We look at what steps you may be able to implement to minimise the impact of the COVID-19 outbreak on your business.
In the wake of the coronavirus pandemic, the Government announced a series of measures to help businesses and the self-employed in its Budget. This has been followed up with several announcements of further support.
We know there are various funds being made available and support being offered, but what you really need to know is what you and your business can actually access and how to do this.
Recovery Loan Scheme
With the old Coronavirus Business Interruption and Bounce Back Loan Schemes closing on 31st March 2021, eligible UK businesses welcomed the announcement in the budget of a new Recovery Loan Scheme (RLS).
UK businesses of any size can apply for loans or overdrafts from £25,000 to a maximum of £10 million until the end of this year. Invoice and asset finance will also be made available to provide finance worth between £1,000 and £10 million.
Finance under the new scheme will be backed by an 80% Government guarantee to encourage banks to continue to lend confidently.
The scheme is open until 31st December 2021, subject to review.
Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme allows all UK employers to access a financial subsidy worth 80% of their 'furloughed' workers’ wage costs up to a cap of £2,500 per worker per month.
The scheme will run until 30th September 2021.
Self-employment Income Support Scheme
The Government's Self-Employment Income Support Scheme (SEISS) is intended to support individuals whose businesses have been adversely affected by coronavirus. This support comes in the form of taxable grants, based on a proportion of average monthly profits.
Statutory Sick Pay (SSP) arrangements
The Government is introducing legislation to allow employees to reclaim Statutory Sick Pay (SSP) relating to absences as a result of COVID-19. This refund will cover up to two weeks’ SSP per eligible employee.
The reclaim can be made the employer’s HMRC PAYE online account, and appropriate records in respect of the claim must be retained for three years after payment is received.
The current rate of SSP is £95.85 per week (from 6th April 2021 £96.35. Note that SSP can now be paid from the first day of absence.
Talk to HMRC
Any Self-Assessment taxpayer not able to pay their tax bill on time, including those who cannot use the online service, can continue to use HMRC’s Time to Pay Self-Assessment helpline to agree a payment plan. It also has a dedicated helpline –0800 024 1222 – with increased staff numbers, to help those who are concerned about being able to pay their tax due to coronavirus.
Companies House accounts filing extension
All companies must send their accounts, reports and confirmation statements to Companies House every year. If a company’s accounts are filed late, the law imposes an automatic penalty.
Companies House previously announced measures for those companies whose accounts submissions were affected by COVID-19. Private companies with accounts submission deadlines originally falling due between 27th June 2020 and 5th April 2021, had their filing deadline automatically extended from nine months to 12 months.
Those with an original filing deadline after 5th April 2021 can still apply for a three-month extension if needed. This can be applied for via Companies House and eligible companies who cite issues around COVID-19 will be granted an extension.
Please note that this will not apply to companies who have already requested a filing extension from Companies House.
Speak to your accountant to ensure that your company takes appropriate action to file your accounts on time or that you have contacted Companies House if you are unable to do so.
Think about funding available
Your bank is probably your first point of contact as they will know you and your business - many of the major banks have stated they have options that businesses are able to access should they experience temporary setbacks as a result of COVID-19 affecting their business.
You should also consider alternative lenders who may be able to help you in the short term.
Stay in touch with your customers
In any crisis clients, whether large or small, look for reassurance. We are all facing similar challenges so you can easily relate to their issues. A quick email, or even better, a phone call to see how your customers are managing may make a big difference to them, show that you truly care and generate goodwill that will be valuable in the future. Most will be comforted that there is someone who understands what they are going through.
Staying in touch also helps you understand the challenges your clients may be facing in their own businesses, which in turn helps you consider the likely impact on your own current and future revenue. The more time you have to look at this impact and react, the better.
And a final point on customers – yes, you do want to keep working with them, but if there are outstanding amounts due to you then start chasing for payment now to help support your own cashflow.
Speak to your suppliers and landlord
It is important to open dialogue as soon as possible where it is likely payments to creditors could be missed. To get your suppliers and landlord onside, engage proactively and treat them like the important stakeholders that they have been, are now, and will continue to be.
Review your working arrangements
Increasingly people will need to work from home and businesses need to start adapting to this new reality. Technology such as Skype, Facetime and Zoom allows you to continue having virtual face-to face meeting with your clients but working from home will involve a huge change for many. Is your business ready for this? Are your staff prepared to work from home? Have they got access to IT equipment, data, suitable broadband speed, etc? Some businesses may already have a business continuity plan, but this is going to be a huge challenge for many, and you may need to talk to external IT support.
Many businesses will inevitably look at ways they can reduce staff costs and will be considering redundancies, reduced working hours, unpaid leave, etc. The Government is urging caution and asking businesses not to over-react to the situation. This is difficult to do when income is falling and you need to protect your business, but it’s important to consider what your business needs to function, even at a reduced level of activity. It’s also worth bearing in mind the costs and challenges of recruiting once the crisis is over and you are trying to return to ‘business as normal’.
But for many, cost control will be inevitable and staff costs will be a key part of this. Flexible working arrangements such as unpaid leave and reduced hours are now commonplace. If you do decide to take this action to protect your business make sure you consider employment law and seek advice should you need it.
Know your numbers
Understanding how your business is performing is critical in difficult times. You are likely to have to make important decisions to help support the business and this needs to be based on an accurate view on where the business is and where it’s going. Cashflow is going to be key.
Make sure your accounting records are up to date and work with your accountant. Now may be a good time to update your systems and take advantage of some of the tools and technology available to help you understand the numbers and save time and effort.
Once your figures are up to date you can more accurately predict demands on your future cashflow, make more informed decisions and get a clear picture of what your business and, more importantly, you and your family may need over the next few months.
Forecast your cashflow
Most businesses will have some working capital available, but this can quickly be used in challenging times. Use your knowledge of your numbers and understanding of future income, orders, costs, commitments, etc. to look at how you and your business can cope with a fall in income. Ask your accountant to help if you need support doing this. Consider how you might respond. Do you need to control costs? Is there a need for further funding?
Look at your insurance cover
Check your insurance policy to see if your commercial insurance includes Business Interruption, Supply Chain or Denial of Access cover. This may include cover in the event of your business being affected by a ‘notifiable disease’. The UK and Scottish Governments have declared that COVID-19 is a notifiable disease.
If you do feel you have some form of cover, speak to your insurance provider or broker and ask them how this would work in your particular circumstances.
It is inevitable that the Government will consider relaxing some regulations which apply to business. We will keep you updated regards changes which could impact your business.
The Government has already said that to support the food industry and help provide meals for people who need to self-isolate, the Government will be relaxing planning regulations to allow pubs and restaurants to start providing takeaways without a planning application.
Speak to our team
There are several ways in which we may be able to help. It’s always important to get good advice and that’s particularly true in turbulent times. If you need help please talk to us on 0800 0523 555 or use our online enquiry form. We can offer initial consultations, advice and support over the phone if you have any concerns about face-to-face meetings.
And please feel free to share this information with your customers to help them plan their business affairs during these challenging times.
For our latest COVID-19 news and guidance for your business, visit our dedicated Coronavirus Hub.
We will be updating it regularly as we continue to monitor and digest all the latest information
Date published 17 Mar 2020 | Last updated 29 Jul 2021This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.