CPAA response to HM Government response to COVID-19 crisis

Wednesday, April 8, 2020

The Association has prepared a response to the measures the Government have implemented to protect businesses from the effects of the current crisis.

Chairman’s Statement

Dear member,

I hope that you are remaining safe through these challenging times. Many of you have reached out to us, explaining how difficult the last few days have been. These are uncertain times and as the Government has continued to announce new measures to support individuals and businesses, clients have been looking to us to provide answers and guidance. We have been trying to keep you as up-to-date as possible, even as the Association’s own operations have been severely disrupted by the crisis. I hope that you have found the information we have been supplying useful as you field questions from clients.

An important function of the Association is to represent its Members with Government and regulators. As part of this function we have explored the Government’s response to date (as it relates to small accountancy practitioners and their clients). As the environment evolves and we receive more feedback from Members we will update this response.

I would like to take this time to implore you to take heed of the Government’s health advice. If possible, remain in your home. I know many Members already work from home, though if you do not you should explore how you can implement homeworking until things begin to return to normal.


William Annand


CPAA response to HM Government response to COVID-19 crisis


The COVID-19 pandemic has shaken all aspects of British society causing massive disruption to businesses and significant fear for the people of the United Kingdom. The affects have been beyond comparison in recent years and will echo for years to come.

In response to this crisis HM Government have announced a series of measures and schemes, many of which directly affect Association Members and their clients. We have been sending regular emails to Members to help ensure that you are aware of these developments. This response has been one of the largest examples of state spending in recent history. While these measures will undoubtedly shield millions from some of the worst financial affects over the coming months, they will leave many without enough protection and do not address many of the long term, structural issues, the economy faces.

The Association is committed to providing support to and representing, its Members throughout this crisis and beyond.

Support for small director-shareholder companies

Many self-employed individuals have been encouraged by the tax system to operate from small limited companies. In many instances these companies wholly consist of one individual who acts as the director, shareholder and sole employee. As encouraged by the tax system, these individuals have paid themselves small salaries, with the rest of their earnings taken as dividends.

Such individuals do not qualify for the Self-Employed Income Support Scheme. If they are able to participate in the Coronavirus Job Retention Scheme, the 80% of salary they will be able to claim will not be a true representation of their earnings.

The Association accepts that these individuals may have received a tax advantage, though believes that the Government should implement a scheme, similar to the Self-Employed Income Support Scheme and the Coronavirus Job Retention Scheme, for those who operate from small director-shareholder companies.

Waiting period for the Self-Employed Income Support Scheme

Details of the Self-Employed Income Support Scheme can be found here. While the Scheme provides sufficient financial support for those who are self-employed, many will find it difficult to cope until June, when the grants will be made available. The Association acknowledges the enormity of the task facing HMRC in administering this scheme, however Government should use all resources available to bring forward the date when the grants will be made available. 

Access to the Coronavirus Businesses Interruption Loans

The Association is concerned that many businesses are struggling to gain access to government backed loans under the Coronavirus Businesses Interruption Loans Scheme. Government must ensure that lenders are providing appropriate finance to businesses to ensure that they can maintain their cash flow throughout this crisis. The Association acknowledges and congratulates the actions taken by Government to improve access to the loans offered under the Coronavirus Businesses Interruption Loans Scheme as detailed in HM Treasury’s announcement published on the 3 April[1]. In particular the Association welcomes the direction that lenders are to stop requesting personal guarantees for loans under £250,000.

Government should also urge the British Business Bank to lower the stated interest rate for its start-up loans for businesses in their first two years of trading from 6% to 2.5% on loans between £500 and £25,000.

The Association also welcomes the FCA’s targeted temporary measures[2]. In particular the proposal that lenders should offer a temporary payment freeze on loans and credit cards for customers experiencing difficulties due to the current crisis. The Association believes that the £500 interest free overdraft limit proposed should be increased to £1,000.

It is the Association’s view in the case of borrowers seeking payment holidays and being granted same due to the crisis, then during that time of holiday payment period only, there would be no adverse effect on borrower’s credit rating when credit history reported at a later date.

Long term support and structural issues

While the Association appreciates that Government’s focus is upon addressing the immediate affects of the crisis, the long-term must not be ignored. Many economists are predicting a deep recession as a result of the crisis, with some theorising that the resulting recession may last for some time. It is particularly concerning how many businesses, self-employed and employed people have been unable to cope with a severely reduced income for a short period of time. Government must ensure that it creates a sound long-term economic program to support the country in the long-term.