Small businesses seek more Covid support

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The Federation of Small Businesses (FSB) is urging the Treasury to update the timeframes for business support measures, which are set to wind up this week, 18 days before the potential lifting of trading restrictions in England.

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On Thursday (1 July), the minimum 5% of wage costs that employers contribute for furloughed staff through national insurance and pension contributions will rise to 14% as the government begins to wind down the Job Retention Scheme. Firms will also have to start paying any VAT deferred from last year, and those in the retail, leisure, and hospitality sectors will lose business rates exemptions.

The FSB is calling on the government to update deadlines for support schemes. National chairman, Mike Cherry, said: “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. At the very least, HMRC should take a safe harbour approach when they are faced with a small business that has made a mistake or has no cash left – Time To Pay should be promoted and encouraged.

“As well as revising support measure deadlines and extending access to, and awareness of, the SME Brexit Support fund, we’re recommending the government look again at our proposal to give those struggling with emergency loans the option to swap that debt for employee equity. Doing so would protect the futures of viable firms, and the staff they employ, whilst helping to close our persistent productivity gap.”