28 October 2020: Changes to business rates and targeted support for specific sectors are among key levers the government should use to boost the UK’s economic recovery, according to a new survey of ICAEW members.

A reduction in business rates and financial support on a sectoral basis are the most effective ways in which the UK government can help the high street and boost the economy, an ICAEW survey of chartered accountants has found.

The survey of ICAEW members working in businesses across every economic sector and UK region found that 62% of respondents said a reduction in business rates would help boost the recovery of the UK economy.

Commenting on the survey Iain Wright, ICAEW’s Director of Business and Industrial Strategy, said it is clear more intervention will be needed from government.

“Some struggling companies could fail when faced with inflexible business rates bills,” said Wright. “Reducing the business rates multiplier would bring down the cost of this charge, and therefore lessen the burden on companies at this critical time.”

The survey of 401 chartered accountants was conducted in mid-October. It found that 76% of respondents’ businesses had accessed a coronavirus loan or support. 63% had furloughed staff and 48% had deferred VAT payments.

Business was down at three in five companies (62%) and just under a third (31%) expected to make redundancies over the next six months. 31% of survey respondents said their businesses will need government support over the next six months, with 71% of those needing assistance not confident that the support on offer would allow them to continue trading for the next 12 months.

ICAEW said the government needed to review its strategy and consider a sectoral approach to fixing the damage caused by the pandemic, to help sectors such as hospitality, leisure and retail which are still struggling.

“Although the whole economy is suffering, it is striking that the economic effects of the pandemic affect some sectors with much more brutal damage than others,” said ICAEW’s Iain Wright. “Targeted sectoral policy measures from government have been seen to work earlier in this crisis. With the prospect of more restrictions threatening the very survival of businesses in some sectors, chartered accountants are telling us they would like the government to provide financial support on a sectoral basis to help those industries most in need.”

Half of respondents (51%) also said they thought a reduction in employers’ National Insurance contributions would be helpful, and a third (37%) backed further reductions in VAT rates.

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