Monthly Archives: April 2020

  • 0

Extension of government support for small companies?

You will be aware that Treasury is now looking at support for SMEs who pay themselves via dividend income.  They tweeted as such themselves this morning.

We’re delighted that the Treasury is urgently looking at ways to help business owners who pay themselves via dividend income, according to their own Twitter account this morning where they say they are ‘looking at proposals’.

At the moment these smaller businesses, often one-person limited companies, feel as though they have been forgotten.

We have been in contact with the Treasury to share our research with SMEs conducted in recent weeks and have suggested a practical solution that would be in line with measures put in place for the employed and larger businesses.

We suggest the government looks at extending the Self-Employment Income Support Scheme (SEISS) to include salary and dividend income from owner-managed companies, as well as self-employment income, but to exclude any furlough grants received. 

This measure would bring support for those affected in line with the support being provided to unincorporated businesses and employees. 

This would be fair and equitable, and in fact would improve on SEISS by eliminating double counting where individuals have a mixture of employment and self-employment.

  • 0

40% of SME businesses have closed due to the lockdown

Over the course of the past few weeks, UK200 Group, of which we are members, has been conducting research amongst small businesses across South East and the UK. 

The results make for worrying reading with more than 40% of SMEs closed as a result of the lockdown and more than half of all SMEs businesses having furloughed staff. 

There has been so much reported in the press about the financial impact of the lockdown due to Coronavirus. Whilst the government is doing much to support businesses and the economy, the reality is that not all businesses or jobs will be saved.  Rishi Sunak has said this himself.

Our research really brings home the reality for many businesses.  We are sharing some of the comments SMEs made to us in the research.  So, in their own words, this is what it means to SMEs in South East:

  • After nearly 2 weeks, the bank has not called me back and even though I’ve gone back to them, the response is they have my details but they are exceptionally busy and will get back to me ASAP.

  • We have contacted our bank for a loan (in March) but they have been too busy to get back to us.
  • We know that some farm machinery dealers in other parts of the country have already been awarded Local authority grants as we retail machinery and parts, but we cannot get any answers from West Berkshire Council currently.
  • We did not get the interruption loan as Lloyds said we had too much security available so got a commercial loan – not what we wanted!!
  • I was employed until June 19 but am now self-employed so I not eligible for either the support schemes for the self-employed or the furlough scheme as an employee.
  • As a small company only founded 3yrs ago, we will be hit hard in the months to come. We provide legal services on a consultancy basis, but as most law firms have had to dramatically reduce operation and in many cases furlough/make redundancies, our work has rapidly dried up. Our profits were due to fall in any event and are unpredictable as best. We are suffering simply due to the fact we have worked exceptionally hard & had two good years profit. It seems unjust that we receive little to no support, and in the medium to long term, it makes little sense for the economy for a small business such as ours to face closure.
  • l run a B&B but because l pay council tax and not business rates l am not entitled to the grant.
  • I am an owner/director with my wage topped up by dividends. Thus, no help from the government.
  • We are a registered dog homing charity. We have had to suspend rehoming as it involves non-essential travel. Our charity shop has closed, and we are unable to continue our fundraising. We are surviving because our trustees are funding the shortfall, but this cannot continue for more than a few months. We have to pay remaining staff at the kennels, animal food and kennel maintenance, services etc. Also, vet fees of £10,000 a month.
  • The Government has come up with some good ideas, but the detail is useless. Small firms are being penalised with no support available often as a result of a technicality. Home based businesses who pay domestic rates or small companies who rent premises do not meet the needs of the small business grant mismanaged by Councils.

Commenting on the survey and the specific examples from SMEs, a fellow member of UK200 Group said; “Hearing how some businesses are being affected is heart-breaking.  Many of the SMEs we are talking to feel they have been forgotten.  31% of them are predicting their business will fail if the lockdown continues beyond the end of June.  As yet we don’t know the likely impact of any ongoing measures once the lockdown is ‘eased’ but this will have a significant and long-lasting impact in the South East.

We have written to the Prime Minister, the Chancellor, Tim Loughton, MP for East Worthing and Shoreham and Sir Peter Bottomley, MP for Worthing West to ask them to prioritise support to Stay Focused; Protect the Economy and Save Jobs. We are committed to doing our bit to support our clients and all SMEs by raising issues with the government on their behalf and by collaborating with the government and others to achieve these goals.

  • 0

UK200Group in conjunction with The Martlet Partnership LLP Coronavirus Business Impact Survey – April 2020

Executive Summary

The responses to this survey confirm the widely held view that SMEs have been dramatically impacted by the effect of the pandemic. A total of 1,793 respondents, 42% report that they have closed their business as a result of the lockdown. A full 88% of respondents have had to scale down operations or close.

52% of respondents have furloughed some or all of their employees. Only the smallest businesses have had to make their staff redundant, with 2% of respondents having done so. Recruitment is frozen across the board. There is stratification between businesses of different sizes here; the larger businesses are making much more use of the furlough scheme than the smaller businesses (comparing businesses of 5-50+ people to those of 2-5 people).

The outlook shared by respondents in bleak. If the lockdown extends to 30 June, 73% of respondents expect to scale down or close (17% expect to close permanently). Again, we see that bigger businesses expect to be more resilient; 1 in 5 of those with fewer than 10 people expect to close permanently. If the lockdown goes beyond 30 June, a full 31% expect to close permanently, while bigger businesses again appear to feel most resilient as a smaller (but significant) 24% of businesses of >10 people expect to close permanently.

Despite this outlook, 71% of respondents have not approached the banks for support. Why? We can only speculate in terms of this survey. Is there no confidence in future performance to take on debt? Of the businesses who have approached the banks, 66% have had problems or have been refused funding. Bigger businesses see a greater proportion approaching the banks, with 56% of >50 people businesses having done so (vs 29% overall). There is a different experience felt by different business sizes; of applicants to the banks, 71% of applicants of 2-10 people have experienced difficulty, vs a smaller 44% of >50 people applicants.

The respondents are almost united in the impact they have felt from the lockdown, and their pessimistic outlook for the coming months and beyond. The furlough scheme has certainly been accessed, while bank support is interestingly much less accessed. We see different experiences of business sizes throughout the responses.

Overview of dataset

A total of 1,793 respondents submitted the survey.

Of these, 68% (1,214) classified themselves as limited companies. Sole traders accounted for 19%, Partnerships 10%, and the remainder “Other”. The responses are most representative of limited companies.

60% (1,073) of respondents are businesses with fewer than 5 people. By business type, 91% of sole traders reported fewer than 5 people, while 52% of companies report fewer than 5. Of companies, 41% (494) have between 5 and 50 people, with 7% (88) reporting >50 people. All business sizes are reasonably represented.

92% (1,758) of respondents are based in England, which follows for each entity type. 35% of all respondents are from London and the South East, with a further 28% from the north of England. Wales returned 111 respondents, Northern Ireland 15, Scotland 10.

Business performance

92% (1,648) of respondents reported that business was as expected or better prior to lockdown. Within the regions this is born out.

40% (724) report this time of year as busy as the rest of the year, with a further 53% (957) reporting it as their very busy period. This is reflected across all business types and regions.

Lockdown impact

A full 42% (746) of respondents have closed their business as a result. [22% due to government instruction, 20% due to business falling to nothing]. 38% of limited companies (467) report closure, vs 53% of sole traders (178).

47% (833) of respondents are running but with reduced trade volumes, therefore a full 88% of respondents have been negatively impacted by the lockdown (12% carry on as normal or better).

There is a stratification between business sizes. Larger entities (>50 people) have fared better but still we see 29% (33) of this group reporting that they have closed. A larger 20% of this group (22) report business being the same or better (vs 12% of the full dataset).

Regionally, London and SE fares best with 36% (229) reporting closure vs the population’s 42%. Overall, negatively impacted businesses in London and the SE is the same as the population, at 88%.

Wales appears to be the worst hit region, with 52% (58) reporting closure. Scotland reports the same, but the sample size is too small to be reported.


52% of respondents (924) have furloughed some or all of their employees. This rises to 60% (734) of limited companies. Only 2% of businesses (33) have made their staff redundant, and these have been the smallest businesses (31 of them fewer than 5 people). Does this indicate the furlough scheme is being used for its intended purpose?

6 businesses in total report having taken on more staff. Recruitment is frozen.

Across business sizes, there is stratification. Of the smallest (2-5 people), 48% (292) have furloughed some or all, but of businesses with 5-50 people, 82% (207) have furloughed some or all employees.

In the >50 people group, this rises to 90% (101). The biggest businesses are the ones most likely to have made use of the furlough scheme.

Table 1 – What have you done about your staff? [By number of people]

Continued lockdown to 30 June

If the lockdown continues to 30 June, 17% (312) of businesses expect to close permanently, a further 19% expect to close temporarily (346), and 36% (649) expect not to close but to scale down their operations further. In total therefore, 73% expect to scale down or close (1,307).

For all businesses with >10 people, a lower proportion of 12% (55) expect to close permanently but a larger 50% (232) expect not to close but to scale down operations.

For respondents with businesses of <10 people, 1 in 5 (257) expect to close permanently.

Continued lockdown beyond 30 June

The view becomes more pessimistic as 31% of all respondents (558) expect to close permanently. 82% in total expect to scale down or close (1,465).

For all businesses with >10 people, now 24% (110) expect to close permanently. More bigger businesses expect to ride out the storm without closure.

No regional findings to note in either of these cases.

Emerging from lockdown

58% (1,036) of respondents expect a slow start that is hard to predict, while a further 27% (488) agree that the restart will be slow, but that normality will return. Therefore 85% of respondents (1,524) expect slow beginnings. The largest businesses (>50 people) are more bullish where 40% (45) expect a slow start but a return to normality.

29% (522) are concerned their business will not survive the effect of the crisis, while a further 53% (950) expect to survive but “this year is a write off”.

This generally follows for business sizes, but those with >50 people feel most resilient. Only 13% (14) are concerned they won’t survive and 1 in 5 (22) in this group expect the year to turn out as normal, vs 16% for all our business sizes (264).

Support from the banks

Interestingly, despite the pessimistic outlook presented above, 71% of respondents (1,273) have not approached the banks for support. This raises further questions. Is this due to confidence in liquidity, despite the concerns for longevity presented? Is it an indicator that businesses are reluctant to take on debt with no confidence in future profitability (“this year is a write off”)? These can’t be answered here.

Of the remaining 28% [NB, rounding] who have approached the banks for funding, 1 in 5 (100) have found them to be very helpful and a further 14% (70) have received the funding they need. 66% (323) of those who have approached the banks, have had problems or have been refused funding.

Of businesses with 10-50 people, 41% (142) have approached the banks while 56% of the >50 people businesses (63) have done so. Bigger businesses appear to be more comfortable/savvy/have felt the need to approach the banks.

In the >50 people group of those who approach the banks, only 44% (28) of applicants have had trouble getting the funding they need. Conversely, of businesses of 2-10 people who have approached the banks, 71% (156) have experienced trouble.

As perhaps expected, the biggest businesses appear to be finding it the easiest to get access to lending.

About the survey and the data

The survey was undertaken by the UK200Group the UK’s leading membership association of independent, quality assured chartered accountancy and law firms. We are one of the member firms. Responses were captured in the first 3 weeks of April 2020. 1,793 SME businesses from across the UK participated in the survey.

  • 0

SMEs – How can we help you?

SMEs are the backbone of our economy.  They account for 16.7 million of our workforce.  They are vital to the wellbeing of our country and communities. 

That’s why we recently conducted research amongst the SME community.  1,793 participated and the results of the survey [link] are now being used by us to call on government for more support for SMEs.

We wrote to Boris Johnson and Rishi Sunak just last week calling for additional support for SMEs and we are delighted to see that a 100% government backed loan has now been introduced.

But we also know this is not enough in itself.  More support and more measures are needed; we know that many businesses need to see an end to the lockdown but are worried about the impact on any ongoing social distancing measures. 

That’s why we will keep lobbying the government on behalf of SMEs.  Please do keep telling us what you need so in turn we can do our bit to help you.


  • 0

We’ve Got Your Back – New 100% government backed loans for SMEs

In the past few weeks we’ve been calling on the government to provide further support for SMEs.  We’re delighted that today the government has announced a 100% government backed loan facility for SMEs to borrow up to £50,000. 

Our view on the new scheme is that this is just the type of funding that is required and complements the main CBILS scheme very well. The simplified application should help to streamline the application process and the ability to defer capital repayments for 12 months provides business owners the time to re-structure their business and the confidence to accept the loan. Where the decision for Banks lending to a business was marginal, delays and rejections were likely, but this scheme will be a game changer for some businesses.

  • 0

Covid19: Overcoming the Challenges to Embrace the New Normal

The impact from the Coronavirus has been far-reaching and over the past few weeks has changed the way we live for the past few weeks, no matter where you are in the world. In the UK, the last few weeks have most definitely been a challenge for most, if not all, businesses. 

The Chancellor has been keen to point out that he is doing everything he can to limit the number of business failures during this period of uncertainty. From providing the opportunity for businesses to furlough workers and receive a grant for their wages from the Government to agreeing deferrals, payment holidays, and providing cash for loans and grants. It does feel like there has been an attempt to support businesses, all for a period of at least three months. At the same time, the Chancellor has told us that there will be dark days ahead.

Starting Back Up Again

The Government are keen to start the economy moving again although the lockdown is set to continue until at least 7 May 2020. Most businesses have focused on their immediate cash requirements over the last few weeks, using short term cash flow forecasts to understand the actual cash coming in and what is going out. Using these forecasts as a base, businesses should now be starting to look at what the next few months will look like. We look at some actions that you can take below:

1. Speak to Your Existing Customer Base

Speaking to your customers will help you to understand what their challenges are, what their immediate/short-term needs look like and will help you to assess their ability to pay you going forwards. There may need to be some adjustments to orders received based on how they envisage demand after the lockdown comes to an end.

2. Turning Work in Progress into Cash 

Whether you are a professional services firm or a manufacturing business, reviewing your work in progress will help you to understand whether you have the ability to complete any of your existing work in progress without the need for additional purchases or input. Concentrating some of your initial efforts on turning work in progress into cash will assist you with your working capital cycle.

3. Identify What Additional Purchases You Need

Carrying out a review of your work in progress will also help you identify what purchases you need to make in order to complete your existing orders. Where you have outstanding payments to suppliers, talking to them about the orders that you have received and cashflow will help you to work with your suppliers to get moving again.  

4. Book Your Haulage in Advance

If you use an outsourced logistics or distribution operation, make sure that you have booked your haulage in advance so that any delays in getting finished products out to your customers are minimised.

5. Reviewing Your Supply Chain

This is a good opportunity to speak to suppliers and understand what their challenges are. Building relationships with your suppliers will go a good way to helping you to move forward – if you have communicated with them with regards to your challenges, the chances are they will be more amenable to being flexible on payment terms in the short term.

6. Consider What the Return to Work Looks Like for Your Employees

Where you have furloughed staff, take some time to think about whether a return to work needs to be phased or shift patterns need to be changed if social distancing rules are set to continue. Where working patterns need to be changed, make sure you seek advice from your employment advisors.

Looking Further Ahead

The position now may seem relatively stable, but the VAT, tax and loan payments which have been deferred will all need to be paid back at some point. Making sure you have enough cash in the future months to meet these obligations will be vital if your business is to exit this period relatively unscathed. Cash will be tight whilst the working capital cycle builds up again and there is likely to be some flex needed with payment terms. Starting to prepare a longer-term cashflow forecast will help you to understand what additional funding requirements you may need, and in what form. 

Many businesses are likely to need some additional help as they start back up again. Even businesses which have been going for many years will likely need to treat their business as a start-up for the next few months. Taking action now will ensure that the dark days ahead will end sooner rather than later. If you are concerned about what the future holds for your business or need some advice about what steps you should be taking next, please get in touch with our team who will be able to help you.

  • 0

  • 0

Operation Furlough

The HMRC portal to enable claims under the Coronavirus job retention scheme (furlough) is now open.

It is estimated that up to one million claims will be made but we understand that the site can accommodate a maximum of 450,000 users at any one time.

It also appears that the relevant connections to make the claim do not jump off the HMRC page and so we are giving below details of the relevant link:

HMRC then published the following useful information:

How to claim

You’ll need the Government Gateway user ID and password you got when you registered for PAYE online.

Online services may be slow during busy times. Check if there are any problems with this service.

Claim now

After you’ve claimed

Once you’ve claimed, you’ll get a claim reference number. HMRC will then check that your claim is correct and pay the claim amount by Bacs into your bank account within 6 working days.

You must:

  • keep a copy of the claim reference number for your records
  • keep a copy of your calculations in case HMRC need more information about your claim
  • tell your employees that you have made a claim and that they do not need to take any more action
  • pay your employee their wages, if you have not already

Contacting HMRC

We are receiving very high numbers of calls. Contacting HMRC unnecessarily puts our essential public services at risk during these challenging times.

Do not contact HMRC unless it has been more than 10 working days since you made the claim and you have not received it in that time.

  • 0

Press release: 25.8% of struggling small businesses in the South East will not survive the Coronavirus crisis

New research has revealed that 25.8% of struggling small businesses in the South East do not believe their business will survive the Coronavirus crisis. This compares to 30% across the UK.

Additionally, the research which has been conducted with 1,400 small businesses across the UK shows that 80% of businesses who feel they are at risk of failing are encountering problems in getting help from the banks.

The research, which has been undertaken by The Martlet Partnership together with other members of the UK200Group, asked small businesses across the UK to share information about how their business was faring before the lockdown and what has happened since. 

92% of the businesses surveyed felt their business was either trading ‘as expected’ or ‘better than expected’ before the crisis.  Since the lockdown 40% of these businesses have closed, either by the government or due to falling trade.

But the biggest underlying concern for many is the inability to access funds. 

Many participating in the survey recognise that the banks are doing their best, but they are stretched and are struggling due to a combination of lack of clarity on the new schemes from the government, increased demand and reduced resources due to the lockdown.

One respondent, an optician commented; “After nearly 2 weeks, the bank has not called me back and even though I’ve gone back to them, the response is they have my details, but they are exceptionally busy and will get back to me ASAP.”

The issue is compounded due to grants to cover furloughed staff costs not yet being available and thus the pressure on the cashflow for these small businesses is being stretched to breaking point.

Commenting managing director, David Macdonald of The Martlet Partnership of said; “Our concern is that these small businesses will simply run out of cash and that will result in many very good small businesses failing.  Yet this is avoidable as there are grants and schemes that have been made available, but they are not easily accessible or understood.  We are working with clients to support them in packaging their applications and then presenting them to the banks to ensure they have the best chance of a quick and positive response and thus can get the money they need to survive.”

We urge all small business owners to ask their accountants and business advisers to help them with their grant and loan applications.  Aside from being able to support you with your applications, they can also clearly explain the different options and schemes available and can advise businesses on the best course of action for them.

  • 0

Update on portal for businesses

The online portal through which businesses can register their furloughed workers and apply to receive a grant to cover 80% of furloughed workers wages from the government, will be available from 20th April.

Furthermore, the government has extended the eligibility to 19 March 2020 – the day before the scheme was announced. Previously the date had been set as 28th February.

This means that employers can claim for furloughed employees that were employed and on their PAYE payroll on or before 19 March 2020.

Clearly getting details of the date from when employers can start making a claim plus the date extension is welcome news.  However, it seems clear that the HMRC will be inundated with queries and claims as soon as their online portal opens on 20th April.

Therefore, they have asked accountants such as us, to support them in this mammoth task of getting these grants to businesses as quickly as possible and with the minimum of fuss.

If you need to apply for a grant, we recommend that you start to collate the information that you will need now, ready to submit your application on 20th April to receive your grant at the earliest possible date.

The key things that employers will need to make a claim are:

  • Your PAYE reference number, UTR and Company number (if applicable)
  • The number of employees being furloughed
  • The claim period (start and end date)
  • Amount claimed
  • Your bank account number and sort code
  • Your contact name and your phone number

N.B. In most cases, Payroll agents are unable to file a claim on behalf of an employer.  Unless you can confirm that your agent can definitely do so, you will need to be registered for PAYE Online through the Government Gateway.

If you would like assistance with making your claim, please get in touch at the earliest opportunity. Even if we cannot make the claim on your behalf, we will help you gather the required information and submit it in the correct format to help you get the funds as quickly as possible.

Contact Us

The Martlet Partnership LLP
Martlet House
E1 Yeoman Gate
Yeoman Way
West Sussex
BN13 3QZ

Tel.: +44 (0) 1903 600555
Fax.: +44 (0) 1903 600828