Soho Business Alliance Demand More Support

The Soho Business Alliance (SBA) have written an open letter to Boris Johnson, Rishi Sunak and Westminster MP Nickie Allen demanding more support for businesses in Soho and around the UK.

Though the SBA was initially established to fight for small hospitality businesses during the pandemic, the group is now described as a “fully functioning alliance, working closely with Westminster City Council, residents, workers and visitors to Soho”, and with members across all business sectors in the area which is the second largest employer per square mile in the UK after the City of London.

The SBA’s open letter highlights the various problems for the government to consider as quickly as possible, stating that “Q2 and Q3 2021 are absolutely the key quarters when most business failures will occur” if these are not addressed. Indeed, there is a very real possibility that one of the most economically dense and diverse areas of the UK may seem like a ghost town by the end of 2021.

The key points they raise are as follows:

• The rateable values of all the sites in Soho has meant that virtually no one received any grant support in March 2020. All the rateable values are well above the £51,000 threshold for grants.
• Most of the buildings in Soho are small townhouses thus leading to small and independent bars and restaurants, rather than big chains. The rents are very high per square foot, compared the rest of the UK and the number of seats/covers per restaurant are very low. The financial impact of social distancing and closure is significantly greater than the average UK restaurant.
• The current CJRS scheme actually adds costs to our business through the NI, pension and holiday contributions. We welcome the support for our teams but there is a large cash cost to this scheme – especially for small independent businesses like ours.
• We will be closed for circa 8 months of the 12-month VAT on food of 5% and have therefore barely benefitted from this excellent support. This is currently due to end on March 31st.
• We are due to start paying extremely high business rates this coming April.
• We are about to start repayments on our CBILs this coming April/May, as the 12 month interest free runs out.
• Rent, VAT, PAYE and supplier payment deferrals will all become payable over the coming months.
• The £3k per month grants and £9k in January might cover the costs/cash burn in a restaurant in smaller cites, towns and villages, but they definitely don’t meet the significantly higher costs that we face in Soho and London in general.

The letter also suggests six key solutions, to address the issues highlighted above, whilst imploring the government to adopt these measures into the 2021 March Budget:

1. The Business Rates Relief needs to be extended for a further 6 to 12 months;
2. The VAT on food of 5% should continue for another 12 months and consideration should be given to reducing VAT on drink sales too;
3. The CBILs 1 year interest free needs to be extended to 2 years and the repayment term extended to 10 years;
4. Give consideration to paying the NI/PAYE contribution on the CJRS for small businesses only;
5. The Govt should support the landlord / tenant negotiations by ensuring no foreclosures by banks on landlords;
6. Deferred VAT and PAYE via the Time to Pay Scheme needs to be extended to 3 or 5 year payment plans.

Without the above support, many  businesses in the hospitality sector will be guided towards mass failure, CVAs and liquidation.

Moreover, once the pandemic has been brought under control, the need for the hospitality sector will be greater than ever. If properly supported, these businesses will play vital role in restoring a sense of normality and reviving the UK’s economy.