What’s happening in the UK – The month of September has always been the time for beginning new adventures. With universities and schools both starting up again, it’s time to see whether our ‘new normal’ way of living will work after the COVID-19 pandemic. Businesses seem to be optimistic about this semi-return to normality, with a good 63,506 new businesses being formed this month alone. However, events may not be quite as rosy as they seem, with the end to the government furlough scheme causing chaos for thousands of already existing businesses. It could be the case that these new businesses are arising to take the place of the ones struggling to survive without the furlough scheme, as starting a business now would be a much more stable venture than trying to shift one-off substantial government support.
CCJs and charges filed both remained relatively stable this month compared to previous ones at 6,949 and 8,361, respectively though the slightly higher number of charges filed in the previous months may reflect the increase in struggling businesses.
As mentioned earlier, the furlough scheme set up by the UK government to preserve businesses throughout the pandemic began in April 2020. At the end of September this year, the scheme officially ended, leaving hundreds of businesses that were still struggling to cope with the pandemic stranded. It has been estimated that since the beginning of the pandemic, over £70 bn has been paid out to over 11.6 million As mentioned earlier, the furlough scheme set up by the UK government to preserve businesses throughout the pandemic began in April 2020. At the end of September this year, the scheme officially ended, leaving hundreds of businesses that were still struggling to cope with the pandemic stranded. It has been estimated that since the beginning of the pandemic, over £70 bn has been paid out to over 11.6 million workers throughout the UK, with some of the biggest borrowers including companies that rely heavily on waiting staff, such as JD Wetherspoons or airlines such as British Airways. Naturally, this has led to worries of huge redundancies in the UK but, paradoxically, we may not see these redundancies affect the UK unemployment rate all that much. This is because since the COVID pandemic, over a million job vacancies have opened up across UK hospitality sectors as overseas workers have moved back to countries where their families reside for the duration of the pandemic, and the UK is struggling to entice them back.
Despite the furlough scheme ending at the end of this month, the UK government has already announced a new scheme to help vulnerable families through the winter. The scheme, named the Household Support Fund, will hold around £500 million to give out to qualifying households throughout the winter who have struggled to get back on their feet in the wake of the pandemic. The fund will be for the purchasing of clothing, food and heating and available from October onwards.
One of the largest stories to rock the world of business this month was the release of the Pandora Papers. Similar to its predecessor the Panama Papers, this 2.94 terabyte leak (equivalent to 2940 gigabytes) has had huge effects in exposing the super elite. Multiple big names have been exposed in the almost 12 million document long leak, including the likes of the Qatari royal family as well as the king of Jordan, large Tory donors and Tony Blair himself. The Qatari royal family was found to have avoided a massive £18.5 million in taxes on their London mansion, with the king of Jordan also secretly snapping up homes across the capital under the guise of shell corporations. In total, more than 330 of the world’s politicians from over 90 countries as well as over 130 people from the Forbes rich list have been found using secret offshore companies to hide their wealth.
However, despite its potentially huge ramifications this event doesn’t seem to have shocked too many people, especially with the previous leaks of the Panama papers and Paradise papers in 2016 and 2017. Although the UK government has previously promised to implement legislation to prevent anonymous companies from owning property in the UK, this has not yet been established into law. The original draft for the legislation was written in 2018, and has still yet to be brought to vote before MPs in the House of Commons. Surprisingly, although the Panama papers dealt with the Panamanian service provider Mossack Fonseca, the new Pandora papers point to a larger, more western-centric ring of corruption. Within the documents, comprised from 14 financial services providers across the western world, US states South Dakota, Florida, Nevada and Delaware were pointed out as having key roles in becoming the modern tax-havens for the super elite.
One of the more surprising names to be seen on the list of the Pandora papers was that of former Prime Minister Tony Blair and his wife Cherie Blair. The Blairs were found to have purchased a £6.5 million London townhouse just north of Mayfair without paying stamp duty, effectively avoiding over £300,000 in tax. They were able to do this by not buying the property itself, and instead by purchasing the company that owned the property. They did this by forming a company called Harcourt Ventures, whose information can be found on DataGardener’s company search page, with each of them owning a 50/50 stake in the company. Then, this company acquired the company Romanstone, formerly owned by the Alazyani family business. 30 Harcourt Street was owned by Romanstone, meaning that when the company was dissolved into Harcourt Ventures, the townhouse went with it without any stamp duty.
With the end of furlough in sight and the exposition by the Pandora papers, what does the future hold for UK businesses both large and small? If there’s one thing that is certain over the next few months, it’ll be testing our ‘new normal’ and seeing how UK businesses will manage to live in a constantly uncertain environment.