from Friday 10 December, masks must be worn in most public venues, including theatres and cinemas, unless someone is medically exempt. This will not apply in premises where people are eating or exercising.
From Monday 13 December, guidance to work from home wherever this is possible will be reintroduced.
By Wednesday 15 December, Covid passes will become mandatory for nightclubs, unseated indoor venues with more than 500 people, unseated outdoor venues with more than 5000 people and any venue with more than 10,000 people.
Two doses will be sufficient for a Covid pass, as will a negative lateral flow test, but this requirement will be kept under review as the booster programme is rolled out.
In Wales, employers (and other businesses) must undertake a bespoke coronavirus risk assessment and take reasonable measures to minimise exposure to, and the spread of, coronavirus based on that bespoke risk assessment. Also, adults and children over 12 must wear face-coverings in indoor public places, with the exception of hospitality settings such as restaurants, pubs, cafes or nightclubs, or for solemnisation of a marriage, formation of a civil partnership or an alternative wedding ceremonies.
In Scotland, face coverings continue to be required in most indoor place, and employers should follow relevant guidance to keep their staff safe.
Furlough and the Job Retention Scheme
The Government announced the Job Retention Scheme on 20 March 2020. The Scheme ran until the end of September 2021.
The Job Support Scheme
The Job Support Scheme was due to commence on 1 November after the end of the Job Retention Scheme. However, due to the extension of the Job Retention Scheme, the Job Support Scheme will not now be used.
If the employer continue to have issues providing work after furlough
Lay-off or short-time working may be an appropriate alternative. Employees who are ready and willing to work but are not provided with work (as would be the case with a temporary closure), or reduced work, can be placed on lay-off or short-time working. Lay-off must be with full pay unless there is a provision within the contract for lay-off without pay (subject to the payment of statutory guarantee pay for employees with at least one month’s service at the time of lay-off). If there is no contractual provision, you can attempt to agree with employees a period of unpaid lay-off.
This may also occur when the business itself has not taken the decision to close, but where, for example, the landlord of the building from which the business operates has decided to close its doors, meaning that no one can enter. In this situation, employers should consider whether it can temporarily move to an alternative location or permit its employees to work from home. If no other alternative can be found, a period of lay-off may be required.
Closure of schools
School closures have been in place from time to time as part of the pandemic response, but currently schools are open for all children.
NHS test and trace service
On 28 May 2020, the NHS test and trace service was launched in England. The service:
- provides testing for anyone who has symptoms of coronavirus to find out if they have the virus
- gets in touch with anyone who has had a positive test result to help them share information about any close recent contacts they have had
- alerts those contacts, where necessary, and notifies them they need to self-isolate to help stop the spread of the virus.
The Government states that, by following instructions to self-isolate, people who have had close recent contact with someone with coronavirus will be protecting their family, friends, colleagues and other people around them, and will play a direct role in stopping the spread of the virus.
When someone first develops symptoms and orders a test, they will be encouraged to alert the people that they have had close contact with in the 48 hours before symptoms started. If any of those close contacts are colleagues, the person who has developed symptoms may wish to (but is not obliged to) ask their employer to alert those colleagues. At that stage, those close contacts are not advised to self-isolate, but they:
- must avoid individuals who are at high-risk of contracting coronavirus, for example, because they have pre-existing medical conditions, such as respiratory issues
- must take extra care in practising social distancing and good hygiene and in watching out for symptoms.
“Close contact” means:
- having face-to-face contact with someone (less than 1 metre away)
- spending more than 15 minutes within 2 metres of someone
- travelling in a car or other small vehicle with someone (even on a short journey) or close to them on a plane.
Those who test positive will be asked, via the service, whether they have had any such close contact in the 48 hours before they developed symptoms and the time since they developed symptoms.
The service will then contact anyone they report as having had close contact with and tell them to begin self-isolation for 10 days from their last contact with the person who has tested positive, even if they do not feel unwell, unless they are fully vaccinated, under 18, or medically exempt from vaccination (these exemptions do not apply if there has been contact with the Omicron variant).
The practical effect of this service is that many more individuals are likely to self-isolate. In addition, large parts of a workforce, or an entire workforce, may receive an alert telling them they should self-isolate because one member of the workforce has tested positive for coronavirus. Employers can help to combat this by ensuring that employees work from home where possible, or implementing strict social distancing and hygiene measures in the workplace where home working is not possible.
Self-isolation is a legal duty and anyone under the duty who is found not to be self-isolating faces fines starting at £1000 and increasing to £10,000 for repeat offenders.
The Government has put together guidance for employers, which stresses that their role in the system is vital by:
- making their workplaces as safe as possible
- encouraging workers to heed any notifications to self-isolate and supporting them when in isolation.
It acknowledges that, although this may seem disruptive for businesses, it is less disruptive than an outbreak of coronavirus in the workplace will be, and far less disruptive than periods in lockdown.
Employers should support employees who need to self-isolate and must not ask them to attend the workplace.
If an employee needs to self-isolate, employers should consider whether they are able to work from home. This might include finding alternative work that can be completed at home during the period of self-isolation.
Employees who cannot work from home will be entitled to receive SSP in line with the guidance on self-isolation given above due to further legislative amendments. SSP is not payable to those who are required to quarantine on return to the UK from overseas. Alternatively, the employer may agree that a period of annual leave is to be taken so that full pay is maintained, or another form of paid leave that is available to the employee.
Giving options to ensure full pay is maintained may be particularly important due to the possibility that an employee may be reluctant to self-isolate if it means a drop in pay. Employers may wish to strongly encourage employees who receive a notification to make this known, and to self-isolate, in order to protect the rest of the workforce.
The NHS test and trace service will provide a notification that can be used as evidence that someone has been told to self-isolate.
A similar scheme, called “test and protect” is in place in Scotland.
Maintaining records of staff
On 18 September 2020, the Government changed its guidance surrounding the maintaining of records to track who is visiting venues within certain venues in England, making it a legal requirement for designated venues to collect contact details for the purposes of NHS Test and Trace in England, alongside displaying official NHS QR code posters. This has now been repealed, but businesses and venues remain strongly encouraged to continue to collect this data, especially in the following sectors:
- hospitality
- tourism and leisure
- close contact services
- facilities provided by local authorities.
Surge testing for new variants
Surge testing is increased testing (including door-to-door testing in some areas) of all residents and enhanced contact tracing in specific locations in England and can look different depending on assessment of local requirements.
There are currently no areas affected by this, but this is subject to change.
Wider effect on employment law
Gender pay gap reporting
The Government suspended the obligation to report on the gender pay gap in 2020 due to the coronavirus. Companies with 250 or more employees are required to submit their gender pay gap information once a year; for the private sector, the deadline is 4 April; for public sector, it is 30 March. In recognition of the extra pressure placed on businesses at this time, there was no requirement to publish the data in 2020.
The requirement to publish data returns for 2021. This means reporting on data from the snapshot date of 5 April 2020 (31 March 2020 for public sector). The Government will not consider implementing enforcement action for failure to provide 2021’s report until October 2021; this effectively gives employers a further six months past the usual deadlines for reporting data.
The Government has confirmed the following in relation to 2021 reports:
- employees who were on furlough on the snapshot date are counted when determining whether the 250-employee threshold is met
- employees on furlough on the snapshot date are not to be included in calculations on hourly pay
- but employees on furlough on the snapshot date are to be included in calculations on bonuses.
Because employees who are not in receipt of full pay on the snapshot date are excluded from the reporting pool for calculations on hourly pay, the pool may be a lot smaller than usual due to the fact that a significant number of employees in the UK would have been on furlough on the snapshot date. Employers may find that the resulting gender pay gap in hourly pay is quite different from previous years. It is important, therefore, for employers to use the accompanying narrative to explain any impact on the results caused by coronavirus.
Annual leave
The laws on annual leave have been amended to allow more flexibility on the carry over of leave. Previously, four weeks of annual leave was exclusive to the year in which it was accrued, meaning it could not be carried over except where it could not be taken because of sickness absence or annual leave. The remaining 1.6 weeks of leave could be carried over to the next leave year subject to the employer’s agreement.
The restriction on carrying over the four weeks of leave has been lifted for circumstances where it was not reasonably practicable for a worker to take some or all of their leave as a result of the effects of coronavirus (including on the worker, the employer or the wider economy or society). Workers now have the right to carry forward leave accrued in this leave year to the next two leave years. The carry over of the 1.6 weeks’ leave is still subject to agreement from the employer.
The rules on pay in lieu of accrued holiday on termination of employment have also been amended. Pay in lieu should include an element reflecting leave which was carried over in this way but remains untaken at termination.
Modern slavery statements
The Government has relaxed the rules around compliance with modern slavery requirements. An updated Government guide makes clear that businesses must continue their activity to identify and address risks of modern slavery in their operations and supply chains but recognises the challenges presented by the virus in publishing their statement within the usual timeframe. It notes “reduced staff capacity” as one such challenge. It states that “businesses which need to delay the publication of their modern slavery statement by up to six months due to coronavirus-related pressures will not be penalised”. The reason for any delay to the publication should be set out in the delayed statement.
Statements are required from all businesses who have an annual turnover of at least £36 million, and must normally be published within six months of the end of the company’s financial year.
Employer checklist
- Move to home working if it is possible to do so, from 13 December 2021.
- Assess the risk of exposure in your business operations including any overseas workplaces.
- Remind yourself of your business contingency plan/pandemic contingency plan.
- Send communication to all employees reminding them of good hygiene measures.
- Ensure there are sufficient soap supplies available and consider providing tissues and hand sanitiser to the workforce where the workplace is permitted to remain open.
- Speak with those in charge of cleaning the workplace and ask for frequent deep cleans.
- Ask employees to keep you informed of any overseas holiday travel so you can manage their return.
- Remind employees of your annual leave cancellation procedures.
- Decide how you will deal with pay during self-isolation, eg will it be no pay, sick pay or full pay?
- Create a work contingency plan in case key members of the workforce are absent.
- Ensure managers are aware of coronavirus symptoms so they can spot it quickly.
- Check whether you have a lay off with reduce pay clause in place in the event that you need to close the business temporarily.
- Remind employees of any employee assistance programme available to them if they have general concerns about virus.
Official advice
- Published in Uncategorized
Businesses fear Christmas trading disruption
The latest BDO business survey revealed that 80% of mid-sized businesses expect rising fuel prices, supply chain disruption, and increasing energy costs to impact end of year trading
The bi-monthly survey of 500 business leaders from accountancy firm revealed that a third of businesses surveyed expect to increase the prices of their goods and services as a direct result of rising inflation with the same number concerned about increasing energy prices and a third also concerned about supply chain disruption.
Overall, 80% of medium-sized business leaders expect their end of year trading to be impacted by at least one of these three factors with 34% also citing Covid-19 restrictions as an issue likely to impact the availability of products and services.
Meanwhile, despite warnings around higher living costs in the next few months, almost a fifth, 17%, of business leaders said they would not be able to increase pay, which BDO stated ‘could bring challenges’ in attracting new staff at a time when competition for is fierce.
Diving deeper into the impact of inflation, BDO‘s survey revealed that 32% of businesses plan to cut the number of products and services they offer as a direct result of inflation. This, in particular, was an issue for manufacturing businesses, with 39% planning to decrease the number of products on offer and a similar number set to increase prices.
Around a quarter of businesses, 26%, see rising inflation and potentially higher interest rates as the issues that will have the biggest impact on their business in the next year.
Ed Dwan, partner, BDO said: ‘Following a year of disruption, many businesses will have been hoping for a strong finish to 2021 and a fresh start for 2022. The harsh reality is that continued supply chain issues, rising energy prices, and increasing costs mean that many are taking further drastic measures to stay afloat. These issues could also be further exacerbated by the new Covid-19 variant.
‘The speculation around interest rate rises is only set to increase, and it’s fair to say all eyes will be on the Monetary Policy Committee when they make a decision later this month.’
Going forward, nearly half of respondents, 45%, are prioritising managing their domestic or international supply chains in the next three months, above other business operations, and as businesses look to the longer term.
However, despite ongoing issues 62% of businesses expect to return to pre-pandemic revenues in the next 12 months.
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£100 spending limit for contactless cards goes live
The national rollout of the new £100 spending limit for contactless card payments begins from 15 October 2021, although it will take time for retailers to update their terminals
The decision to raise the contactless limit from £45 to £100 was made by the Treasury and the Financial Conduct Authority following a public consultation and in discussion with both the retail and banking sectors. It follows on from the increase in the limit from £30 to £45 in April 2020 at the height of the covid pandemic.
From 15 October 2021, consumers will start to see retailers accepting contactless payments up to the new £100 limit, which will give customers more flexibility when shopping in store, UK Finance said.
Given the number of terminals which will need to be updated to accept the new limit, it will take some time to be introduced across all retailers. To check if a retailer has updated to the new limit, customers should either ask in store or follow the prompts on the card payment machine when paying.
For consumers spending more than £100 there are many ways to pay, for example through Chip & PIN, cash and alternatives such as mobile payments like Apple Pay or Google Pay which do not have an upper limit when authenticated through biometric technologies like fingerprint or facial recognition.
David Postings, chief executive of UK Finance, said: ‘Contactless payment has proved very popular with consumers and an increasing number of transactions are being made using contactless technology.
‘The increase in the limit to £100 will allow people to pay for higher value transactions like their weekly shop or filling up their car with fuel. The payments industry has worked hard to put in place the infrastructure to enable retailers to update their payments systems so they can start to offer their customers this new higher limit.’
Chancellor Rishi Sunak said: ‘Increasing the contactless limit will make it easier than ever to pay safely and securely – whether that’s at the local shops, or your favourite pub and restaurant. Millions of payments will made be simpler, providing a welcome boost for retailers and shoppers.’
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Taxi drivers face tax checks to renew licence
Changes to the licensing rules for taxi drivers will add a requirement to check their tax compliance before issuing new licenses in a bid to tackle tax evasion from 2022
HMRC has issued guidance on how the tax checks, known as conditionality, will work from April 2022 for licence applications initially in England and Wales. There are plans to extend the rules to Scotland and Northern Ireland from 2023.
HMRC believes that taxi drivers and scrap metal dealers are often part of the hidden economy, operating outside the tax regime, and has indicated that the scheme is likely to be extended in the future to cover more sectors.
In the technical brief outlining the original policy, HMRC stated: ‘The hidden economy consists of individuals and businesses with sources of taxable income that are entirely hidden from HMRC. This deprives the government of funding for vital public services. The hidden economy tax gap (the difference between the amount of tax that should, in theory, be paid, and what is actually paid) is estimated to be £2.6bn for 2018 to 2019.’
The new tax checks are projected to raise £30m in taxes in the first year of operation in 2022-23 with Treasury estimates indicating that this will rise to £55m by 2024-25.
The rules are changing for individuals, companies or any type of partnership applying for a licence for a taxi driver, private hire driver, private hire vehicle operator, scrap metal site and scrap metal collector.
Any individuals that make an application from 4 April 2022 will need to complete a tax check if they are renewing a licence; applying for the same type of licence previously held, that ceased being valid less than a year ago; and applying for the same type of licence already held with another licensing authority
The key element of the new system is a tax check which must be carried out by the individual applicant and cannot be conducted by an accountant or tax agent.
There will be a number of questions to identify whether the individual complies with tax rules and how they pay any tax that may be due on income earned from the licensed trade before a licence will be issued.
Once the tax check is completed and verifed by HMRC, a nine-character tax check code will be issued. This must then be included with the application to the licensing authority, so they can confirm a tax check has been completed.
This will add extra administrative work for licensing authorities but there will be not costs for the HMRC checks.
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Self-isolation: do you face a bigger risk of an outbreak?
Double-jabbed workers no longer need to isolate after coming into contact with someone with Covid-19. And while that’s great for business, it means staff could be more likely to bring the virus into work. Which increases your risk of a big outbreak and costly closures.
So, how do organisations stay safe, compliant, and open for business?
1. Keep up with and communicate self-isolation rules
Staff need to know when to self-isolate. And to avoid unnecessary staff shortages and closures, they also need to know when they don’t need to. Make sure everyone is aware of the current rules.
Double-vaccinated staff no longer need to isolate when:
- returning from countries not on the red list
- they’ve been in contact with someone who has tested positive for the coronavirus
- they live with someone who has Covid-19.
However, your non-vaccinated staff will still need to self-isolate in these situations.
Note that, even if not fully vaccinated, the fully vaccinated rules apply to:
- under-18s resident in the UK
- those taking part in an approved Covid-19 vaccine trial in the UK or USA
- those resident in England and medically exempt from taking the vaccine.
Regardless of vaccination status, all staff still need to isolate when they:
- have Covid-19 symptoms
- are waiting for PCR test results
- test positive for Covid-19
- return from a country on the red list (the self-isolation must take place in a managed hotel).
2. Stick to preventive measures
Organisations are no longer legally required to follow Covid-secure guidance.
However, your Covid control measures should still be based on your risk assessment. Vaccinated people can still carry coronavirus and pass it onto others so it makes sense to continue certain preventive measures to stop the virus spreading.
To reduce the risk of transmission, the Government is still asking employers to:
- make sure there’s fresh air running through the workplace
- keep up with regular and thorough cleaning
- turn staff and customers with Covid-19 symptoms away
- keep staff and customers up to date with any safety measures
- complete a risk assessment which outlines the organisation’s safety measures.
3. Encourage vaccine uptake
Self-isolation rules have relaxed for your double-jabbed staff. If the majority of your workforce have now taken the vaccine, you’re less likely to deal with inconvenient staff shortages.
But if your staff are unprotected, they still need to isolate if they get pinged by the NHS app. To avoid big gaps in the rota, it’s important to improve vaccine uptake in your staff.
If there’s a high level of hesitancy in your organisation, here are some basic steps to boost uptake:
- allow paid time off for vaccine appointments or side effects
- share vaccine information from reliable sources
- outline the benefits of taking the vaccine
- invite an external healthcare expert to answer any questions.
You could even provide an incentive for vaccinated staff, like an extra day of leave. (However, you will need to consider medically exempt staff or those with religious objections, etc otherwise this could be seen as discriminatory.)
4. Use lateral flow testing
One way of picking up asymptomatic Covid spreaders is through the use of lateral flow tests (LFTs).
LFTs can be distributed to staff (or are available for staff to pick up free from pharmacies). Many organisations require staff to test twice a week and report their results through the GOV.UK website. You could request any visitors to complete an LFT 24 hours before their visit.
If an LFT comes back positive, the individual should take a PCR test and self-isolate while they wait for the results.
5. Track who’s been vaccinated
Before the recent change to self-isolation rules, the same rules applied for all employees but now your non-vaccinated workers face a higher chance of self-isolation. And to keep these staff both safe and in work, you may need to do more to protect them. To do that, you’ll need to know who hasn’t received the jab.
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Accountants in ‘hot demand’ after pandemic
The demand for finance and accounting talent in businesses now exceeds pre-pandemic levels reveals a new report by specialist recruiter Robert Half
According to the 2022 Salary Guide from Robert Half, finance managers, financial analysts, and management accountants are the most sought-after roles due to the effects of Brexit and the Covid-19 pandemic.
The guide, which is an annual report for projected salary ranges, benefits, and hiring trends across several sectors, revealed that candidates with a strong understanding of Microsoft Excel, finance management, and tax are particularly attractive for employers at this moment.
The report states that the ‘biggest strategic priority’ for chief financial officers (CFO) and finance departments over the next 12 months is rolling out digital transformation and automation initiatives to ‘streamline workflow, increase productivity and reduce costs’.
As well as transforming internal processes, the report states that big data will be ‘key to providing the growth insights’ that businesses need to bolster their recovery efforts with the accounting and finance teams expected to adapt in order to meet these needs.
Leo Hewett, associate director, Robert Half, said: ‘Competition for candidates in finance and accounting is fierce – especially those with the tech skills to support on digital transformation projects. New hires can command significant salary increases, making existing staff more likely to jump ship, so those concerned about retaining talent should be prepared to put up a fight.’
The report also found that 56% of CFOs believe that it will be more challenging to find skilled candidates in 2022 with employee retention at the front of CFO’s minds. The report found that 93% of CFOs are ‘somewhat to very’ concerned about their ability to keep top talent in their ranks.
The rise of environmental social governance (ESG) initiatives and regulatory shifts has also raised the demand for risk and compliance roles with UK businesses launching new responsible and sustainable strategies that require candidates who can help broaden related compliance policies.
In this area senior roles are some of the most sought-after roles that businesses are after are head of compliance and compliance managers.
Chris Henson, senior manager, Robert Half said: ‘There has been high demand for digitally skilled workers in the financial services sector as the link between finance and technology becomes ever-closer.
‘Additionally, the new regulatory landscape and heightened focus on ESG strategies is creating demand for risk and compliance specialists who can help companies create, develop, and adhere to policies and frameworks in relation to this.’
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Treasury invests £500m in Plan for Jobs expansion
The Treasury announced yesterday that it was to support hundreds of thousands of people as part of a £500m expansion to the government’s Plan for Jobs scheme
As part of his speech at the Conservative party conference in Manchester, Rishi Sunak ramped up his message that he is ‘ready to double-down’ on his promise to ‘do whatever it takes’ to recover from the Covid-19 pandemic.
Sunak announced that the Plan for Jobs extension will specifically target workers leaving the furlough scheme and those who are unemployed over the age of 50.
The new package aims to ensure that older workers will receive ‘better information and guidance’ on later life planning which aims to help people make informed choices that will allow them to plan their career and remain in work.
The Government is also prioritising support for those coming off furlough through the job finding support (JFS) scheme as well as extending the job entry targeted support scheme (JETS) to September 2022.
This scheme provides online ‘intensive and tailored support’, one-to-one support for people unemployed for less than 3 months, including recruitment advice from a skilled adviser, support with CVs, and mock interviews.
Starting in April 2022, the Government also announced that it will enhance its support for those on universal credit by offering coaching support and advice to aid career progression as well as providing more Job Centre Plus specialists who will work with local employers to identify local opportunities for people to progress in work.
Measures included in the new package will include a four-month extension of the £3,000 incentive for employers to take on apprentices, there will also be an extension to the kickstart scheme which provides funding to create jobs for 16 to 24-year-olds at risk of long-term unemployment – until the end of March.
The government is also extending its Youth Offer to 2025 and expanding eligibility to include 16- and 17-year olds in addition to 18-24-year-olds.
Commenting on the announcement Ed Hussey, director of people solutions at Menzies LLP said:‘This support package is welcome news for the many thousands of UK workers finding themselves out of work and without the support of the furlough scheme. The only question is, will it be enough to help them to find jobs, so they can, at last, get on with their lives?
‘Businesses can play their part in helping people back to work, at the same time as strengthening their skills base, by taking advantage of the Government’s decision to extend the Kickstart Scheme until March next year. This scheme is designed to benefit young people on Universal Credit and has been proving popular with both employers and workers.
‘The decision to extend the £3,000 incentive for businesses taking on a new apprentice to the end of January 2021 could also help to fill skills gaps. Employers can maximise their subsidies and support by using the KickStart Scheme as a trial period for new employees, the best of whom can then become an apprentice, and there is lots of free support available for companies to navigate the process and maximise their benefits.
‘The decision to extend the period of support is significant as it is clear that the pandemic is continuing to cause disruption for many sectors, at a time when households are being affected by rising costs. The measures announced are just for the short-term, however, and there is a risk that the economic cliff-edge facing many households has just been pushed a bit further away.’
The Chancellor will confirm the specific funding for each measure of the scheme at the spending review before the government department releases its Autumn Budget on 27 October 2021.
The shadow work and pensions secretary, Jonathan Reynolds, said: ‘The government’s struggling plan for jobs has failed to hit its original targets; it is not creating the number of jobs needed and has failed to address the supply chain crisis Britain is experiencing.
‘Giving himself an extended deadline will do nothing to compensate for the Chancellor’s tax rises, cost of living crisis, and cuts to Universal Credit which are set to hammer millions of working families.’
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