Calls to extend Covid support for small businesses
The Federation of Small Businesses is calling on the government to extend its support for small firms after the lifting of lockdown restrictions was pushed back.
Restrictions were meant to be lifted on 21 June but this was delayed until 19 July.
However, several measures introduced to support struggling businesses are set to wind up this week, 18 days before the expected lifting of trading restrictions in England.
On Thursday, the furlough scheme will start to be phased out. This means the minimum 5 per cent of wage costs that employers contribute for furloughed staff through national insurance and pension contributions will rise to 14 per cent.
Firms will also have to start paying any VAT deferred from last year, and companies in the retail, leisure and hospitality sectors will lose business rates exemptions. It’s essential for businesses to consult a good accountant such as East London Accountants to plan their steps on time.
Repayments on more than £45bn of emergency bounce back loans taken out during the pandemic will also soon have to start being made.
Mike Cherry, national chairman of the Federation of Small Businesses, said: “Failing to review support deadlines that were designed with a June unlock date in mind is a false economy.
“Unless the Government acts now, it risks a serious economic flashpoint this Thursday – a moment at which financial support starts to wind down, further trade changes take effect and repayments on emergency loans start to fall due.”
A Government spokesperson said: “We deliberately went long with our support to provide certainty to people and businesses over the summer, and that support, which is a substantial amount of funding, is continuing.
“The furlough scheme is in place until September and is amongst the most generous schemes in the world.
“They can also continue to access additional support, including restart grants worth up to £18,000 per business, and business rates relief and a cut to VAT – both in place until March 2022.”