Businesses need a break this Christmas - Business - News - Moneyfacts


Businesses need a break this Christmas

Businesses need a break this Christmas

Category: Business

Updated: 22/12/2010
First Published: 22/12/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Small businesses have asked the Government to show a little Christmas cheer to help them survive through the prolonged cold snap.

The plea has come from the Federation of Small Businesses (FSB), which has said that a range of measures should be put in place to help firms stay afloat over Christmas and New Year.

It is thought that the current weather conditions are costing the economy between £600 million and £1 billion each day.

It completes a miserable year for many of the UK's small businesses, and with a rise in VAT to come, there appears to be little respite for some firms.

The FSB has said that even before the UK was gripped by snow, ice and below freezing temperatures, businesses dependent on discretionary spending, such as retailers, were predicting job losses and difficult conditions.

Almost 40% of retailers thought their businesses prospects in the last quarter of 2010 would be worse than quarter three, despite the festive season.

The big freeze is likely to have worsened the situation for many firms.

As such, the FSB has called for a number of measures, including:

  • HMRC extends its Time to Pay scheme to allow small businesses time to recoup lost takings in order to have the cash-flow to be able to pay
  • Landlords, especially where the landlord is the local council, should push back rent reviews due in the New Year
  • Local councils should use their powers to grant hardship relief and temporarily reduce business rate bills for those businesses in financial difficulty
  • Banks, utilities and insurers should give small businesses some breathing space

"Small businesses were banking on a good Christmas to make up for a bad year and the prospect of more bad news in 2011," said John Walker, national chairman of the FSB.

"Many shops and restaurants have taken on additional seasonal staff to cope with the anticipated demand of the Christmas season, but last weekend saw a drop in footfall of up to 30%, leaving businesses with increased overheads and falling trade.

"The last thing this Government needs is a wave of bankruptcies and shop closures in 2011, but small firms will find it very difficult to bounce back in the New Year when

VAT increases to 20% and the spending cuts start to bite.

"We need to see a co-ordinated effort from Government, banks, local authorities and landlords to give small businesses some breathing space to recover in the New Year."

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