UK SMEs owners have reported greater levels of stress and anxiety due to Covid-19 according to recent surveys from the ACCA UK and The Corporate Finance Network (The CFN) in their latest SME Recovery Tracker. The tracker features insights from accountants working with the UK SME community.
The survey of UK accountants, that together representmore than 22,000 SME clients, shows increased stress levels on anxious UK SME owners ahead of 4 July lockdown changes. 71% of accountants reported their small and medium business clients had shared with them that they had been much more stressed and anxious than the usual day to day stress of running a business. This is up slightly from 69% two weeks ago.
Despite even more SMEs across the country preparing to trade again, small and local businesses are reporting increased fears over future finances. The latest Tracker results highlighted more than two thirds of businesses will be unable to meet deferred tax liabilities even within the next six months.
The results which closed on the 30 June also show:
· 2.9% of UK SMEs say they’ve decided to liquidate their business.
· 15% say they feel social distancing requirements as they currently stand will make it impossible/ unviable to reopen their business as they cannot afford of their properties don't allow it.
· 28% have had to extend credit terms with clients in a bid to ensure they can survive in the near future.
Kirsty McGregor, founder of The CFN network comments: ‘The reality for business owners is becoming all the more stark now that a greater number are attempting to grow their business again. Supporting the release of lockdown for the economy in general, albeit whilst potentially still being loss-making, is incredibly stressful. I would encourage all businesses to critically assess both their short and longer-term cashflow projections. A written plan and some clear strategies will allow for a calmer mindset during this period, and should take some of the worry away.’
Claire Bennison, head of ACCA UK adds: ‘The results from this week’s tracker represent the legitimate concerns thousands of small businesses face. Thoughts are turning towards economic recovery and concerns they have over supply chains, tax liabilities and wellbeing in general. Navigating these obstacles requires resilience, July 4th is a significant step in the post-Covid journey.
‘Many businesses await Rishi Sunak’s economic statement next week, and whether there will be an emergency budget or spending review. Businesses owners need to be clear about exactly what they need to do in order to move forward with confidence, save jobs and reboot their business.
‘Uncertainty breeds inaction, this is something businesses simply cannot afford in these difficult times.’