Summer Statement 2020: What does the announcement mean for SMEs?
The Chancellor, Rishi Sunak has announced a cut in VAT – effective from next Wednesday – from 20% to just 5% for food, accommodation and attractions in a move designed to help the struggling hospitality industry. He also announced a £1000 bonus for employers bringing staff back from furlough if they are reemployed up until January next year.
This period has been incredibly challenging for every sector of business and especially the hospitality sector, in which many businesses rely on packed spaces to make the most of custom. The Chancellor’s announcement will come as a welcome boost to the sector as they encourage people and customers who are very conscious of their finances to get back into pubs and restaurants. Innovation will be needed to make new restrictions work for businesses and customers, but this is something that UK SMEs have in spades.
Now, with this added support from the Government and as private finance providers, could be a fantastic opportunity to support businesses in this sector at a time when they need it most and with the biggest opportunity for growth. When lockdown and social distancing restrictions are eventually fully lifted this period could lead to a new age of innovation and improved customer experience in hospitality, making it an exciting sector to be a part of.
The job retention bonus will undoubtedly help small firms to retain staff. No leader of a small business wanted, or now wants, to make staff redundant, for the majority of those employed in the UK – by the SMEs – leaders are doing everything in their power to keep on staff. We hope this help will allow firms to keep staff on and then think once more about their ambitions in terms of growth and job creation.
Now could be a fantastic opportunity to support businesses in this sector at a time when they need support most and with the biggest opportunity for growth. As lockdown and social distancing restrictions are beginning to be lifted, this period could lead to a new age of innovation and improved customer experience in hospitality, making it an exciting sector to be a part of – especially if investors also take advantage of tax efficient investment schemes, such as the Enterprise Investment Scheme (EIS).
The EIS is one of the UK government’s most successful initiatives in terms of driving investment into high-growth early-stage companies. It has helped produce some incredible business successes that otherwise may not have got off the ground due to the reluctance of banks to lend to these firms.
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