Businesses across the Midlands are facing a desperate fight for survival as a result of the latest coronavirus lockdown, according to a leading accountant in the region.
Jamie Skelding, a Director with the Prime Accountants Group, which has offices in Birmingham, Coventry and Solihull, is expecting a surge in the number of redundancies and staff being furloughed as a result of the latest action to tackle the pandemic.
The accountant has also highlighted the level of uncertainty and increased bureaucracy facing firms which are looking to claim government grants to keep their business afloat and furloughing staff in a bid to save jobs.
Jamie, who has spent the past nine months leading Prime’s specialist Covid-19 service for clients, said: “The number of businesses put under extreme pressure, and possibly too much pressure, will increase vastly and that will unfortunately cause redundancies or worse still failures.”
“I am also expecting to see increased claims for furloughing staff, as inevitably work drops off during lockdown and companies will have no choice but to get government grants and help to cover all possible costs.”
Jamie said the length of lockdown and the success of the nationwide vaccination programme will be key factors in determining the ability of firms to survive the latest body blow to business.
He said: “The speed of the recovery will be pivotal for many of our businesses across the region and across the country as a whole.
“A long lockdown and a delayed vaccination programme will impact on the lifting of restrictions, which will in turn obviously delay the start of any recovery.
“I also suspect that costs will come back much quicker than income streams, with repayments of deferred debt kicking in, too.
“That’s why I fear for those weaker businesses that simply won’t have the reserves, and therefore the time, to experience recovery.”
Jamie’s warning echoes the latest survey by the Federation of Small Businesses (FSB) which reveals a record number of small firms could close in the next 12 months.
The FSB based its prediction on a survey of 1,400 small firms, with five per cent of them admitting they expected to close this year, which would translate into the loss of 250,000 of the UK’s small businesses.
Prime is working flat out to help prevent its clients succumbing to the pressures of the pandemic by ensuring they receive all the Government help available.
However, Jamie said the additional administration work involved in understanding and applying for the various schemes represented a real challenge for firms seeking to claim the much-needed support.
Jamie said the furlough system is a classic example, explaining: “It is a massive burden for companies to adjust their payroll and to make these claims.
“Nine months in and it’s still a struggle, with a system which requires so much re-inputting of information as it’s just not capable of storing employee data or static company data.
“That means almost every entry has to be re-keyed every single month. There’s also been late, delayed and drip-fed information about the scheme’s mechanics which has caused further challenges we needed to overcome.
“Now, we’re beginning to see enquiries coming back regarding some of the earlier claims. These range from really detailed and in-depth demands for information, which takes a huge effort to respond to and to deliver, through to simple, but vague, suggestions the client may want to review their claims.
“The implication with the latter being that there are errors but unfortunately with no further information to indicate where the errors could be.”
Prime has now released details of the scale of their furlough service to clients which show that, in December – before the latest lockdown – they had 141 companies claiming a total of £709,935 for the furloughing of 798 staff.
Those figures are expected to surge this month (January) towards the kind of numbers seen in April and May of last year, when almost 200 firms in the region had furloughed nearly 1,400 staff at a cost of close to £2 million.
The lowest number of claims seen by Prime since the start of the pandemic came in October, when 136 claims were made at a cost of just over £500,000.
For more information on Prime Accountants Group, and the accounting and financial services they provide, along with any Covid-19 support they offer, visit www.primeaccountants.co.uk.
