The COVID-19 coronavirus pandemic is sweeping across the globe and thousands of UK businesses are bracing themselves for its impact, not only in the long-term, but with immediate effect.
Many companies, partnerships and sole trader businesses simply do not have the financial breathing space to manage an emergency cash flow situation – and this is the threat that COVID-19 is posing to businesses across the country in a wide variety of industries and sectors.
Looking After Your Business
How can your business cope from the imminent financial impact of this coronavirus?
Business Insurance
Your business insurance may not provide the cover you need if your business has to stop trading indefinitely. Check your policy’s wording for Business Interruption cover. Once you have confirmed that you have Business Interruption cover, you will also need an extension for “notifiable diseases”. If you are unsure, please speak to your insurer directly.
Business Interruption Loan Scheme
A new, temporary Coronavirus ‘Business Interruption Loan Scheme’, delivered by the British Business Bank, is due to launch in a matter of weeks to support business’ access to lending and overdrafts. The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £1.2 million in value. This new guarantee will initially support up to £1 billion of lending on top of current support offered through the British Business Bank.
Pay Outstanding Invoices
Ask your customers – particularly larger companies – to pay your outstanding invoices. Morrisons have led the way with this by paying 3,000 suppliers instantly, regardless of payment period. Small businesses or the self-employed with invoices issued should use this moment to chase for instant payment.
Tax Helpline
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through “HMRC’s Time To Pay” service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559.
Business Rates – Grants for Smaller Businesses
The government will provide an additional £2.2 billion funding for local authorities to support small businesses that already pay little or no business rates because of Small Business Rate Relief (SBBR). This will provide a one-off grant of £10,000 to businesses currently eligible for SBRR or Rural Rate Relief, to help meet their ongoing business costs.
If your business is eligible for SBRR or Rural Business Rate Relief, you will be contacted by your local authority – you do not need to apply.
Funding for the scheme is due to be provided to local authorities by government in early April.
Business Rates – Additional Relief
The Business Rates retail discount in England is increasing to 100% for the 2020-21 tax year. This increase applies to properties with rateable value of under £51,000 and is also being extended to the leisure and hospitality sectors. Eligible businesses may need to apply to their local authority. Guidance is due to be provided to the local authorities on 20 March 2020.
Looking After Your Employees
As an employer, looking after the health and wellbeing of your staff is vitally important. We highly recommend you follow guidance given by the Government and take every precaution to protect them. To find out more, click here.
Statutory Sitck Pay
A new legislation has been passed to allow small and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) for sickness absence due to COVID-19.
To be eligible you must have fewer than 250 employees as of 28th February 2020.
The reclaim will cover up to a maximum of 2 weeks of SSP per eligible employee who has been off work or self-isolating, because of COVID-19. The additional reclaims come into effect for qualifying absences from 14th March 2020 and is due to remain available for the following eight months.
Employees on Zero Hour contracts may be entitled to sick leave via their employment (depending on their contract). Otherwise, they can claim under Universal Credit or Employment Support Allowance (ESA).
Self-employed individuals should be able to claim under Universal Credit.
Self-Employed Support
For those who are self-employed, the Government are in the process of making it easier to access benefits. At present, the minimum income floor has been removed from universal credit. To find out more click here.
What Are Your Rights If Working From Home?
According to the recent update from Prime Minister, Boris Johnson, everyone should work from home if they can to combat the spread of Coronavirus.
For many people, homeworking will not be possible, but they still face the possibility of 14 days of self-isolation. If you cannot work at home, employers have the right to tell workers to take holiday if they decide to shut for a period.
If it is mandatory to self-isolate, even if you are not unwell, the decision to offer contractual sick pay will be down to the employer.
How We Can Help
Dunkley’s remain open and have measures in place to ensure that our service to you is as unaffected as possible. If you are past your year end and have not got your records in to us yet, please do so.
In this time of uncertainty, you will need to consider the best options for your businesses. This will include some hard decisions, however through this all, Dunkley’s are here to help.
Get in touch if you need any help or advice regarding:
- Seeking Finance
- Cashflow Planning and Forecasting
- Insolvency
Call 01454 619900 or email your Client Partner.