UK200Group Member Responses to COVID-19
This morning we bring updated insight from fellow UK200Group Members with regards the Government’s support packages for SMEs with regards to the current crisis.
UK Financial Support for SMEs from Tax Panel
The evening of Tuesday 17th March, Chancellor of the Exchequer, Rishi Sunak, announced that he will be almost tripling the UK coronavirus rescue package for the UK economy and new measures have been put in place to support businesses. We reached out to the UK200Group Tax Panel for their expert views on this subject matter. Please see the responses below:
Paul Brown, Whittingham Riddell
‘The grants for smaller businesses (up to £10k for businesses qualifying for small business rates relief and up to £25k for retail, leisure and hospitality businesses with properties with a rateable value between £15k and £51k) are obviously very welcome as a short term cash injection and should go some way to easing immediate cash flow issues. Similarly the business rates holiday for all retail, leisure and hospitality businesses can only be a good thing as well. Allowing restaurants and pubs to operate a takeaway service might make some small difference as well – I for one am prepared to make the sacrifice and eat more takeaway if it is in the national interest!
The government backed loan scheme is also going to help mitigate the short term impact, especially if the first six months are interest free. However the reality is that this is just a loan (and one guaranteed by the government rather than provided by it). It will therefore have to be paid back at some point. Businesses will need to be realistic in terms of how much they borrow and how they can repay it once the situation returns to normal, otherwise they might just be “kicking the can down the road.” The cynic in me thinks that it is slightly disingenuous of the government to be trumpeting £330 billion in support when in reality it is the lenders who will be putting the cash on the table and the government will (aside from covering the first six months of interest) only bear a cost if the guarantee is ultimately called upon. That is not to say the support is not valuable – it clearly is – but I do wonder whether more emphasis on grants and the like might have been more valuable in securing the longer term future of business.’
Francis Whitbread, Edmund Carr
‘Whilst the financial support package is very welcome, my view is that a considerable amount of clarification is needed on how it will be applied. I would have thought a self-employed individual was a business and so was in need of support, but there is an implication this is not the case. The only reference to self-employed persons is under the section “Support for businesses paying tax”, which talks about “All businesses and self-employed people in financial distress”. Elsewhere the term used is “business”, so does this mean the only support envisaged for other self-employed persons is a longer period to pay tax? Given the large number of individuals who are self-employed, proper support is also needed for them.
Other Comments…
Equally we have comments from another UK200Group member – the Succession Forum Chair, Richard McNeilly of member firm Dains.Please see below:
Filing deadlines
On a daily basis, we are being asked to postpone fieldwork with clients (mainly audit) this will impact the client at ourselves. Firms don’t run with loads of capacity so if we miss the ‘window’ with clients to complete their work, it is possible that we will not be able to fit it in later (depending on how long the issues persist). The ICAEW aren’t going to drop their standards (quite rightly) but it may help to improve flexibility in filing deadlines for statutory accounts and corporation tax in due course.
HMRC – time to pay and other queries
Whilst recognising that HMRC are likely to be inundated with TTP requests, it would be helpful if government can ensure that there really is some ‘joined up thinking’ between policy makers and HMRC, implementing TTP. On too many occasions in the past HMRC have been unwilling to accept the narrative accompanying a request from business owners, many of whom have played by the rules and paid their taxes. Rather than HMRC intervene on every occasion, surely HMRC/government can simply apply a set of rules to TTP, which accountants could secure through provision of information in a standard format – simple form, simple process – no need to intervene and waste time arguing! If this applies for initial requests only, this would hugely reduce the workload of HMRC.
