A series of cost hits and fresh admin requirements landing in April threaten to push UK business “to the brink”, reveals fresh research published today.
Several support packages put in place to cushion the impact of the Covid-19 crisis on firms end today and over the course of the next month, just as companies are still repairing their balance sheets.
Firms will be expected to pay all deferred VAT payments under a relief scheme set up to offset the impact of the Covid-19 crisis from today.
From tomorrow, hospitality businesses’ VAT bills will revert to pre-pandemic levels after the temporary 12.5 per cent rate ends.
Meanwhile, all companies will need to return their VAT statement through the government’s new making tax digital scheme, increasing businesses’ tax compliance costs.
Although the UK economy has rebounded sharply from the pandemic, businesses have yet to fully shake off the damage inflicted on them.
Around 250,000 firms are concerned they will collapse soon, according to the Office for National Statistics.
“This April flashpoint will push some firms to the brink,” Martin McTague, national chair of the Federation of Small Businesses, said.
“Spiralling energy costs are causing huge anxiety – small firms trying to navigate the energy market remain sandwiched between domestic consumers, who are protected by a price cap, and big corporates, which have leverage to secure the best deals,” he added.
Businesses and employees will also have to shoulder a 1.25 percentage point national insurance hike from 6 April.
Separate research, however, indicates there are sharp differences in the prospects for businesses among regions in the UK.
London firms are the most confident in the country, according to Lloyds Bank, while Welsh firms are very pessimistic.