News, Culture & Society

Budget verdict that counts – from small business bosses

From shop owners to personal trainers, hotel managers to wedding planners, small businesses and sole traders up and down the country eagerly watched last week’s Budget to find out what was in store. 

For many, it has only been the financial support from the Government over the last 12 months that has enabled them to just about hang on. Even with the help available, thousands of businesses have sadly closed due to the pandemic. 

In his Budget, Chancellor Rishi Sunak announced a new wave of support for the nation’s small businesses, including £5billion in Restart Grants for shops and hospitality businesses, and an extension of the furlough scheme and VAT cut for the hospitality sector. 

By the book: Sarah Laker has kept her stationery shops running with loans

However, he also confirmed the resumption of business rates from June and a rise in corporation tax. So what was the verdict from small businesses? 

We spoke to several to hear their views. 

Seeing larger chains such as WHSmith still being allowed to sell stationery, gifts and cards in their shops has been frustrating for Sarah Laker. She runs two stationery shops in Cheshire, but has been unable to open either during lockdown restrictions. 

Sarah opened her first store in Marple, near Stockport, 15 years ago and acquired another in nearby Wilmslow last October when the previous owner retired. She has kept her businesses running thanks to a mix of Government loans, grants and the furlough scheme, and says that she found ‘a lot that was positive for small businesses’ in last week’s Budget. 

The Restart Grant of up to £6,000 for small businesses which have been forced to close during lockdown ‘will really help,’ she says, as ‘the Wilmslow shop is really struggling at the moment and the Marple shop is only just breaking even’. 

Free investing guides

Throughout lockdowns, Sarah has switched to click-and-collect and online sales, but says that operating this way is ‘incredibly time-consuming because everything takes three times as long’.

She says: ‘It’s been really hard. I’ve been working six or seven days a week throughout and haven’t taken an income for a year now. There was just no way I was going to let a pandemic take my business away from me.’ 

Having furloughed her four staff on and off over the past year, Sarah says that the extension of the scheme until the end of September will be useful. 

‘It’s been really handy to be able to furlough people, but I wonder whether the extension goes far enough as some businesses might struggle to fully restart by the time the scheme finishes,’ she adds. 

The increase in contactless payments – from £45 to £100 – will be useful when the shops reopen, as she found many customers were reluctant to touch the card payment machine when required to enter their pin number, even though she sterilised it every time. 

Moving from London to Hertfordshire to open Bethnal&Bec luxury self-catering retreats in 2017 was a leap of faith for Chris and Vicky Saynor. But their determination paid off as their business soon became a constant fixture on ‘Best UK staycation’ lists.

After being almost fully occupied in the first few years of opening, Bethnal&Bec was forced to close along with the rest of the hospitality industry for nine months out of the last 12. 

Chris and Vicky were able to benefit from the one-off £10,000 Small Business Grant as well as later grants for closed businesses. 

Being self-employed, the couple were theoretically eligible for the self-employed income support scheme. But having invested heavily in setting up the business, their latest tax return showed a loss thanks to rolling over operating losses so they couldn’t claim any support. 

‘If you’re a new business, or a business that has made a lot of capital investment, you get no support,’ says Chris, adding that it was only thanks to the business grants and other personal savings that they were able to keep going. 

The new Restart Grant for businesses will certainly be a help to Bethnal&Bec, but the business rates holiday extension until the end of June will have no impact. ‘The business rates holiday is great, but if your business is under a certain rateable value threshold you wouldn’t be paying business rates anyway thanks to Small Business Rates Relief,’ says Chris. 

He adds: ‘I don’t want to bash the Government as this is an unprecedented situation and these grants have been a godsend.’ 

But he suggests grants may have been more effective if they supported new businesses and differentiated between companies that would usually be closed off-season and those that are usually open all year round. Specialist sports retailer Berkhamsted Sports is another of the thousands of retailers still having to manage sales remotely. 

Dave Walden is the co-owner of this Hertfordshire business and says that turnover is down 80 per cent because they can only do deliveries and click-and-collect. 

‘Our business is all about talking to our customers and letting them try out the shoes or equipment, so it’s been really hard,’ says Dave. ‘We did well in the summer, but to close again just before Christmas – one of our busiest times – was awful.’ 

Without the Government’s business grants, including the £25,000 Retail, Leisure and Hospitality grant last summer and lockdown grants since, things would have been very different, he says. 

‘Whatever your opinion about the Government, there’s no question that they’ve really helped small businesses throughout the pandemic,’ adds Dave. 

The Restart Grant of up to £6,000 will also be ‘really helpful,’ says Dave, while admitting it would have been nicer if it was bigger. 

‘But it could have been a whole lot worse and the Government is going to have to start clawing money back from somewhere.’ 

Dave would also have preferred to have seen a longer business rates relief extension announced in the Budget.

While he was initially alarmed at the hike in corporation tax, he says that it should have minimal effect due to the size of his company. 

The Baby Cot Shop founder and nursery designer Toks Aruoture says she has ‘mixed feelings’ about the business rates relief extension. She has premises on the upmarket King’s Road in Chelsea, West London. 

‘I appreciate that business rates were waived for a year, but I don’t think we should be asked to start paying them, even at a reduced rate, from June,’ she says. 

‘It would have been better if they had been scrapped until next year. Many of us are not going to be able to recover those lost sales from 2020 and it’s a large amount of money for us.’ 

Toks founded her baby products and nursery design business in 2012, first online and opening her shop four years ago. 

Due to lockdown, the retail outlet has been closed for much of the past 12 months and while she was able to shift to offering digital interior design services and live video consultations, turnover was still considerably down. 

‘Our customers love coming into the store and bringing their partners, their parents and friends – it’s a big affair,’ she says. 

‘But even when we could reopen, pregnant women understandably didn’t really want to venture out shopping as much as before.’ 

Toks has appreciated the Government support of grants, bounceback loans and flexible furloughs. 

However, she says: ‘I’m not dancing for joy. The Restart Grant is good, but it’s not enough – it’ll cover rent for a month – and I feel the VAT cut for the hospitality industry should be for the retail industry too as we’ve suffered as well.’ 

However, she is looking on the bright side. 

‘I just can’t wait to reopen,’ she says. ‘I love helping and encouraging new mums-to-be and to see them and my staff again would be the icing on the cake.’ 

THIS IS MONEY PODCAST

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

Read more at DailyMail.co.uk