FSB warns over end of furlough, apprentice support, VAT rises and supply problems hitting Kent's small firms


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The Federation of Small Businesses (FSB) is warning of an "autumn storm" as firms face a host of support measures being withdrawn.

The Coronavirus Job Retention Scheme - better known simply as furlough - ends today, while the small employer sick pay rebate and an incentive scheme to hire apprentices also concludes.

Chancellor Rishi Sunak has called time on the furlough scheme
Chancellor Rishi Sunak has called time on the furlough scheme

And it has prompted the FSB to warn it is only the tip of the iceberg for firms already struggling with inflation, staff and supply shortages, energy price hikes, increased VAT for some, the prospect of tax rises and the ending of the suspension of insolvency rules.

It is now calling on the government to take steps to ease the burden amid warnings of further job losses.

Jemma Fairclough-Haynes, area lead for Kent and Medway FSB, said: “For many small businesses, the end of September will mark a significant turning point. With challenges on many fronts, the removal of some of the support measures brought in to hold off the worst effects of the pandemic on businesses will be tough for many to navigate.

“It’s potentially a dangerous moment. As the weather turns colder, so too will the operating environment for many firms. With recent economic growth numbers having fallen below expectations, the upcoming festive season may not provide as much of a boost as hoped to many small businesses’ bottom lines.

“We all know that the unprecedented support to businesses and individuals which the government provided to forestall a full-on economic collapse could not last forever, and that some sort of ‘business as usual’ would need to be resumed. But the government needs to think carefully about the signals it wants to send to the business community.

Many small firms face a tough time balancing the books as support schemes end
Many small firms face a tough time balancing the books as support schemes end

"The memory of how National Insurance and dividend tax rises were pushed through Parliament with no time for proper scrutiny is fresh in every business owner’s mind, and has dealt a significant blow to stores of goodwill. The prospect of huge jobs tax increases now hitting in April will lead to an extra 50,000 people joining the unemployment line.

“The skills shortages in many sectors are continuing to bite – not least in tourism and hospitality, which will have to factor in a higher rate of VAT as of tomorrow.

"Ending the apprenticeship incentive sends exactly the wrong signals to the business community about the government’s commitment to training and skills development. If anything, we need even more apprenticeships in small businesses as we come out of the pandemic. Add in the rumoured axing of the New Enterprise Allowance, and the implied message about the value placed on nurturing entrepreneurship is equally bleak. It seems bizarre that at a time when we should be starting the long road to recovery, the government is making employment more expensive, making it harder to start a new business, and making apprenticeships less attractive and accessible.

“The easing of restrictions on winding-up petitions is thankfully unlikely to lead to a flood of corporate insolvencies, due to the mitigation policies in place until next March. However, it is still a potential wake-up call to businesses struggling with debts, and we hope that creditors of all kinds will show forbearance wherever possible.

“Firms feel assailed on all sides, from energy prices and fuel shortages to longer-term changes to taxes which will disincentivise growth and investment.

Small businesses face a host of challenges as we approach winter
Small businesses face a host of challenges as we approach winter

"Small businesses need to feel the government is on their side; however, recent decisions made have not had their interests at heart."

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