2024 Budget: Key changes and the implications for individuals and businesses
Today, Chancellor Rachel Reeves delivered her Budget speech, representing the Labour...
The government has done a good job supporting many businesses throughout the Covid-19 crisis, but we now need greater clarity to help SMEs survive the deluge of debt so many will face in early 2021.
One of the biggest issues facing SMEs in 2021 is that of how debt deferred in 2020 – such as VAT and income tax – is going to be treated by the government and their agencies.
On top of this many SMEs have borrowed via bounce back loans and the Coronavirus Business Interruption Loan Scheme (CBILS), which have 12-month repayment holidays, and so payments will start in the Spring of 2021.
Without clarity many businesses will understandably be taking drastic action now in order to minimise the risk of being unable to pay the likes of deferred Income Tax, VAT and their Bounce-back loans at the time due. The most likely impact will be higher redundancies than might be necessary.
And this is why we are calling on the government to take action now to introduce measures to address this worry and to provide support that goes further.
Together with our colleagues at the UK200Group we have produced a paper which details recommendations on several financial problems affecting SMEs as a result of Covid-19.
This paper has been sent to, and is currently being considered by, the government.
Measures being recommended include:
- Consolidate certain debts into a single business support loan owed to HMRC.
- Establish a threshold for loans repayments based on a criterion such as: average profits of the last 3 years, size of business and size of loan.
We are encouraging SMEs to get behind our proposals by writing to their local MP to encourage them to support the introduction of the measures. We have produced a template letter that SMEs can use. This is available to download here [insert link].
Here to Help
In this year of uncertainty your business will be facing some unique challenges. With so many changes to taxation and grants and with other measures having been introduced, it can be confusing to keep on top of your entitlements and indeed, obligations.
Please do get in touch if you would like to receive some guidance or advice that is specific to your business and your circumstances.
ENDS
This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice. All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.
