UKH pushes Government on energy bills support

Nicholls has asked business secretary Kemi Badenoch to work with the British Business Bank (BBB) to change the terms of the Coronavirus Business Interruption Loan Scheme (CBILS).

In a letter seen by Sky News​​​, Nicholls stressed that her members are reliant on such help being afforded as many are currently locked into expensive multi-year energy supply contracts.

UKHospitality research shows that almost a third of its members were worried about collapsing in the next year, with the overwhelming majority linking this concern to their energy bills.

“An issue compounding this is a lack of cashflow associated with debts resulting from Covid,” Nicholls wrote. “A substantial number of businesses are still repaying bounceback loans and Coronavirus Business Interruption Loans (CBILs) - where interest rates on repayments has risen to around 8-10%.

“Inflexibility from HMRC on the application of Time To Pay concessions is also damaging the ability of some businesses to function.”

Nicholls added that participating banks are not allowed to extend CBILs repayment terms other than in exceptional circumstances, but that doing so meant a company must declare itself ‘severely compromised’, which triggers a negative impact on its credit rating.

The UKH chief has asked Badenoch to work with the BBB to draw up a revised set of conditions for the extension of CBILS loans.

“This should also have no impact on a business’ credit rating as it would be considered a standard refinancing,” Nicholls said. “Alongside this advice should be given to HMRC to take a more lenient approach to Time To Pay (TTP).

“We have evidence of fully viable businesses being refused TTP despite documenting their cashflow and the short-term nature of their liquidity squeeze.

“This is predominantly caused by energy suppliers demanding extortionate deposits, and the slowness of others in paying back deposits.”