Coronavirus – Covid-19 is at the forefront of everyone’s minds and many small and medium-sized businesses are already feeling its effects.
You need to be aware of what help is out there and you need to follow the standard precautions to keep yourself safe, there is no pretending this virus is not here. That said, at risk of stating the obvious, you also need to give your business its best chance, some TLC and avoid knee jerk reactions. Remember that downturns are temporary and deciding to spend money on marketing to generate more leads for you, rather than discounting your products and services which could ultimately leave your business vulnerable is sensible. So as per the famous sentence from Corporal Jones of Dads Army fame “Don’t panic Mr Mannering”. Have a read of my notes below, no waffle I promise.
I would encourage you to read HMRC’s guidance for employers and business owners, which can be found on the gov.uk website here. This gives helpful advice on minimising the spread of infection and what to do if one of your staff presents symptoms.
Financial Opportunities and Support Available
Tax (HMRC)
Some ActionCOACH clients have already contacted HMRC, who have been very understanding and have offered to defer all tax payments (including VAT) for 2 months. In effect this is free credit to help with potential cash flow issues. Many of our clients are following suit and we’d encourage you to do the same.
The simple principle here is – once you’ve paid it, you won’t get it back! HMRC are likely to have to give further concessions if the effect of coronavirus is as severe as expected.
More information is set to be announced in the coming weeks and further details on how to apply. In the meantime, businesses with immediate concerns are advised to contact HMRC’s Business Support Helpline
A helpline has also been set up to help businesses and self-employed individuals with outstanding tax liabilities receive support with their tax affairs. Through this, businesses may be able to agree a bespoke ‘time to pay’ arrangement. If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s helpline on 0800 0159 559. You may want to talk to your accountant before making that call.
Banks and Loans
Banks are also said to be increasing credit lines and overdrafts and in some cases they may even offer repayment holidays on loans. Why not contact ALL of your credit suppliers to ask about relaxing payments.
Suppliers
We are also seeing some improved terms in cases of businesses renegotiating supplier payments and even improved pricing.
Government Support
In addition to this, to assist business owners the government has announced that it will provide support to ensure the impact of COVID-19 is minimised.
Loan
A Coronavirus Business Interruption Loan Scheme has been introduced. Businesses with a turnover of less than £41 million can apply for a loan of up to £1.2 million, with the government covering up to 80% of any losses with no fees. The Coronavirus Business Interruption Loan Scheme (CBILS) temporarily replaces the Enterprise Finance Guarantee Scheme and will be provided by the British Business Bank through accredited lenders. To apply visit this website and follow the information provided.
Please note that there is no certainty that this funding will be available and in the case of previous loan guarantee schemes the turn around time for applications was significant.
Covering Sick Pay
For businesses with fewer than 250 employees, the cost of providing 14 days of statutory sick pay per employee will be refunded by the government in full. This will provide 2 million businesses with up to £2 billion to cover the costs of large-scale sick leave. Coronavirus statutory sick pay is expected to be in the form of a refund. The Treasury says that it is “working with employers over the coming months to set up a repayment mechanism as soon as possible for employers reclaiming statutory sick pay”.
Coronavirus help for self-employed
For the self-employed not eligible for SSP, contributory Employment and Support Allowance will be payable, at a rate of £73.10 a week if you are over 25, for eligible people affected by coronavirus or self-isolating in line with advice from day one of sickness, rather than day eight.
For more information about coronavirus government statutory sick pay, go to the Department for Work & Pensions website here.
For further advice regarding sick pay and how best to support your employee’s should they self-isolate, the ACAS website has issued the following information – https://www.acas.org.uk/coronavirus
Do you get Small Business Rates Relief?
There is also a £3,000 cash grant being made available to 700,000 of our smallest businesses, which will be delivered by Local Authorities, and worth a total of £2 billion. Your local council will have further information on this as the scheme is rolled out.
The government is also temporarily increasing the business rates retail discount in England to 100% for 2020-21 for properties below £51,000 rateable value. Nearly half of all business properties will not pay a penny of business rates. This will also be implemented through your local council. If you already receive the current business rates retail discount, you will receive notification of the changes in due course. If you currently don’t receive any relief, you can check with your Local Authority for your eligibility. You can find your local authority here
Please note that if you do not currently pay business rates because of the terms of your lease, it is possible your landlord may be getting the benefit and therefore you should approach them as you would expect the benefit to be passed on (the cost is effectively included in your lease costs).
I hope you have found this information useful.
Best Wishes
Kathy Bassett
