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 was followed up on 17th March by an announcement of further support, including the creation of a Government-backed loan scheme of up to £330bn.
The situation is changing rapidly, and we expect further announcements throughout to follow. We will continue to monitor and will update you as more information becomes available.
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.
Coronavirus Business Interruption Loan Scheme
The scheme started on 23rd March and was further updated on 2nd April.
The scheme will be delivered by the British Business Bank and, as well as business loans, there are many other types of finance supported by the programme, depending on the provider. You can find out what type of finance is provided on the British Business Bank partner page.
For further information regards availability of finance products and eligibility criteria, please click here.
Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme allows all UK employers to access a financial subsidy worth 80% of their workers’ wage costs up to a cap of £2,500 per worker per month. Employers would need class their employees as ‘furloughed workers’ to be eligible for the scheme. For further information please click here.
Business Rates and Cash Grants
To support businesses in the UK, the Governments of England, Scotland, Wales and Northern Ireland have announced a series of Business Rate and Cash Grant packages to help them through the coronavirus outbreak. To find out more please visit our page dedicated to these packages.
Statutory Sick Pay (SSP) arrangements
The Government is introducing legislation to allow employees to reclaimStatutory 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 repayment mechanism is still being developed by the Government, but it’s important that you maintain records of any staff absence and payments of SSP to ensure you can claim when the system is up and running.
The current rate of SSP is £94.25 per week. Note that SSP can now be paid from the first day of absence.
We will update you with details on how to obtain repayment as soon as it’s announced by the Government.
Talk to HMRC
Among the series of support packages, the Government pledged in The Budget, was an enhancement to HMRC’s ‘Time to Pay’ arrangement scheme to help those with upcoming tax bills plan how they can pay with an individual plan. To support this, it has also launched a dedicated helpline - 0800 0159 559 – with increased staff numbers, to help those businesses and self-employed people who are concerned about being able to pay their tax due to coronavirus.
Deferral of VAT payments
If you have a VAT-registered business, the VAT becoming due between 20th March 2020 and 30th June 2020 will be automatically deferred to ensure the payment won’t be due until 31st March 2021, though you can still pay if you wish. The deadline for submitting the VAT returns remains unchanged, i.e. it is one month and seven days after the end of the VAT period.
If you are paying HMRC by direct debit and do not want to pay the VAT until next year, you should cancel the direct debit or HMRC will take the payment if VAT is due. Please ensure you cancel your direct debit in good time so HMRC does not attempt to automatically collect on receipt of your VAT return.
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?
Get in touch with Companies House
If COVID-19 has affected your business and you require more time to file your accounts, you should act before your filing deadline.
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 has announced measures for those companies whose accounts submission has been affected by COVID-19. If you have yet to submit your accounts and believe they will be late because your company is affected by COVID-19, and your filing deadline has not yet passed, you can apply for an immediate three-month extension to file your accounts. For further information on applying for an extension and circumstances where you may not be eligible please click here.
It is possible to appeal any late filing penalty if you have filed your accounts late and not applied for an extension as a result of COVID-19. Instructions on how to appeal the penalty can be found here.
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.
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.