Government support can’t stop with hospitality and leisure
When Chancellor Rishi Sunak stood up in the House of Commons on 8 July and announced measures to support the hospitality and leisure industries, there was a cautious ripple of applause.
Applause because these targeted, practical interventions may well keep many businesses afloat at a time when footfall and visitors numbers have plummeted, for obvious reasons.
It’s no mean feat to find the right levers to pull to counteract the economic impacts of COVID-19 but, by and large, Sunak seems to have the knack.
There’s caution in the response, however, because although everybody recognises that those sectors have been hit especially hard, many other small businesses are struggling and deserve support, too.
Hairdressers and beauticians, for example, have been allowed to reopen but at drastically reduced capacity – 65% according to entrepreneur Katya Davis in this interview.
It would take relatively little support to make up the shortfall in their takings and bring their incomes back up to something like pre-lockdown levels.
Construction contractors, pubs, gyms, childcare providers… There’s an endless list of entrepreneurial businesses that aren’t yet allowed to open, or which are trading but struggling, having been at the end of the list when it came to relaxing lockdown rules, after retail and takeaway chains.
The slow road out of lockdown
The challenge is partly because of the difficulties of operating in a new world of constant cleaning and track-and-trace, along with that issue of reduced capacity.
But it’s also because, frankly, the pandemic is still with us, even if lockdown is loosening.
Recent surveys by Ipsos MORI reveal that the British public remains nervous about returning to shops, cinemas, restaurants and other indoor businesses, with c.60% reporting discomfort at the very idea.
What’s more, they’re confused: another Ipsos survey suggests that more than 40% of people aren’t clear about who they’re allowed to socialise with, and are generally befuddled by the ever-changing rules.
Does the Government want us to go to restaurants, or not? Sunak’s speech and the surrounding PR certainly suggests as much, but other Government communications have been less encouraging.
What can be done?
We’ve got strong views on this because, like most businesses, Capium started small and our client base includes many small to mid-sized accountants. And their clients, in turn, tend to be SMEs. So we feel pretty invested in the fate of entrepreneurial British businesses.
With that in mind, we’d like to see the temporary VAT cut for hospitality and tourism, from 20% to 5%, extended to a broader range of sectors.
We also think there was merit in the idea of £500 high street vouchers that was floated in the run up the mini-Budget. Sure, that’s a cost the taxpayer will have to bear at some point, but in the short term, it’s about giving consumers an incentive to get up, get outside (with masks on, of course) and spend money with local enterprises.
We can’t change government policy. What we can do is make sure that our cloud accounting and practice management software offers free payroll and bookkeeping functions, and is always up to date.
Accounting firms that use Capium will find adapting to the new VAT regime easy and efficient, which will make life easier for their clients in turn.
And in the present climate, where everything feels like a challenge, anything that makes life a bit more straightforward is to be welcomed.
If you’re feeling the squeeze and want to better support your SME clients, book a demo with us today - we are willing to help!
You might also be interested in
Capium is cloud based accounting and practice software.