The Shorthand – cutting costs from cucumbers to childcare

The Shorthand
The week's small business news in under 5 minutes
19 August 2022
4 minute read

Welcome to this week's edition of The Shorthand, your weekly digest of the top news stories that affect small businesses in the UK! Here, we break down the stories you may have missed during the week, detailing what they’re all about and, more importantly, why you should care.

And all that in under 5 minutes.

Go on, put the kettle on and we’ll have you caught up with the most pressing business news stories of the week by the time you’ve finished a cup of tea.

1. New trade scheme cuts tariffs on hundreds of everyday products

What’s happening here?

As part of their post-Brexit efforts to replace trade systems set up by the European Union, the UK government has announced the Developing Countries Trading Scheme (DCTS). Designed to improve developing countries’ access to the UK market, the new scheme replaces the Generalised Scheme of Preferences (GSP).

The DCTS will make more goods eligible for tariff reductions and removals, eliminating some seasonal tariffs altogether. It will also simplify complex trade regulations such as rules of origin – which dictate how much of a product must be made in its country of origin.

Set to come into force at the beginning of 2023, the DCTS covers 65 countries across Africa, Asia, Oceania and the Americas. It will apply to a wide range of products that aren’t widely produced in the UK, including clothing and food such as olive oil, tomatoes and cucumbers.

Why should you care?

As well as benefiting emerging economies, the DCTS will help UK businesses access hundreds of everyday products at lower prices. The government estimates that businesses will save more than £750m per year on import costs – and these savings will lead to more choice and lower costs for UK consumers.

Secretary of State for International Trade Anne-Marie Trevelyan said:

We are taking back control of our trade policy and making decisions that back UK businesses, help with the cost of living, and support the economies of developing countries around the world.

UK businesses can look forward to less red-tape and lower costs, incentivising firms to import goods from developing countries.

Marco Forgione, director general of the Institute of Export & International Trade (IOE&IT), welcomed the new scheme, saying:

International trade has a key role to play in lifting people out of poverty, transforming communities and increasing sustainability. The UK’s new tariffs regime is an important step in achieving these goals.

2. Challenger banks top customer service survey

What’s happening here?

Following its investigation into the retail banking sector, the Competition and Markets Authority (CMA) made it compulsory for all relevant banks to take part in customer service surveys, hoping to promote competition between providers and provide better experiences for account holders.

In the latest survey, Starling Bank and Monzo were the top choices among both personal and small business account holders. These so-called 'challenger' banks out-ranked traditional high-street brands such as NatWest and Barclays – while some of the lowest spots were filled by Co-operative Bank and HSBC.

Asking both consumers and small businesses how likely they would be to recommend their bank to a friend, relative or other business, the survey covered the quality of online, mobile, branch and overdraft services. Small businesses were also asked about the quality of the relationship management they receive.

Why should you care?

Customer service is a key consideration when choosing any financial service, so for small businesses looking to open a current account or switch banks, these results could provide valuable insight into the different available options.

Adam Land, senior director at the CMA, said:

As the rising cost of living bites, it's important that people and businesses have the information they need to manage their money and make savings. These results show how banks are treating their customers at a time when many are feeling the pinch.

When times are tough you find out who's fighting your corner and if your bank doesn't match up to the competition – you can vote with your feet and make a switch.

In recent years, challengers like Monzo and Starling have significantly increased their market share – at the expense of high street heavyweights. The results of this survey suggest that their share could increase even further as consumers and small businesses are drawn in by better customer service and digital-first solutions.

3. Back to school? Get help with childcare costs

What’s happening here?

As the summer holidays come to an end, HM Revenue and Customs (HMRC) is reminding working parents to register for Tax-Free Childcare.

Tax-Free Childcare supports eligible families with the cost of before- and after-school clubs, childminders, nurseries, holiday clubs and other approved childcare schemes. Working parents can receive up to £2,000 a year per child, or £4,000 a year if their child is disabled.

Both PAYE employees and self-employed workers can use the scheme, but you need to earn above the national minimum wage. If you’re self-employed, you can use your predicted profit for the current tax year to work out if you’re eligible, while the earning threshold is waived if you started your business less than a year ago.

Why should you care?

More than a million families are entitled to some sort of government childcare support, but in the last tax year, only 512,415 families claimed Tax-Free Childcare.

This is, in part, because parents are unaware of the support available to them. So HMRC’s reminder will be welcomed by UK families facing rocketing prices and inflation – on top of some of the highest childcare costs in the world.

Businesses could also benefit from more parents taking up Tax-Free Childcare. Over the last year, there’s been an increasing number of women leaving the workforce due to caring responsibilities. By easing the cost of childcare, the scheme could help parents stay in work, which would be great news for employers struggling to retain and hire workers due to the current staffing crisis.

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This content has been created for general information purposes and should not be taken as formal advice. Read our full disclaimer.

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