17th March 2020
In these uncertain times, businesses are inevitably going to face huge challenges in the forthcoming weeks and months as to how to navigate their way through the Coronavirus and the serious issues it presents.
We have considered the major areas of impact and have set these out below with some of the proactive steps that you can take.
HMRC have recognised that businesses will struggle with cash flow and one of their major demands will be to meet their tax payments. They have therefore recognised this and set up a specific helpline to provide time to pay.
The contact number is 0800 015 9559.
Our experience is that HMRC are willing to be relatively flexible and helpful over deferred tax payments, especially with those industries likely to be hardest hit, such as leisure and retail.
This helpline covers Income Tax, PAYE, VAT and Corporation Tax.
The budget announced that small business grant funding of £3,000 is available for all businesses in receipt of small business rates relief and rural rates relief’
In addition, those premises with a rateable value of less than £51,000 will not pay business rates for one year for 2020/21, under the Small Business Rate Relief scheme. This applies to those businesses in the retail, leisure and hospitality industries.
Although not entitled to small business rate relief, pubs with a rateable value of £100,000 or less are entitled to a £5,000 business rates discount.
To obtain the business rate relief you are entitled to, HMRC advise you to contact your local authority, as each has their own designated procedures to deal with the rates refundable. To find the contact details applicable to you please use the web link below:
Coronavirus Business Interruption Loan
In a matter of weeks, the government will provide lenders with a guarantee of 80% on each loan. This is to give lenders confidence in providing finance to Small Medium Enterprises. Application instructions will also be published shortly.
No charge will be levied to businesses or banks for using the scheme. The scheme will support loans of up to £1.2 million in value.
We are also aware of the willingness of banks to help with extended funding for those hardest hit in business, with extended overdrafts, repayment holidays and lending on other finance terms, being suggested.
Businesses need to ensure all employees are aware of the latest government guidance and the procedures that are in place to protect and support them.
You will need to plan for flexible working and ‘key man’ cover. It may be worth reviewing your insurance policy in this regard.
There will be many questions regarding this topic and this advice is constantly being updated.
We would suggest you refer to the ACAS website below (website recommended by the government), which has a lot of common queries addressed:
Please also remember if you have subscribed to our Fee Protection Service you will also have FREE unlimited telephone access to Employment Law specialists who can provide pro-active HR advice on hand helping you to manage your employees.
Statutory Sick Pay (SSP)
The government will fund SSP for small businesses (with no more than 250 employees) for 14 days per employee, and from day one of the sickness arising (rather than day four).
Those diagnosed with the virus, or those unable to work due to self-isolation in line with government advice, will be eligible for the relief.
The SSP is expected to be in the form of a refund. The treasury is setting up a repayment mechanism so employers can reclaim SSP, if this is not claimable as a reduction against the overall PAYE & NIC liabilities.
You may need to ensure that your employees are able to work from home where possible and that working from home arrangements have been discussed.
Stress Test IT
If employees are working from home there will be a lot of ‘remote’ access on your servers. You will need to ensure your IT infrastructure is able to support such demand.
Our sister company, ThinkIT are experts in business IT solutions including home and remote working. If you need help or advice please contact them on 01392 435803.
It is worth checking the terms of your business insurance policy as there may be an element for business interruption payments if your business is required to close down by the government. For example, we are aware of at least one pub/restaurant, which will receive up to £250,000 in such insurance if the government insists on a full shut down of this business.
Those that supply your business may also be affected, so you will need to consider contingency arrangements to ensure that your business is still in receipt of the supplies it needs to function.
It is worth contacting your suppliers to ensure the disruption to your business is minimal and identify the areas of strain that may mean services and goods will be disrupted.
If it is not business as usual, communicate and advise clients of your alternative plans, so that customer service levels are maintained, and customers still can rely on your business going forward.
The government anticipate that the worst elements of the virus will have passed after 10-14 weeks, so keep that in mind to ensure your business can return to optimal capacity when this does occur.
Clearly this is a fast-developing situation and we will be watching how it develops and whether there are further steps that our clients can take to mitigate their risk.
Please watch out for our further client updates in the coming days.