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You are at:Home»Features»New Winter Support for Some Businesses – Others Left Out In The Cold
Budget

New Winter Support for Some Businesses – Others Left Out In The Cold

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Posted By sme-admin on October 2, 2020 Features, Finance

Chancellor Rishi Sunak has announced his ‘new winter economy plan’ to support businesses and jobs as restrictions to our movements across England come into play in the fight against Covid19 – probably for six months.

The Chancellor has already confirmed that the usual November Budget is cancelled and he has outlined support which will kick in from November 1 – the day after the existing furloughing scheme ends.

The key phrase seems to be that support is now targeted at businesses which can offer ‘viable jobs’. This seems to mean companies that can employ people actively working at least a third of their normal hours.

Opposition MPs are questioning why there is no mention of those excluded from support or those who have only been able to access very small business grants e.g. the self employed who are directors of limited companies, those who have just started in business in the last year and others.

For many business owners who are paid through dividends, no income has been received from their businesses and, in spite of the furlough scheme, some have had to take out CBILs or bounce back loans just to keep going.

Here are some highlights from Rishi Sunak’s speech:

*A new Jobs Support Scheme will be introduced from November 1 for six months – where ‘viable jobs’ will be supported with government top ups to wages. An employer must be able to employ staff for a third of their normal hours and the government will then help an employer to top up that salary to two thirds of normal pay. 

*This will be open to any medium or small business even if they have not previously used the furloughing scheme. 

*The self-employed support scheme will continue. 

*Bounce Back Loans can be paid back over ten years and will be pegged to the principle of ‘pay as you grow’. 

*Business Interruption Loans will extend pay back terms to ten years and business owners can apply for a loan up to December 31 this year. 

*Deferred VAT bills which were due to be settled in March can now be repaid over a longer period (11 months). 

*VAT for the hospitality and tourism sectors will remain at 5 per cent until March 31 2021. 

The Chancellor once again made it clear that the Government can not save every business or every job.

Fiona Scott, South West representative of the national organisation #forgottenltd,  said:“Of course when it’s laid out in Parliament it all sounds very plausible, caring and empathetic. The devil is however in the detail. There is nothing for directors of limited companies to cover their losses, many have earned nothing personally for six months. If these individuals cannot pay their bills then they will go under, as will any staff they employ.“If they work from home they get nothing. This particularly discriminates against women who will often start a microbusiness around caring responsibilities. Nothing today has changed that. Jobs will still be lost in their twos and threes until many more thousands of roles have gone. However, I’m sure the Chancellor will conveniently class them as unviable.”

Julianne Ponan is the CEO of Creative Nature, a company offering snack products and superfoods which are free from the top 14 allergens. The company was named UK Small Business of the Year by the FSB two years ago.

Julianne commented, “There is still no clear plan for businesses who have carried on going through coronavirus. We need to know what the plan is and when is this money going to have to be paid back and how? Are we going to be subjected to much higher taxes later?“During this period I have not furloughed any staff and we have continued working with our contractors to support them. We have had to adapt to put measures in place to keep going. We saw snack sales plummet and then baking mix sales soar – so we’ve had to flex accordingly, we’ve not been making lots of extra money.  Suddenly are we going to be hit with high taxes instead of a reward for keeping going and keeping people in work and not using the government furlough scheme?“There has been a mention of tourism and hospitality yet many other sectors have been hit badly and there’s little hope for them. Once again it seems the self-employed who are directors of limited companies are getting the least help – yet they are the ones who are keeping people in employment. They need to earn a wage as well. If they are not supported and they go under the jobs will go with them. It’s that simple.”“Any business which can prove through its accounts that it was profitable and viable prior to Covid19 should be able to access grant support during this period and not live in fear of incurring debt or being subject to big taxation hikes later.”

Alec Jones-Hall is the Director and Co-Founder of The UK’s Largest Regional Business Exhibitions, The Great British Expos and has helped over 50,000 UK SMEs. “I feel betrayed by this Government for the lack of support in our industry. We are part of the exhibitions and events sector which is on the brink of collapse following the Prime Minister’s announcement that the sector will remain closed for at least a further six months. We have already been required to remain completely closed since March 2020 as part of the Governments’ national Covid-19 lockdown, and unlike most other parts of the economy have not been able to reopen at all since. During the last six months we have worked tirelessly to create and demonstrate Covid secure guidance which has been approved by public health officials. We had been given a restart date of the 1st October, but this has now been taken away. We remain one of only five sectors closed, seemingly for a further six months, meaning the Government has removed our, and our customer’s, ability to trade and generate revenue for at least a year, and likely longer given the lead-in times required for exhibitions.No one in the events industry expects special treatment for this sector. All we want is simply to be treated like all others that have been allowed to reopen under Government-approved guidance. We currently do not feel that our industry is being treated fairly.The Government has provided grants for various industries, sectors, venues, heritage sites and the arts. However, the events industry has not been given any direct grant scheme even though we play a critical role in the UK economy. The overall sector generated £70bn of economic impact in 2019, employing some 600,000 people (with the exhibitions sector alone creating £11bn, supporting some 114,000 of those jobs). Job losses are already happening. We as an industry are desperate for financial support. We anticipated 45% of the workforce being made redundant, but given the announcement yesterday, unfortunately we estimate this to rocket to 80%, meaning a job loss of over 90,000 people from our sector.”
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