The prime minister’s announcement that people should work from home and stay out of town centres will be a hammer blow for many businesses, particularly those in the hospitality, retail and leisure sectors, says leading tax and advisory firm, BlickRothenberg
Milan Pandya, a business advisory partner at the firm, said: “Encouraging people to work from home and stay out of the town centres will be a final hammer blow rendering their business unviable. For them working from home is simply not an option.”
He added: “Following the Government’s announcement of further restrictions including the revised message that those who can do so should work from home and may need to do so for a period of at least six months it is imperative that the support measures introduced by the chancellor are also extended, otherwise businesses will suffer and unemployment will rise.
“The previous basket of measures introduced at the start of the pandemic are being phased out in the coming months which was when the Government thought normality would return. The resurgence of the virus has forced the Government to act and revise these plans by at least six months, so the chancellor’s plans need to be revised as well.
“The broad measures originally available to all businesses to aid cashflow included the deferral of tax liabilities and access to funding which was 80% guaranteed by Government through the CBILS lending platform. These lending schemes need to be extended as businesses now revise their forecasts to take into account the impact of the latest restriction measures with perhaps a stricter lockdown in the coming weeks.
“Additionally, for those businesses that have secured lending the profile of repayment should be amended to provide a greater than 12-month initial repayment holiday and extend the repayment terms to 10 or 15 years to allow the cashflow to be affordable.”
Commenting, Donald Boyd, partner at Azets, the UK’s largest regional accountant, said: “The 10pm finish is likely to halve the potential turnover of restaurants and many as a result will struggle to survive the next six months, unless the government reconsiders its position on providing support to the sector, as well as reducing the tax burden, such as VAT or rates.
“The six months covers the Christmas period where a disproportionate amount of profits are made to fund the lean January to March quiet period in the trade. The early evening finish means they will only have the option of turning the tables once, whereas they would traditionally turn the tables a number of time over the course of the evening trade to make the returns they need to keep going.
“Six months of the new measures means it is unlikely live crowds will be allowed back at sport. This is fine for the wealthy clubs but will be the nail in the coffin for lower league professional football and it is likely they will have to move to being part time. Football has been budgeting for a partial return in October and a full return in January. This is unlikely now and could potentially see more Clubs go to the wall. That’s before we look at other less well funded sports.”
Dorset Chamber chief executive Ian Girling said: “We are at a critical point in the fight against coronavirus.
“The new measures will be a concern for some sectors of business but clearly action needed to be taken to get to grips with the escalation of the virus.
“Some hospitality businesses will undoubtedly be disappointed and the guidance on homeworking is a major change just when employees were returning to the office.
“We must not hide away from the fact that a return to homeworking will not be easy for some employers and employees.
“Some roles are suited to homeworking while others are not. There is productivity to consider, and it may be problematic from a HR management perspective as well as for those people who do not have ideal homeworking conditions.
“Many businesses have already carried out a huge amount of work to make their offices Covid-safe and now face implementing fresh working practices.”