It is still too early to know how difficult the next few weeks (or months) are going to be. What is certain is that all businesses are going to be faced with a number of potential issues (reduced cash flow, reduced availability of staff due to illness or the closure of schools etc.).
We have summarised below some initial thoughts regarding practical points and suggestions to help businesses get through the next few weeks.
Guidance for businesses - www.GOV.UK
There is useful information from the Government on this link:
HMRC and time to pay
For many businesses, the HMRC “Tax” liability is one of their largest outgoings (PAYE, Corporation Tax, Personal tax and tax deducted under the Construction Industry scheme).
HMRC have set up a dedicated helpline to support businesses who have concerns about paying their tax due to Coronavirus.
The number to ring is 0800 0159 559
Monday to Friday, 8am to 8pm
Saturday, 8am to 4pm
The helpline will not be available on Bank Holidays
If you believe, as many businesses owners will, that your cashflow is likely to be adversely impacted by the current situation, asking for time to pay is a sensible precaution.
How supportive HMRC will be is unknown at the moment. We will keep you updated as, and when, further information on HMRC’s stance becomes available through the various forums and newsletters to which we subscribe.
The importance of cashflow projections over the next few months should not be overlooked.
Whether this is a 'rough and ready' cash flow (using Excel), or a more sophisticated one using software that integrates with your accounting software, having information about any future pinch points will be really useful. This may also enable you to talk to HMRC with more confidence and help achieve a better outcome (i.e. increased time to pay) compared with calling them with little or no information to support your request for time to pay.
Please give us a call if you would be interested in a cash flow solution that integrates with Xero.
£10,000 grant for business claiming small business rates relief
No information on how this can be claimed is currently available. We believe this will be administered by the local councils; so timing will depend on how quickly your council reacts to the situation.
We are monitoring the situation and as soon as we hear how this can be claimed (and how it will be paid) we will send an email to all business clients.
Can you and your staff work from home?
Remote working is possible. If they need to access the office server, software is available to enable them to remotely log in.
Please speak to your IT provider to get this set up in case your team needs to work from home.
We expect that all IT support will be really busy, so prepare in advance for the possibility of remote working by contacting your IT support as soon as possible.
And reduce face to face meetings with customers and suppliers and to keep in touch with team members.
Now is the time to consider using the internet to hold meetings using platforms such as:
If you have held back from using technology because you are not an expert, now is the time to dive in. There will be a significant number of businesses that will be using this option for the first time, so everyone will be excused for not getting everything 100% correct for your first virtual meeting.
Once you have got used to these internet meetings, you may decide that this is the way to do more of your meetings in the future (saving travel time and travel costs).
Talk to your landlord if rent is paid quarterly in advance
If rent is due quarterly in advance, talk to your landlord to see if the rent can be paid monthly in advance rather than quarterly.
Statutory Sick Pay (SSP)
The Government has stated that the cost of providing 2 weeks of Covid-19 related SSP will be refunded in full and is payable to staff from the first day of sickness rather than from day 4 as is currently the case.
What is not yet clear is how this will be done in practice and also whether the refund will be kept separate from any time to pay arrangements that may be entered into by businesses.
We will keep you updated on this as better information becomes available.
Delay non urgent capital expenditure
(Or even non urgent repair expenditure) and renegotiate lease contracts about to end
If you are thinking about purchasing significant plant and equipment, consider whether your business must have the replacement now, or whether a delay of a few months could be managed.
In normal times, having equipment serviced just before the business year end, rather than just after makes sense from the tax point of view. However, now might be the time to consider delaying the repairs/servicing until it is needed, even if this is shortly after the end of your financial year.
If a leasing contract is about to end, the leasing company may consider extending the lease period. For example, if a car lease was due to end (normally you would look to replace the car with a new one), there would be a cash flow advantage to delaying the replacement as the finance cost would be lower. Normally finance companies may have been averse to this, but their willingness to ‘do a deal’ may increase if they come under pressure from the Government.
Banks are looking to support their customers through this period of uncertainty
Speak to your bank manager or bank business support team about overdraft facilities, new short-term loans or a repayment holiday on existing loans. Even if you are unsure as to the extent of the support you need from your bank, finding out what is on offer and how you can access it (at short notice) is a sensible precaution.
For example, we understand that NatWest and Lloyds are expecting to make emergency loans to small businesses and scrapping borrowing fees for businesses struggling with the impact of the Coronavirus.
Loan repayment holidays of up to 6 months may also be available.