Covid-confusion: over 415K SME owners still don’t know if they are eligible for government support
Fewer than 1 in 10 (9.6%) UK SMEs feel adequately supported by the government, according to new research from FreeAgent, the cloud accounting software for small businesses, freelancers and their accountants.
Covid-19 has had a huge impact on SMEs and freelancers across the UK, which make up 99% of the UK’s total number of businesses. FreeAgent’s research revealed that 70.3% of SMEs say that they have been negatively affected in some way by the pandemic and 83.5% are taking proactive measures to sure up their businesses in order to survive during this period. This includes:
More than a quarter (27.8%) are reducing overheads associated with rent or office space, with a fifth relocating staff to work remotely permanently
Almost one in five (19.5%) are cutting staff wages through furlough, redundancies
Almost one in five (19.8%) are reducing investment in the business
Many support measures have been rolled out by the government during this period, including Self-employment Income Support Scheme (SEISS), Bounce Back Loan Scheme, Local Restrictions Support Grant and furlough measures. However, less than 10% feel that this support has been adequate for SMEs and 14% say that they feel badly let down by the government.
The complexity of applying for grants and support has also been highlighted as a key barrier throughout this period. Following months of communication and support packages, as of October 2020, the research suggests approximately 415,800 SME business owners still don’t know if they are eligible for government support.
When asked what would have the biggest positive impact for them, SME business owners cited:
More government support in the form of grants – 20.6% ranked this in first place, 58% in second place
Abolishing unnecessary red-tape and restrictions on small businesses – 21.4% ranked this in first place, 16.4% in second place
More government support in the form of fewer taxes – 17.2% ranked this in first place, 21.8% in second place
Ed Molynuex, CEO and co-founder of FreeAgent said, “While the Government’s support packages have helped to reduce job losses, there is still a lot more that needs to be done to mitigate the impact of the pandemic on the UK economy. Small businesses and the self-employed, in particular, have been severely impacted by Covid-19, but many have not been eligible for the kind of support that they desperately need or are unable to identify if they qualify for support because of the complexity of the system.
“With Covid threatening the next six months – at least – of economic recovery, many freelancers and SMEs who are already feeling the strain will now be very worried about the future – particularly as we head into the New Year still uncertain on what restrictions will look like, how long they will last, and what impact they will have on businesses.
“It’s therefore important that every small business that can come through the crisis as a sustainable enterprise is provided with the support they need to stay afloat. Ultimately, they will benefit the economy and the UK will reap the benefits – in post-Covid times and beyond.”
For more information, visit: https://www.freeagent.com/