NEWS: Small businesses prioritise future finances but need to plan to pay off HMRC debts
Accountants have been increasingly successful in persuading SMEs to reforecast their financial performance in the second half of 2020, according to the year-end results of the ACCA and The Corporate Finance Network (The CFN) SME Recovery Tracker.
In early June, only 27% of smaller businesses said they had completed a reforecast of finances to take into account the effect of the global pandemic.
However, in the following months, the figure rose to 49%, as accountants encouraged clients to take a fresh look at their financial prospects, supported by industry-wide campaigns such as the #LeaveNoBusinessBehind initiative.
But the latest survey of accountants representing 3, 805 clients shows worrying signs for SMEs, with only 15% of businesses being fully aware of their funding requirements and financial risk over the next six months.
The tracker also revealed concern from accountants that overwhelmed SMEs may not have made a plan to pay outstanding or deferred tax and VAT bills. The deferral is due to end in March 2021 and many businesses face being hit by unplanned debt.
“it’s clear that many businesses have been in survival mode and deferral of tax and VAT bills has been a key factor, “claire Bennison, head of ACCA UK, said.
However, with Self Assessment payments coming in January, the deferral coming to an end in March, and VAT changes for those who trade with the EU, now is the time that they should be speaking to their accountant and planning to set up a payment plan with HMRC, for any outstanding and deferred debts.
Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.