The impacts of 2020 and the COVID-19 pandemic have taken their toll on businesses in the last year, particularly those in the retail and hospitality sectors. With so much uncertainty in the new year around Government support, the Budget and Brexit, it has been a uniquely challenging start to 2021. But now spring is finally here, what does the rest of the year hold and can there at last be a sense of optimism? ProActivity spoke to Tara Aldwin, Director at Foxley Kingham, about whether the outlook is brighter for 2021.
“We’ve seen businesses having to adapt literally overnight so they can continue to trade. Where businesses have been able to do this and adjust and be flexible to the changing lockdown restrictions, the outlook is promising – certainly compared to what it was at the beginning of this year.”
“As recently as the new year, we still had so much uncertainty that it was extremely difficult for businesses, and individuals, to plan ahead in any significant way. We didn’t know what would be in the Budget, the detail of trading implications due to Brexit, or what the level of Covid-19 support would be from Government.”
Now the Budget is published, Brexit is unfurling, and the extensions of Government support have been announced, we asked Tara, if these developments have the desired positive effect for businesses.
“In that businesses can now plan ahead, yes definitely. Although the landscape is still very uncertain, we know so much more now regarding the Budget, support and Brexit, that businesses are in a better position to be able to make future plans and regroup accordingly,”
But what are those plans? How has Tara seen businesses regroup and get to grips with planning their future?
“Digital is huge now of course. We’ve seen the businesses who have embraced digital, and really taken the time to use their data to understand their customers, and work out how best to serve them online, have gained so much, not only in terms of immediate resilience, but in future-proofing their setup.”
Certainly, businesses can feel more confident about the extended furlough and self-employed scheme support from Government until September this year, although employers will have to contribute from July. But at least this sets the landscape. Is this enough stability for businesses to feel more confident they are over the worst?
“I would say there is enough certainty now for us to feel more optimistic about the future, but I have a caveat: it’s still very much a time to remain cautious,” says Tara.
“The Budget could have been worse for businesses, and restrictions are starting to ease, but we’re not out of the woods yet and I would caution any business owner against thinking this is the case. The furlough and self-employment schemes are extended until September, and the rise in Corporation Tax is coming, but not until 2023. These are all positive outcomes and give us a strong indication of where we are. If the devil is in the detail, which it is, we can now say we know more of that crucial detail to enable us to plan a recovery journey.”
So, a hint of spring optimism is in the air, perhaps? “The brighter days, the fact we have a vaccine now and the Government‘s roadmap for easing restrictions all add to the positivity and brighter outlook. We just need to balance our optimism with an amount of realism. We’ve come so far. Businesses have really dug in to weather the storm. But we need to be able to see the recovery through a bit longer.”
It’s all good for those businesses with a clear plan, but what about those businesses still struggling to see a way forward, and for who the Government support isn’t enough?
“There is help available, My advice is to talk to us at the earliest detection of difficulty. It’s much easier to put measures in place to safeguard the future than it is when at crisis point and options are running out. We can help with finance applications, tax deferrals, grant applications and tax efficiency strategies. Long-term success is all in the planning, and that’s truer now more than ever. We’ve got more information now to be able to do that, which is really positive.”