Welcome to the December 2021 'Need to Know' update. You'll find the latest key information on HMRC loan charges, regional air connectivity, support for Welsh SMEs, Northern Ireland Covid checks, single-use plastics being phased out and the fall-out from the cancellation of the Eastern leg of the HS2 project.
Suicides linked to HMRC repayment demands
There have been eight cases of suicide among people facing HMRC demands centred around the loan charge controversy, ministers have admitted.
MPs from all parties had already raised suicide concerns over the loan charge, which was imposed on self-employed and freelance contractors who took part in loan schemes, with HMRC imposing large demands for repayment in some cases.
The tax authority has ruled that they avoided tax through “disguised remuneration schemes”, those facing bills say that they are victims of mis-selling, and that they used the schemes in good faith after professional advice.
HMRC has referred eight cases of suicide to the Independent Office for Police Conduct, which oversees certain serious complaints about the conduct of tax inspectors.
Just a few weeks ago, more than 200 MPs demanded HMRC provide a 24-hour suicide prevention helpline for those affected.
HMRC levied the charges on people who took part in loan schemes that the tax authority now claim are “disguised remuneration” devices, allowing people to avoid paying national insurance and income tax. Because the schemes were used for many years without being closed down, some of the bills involved are massive. It is thought that about 50,000 people are being pursued for about £3bn in total.
You can read more here.
Government boosts regional air connectivity with £4.3 million to fund flights to London from Dundee and Newquay
The Government has confirmed it will provide up to £4.3m to fund direct flights between London and Newquay, and London and Dundee, in a major boost for regional links across the country.
Cornwall Council will receive up to £1.8 million over two years to run flights from London to Newquay in a reinstated public service obligation (PSO) agreement that will create hundreds of jobs and keep people connected as we build back better from the pandemic.
The Government has also confirmed that it will provide up to £2.5 million to fund direct flights for a further two years between Dundee and London until 2023. This funding will keep an important route running, supporting regional links across the country.
The two PSO agreements ensure that people from both ends of the country can stay connected through direct flights and benefit from economic growth through encouraging tourism and business travel for years to come.
The airline Loganair will continue to run the flights to Dundee, operating from Dundee Airport to London City Airport. Flights from Cornwall Airport Newquay to Gatwick will start on 9 December 2021 and will be operated by Eastern Airways.
You can read more here.
£45 million package to train staff and help Welsh SMEs grow
A £45 million package of funding that will help small businesses across Wales to grow and support thousands of people to train to work in key sectors is being made available by the Welsh Government.
As part of the package, £35 million will help small and medium sized businesses (SMEs) in Wales relaunch, develop, decarbonise and grow to help drive Wales’ economic recovery. The funding will support more than 1,000 business, help to create 2,000 new jobs and safeguard a further 4,000 jobs.
In a joint initiative between the Economy Minister and the Minister for Education and Welsh Language, Jeremy Miles, an additional £10 million is being made available to boost Wales’ popular Personal Learning Accounts. This will enable further education colleges to deliver additional courses and qualifications which will help 2,000 people access a wider range of job and earning opportunities in priority sectors facing labour shortages.
Funding will be specifically targeted at reengaging and retraining staff to return to work in the NHS and in social care, training more HGV lorry drivers, reskilling individuals to respond to exciting new job opportunities in green construction and renewable energy, and to ensure there are more trained chefs, waiting and front of house staff to work in Wales’ thriving hospitality sector.
Ministers say the substantial package will help support Wales’ economy through the winter months.
Read more here.
FSB release results of a Northern Ireland poll on Covid Status Certification Checks
Following the Executive’s recent vote to introduce mandatory COVID Status Certification checks in a wide range of business settings, FSB Northern Ireland has polled its members and found an alarming disconnect between the Executive policy and the business community.
Speaking about the Poll, Head of FSB Northern Ireland, Roger Pollen said:
“In the wake of the news that many businesses will be required to introduce mandatory checks - where they will be required to ascertain whether customers are either ‘fully vaccinated’; can produce a negative Lateral Flow Test; or can demonstrate natural immunity - we quickly started to hear expressions of real unease right across our membership.
“This ranged from concern around the lack of clarity as to the actual purpose of the checks, to the massive additional burden such checks could impose on businesses.
“There was also real concern about the inequality of approach, as it proposes only requiring the private sector to implement the checks, with no similar requirement in enclosed spaces operated by the public sector.
“The level of concern was such that we felt it important to poll our members to gauge the depth and breadth of feeling - the response to the poll was surprisingly quick and substantial.”
Read more here.
Small firms back step away from single-use plastics
The Government is considering the introduction of a ban on polluting plastics across England, Environment Secretary, George Eustice, has announced.
If successful, the bid to eliminate plastic waste will see single-use plates; cutlery; expanded and extruded polystyrene; and food and beverage containers being phased out. The recent proposals were drawn up after 12 weeks of public consultation. In tandem with banning polluting plastics, businesses and consumers would be prompted to make use of sustainable alternatives.
Only 10 per cent of the 1.1 billion single-use plates and 4.25 billion single-use items of cutlery used in England annually are recycled. The Government is considering future policy measures such as the implementation of mandatory labelling on packaging to ‘help consumers dispose of these items correctly.’
Federation of Small Businesses (FSB) National Chair Mike Cherry said: “Small businesses are right behind the Government’s efforts to stamp out use of harmful single use plastics. The majority are proactively upping their recycling efforts, and a big share are assessing alternatives to plastic wherever possible. Among smaller retailers, close to half are already exclusively using packaging that’s recyclable, reusable or compostable.
“We look forward to exploring the most effective incentives for spurring change with policymakers – driving investment in innovation where replacement materials are concerned, recycling infrastructure, and awareness-raising.
“The Government has already taken a positive step in exempting green investments from business rates valuations. We now need to look at positive nudges elsewhere.
“We’re encouraging the Government to follow the Help to Grow model with a Help to Green initiative. Doing so would empower small employers and sole traders to make the changes necessary to reach net zero at a time when cash is still tight and supply chain disruption, labour shortages and a forthcoming tax jobs tax hike are all weighing on small business confidence.”
You can read more here.
Worry levelling up going off track after HS2 update
The Government announced in November it is scrapping the Eastern leg of the multi-billion pound rail infrastructure project, High Speed 2 (HS2).
The promised new rail lines would have nearly halved travel times between major cities, creating new network opportunities for regional businesses as well as more accessible commutes.
As a substitute for the cancellation, the Government has announced the new Integrated Rail Plan (IRP), a £96bn investment package for the Midlands and the North. The move has sparked disappointment amongst some regional business leaders, while others have praised the new plan and the £18bn savings it will ensure.
Federation of Small Businesses (FSB) National Chairman Mike Cherry said: “Confirmation that a significant section of HS2 is not going ahead will come as a big disappointment to small firms right across the country which were banking on its delivery.
“Targeted, local investment is a great thing. There will be those who worry that the levelling-up agenda is already going off track.
“Fundamentally, we need guarantees that the investment being promised will deliver the same benefits as the original plans where passenger and freight capacity are concerned. For the sake of business travel, tourism, supply chains, international trade, and levelling up in the round, that same additional capacity needs to be there.
“Suddenly changing course on a project like this when so many were working on the basis that it was going ahead is never helpful. That said, there are some interventions to welcome as part of this release, not least around flexible ticketing.
“Small businesses will be hoping that the Government can reassure with specific investment proposals when it publishes its plan in full tomorrow.
“Any savings realised should be directed towards a holistic levelling-up approach, assisting firms with the spiralling cost of doing business by increasing the Employment Allowance, launching a Help to Green initiative aimed at spurring sustainable investment, and taking more of the smallest businesses out of the business rates system.”