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Government needs to boost support for virus-hit firms

by LLB Editor
19th Aug 20 11:18 am

The government needs to consider what further targeted support it can provide once current support measures come to an end, especially for seasonal businesses say Leading tax and advisory firm Blick Rothenberg.

Business advisory partner Richard Churchill said: “ as we approach the autumn where the basket of measures implemented by the Government to help businesses survive come to an end, it needs to consider setting up a specific assistance fund.

He added: “With the Corona virus Job Retention Scheme (CJRS) phased out by the end of October and the Corona Virus Business Interruption Loan Scheme (CBIL’s) lending ceasing on 30 September, only then will the full impact of how businesses have faired start to be known.”

Richard said: “ Many businesses in or connected to the leisure and hospitality sectors rely upon the summer months to have bumper cash flows. This surplus cash is then used during the autumn and winter to sustain the business.”

He added: ”The current funding may have allowed the business to survive the period March to July but these businesses will still need assistance in coming months to ensure their survival and be ready to trade in the spring of 2021.

“Some leisure businesses have opened but cannot operate at capacity because of the pandemic and there are many extra expenses including PPE for staff which will eat into any profits that may be made.”

Richard said: “ Whilst it is right and proper that there are no further broad brush measures and support needs to be targeted, this could be in the form of grants to specific businesses.

He added: “ With a fund set aside, applications could be made and diligence carried out to support the submissions to ensure that the support reaches the right businesses.”

“Additionally there are a number of businesses which, cannot open fully yet and many of these are venues for events. Many of their 2020 bookings have been rescheduled for 2021, which is sensible to avoid the cash flow impact of repaying customers.

“However these businesses will hopefully be operating as normal in 2021, but will have reduced cash flow as the money has already been received. If businesses utilise these receipts in advance to get through the fallow months, the cash flow impact will be felt next year when operations return to normal, but with limited new cash inflows.”

Richard said: “ With high rates of unemployment looming, the Government is likely to only carry a greater burden if these businesses fail.”

He added: “Providing targeted funds to support business and preventing further job losses is the best plan for UK Plc in the medium to long term.”

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