It’s fair to say that we are living through unprecedented times with governments around the world taking actions that would normally unheard of in peacetime.
Yesterday, the chancellor, Rishi Sunak, announced an initial package of measures totalling over £350bn to support people and businesses as the coronavirus situation escalates.
Sunak also made the point of repeating many times, a pledge to deliver “whatever it takes” to keep companies and households solvent, with the general feeling that this was just the beginning of what we can expect from the government.
As part of the £350bn+ package detailed by the chancellor, £330bn (equivalent to 15% GDP) of state backed loans have been made available to all businesses in the UK. Money will be available from the start of next week and while a positive step, it is important to remember that these are loans and will ultimately need to be repaid in the future.
Alongside loans, small businesses eligible for Small Business Rate Relief will be able to apply for grants of up to £10,000, up from the previous limit of £3,000.
A separate £20bn package of measures was announced for some of the hardest hit industries including retail, leisure and hospitality. Cash grants up to £25,000 are to be made to businesses in the mentioned sectors, with business rates also set to be scrapped for one year.
IR35 delayed until 2021
Speaking in Parliament on Tuesday evening, Chief Secretary to the Treasury Steve Barclay said: “The government is postponing the reforms to the off-payroll working rules, IR35, from 6 April 2020 to 6 April 2021.”
This will come as a relief to all businesses – from end clients, to PSCs to agencies.
‘Medium and large businesses’ that have been applying blanket ‘inside’ bans, are now in a position where they can review their resource requirements with more ease.
For all businesses, cash flow is going to be incredibly important (as evidenced by the £330bn loans). ‘Medium and large businesses’ can take appropriate steps to switch gears and put their focus into driving forward programmes that stimulate business growth.
For agencies, this means picking up calls to all clients and prospects and clients at ‘Medium and large businesses’ to ascertain:
- What contractors were going ‘inside’ that now need their contract to be reviewed?
- What placements that were ending before April 6th can now be extended?
- What teams can they hire to run growth projects?
- What hires were going to be perm that can now be run as a fixed contract?
- What is their recruitment hiring policy relating to Coronavirus and how agencies can support contingency?
Remember, your agency has the networks and with businesses distracted by how they sell and remain competitive in this market – working with suppliers to hire top talent will be much needed.
The benefit for the end clients are clear:
- Hiring contract over perm reduces overheads and employment law compliance and associated costs
- Extending contracts means projects stay up and running with no delay in delivery
- Hiring contract increases the client’s flexibility to ramp up or decrease team sizes per project