24 March 2020, London – The Chartered Institute of Management Accountants (CIMA), the world’s largest body of management accountants, calls on the Government to further help the self-employed, sole traders, and small and micro U.K businesses hit by the growing coronavirus outbreak.
CIMA wrote to the Chancellor yesterday calling for five key measures to be adopted to help the most vulnerable areas of business and those in self-employment not yet addressed by the Government measures. These complement the swift and helpful Government’s response to support society, business and the economy during these unprecedented and testing times.
- Set up a new quick-to-access “Coronavirus Loan Scheme” for self-employed and sole traders to allow businesses and self-employed to solve their current cashflow issues quickly and continue operating.
“Based on the principles of the student loan and maintenance scheme, we should give self-employed, sole traders and SME owners access to an immediate state-backed loan up to a maximum of £30,000 with 15 years to pay it back. Helping cashflow to cover their immediate expenses and costs will provide them with some much-needed relief.” Andrew Harding FCMA, CGMA, Chief Executive – Management Accounting
- Offering a basic three-month income grant for self-employed and gig economy workers who are struggling with work and income losses to shore up their cashflow, pay the bills and spend in the economy.
“The Government has stepped up to the plate to help employees through the Coronavirus Job Retention Scheme, but the self-employed and gig economy workers are struggling more than ever to make ends meet. Linked to the average UK earnings, we must give them a similar level of support as company employees and guarantees up to the £2,500 income threshold.” Andrew Harding FCMA, CGMA, Chief Executive – Management Accounting
- Immediately reduce VAT to 15% to encourage spending, keep businesses afloat and boost to the economy in the short-term.
“Rising concerns around people and businesses’ abilities to pay their bills and survive the coronavirus crisis are holding spending decisions back. Cutting VAT by 5%, which has proved an efficient tactic following the 2008 financial crisis, is easy to implement and would encourage larger spending decisions to keep cash flows and the whole economy running.” Andrew Harding FCMA, CGMA, Chief Executive – Management Accounting
- Consolidate communication channels for businesses, SMEs, self-employed and individual consumers. With the number of new schemes and policies being announced at a rapid pace, businesses and individuals alike find themselves overwhelmed by the flow of information.
“Businesses and individuals alike are finding hard to get their head around the many new schemes and policies announced by the Government. We need a more accessible and manageable way to share information, this could include creating a single central hub webpage with new separate helplines for business advisors such as accountants and one for individuals at HMRC.” Andrew Harding FCMA, CGMA, Chief Executive – Management Accounting
- Extend business rates holiday to all SMEs and suspend evictions to help struggling businesses preserve their cashflow and keep supply chains open, which would benefit the U.K. economy in the long-term.
“We need to cover all self-employed, sole traders and small and micro U.K businesses. Many businesses outside of the retail, leisure and hospitality sectors are currently struggling. Therefore, the business rates holiday should be extended to support businesses across sectors and help kickstart the economy.” Andrew Harding FCMA, CGMA, Chief Executive – Management Accounting
Andrew Harding FCMA, CGMA, Chief Executive – Management Accounting, added:
“We understand the Government is currently under huge pressure and strain, and has already provided businesses and consumers with measures that will really help them. We fully support these measures, but believe more needs to be done to support the micro business owners and self-employed, who make an important contribution to our economy – we are calling for these suggestions to ensure that they are able to do so now and in the future.”
For more information, or to request further comment, contact Sarah Freytag-Traut at firstname.lastname@example.org