More than 440,000 small firms could be forced out of business by the late payment crisis, according to the Federation of Small Businesses (FSB).

An FSB study of more than 1,200 business owners found that close to one in three has seen late payment of invoices increase over the last three months, with a further 8% experiencing other forms of poor payment practice.

As a result, 8% of small businesses say late payments are now threatening the viability of their business. This equates to 440,000 of the estimated 5.5 million small businesses in the UK.

FSB National Chairman, Mike Cherry, said:

‘After another frustrating festive season, small firms are facing flashpoint after flashpoint. Today, it’s a fresh wave of admin for importers and exporters – in three months’ time it will be a hike to the jobs tax that is national insurance contributions, a rise in dividend taxation, business rates bills and an increase in the national living wage.

‘On top of that, operating costs are surging – many will soon be trying to strike energy deals without the clout of big corporates, or the protections afforded to consumers.’

Internet link: FSB press release

On 20 December 2021, the Welsh government outlined a Budget to ‘build a stronger, fairer and greener Wales‘.

The Welsh government unveiled a £116 million package of funding to aid with the economic recovery from the COVID-19 pandemic. This will be combined with existing permanent relief schemes that see over 85,000 properties continue to receive support. The scheme will be capped at £110,000 per business.

Many firms had been receiving 100% off their rates, which helps to pay for services provided by local government, but previous COVID-19 business rate schemes have come to an end.

A further £35 million has been set aside to freeze the non-domestic rates multiplier for 2022/23, so there will be no increase in the amount of rates businesses are paying.

Meanwhile, an additional £1.3 billion in funding will be supplied to the NHS in Wales to help provide effective, high quality and sustainable healthcare following the COVID-19 pandemic.

The Budget also tackles inequality and invests in future generations through an additional £320 million to continue a long-term programme of learning and education reform.

Welsh government Finance Minister, Rebecca Evans, said:

‘The UK government’s Spending Review did not deliver for Wales and this Budget is delivered in that context. While there are tough choices ahead, we have been able to provide funding that will allow Wales to rise to the challenges we face, grounded in the distinctively Welsh values of environmental, social and economic justice.’

Internet link: GOV.WALES

On 21 December 2021, Chancellor of the Exchequer, Rishi Sunak, unveiled a £1 billion COVID-19 fund, including cash grants of up to £6,000 per premises for each eligible firm.

Mr Sunak said the government would also help certain firms with the cost of sick pay for COVID-related absences.

The Chancellor also announced an extra £30 million to help support organisations such as theatres, orchestras and museums.

To support other businesses impacted by the Omicron wave – such as those who supply the hospitality and leisure sectors – the government is also giving a more than £100 million boost to the Additional Restrictions Grant (ARG) fund for local authorities in England.

The Chancellor said:

‘We recognise that the spread of the Omicron variant means businesses in the hospitality and leisure sectors are facing huge uncertainty, at a crucial time.

‘So, we’re stepping in with £1 billion of support, including a new grant scheme, the reintroduction of the Statutory Sick Pay Rebate Scheme and further funding released through the Culture Recovery Fund.

‘Ultimately the best thing we can do to support businesses is to get the virus under control, so I urge everyone to Get Boosted Now.’

Internet link: GOV.UK

HMRC has reminded self assessment taxpayers to declare any COVID-19 grant payments on their 2020/21 tax return.

According to HMRC, more than 2.7 million customers claimed at least one Self-employment Income Support Scheme (SEISS) payment up to 5 April 2021.

The tax authority says these grants are taxable and customers should declare them on their 2020/21 tax return before the deadline on 31 January 2022.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said:

‘We want to help customers get their tax returns right, first time. We have videos, guidance and helpsheets available online to support you with your self assessment.’

The SEISS is not the only COVID-19 support scheme that customers should declare on their tax return. Information on which support payments need to be reported to HMRC and any that do not is available on GOV.UK.

Internet link: GOV.UK

HMRC is waiving late filing and late payment penalties for self assessment taxpayers for one month.

The measure will give those taxpayers affected by the coronavirus (COVID-19) extra time, if they need it, to complete their 2020/21 tax return and pay any tax due.

HMRC is still encouraging taxpayers to file and pay on time if they can. The tax authority also revealed of the 12.2 million taxpayers who need to submit their tax return by 31 January 2022, almost 6.5 million have already done so.

The deadline to file and pay remains 31 January 2022. The penalty waivers will mean that:

• anyone who cannot file their return by the 31 January deadline will not receive a late filing penalty if they file online by 28 February; and
• anyone who cannot pay their self assessment tax by the 31 January deadline will not receive a late payment penalty if they pay their tax in full, or set up a Time to Pay arrangement, by 1 April.

However, interest will be payable from 1 February.

Angela MacDonald, HMRC’s Deputy Chief Executive and Second Permanent Secretary, said: ‘We know the pressures individuals and businesses are again facing this year, due to the impacts of COVID-19. Our decision to waive penalties for one month for self assessment taxpayers will give them extra time to meet their obligations without worrying about receiving a penalty.’

Internet link: HMRC press release