SMEs in hard hit sectors are increasingly moving to close down their businesses, according to ACCA UK and The Corporate Finance Network’s (CFN) SME Tracker.
The SME Tracker survey revealed in February that two accountancy practices reported that 20–25% of their SME clients had already liquidated or wound up, while other accountants, while other accountants reported a much lower figure (0–2%) of enterprise taking the decision to liquidate.
Between May and August 2020, the SME tracker revealed that around 1% of SMEs chose to close their businesses.
Ahead of the March budget, 3.1% of SMEs reported that they expect to run out of money in the next six months and are unlikely to be able to access any extra finance. Another 4.7% also thought they would run out of cash in the next six months but believed they would be able to secure funding to support them.
A substantial 8.5% of small firms said they would be affected by new off-payroll (IR35) rules, which come into force for the private sector on April 6. The rule changes are expected to dampen the contractor employment market, as companies become responsible for determining the tax status of contractors, meaning extra workload and a risk of penalties.
Read more at the International Accounting Bulletin here