Trade bodies plead with government to prop up small business during COVID-19 outbreak
While cases of COVID-19 remain comparatively low in the UK, government has moved to the ‘delay’ phase of its action plan and the rash of panic buying continues, leading retailers to increasingly seek advice on what is to come and potential worst-case scenarios.
As well as the £330bn care package for business, announced by government on Tuesday, March 17th, a number of trade bodies have offered support and advice on how best to act.
The Association of Convenience Stores (ACS) has echoed government advice while lobbying to ensure small retailers get the support they need when it comes to dealing with the impact of coronavirus.
The organisation has called for an automatic deferral of payment of VAT, employers NICs, business rates, PAYE and corporation tax for at least six months, a government fund to compensate businesses impacted by coronavirus and subsidised wages for people laid off as a direct result of the outbreak.
Unveiling new measures to tackle the impact of the disease at a press conference on Tuesday, March 17th, Prime Minister Boris Johnson and Chancellor Rishi Shunak announced a support package for businesses affected by coronavirus.
The measures include: government backed loans for any business that needs access to funding, an extension of the business interruption loan scheme for SMEs for up to £5m – due to be in place by the end of next week, cash grants of up to £25,000 for all local shops who have a rateable value of less than £51,000, an extension of the business rates holiday to all businesses in the retail and hospitality sector for 12 months, cash grants for businesses currently eligible for Small Business Rate Relief or Rural Rate Relief will be increased to £10,000.
However, the Federation of Small Business (FSB) has said in response: “While it is a major lobbying win to get these decisions, only some of that support is available instantly. A decision for a scheme or initiative is not enough.”
Additionally, Robert Chote, the head of the budget watchdog the Office for Budget Responsibility, has warned that the government must spend without regard for the national debt in this ‘wartime situation’.
The FSB is imploring larger businesses to pay any invoices owed to small businesses immediately, and, if they hold any unpaid invoices, to pay them as soon as possible. It has also advised small business owners to talk to their insurers about what happens if they need to close their doors temporarily. If retailers’ insurance includes business interruption cover, the policy may still include an exemption for ‘notifiable diseases’, which COVID-19 has been declared by government, according to the FSB.
The federation emphasised the importance of communication ahead of a potentially stricter shutdown. In a statement, the federation said: “Please keep talking to everyone. Before this crisis escalates, touch base with your clients; your suppliers; your bank; your accountant; your solicitor; your neighbour; the FSB; any other business groups or associations; and fellow small businesses.
“Even if you have to self-isolate, you are not alone. Everyone will be affected. We are all in this together.”