Small business calls for support extension to match reopening delay

Small business organisations call for stop to employers helping pay for furlough, forbearance on Covid loans and extending the ban on landlords evicting commercial tenants

Small business associations have called for support to be extended to match any delay in reopening due to current lockdown restrictions.

The final easing of lockdown restrictions is set to be postponed beyond June 21, according to reports. Most current rules will remain in place.

However, from July 1, businesses are due to contribute 10 per cent of staff wages in a staged withdrawal of furlough, which is set to finish at the end of September. And a moratorium on evictions and debt collection from commercial tenants is due to lift on June 30.

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The worry is that without more taxpayer support already vulnerable small businesses will close completely.

Organisations including the Federation of Small Businesses, UK Hospitality and British Chambers of Commerce said they were poised to demand help such as loan forbearance, more generous furlough terms, and an extension to an eviction ban and business rates holiday.

Most hospitaly venues are still losing money, are buried under a mountain of debt, and consider any delay to the lockdown easing timetable as a grave threat to the industry with hundreds of thousands of jobs at risk. The hospitality sector would lose about £3bn in sales from a one-month delay, UK Hospitality said.

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Kate Nicholls, chief executive of UK Hospitality, said that full business rates relief, which runs until the end of this month, should be extended by three months.

Craig Beaumont, of the Federation of Small Businesses, told the Times: “Changing the road map will be a huge blow to businesses in the night-time economy who have had five quarters of no revenue whatsoever. For everyone else, the chopping and changing makes it impossible to plan and mitigate against the difficulties of restricted trade.”

The BCC said the chancellor would need to delay the tapering of the furlough scheme and called for cash grants, adding that “measures need to be in place until the economy is able to reopen fully”.

Claire Walker, co-executive director of the BCC told the newspaper: “We would be calling for the government to provide further cash grants, at least equivalent to levels provided during the first lockdown, and to delay the tapering of government payments into the furlough scheme, planned for the start of July.”

Beaumont added that there was “lots government can do to help” and support measures must include an extension of fully subsidised workplace testing, a delay to the end of the rent moratorium, and emergency insolvency protections, leniency over state-backed loan repayments for those whose reopening is delayed, plus an extension of business rates relief for affected sectors.

He added that the ability to defer VAT is also due to end this month. “A third of those who deferred their VAT have yet to agree a repayment plan,” said Beaumont. “We will be pressing for more support.”

The reopening delay means that nightclubs will remain closed. A recent poll by the Night Time Industries Association showed 90 per cent of businesses saying another reopening delay would have a criticial impact on their chances of survival.

Further reading

What are the funding options for hospitality businesses?