2021 – A year of more change

Well we started the New Year in tiers but as I write this, in England, our tiers are drying up and we have entered a new lockdown in a bid to reduce the rate of spread of Coronavirus. Whilst clearly that is not good news the year, as it moves past February and March, looks set to bring positive changes compared to the way life has played out over the past twelve months...

Further Support from HM Treasury

Following the announcement of the third national lockdown, the Chancellor has swiftly come forward with some additional assistance over and above that already in place. This includes one off top up grants of £9,000 per property for the hard hit retail, hospitality and leisure sectors and £594 million to local and devolved administrations to support businesses affected by the lockdown but not eligible for the grants. Both these steps are obviously welcome and of course the furlough scheme is extended to end of April. These moves will hopefully assist in protecting many jobs and businesses now threatened through no fault of their own.

The vaccines

Moving to more optimistic news the recent approval of the Oxford Astra Zeneca vaccine, with initial doses being administered this week, will allow the UK vaccination programme to ramp up with now two vaccines and hopefully more to come.  30 million people have been identified as being in nine priority groups including all over 50’s, younger adults with health conditions together with care and medical staff.  With two different vaccines now approved for use, plans are underway for a mass vaccination programme on an unprecedented scale, aided by the fact that the Oxford vaccine is able to be stored at fridge temperature rather than in specialist chilling units.

Whilst it will take a significant period of time to vaccinate all, as those more vulnerable to the decease become protected the pressure on our NHS should start to lift, and we can begin to emerge from our quasi-hibernation to get our lives and business driving forward again.

Brexit

With a form of deal finally agreed and the transition period over, we have now left the EU after the deal was voted for by MPs on 30^th December.  The deal covers a rather limited range of issues including trade, customs and VAT, the use and handling of data, travel and work. Unfortunately it is close to silent on services which form 80% of our economy.  One of the biggest changes relates to the ability to work in the UK, with those wishing to work in the UK now subject to a points-based immigration system premised on various factors including the salary of the role they are applying for and their level of education. The counterbalance of course is that UK citizens cannot now easily work and live within the EU.

It is hoped that this limited deal can be the basis for more EU wide or bilateral agreements with individual EU countries in the future thereby unlocking more opportunity. Whatever your views though any deal was broadly better than no deal so we should be thankful for small mercies, especially given everything else that is going on at present.

For our latest articles on the different aspects of Brexit legislation and how it applies to and affects business click here.

So what else does 2021 have in store for us in terms of new legislation?

Spring

• The Chancellor’s budget in March could potentially bring about changes in relation to Capital Gains Tax (CGT) and/or Inheritance Tax (IHT). Whether the third lockdown will change his plans we cannot say but it is hoped nothing will be done to stifle innovation or the ambition of entrepreneurs.
• Coronavirus Job Retention Scheme will end – this popular and vital scheme, which has been a lifeline for many businesses during COVID, is due to finish at the end of April. The scheme has been extended several times and a further extension is not out of the question but we probably all hope that the vaccination programme will be advanced enough to mean this is not needed.
• IR35 – due to be implemented in April having been pushed back in 2020, the changes to the way a worker is classified (as an employee or a consultant) will have a significant impact on businesses and individuals this year. For our latest analysis and information relating to the impact of IR35, click here.

Autumn

• The long-awaited divorce law reforms will be implemented in the autumn allowing a ‘no fault’ divorce to take place in the UK. The new laws are designed reduce the time period over which divorces are finalised, remove the requirement for blame currently required to petition for divorce before a period of five years (instead simply being able to say that the marriage has broken down irretrievably without assigning fault) and also allows spouses who are both in agreement to apply for divorce jointly.  There will still be a minimum of six months between applying for a divorce and it being granted to ensure there is time for reflection and that the decision is the right one. Given the pressures couples and families have been under over the last year this may, sadly, be an oft used piece of new law.

In summary therefore, 2021 is likely to be a year of yet more change in terms of how businesses operate and how individuals are able to go about their daily lives.

With COVID and Brexit occurring together, it has been a rollercoaster during 2020 and 2021 will doubtless have its fair share of white-knuckle moments as well, but we are, perhaps, nearing the end of the ride.

Our blog will be kept up to date with any changes as they happen (click here) and if you have any questions about the effect of new legislation on your business, contact Dale Williams (dale.williams@bpe.co.uk or 01242 248234).