The Government is being urged to extend emergency coronavirus support in the upcoming Budget with a recent study warning that businesses face a £50 billion shortfall when the support measures end in April 2021.
Labour is calling for an extension to support measures, asking for the Chancellor, Rishi Sunak, to announce a further extension to the business rates holiday for the retail, leisure and hospitality sectors and for the temporary cut in VAT to five per cent to continue for those businesses as well.
Recent research has indicated that half a million businesses face the prospect of insolvency when coronavirus support schemes are removed, with many firms currently closed because of the lockdown measures introduced at the start of the year.
Some experts are calling for support schemes, including the furlough scheme, to be extended until the economy is fully re-opened, with a recent study finding that half of hospitality, food and specialist service companies have less than three months’ cash in reserve.
With the Budget less than a month away, many business leaders are urging the Chancellor to extend financial support and set out a roadmap for the schemes going forward in line with the economy re-opening post-lockdown.
Additional costs facing businesses from April 2021 include £34 billion in VAT deferrals, which affects more than one-quarter of firms, £9.6 billion in business rates for payments that businesses will be liable for when the business rates holiday ends, and £3.3 billion in monthly support that is currently funded via the furlough scheme.
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