EIC0330

Written evidence submitted by Paul Ludford

Introduction to APL Event Limited

We are a family business, a Limited company, working from home, with four family directors, based in North East England, with an annual turnover pre-CV of £240k, responsible for employment of up to twenty-five persons during the outdoor music events and festival season running May to September.

The company has been operating as a Limited company for seven years, and prior for twenty years plus, as a partnership.

We act as project, production, safety and site management during the planning and on-site periods of music events and festivals, providing many years of experience and knowledge in the effective safe planning and execution of events such as Creamfields, Download, Camp Bestival, Glastonbury, T in the park etc., within a multi-million pound music events and festivals industry.

Reasons for submitting evidence

The financial support from government has specific qualifying requirements and despite our sector being hit on the frontline by government-imposed lockdowns, our qualification is severely limited.

Our income window is limited by the short operational season, (May to Sept) and has been significantly reduced in the current financial period by 55%, due to government-imposed lockdowns.

Due to the specific seasonal nature of our sector, bounce back will not commence until next events seasons in 2021, with recovery extending into 2022.

Immediate impact

The lockdown and restrictive gatherings of persons in excess of two, is closing all music events and festivals.

Our income in the current financial year October 2019/20, is reduced by 55% with no further income projected until next year, 2021, with recovery extending into the following financial year, 2021/22.

Job Retention Scheme

In keeping with many small self-employed Limited companies, our earnings are partly paid through PAYE and partly dividends; consequently, JRS covers 40% of our true earnings, not 80% as paid under PAYE or SEISS.

In calculating the JRS payment, the true earnings of a SME self-employed limited company director should be taken into consideration, including declared dividends. Alternatively, JRS payment should be based on declared profits (excluding salaries and dividends), as the SEISS scheme.

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On April 27th, the Treasury Select Committee Chair recommended to Government that self- employed furloughed directors’ dividends are counted when it comes to the assessment of the furlough amount they can qualify for. This needs immediate action.

Support to Businesses and Financial Services

Small Business Grant We work from home and are not registered for business rates, consequently we do not currently qualify for the governments Small Business Grant of £10k.

On 2nd May Government provided Top-up to local business grant funds scheme; a discretionary fund to accommodate small businesses previously outside the scope of the business grant funds scheme. To date, no further details have been provided

Bounce Back Loan The Bounce Back Loan Scheme is a welcome support, however:

 It is interest free for only twelve months – our recovery will be at the least eighteen to twenty-four months.  The low rate of interest after twelve months is 2.5%. All additional costs after twelve months will prevent and delay our recovery.

The Bounce Back Loan is of no interest to me, and many other SME's, as it does not replace lost sales and is not a grant, as benefitted from SEISS.

How effective is the governments support?

The one shoe fits all approach does not address the needs of all businesses:

 The Small Business Grant of £10k would help enormously.  JRS on 80% of our true earnings would ensure continuing employment.  The Bounce Back Loan interest free period extended over two/three years will help recovery

The differences in existing and required financial support are detailed below:

Financial Support Detail Existing Required Small Business Grant Nil £10k Job Retention Scheme – 4 months £14.2k £30.5k Totals £14.2k £40.5k

These figures demonstrate the huge difference between current and required justifiable grants, (which others benefit from), and are the difference between the company continuing, or ceasing to trade.

Management and cash flow accounts are available to show this.

Support from HMRC regarding long term deferment of PAYE, P11D and Corporation tax payments is essential, without such, liquidation and winding up of the company is inevitable.

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Due to the one shoe fits all approach, businesses with little need of financial support have benefitted from the Small Business Grant, JRS or SEISS; whilst others have slipped through the net and are receiving limited, inadequate support and face closure.

Long term impact

The government and Rishi Sunack are failing in their promise to do “whatever it takes” to support households and businesses through the worst of the coronavirus outbreak.

The plan, “Our Plan for People’s Jobs and Incomes,” is not doing what he and the government intended it to do.

Immediate action is required to help long established SME’s like ours; an event-based business, Limited company, working from home, earning salary through a combination of dividend and PAYE.

We need immediate financial support (as others are receiving), to get through the worst of the coronavirus outbreak and be able to bounce back and recover in future years.

Lessons learned

One shoe does not fit all.

Small businesses operating within the events industry need specific help, particularly as our work and income is seasonal and there will be no immediate bounce back.

SME’s, more notably SE’s, such as sole traders, partnerships, self-employed Limited Companies with few directors, and lower turnovers, need a voice … and be listened to.

SE’s are not the focal point of government led business support forums, partly because SE’s do not seek assistance from such groups, and partly because forums tend to focus on ME’s.

There are huge differences between SE and ME businesses; the ways they are financed, managed, and operated, and consequently need different types of support.

May 2020

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