Since our last update on Friday 20 March 2020, everything has certainly changed, and even more so with the Prime Minister’s address to the nation on Monday evening at 8:30pm when he made the point a bit more firmly; to remain home.
The police have been given extra powers to deal with social gatherings and many of us have had to start working from home, or I should say, many of us have returned to working from home, just like we did when we originally set-up our businesses.
We are still waiting for further guidance from HM Revenue & Customs ‘HMRC’ regarding furloughing staff, however, what we do know is that no payroll software is at present set up to deal with it, we have however been given initial guidance by our software provider and a suggestion on how to handle it with their software. We therefore urge any clients considering furloughing staff to let us know in plenty of time.
Remember, to furlough staff means they can no longer participate in the business in anyway shape or form.
Important: If you are going to furlough your staff and your contracts of employment do not allow for changes to their working arrangements, we suggest you sit with them and confirm that they are happy with the new arrangement and get a simple document signed by them to confirm this.
We suggest you speak with your HR professional, if you don’t have one, we can recommend Grassroots HR.
Once furloughed, you will be reimbursed by HMRC 80%, up to a maximum of £2,500, of their salary, this means you can pay your staff 80% of their salary and recover all this, or you can top it up to 100%, but remember, you will only be reimbursed for 80%.
We understand HMRC are currently working hard to set a portal up to facilitate the reimbursement, as you all know HMRC are designed to take money off you, not give it back, so they need a bit of time.
If the delay in reimbursement is going to cause your business financial difficulties, you can apply for a Coronavirus Business Interruption Loan.
Previously, the self-employed have been overlooked. In the Coronavirus bill put before Parliament on Monday 23 March 2020 provisions have been made, although not very generous ones.
Payments to self-employed or freelancers are to be set so that the net monthly earnings do not fall below:
- 80% of their monthly net earnings, averaged over the last three years, or
whichever is lower.
So, no payment will exceed £2,917 per month.
We cannot express enough the importance of ensuring you are registered for business rates with your local council, there are generous grants being offered.
Those in receipt of Small Business Rates Relief or Rural Rate Relief will receive grant funding of £10,000.
Retail, hospitality and leisure businesses with a ratable value between £15,000 and £51,000 will receive £25,000 in grant funding.
Remember, we can not answer your questions on whether you qualify, you need to contact your local council and check with them.
Grants are expected to be paid early April 2020.
For those in the hospitality and leisure industry, there is to be a business rates holiday for the 2020/2021 tax year.
You are eligible for the business rates holiday if:
- your business is based in England
- your business is in the retail, hospitality and/or leisure sector
Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:
- as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
- for assembly and leisure
- as hotels, guest & boarding premises and self-catering accommodation
How do I access the scheme?
There is no action for you. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge. They will do this as soon as possible.
The deferral for VAT payments applies from 20 March 2020 until 30 June 2020.
If your VAT payment is due on 7 April, 7 May or 7 June 2020, whether this is a quarterly or monthly VAT payment, you can defer payment, currently the liabilities will have to be cleared by 5 April 2021 so remember, it’s a deferral only, the debt still exists.
Although this is automatic and no formal application has to be made, at the time of writing, there has been no official confirmation that HMRC will automatically suspend collection of direct debit payments.
We advise you consider cancelling your direct debit, just in case, but remember, you will have to set it up again later on.
We again urge you to bookmark the government webpage COVID-19: support for businesses.
Let’s face it, the world as we know it has just been turned upside down, and most of us are reeling from the speed of change. Well, at Holden Associates we would like to say to all our clients, we are here, we are working and doing our job, the job of supporting you, our clients.
So, here is an action plan, in no particular order:
Cashflow – have you prepared or updated your cashflows forecasts and projections? Now is the time to either do your first one or update the old ones, this is an area we excel at and can help you with.
Business – how can you turn this crisis on its head and progress your business, new product or service lines? Remember, innovation comes through adversity, so be innovative, we can be your sounding board.
Your team – are they performing and going beyond? If they are, go with them, push forward and through this crisis.
Financial health – now is the time to conduct a financial health check, aka cash in the bank and prepare a cashflow from now until the end of June 2020 (our clients have already been given a copy of this).
Getting paid – one of the most difficult issues right now, you need to contact all those who owe you money and be firm, you need to be paid, even if its not the full amount, put them on a payment plan over the next 3 months.
Paying out – just like you will be looking to get paid, you will be on someone else’s list. Expect the call, and remember, if you have prepared your forecasts then you know your numbers and if you can pay them, it’s time to pay. Let’s work together to keep the UK in business.
12-month Interest free loan – included in the recent package of measures the government have rushed out is a 12-month interest free loan, something you need to talk to us about helping you apply for, Coronavirus Business Interruption Loan Scheme.
Defer it – VAT payments until the 30 June 2020 are to be deferred and you have until 5 April 2021 to repay this money, use it wisely to survive.
Staff – rather than reducing hours or laying staff off consider using the Coronavirus Job Retention Scheme ‘furloughed workers’. Speak to us about this (our clients have already had an agreement for furlough leave letter for staff to sign).
Grants – speak to your accountant about the grants that are being made available, you can read about them further up in this blog, or just come to us if your accountant is not doing for you what we are for our clients. It’s time to change, and we are open for business, well virtually open anyway, we can meet and chat on Zoom our preferred video conferencing software.
Seek counsel – reach out to others around you, right now around the UK there are many small firms of accountants like Holden Associates supporting each other- that’s right the competition is now each other’s support and lifeline! Right now, we all need to support each other more than at any other time in our recent history.
Review – right now our advice is to review your business and everything you are doing in it twice a week. Yes twice a week, subject to anymore announcements from government.
Fight or flight – do you want to ‘cut and run’ or do you want to fight for your business and your future? Well here at Holden Associates we have chosen to fight, as have our staff, and we are fighting for you our clients, so please do not give up as we will not be giving up on you.
Remember, we can always be contacted and even though right now our workloads have gone through the roof, we will still make the time.
We can be contacted by email, mobile, or we can chat over Zoom our chosen method of video communications.
Accept it is no longer business as usual, but unlike any other time we can remember the same applies to everyone.
And finally, whether we are your accountant or you use another firm, please remember, we are also one of your suppliers, an important one. As demonstrated in this blog, we are spending a lot of our time and resources dealing with the changes the government are bringing in to help you and your business. We are deciphering and reporting them to you, and we are going to be your first port of call for help accessing or implementing government help, but we can only be here if we are paid. Please remember to pay your accountant, after all, without payment your accountant will cease to exist, and then where will you be?