The Chartered Institute of Management Accountants (CIMA) has called on the UK Government to provide more support for UK SMEs as they continue to face the challenges presented by the Covid-19 pandemic.
CIMA wrote to UK Chancellor Rishi Sunak suggesting the adoption and implementation of six additional measures to ensure that UK SMEs can stay afloat:
- Defer PAYE and Corporation Tax payments to enable SMEs to have immediate access to working capital and help with immediate, critical cashflow issues. Combined with deferral of VAT and self-assessment payments, this will help lift some of the pressure on SMEs.
- Ensure all SMEs get commercial rent holidays and provide commercial landlords with appropriate guidance to help SMEs free-up their cashflow and help businesses remain viable.
- Give SMEs access to the small business rate relief by making sure that commercial landlords pass on the rent reduction to the occupier, which would in turn allow relevant SMEs to also apply for the Small Business Grant Fund.
- Extend business rates holidays and increase cash grant funding to £25,000 for all SMEs to ensure parity and help all struggling businesses preserve their thinning cashflow and keep supply chains open. This would benefit the U.K. economy in the long-term.
- Ensure that HRMC and local authorities switch to electronic correspondence to minimise the risk of missing important information and decrease travel to offices and commercial premises to retrieve important correspondence.
- Allow greater access to the Coronavirus Self-employed Income Support Scheme and Coronavirus Job Retention Scheme for SME business owners so they can get some much-needed financial support for themselves and their families. Additionally, the Government should ensure that it truly reflects their earnings over the past three years by allowing them to have their dividends considered alongside their PAYE using the definition of ‘Close Company’ (five or fewer participators) in the Corporation Tax Act 2010.
CIMA chief executive –management accounting –Andrew Harding said: “As great as the Government’s response has been so far, it doesn’t go far enough or fast enough to help SMEs and the self-employed. Cash is king in this field and we are keeping them away from what they need the most to survive. Deferring PAYE and Corporation Tax payments would give them access to working capital and help with immediate cashflow issues.
“SMEs and the self-employed play in crucial part in our economy – they drive business growth, provide employment opportunities and drive innovation and competition in markets. In the aftermath of this global crisis, they will be one of the major driving forces behind the UK’s economic recovery, but only if we provide them immediately with the support needed to rapidly ramp their activities back up.”