Small Business Survival in 2021

As financial accountants to many small businesses, we know the hardships and challenges many owners and their staff currently face.

Months of lockdown mean that thousands of business owners are at breaking point, with bills still to pay and with rising costs and falling sales.

We've all struggled greatly with the third lockdown and sometimes all you can offer is a friendly ear and the chance for a bit of a laugh, but sometimes (I'm told) that makes all the difference!

Let's keep on supporting each other as best we can, until things improve. And I think that they will – it's just been a much longer haul than we could ever have imagined.

Sadly, by no means are businesses 'out of the woods' yet but there is help available for many and there's hope that we may get back to some sort of normality by the summer.

A recent report based on data from the Office for National Statistics, suggests that unless swift action is agreed, an 'at risk' group of 390,000 businesses are 'on the cliff edge'.

The report, 'A major wave of UK business closures by April 2021? The scale of the problem and what can be done', estimates that more than one in seven 'micro' UK businesses are at real risk of imminent closure – an incredibly worrying situation.

There was, however, some good news in early January, with Chancellor Rishi Sunak announcing a new £4.6 billion package of grants to support businesses through the latest national lockdown.

If small businesses are going to survive the current lockdown, it's really important that they check if they are eligible for any of the current government help available as some dates have changed.

What government help is on offer to small businesses?

There's some good news for businesses in the retail, hospitality and leisure sectors, which are to be given one-off grants worth up to £9,000.

The payments are expected to support 600,000 business properties across the UK. A further £594 million will be made available to councils and devolved nations to support businesses not covered by the new grants.

Business groups welcomed the new help as a good start, but have warned the money still wouldn't be enough to save many firms from collapse.

The government are also offering Business Rates relief and extending The Furlough Scheme, which will now run until the end of April.

Businesses will need to make sure they still qualify for help and, if necessary, prove that they have been adversely affected by COVID-19.

If so, they can now make use of the CJRS until the end of April, with the government continuing to pay 80% of employees' salaries for hours not worked. Employers will only be required to pay wages, national insurance contributions (NICs) and pensions for hours worked, and NICs and pensions for hours not worked.

Additionally, the government is extending COVID-19 business loan schemes until the end of March 2021. Businesses will be given until this time to access the Bounce Back Loan Scheme (BBLS), Coronavirus Business Interruption Loan Scheme (CBILS) and the Coronavirus Large Business Interruption Loan Scheme (CLBILS). These schemes were due to close at the end of January.

If you cannot pay your tax bill because of COVID-19

You may be able to pay your Self Assessment tax in monthly instalments. This includes any delayed (deferred) 'payments on account' that were due in July 2020, if you did not pay them at the time.

Contact the HMRC coronavirus (COVID-19) helpline if you cannot pay any other tax bills because of coronavirus.

As well as accessing practical and financial help, it's also essential to reach out for other support.

Tap into support networks

From chatting to friends and family members, whose advice we value, to joining one of the free video or virtual work or otherwise support groups, there's a host of support – both professional and social - out there.

Look for any Facebook Groups you might want to join – there are lots of professional networks available, which can help with isolation, as well as offering a trusted alternative perspective on a work-related issue. From non-paying clients to looking for new work opportunities, groups can offer a personal link with like-minded individuals.

With over 700,000 members, you can connect and chat virtually on the professional platform LinkedIn. Build your network using the great search and filter function and use it as both a way to share news with others and add value to others' posts, by commenting. It's also a great place to find and connect with old work colleagues.

Check what business group or government help is available in your area by searching https://www.gov.uk/business-finance-support

We work in partnership with many businesses, charities and individuals across West Sussex and beyond. Please feel free to get in contact with one of us for an informal chat about your business finances on 01403 337490.

You can read our roundup of current small business news here https://www.giltinan-kennedy.co.uk/news/covid-19/article/2020/March/chancellor-unveils-46-billion-lockdown-grant-package