4 November 2021
The UK government is on course to withdraw pandemic support measures for small and medium-sized businesses (SMEs). This means that businesses are about to be affected by some pretty tangible changes, which can be found below.
Please see the list of the withdrawn pandemic support measures below.
Lifting the ban on commercial property evictions
When? March 25, 2022
In April last year, the government introduced a moratorium on the commercial evictions of the shop, restaurant and other business tenants that had stopped paying rent, as part of emergency measures to soften the economic impact of the pandemic.
The commercial eviction ban, or 'debt moratorium', essentially prevents landlords from taking their tenants to court over unpaid rent when those businesses have been prevented from trading.
Tenants will still be expected to pay rent once the eviction ban ends. This means that rent debt accumulated before March 2020 and after the date when relevant sector restrictions on trading are lifted, will be actionable by landlords as soon as the tenant protection measures are lifted, i.e. after March 25, 2022.
The end to the Coronavirus Business Interruption Loans Scheme (CBILS)
When? June 30, 2022
The CBILS supported businesses that needed finance to survive the challenges of the coronavirus pandemic and recover afterwards. Through CBILS, businesses could access financial support of up to £5 million if they had been adversely affected by COVID-19.
However from 1 January 2022, the following changes will come into force:
• The scheme will only be open to SMEs;
• The maximum amount of finance available will be £2 million per business;
• The guarantee coverage that the government will provide to lenders will be reduced to 70%.
The end of the VAT holiday for hospitality businesses
When? April 1, 2022
The rate of the VAT tax will return to the pre-pandemic levels, which means 20%.
The rate was reduced to 5% in July 2020, rising once again to 12.5% in October 2021 to help businesses manage the transition back to the standard rate on 1 April 2022.
Summary
Thus, as the world gets used to doing business in a pandemic, things get back to normal, and government support measures are no exception. Nevertheless, be careful that the cancellation of these measures does not come as an unpleasant surprise to your business. Therefore, it is important to pay attention to the following points in your business:
Cash flow;
Dealing with creditors;
Accessing government support and grants.
For further information on any of the points above contact
Mikita Makayou at mikita@lexefiscal.com, or
Dr. Frank at clifford.frank@lexefiscal.com.
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