As the news changes almost on an hourly basis the enormity and depth of the crisis facing us begins to become clearer. The challenge facing small businesses has never been more acute and the time for action is now!
Now, more than ever, cash flow is going to become make or break. Every penny will count and every action, no matter how small, will increase the chance of weathering the storm.
We have put together some advice and support currently available for our clients and other local small business in St Albans, Welwyn Garden City and beyond. We believe the government needs to go much further and faster to protect these small businesses. Unfortunately even the limited measures announced in the budget lack clarity or process. As local accountants it is our job to make sense of the emergency financial measures being made and update our clients as we learn more.
At the time of writing Rishi Sunak is due to announce a further package of measures to help businesses affected by the coronavirus outbreak. Keep watching the news.
Staying in touch during the coronovirus outbreak
Following the publication of recent government guidelines regarding social contact and the spread of coronavirus we have taken the decision to temporarily cease face-to-face client meetings; either at our premises in St Albans and Welwyn Garden City or at our clients' premises.
Obviously this is a worrying time for small businesses so we want to assure clients, as your accountants, our clients that our door remains ('virtually') open. We are happy to arrange teleconference calls and video conferences using a variety of remote hosting technologies to suit you.
This is to protect both our staff and our clients during this pandemic. We hope you will understand and support our stance. We will keep our policies under review as advice changes.
If you would like to arrange a virtual meeting please get in touch.
Delivering for our clients in the event of a lockdown
We would like to assure all of our clients, as well as local small business needing urgent advice, that we have been extremely busy building contingencies in the event of a complete government lockdown on day-to-day movement.
All of our staff have been given the hardware, software and technology to continue working remotely from home for as long as necessary. We have also introduced an automated call-handling system for the phones which we hope will be helpful!
Coronavirus special newsletter
The Chancellor’s first budget was very much delivered on the premise of “getting it done”. But what does this mean for small businesses and employers? In particular, what support has been made available to help small businesses survive the economic impact of the coronavirus?
How much of it actually benefits small business?
HMRC are increasing Employment Allowance (EA) relief from £3,000 to £4,000 pa from 6th April 2020. New rules and processes for claiming the EA will also come into force so Employers will need to make extra checks from 6th April 2020 to establish whether or not they are eligible to claim the allowance.
Increased National Living Wage and National Minimum Wage rates come into force in April 2020. Employers must be aware of these so that they can budget and plan accordingly. Some local businesses may have to pay higher salaries to young people - Many of our Visionary clients employ young people and are based in St Albans, Welwyn Garden City and Watford.
There was some good news for the retail, leisure and hospitality sectors as the Chancellor abolished business rates for businesses within those sectors with an annual rateable value below £51,000. There is some limited help for Pubs. Small businesses that pay no rates (under SBRR) are promised a £3,000 cash grant (although no one has discovered how to claim this yet!). For the rest of us I'm afraid there is no relief so far...
To do list - Urgent!
Talk to your accountants and professional advisers
We will do our best to send out new information as we receive it but we are at the mercy of government and HMRC who may announce measures with no mechanism yet in place.
If you have concerns or ideas please contact us as, because the sooner we are aware of a problem the better the chance we can help.
Make sure you are on top of your cash flow. Ideally you will need a working capital fund of at least two months. Talk to your suppliers and your customers. Do deals where possible - less cash in your hand is worth more than an unpaid debtor.
Measure and manage your cash flow every day. Ensure your supply chains are able to remain intact.
Confirm your liabilities
Get your company's accounts and corporate tax return completed asap. Then you will know what you need to pay and when so that you can reserve funds or make a payment plan.
The same goes for your personal tax liabilities. Ensure your accountant can complete your tax return as soon as possible after tax year end.
Prepare for the worst...hope for the best
Communicate with your staff so that they know what preparations you are making as an employer. Put remote working contingencies in place now, where possible, so that you are ready to move to remote working if necessary. Talk to your IT company and look at your hardware and software requirements.
Have policies in place for sick pay, stautory sick pay and remote working requirements so that your employees are fully informed.
Keep HMRC informed well ahead of any problems paying tax bills. They are under instructions to be sympathetic and put time-to-pay arrangements in place. See their help page Time2Pay.
Make sure that you are up to speed with government guidance including the COVID-19: guidance for employers and businesses factsheet.
This Budget paper advises what needs to be done if Coronavirus is suspected among any members of staff and details the financial measures that are being made available including:
- Refund for businesses and employers required to access Statutory Sick Pay
- A 100% Business Rates retail discount for one year
- Funding support for those small businesses that pay little or no Business Rates because of Small Business Rate Relief
- The Coronavirus Business Interruption Loan Scheme
Investigate what help is available from your bank, what terms and conditions there are, and whether the help is currently needed. RBS, Lloyds Bank and Barclays have pledged to offer support by mortgage repayment holidays, temporary increases in credit card limits, waiver of fees on early access to fixed savings accounts and late credit card, mortgage, and loan payments.
Check your insurance policies - what cover do you have for things like business interruption, sickness, keyman, critical illness etc.
Review business costs
Investigate all costs and reduce discretionary and non-essential expenses as far as possible. Fixed costs such as wages, rent, utilities, financing costs and tax liabilities not affected by a decline in sales need to be properly managed. Investigate whether costs can be spread rather than paying in one lump sum (e.g. car insurance).
Carry on and look ahead
It is vital that businesses at least give the impression of carrying on as normal. This may be impossible if the business is a restaurant, but is feasible for the many others who might have to self isolate. Look at using technology and remote support, such as Virtual Assistants, where possible.
The coronavirus will change the way businesses and society works. When the urgent part of the crisis is over, businesses should consider what lessons can be learned and plan for any future crises.