As the non-essential retail, including gyms, hairdressers and outdoor hospitality sector reopens today as the UK eases out of lockdown, Heather Williams, tax partner and SME specialist at Azets, the UK’s largest regional accountancy and business advisors to SMEs, said:
“In 2008 certain banks were too big to fail. And now the SME powerhouse of the UK is too big to fail as a result of the pandemic. We’re all breathing a sigh of relief as some semblance of normality resumes, but businesses reopening face many uncertainties.
We hear from SME clients across all industries that their main worries include: retail desperately trying to transition from bricks and mortar to omnichannel while demand has tanked; hospitality and tourism dealing with a customer demand wasteland through social distancing, movement restrictions and changed attitudes; manufacturers and exporters struggling with supply chain restrictions and wholesale Brexit uncertainty; technology and global businesses facing decreased demand and investment as the globe plunges through recession and skills shortages through Brexit and Covid international immobility.”
She added, “CBILs, Bounceback, HMRC deferral, JRS, JSS continue to support Covid-affected businesses. However, this support will fall away and businesses will have to find a way of servicing debt levels, during a deep recession. Many previously viable businesses will topple over the edge by this debt burden. The logical next step to support viable businesses struggling under the pressure of debt, unable to refinance or invest for growth, would be to turn the government’s passive equity stake into a real one. CBILS, and perhaps some HMRC debt could be converted into equity under the umbrella of a state backed investor. This would allow viable debt burdened businesses to raise additional debt or equity, provide an eventual return to the taxpayer and encourage and deliver investment for growth as a partner investor to private equity and banks. The time for Government and business to work together in a focussed and agile way has never been so pressing.”
Azets clients in the South East re-opening on the 12th April give their views:
Claire Burnet, co-founder of Dorset-based, award-winning chocolate company Chococo, and a client of Heather Williams at Azets in Dorset, said
“We are delighted to be finally fully opening our Chocolate Houses again. It has been a long winter for our chocolate house teams to be on furlough, and whilst our online business has grown strongly in this time, we have missed the direct face to face contact with our local customers who visit our Chocolate Houses to buy chocolates or enjoy a café treat in Swanage, Winchester, Exeter and Horsham. We opened them again on Good Friday for café takeaway sales and click & collects only but that is just not the same. It is nerve wracking as we don’t know how many people will want to come shopping again, but we will be able to put our tables and chairs outside from Monday and, weather permitting, our customers will be able to enjoy a hot chocolate, brownie or gelato in the sunshine and can start to feel a bit more normal again, well as normal as it can be with everyone wearing masks and only limited numbers of bubbles allowed inside to shop at any one time!’