By Legal Futures Associate Purbeck Personal Guarantee Insurance [1]
Ahead of the Chancellor’s Spring Statement on 23 March 2022, Purbeck Personal Guarantee Insurance [2] is urging Rishi Sunak to consider key measures to support small businesses following news that company insolvencies doubled in February [3]. Purbeck is the provider of Professional Risks Personal Guarantee Insurance to the Directors/Partners of Solicitors’ practices to support Professional Indemnity Insurance (PII). The business also provides Personal Guarantee Insurance to small business owners
- Tailor the Recovery Loan Scheme or its successor to those sectors which have been more adversely impacted by the pandemic and are now in recovery mode and now being hit by inflationary pressures.
- Implement initiatives to support small businesses with rising energy costs (e.g. business rates rebate) or special small business subsidies. At the same time, consider initiatives for small businesses to support (and support to introduce) their own green agendas and move to renewables.
- Introduce further tax incentives to support small businesses. This could include increasing the annual investment allowance; supporting start-ups with a reduced rate of corporation tax (for certain turnover thresholds); tapering of the NIC rate to encourage recruitment of young workers and apprentices.
- Support the FSB’s agenda to help end the UK’s poor late payment culture by making Audit Committees directly responsible for ensuring best practices within supply chains.
Todd Davison, MD for Purbeck Personal Guarantee Insurance said: “Lending to small business is recovering according to the latest British Business Bank report [3] but given the recent news that company insolvencies doubled in February 2022, clearly the Chancellor should be considering a multi-pronged approach to give much-needed support to small firms now facing multiple cost issues.
“Alongside the Spring Budget on 23 March 2022, the Office of Budget Responsibility will publish its forecasts on inflation and the outlook for the Bank Rate which has now increased to 0.75%. Prior to the Russo-Ukraine conflict, the Monetary Policy Committee (MPC) was understood to be considering an increase in the Bank Rate to target inflation back to the 2% rate by mid-2023. However, the impact of the conflict may cause the MPC instead to adopt more of a ‘wait-and-see’ approach following this initial increase with further rises in the Bank Rate on a more graduated basis during 2022 to avoid a stagflation scenario. We certainly hope that will be on the case and that The Chancellor will take The Spring Budget as an opportunity to increase the support available to small businesses in recognition of the extremely challenging mix of trading conditions they are now facing.”