In a critical appeal for support, UKHospitality is championing the extension of Coronavirus Business Interruption Loans (CBILS) repayment terms. According to the organisation's chair, this move is pivotal for the continued existence of many hospitality businesses across the UK.
The call for action was made in a letter dated 10 July, addressed to the business and trade secretary. Kate Nicholls, the chair, highlighted the pressing situation: many businesses are grappling with the repayments of bounceback loans and CBILS amidst soaring interest rates, now approximately between 8%-10%.
Further adding to the sector's distress, Nicholls pointed out the rigid stance of HMRC concerning the Time To Pay concessions, even for businesses complying with cashflow documentation requirements. This concern arises from a worrying report from Sky News on 13 July. The report revealed a startling statistic: over the past two years until March 2023, 3,347 restaurants have defaulted on their debts, translating to an alarming rate of six restaurant closures per day in the initial quarter of 2023.
Nicholls proposed a collaborative solution, suggesting that the government and the British Business Bank formulate revised conditions for CBILs extensions. This approach should favour businesses adversely affected by the current energy crisis and ensure that such extensions do not negatively impact their credit ratings. Additionally, she called for HMRC to adopt a more flexible approach regarding Time To Pay arrangements.
Nicholls also recommended extending the chancellor's mortgage-related guidance to businesses to provide comprehensive support and accommodate payment delays without penalties.
As per Nicholls, the hospitality sector is under severe strain due to skyrocketing energy prices. Data from UKHospitality's latest survey paints a grim picture: 30% of member businesses fear imminent failure within the year, with 94% attributing this to the energy crisis.
Recognising the gravity of the situation, Nicholls expressed her willingness to engage directly with the business secretary and facilitate discussions with impacted businesses. Such efforts aim to secure a future for thousands in the hospitality industry.
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