The Government needs to do more to help businesses survive, with payment holidays introduced across the board on key outgoings such as PAYE and NIC, according to the Midlands branch of the insolvency and restructuring trade body R3.
The organisation is backing the ‘Whatever It Takes’ strategy adopted by the Chancellor of the Exchequer, Rishi Sunak MP, to support businesses during the COVID-19 outbreak, but warns that more support is needed than is currently on offer.
R3 Midlands Chair Eddie Williams, a partner at Grant Thornton in the East Midlands, said: “Businesses need more help right now, with other types of initiatives required alongside those already announced.
“Feedback from our membership is that otherwise healthy businesses are already experiencing a cash flow crisis. Many businesses will face insolvency without significant creditor forbearance or direct help from the Government to bridge the gap in their finances.
“It’ll be expensive, but Government intervention is needed now to weather the storm. As well as additional money going into businesses, payment holidays for major outgoings such as PAYE and NICs could prove pivotal in terms of survival.
“The Government’s current focus on loans could store up problems for later: these loans will need to be paid back. Grants for small businesses will help, but larger businesses aren’t immune to the impact of COVID-19.”
Eddie Williams stressed: “The first step any business in difficulty should take is to seek professional advice. There are options out there. Speaking to creditors will also be key, and the earlier businesses do this, the earlier they may be able to rearrange payment terms.”