In the wake of the coronavirus pandemic, the Government announced a series of measures to help businesses and the self-employed in its Budget. This was followed up on 17th March by an announcement of further support, including the creation of a Government-backed loan scheme of up to £330bn.
The situation is changing rapidly, and we expect further announcements to follow. We will continue to monitor and will update you as more information becomes available.
We know there are various funds being made available and support being offered, but what you really need to know is what you and your business can actually access and how to do this. At present this is unclear, but we will keep working to find answers and will let you know once guidance is released by the Government.
In the meantime, we look at several practical steps you may be able to implement to minimise the impact of the COVID-19 outbreak;
Stay in touch with your clients
In any crisis, customers, whether large or small, look for reassurance. We are all facing similar challenges so you can easily relate to their issues. A quick email, or even better, a phone call to see how your customers are managing may make a big difference to them, to show that you truly care and generate goodwill that will be valuable in the future. Most will be comforted that there is someone who understands what they are going through.
Staying in touch also helps you understand the challenges your customers may be facing in their own businesses, which in turn helps you consider the likely impact on your own current and future revenue. The more time you have to look at this impact and react, the better.
And a final point on customers – yes, you do want to keep working with them, but if there are outstanding amounts due to you then start chasing for payment now to help support your own cashflow.
Review your working arrangements
Increasingly people will need to work from home and businesses need to start adapting to this new reality. Technology such as Skype, Facetime and Zoom allows you to continue having virtual face-to face meeting with your clients but working from home will involve a huge change for many. Is your business ready for this? Are your staff prepared to work from home? Have they got access to IT equipment, data, suitable broadband speed, etc? Some businesses may already have a business continuity plan, but this is going to be a huge challenge for many, and you may need to talk to external IT support.
Many businesses will inevitably look at ways they can reduce staff costs and will be considering redundancies, reduced working hours, unpaid leave, etc. The Government is urging caution and asking businesses not to over-react to the situation. This is difficult to do when income is falling and you need to protect your business, but it’s important to consider what your business needs to function, even at a reduced level of activity. It’s also worth bearing in mind the costs and challenges of recruiting once the crisis is over and you are trying to return to ‘business as normal’.
But for many cost control will be inevitable and staff costs will be a key part of this. Flexible working arrangements such as unpaid leave and reduced hours are now commonplace. If you do decide to take this action to protect your business make sure you consider employment law and seek advice should you need it.
Look at Statutory Sick Pay (SSP) arrangements
The Government is introducing legislation to allow employees to reclaim SSP relating to absences as a result of COVID-19. This refund will cover up to 2 weeks’ SSP per eligible employee. The repayment mechanism is still being developed by the Government, but it’s important that you maintain records of staff absence and payments of SSP to ensure you can claim when the system is up and running.
The current rate of SSP is £94.25 per week. Note that SSP can now be paid from the first day of absence.
We will update you with details on how to obtain repayment as soon as it’s announced by the Government.
Know your numbers
Understanding how your business is performing is critical in difficult times. You are likely to have to make important decisions to help support the business and this needs to be based on an accurate view on where the business is and where it’s going. Cashflow is going to be key.
Make sure your accounting records are up to date and work with your accountant. Now may be a good time to update your systems and take advantage of some of the tools and technology available to help you understand the numbers and save time and effort.
Once your figures are up to date you can more accurately predict demands on your future cashflow, make more informed decisions and get a clear picture of what your business and, more importantly, you and your family may need over the next few months.
Most businesses will have some working capital available, but this can quickly be used in challenging times. Use your knowledge of your numbers and understanding of future income, orders, costs, commitments, etc. to look at how you and your business can cope with a fall in income. Ask your accountant to help if you need support doing this. Consider how you might respond. Do you need to control costs? Is there a need for further funding?
Think about funding available
Your bank is probably your first point of contact as they will know you and your business - many of the major banks have stated they have options that businesses are able to access should they experience temporary setbacks as a result of COVID-19 affecting their business.
You should also consider alternative lenders who may be able to help you in the short term.
Coronavirus Business Interruption Loan Scheme
At Budget 2020 on Wednesday 11 March, the Chancellor announced a ‘Coronavirus Business Interruption Loan Scheme’, to help businesses during these difficult times.
This has been brought forward, and we are hopeful this scheme will be available from week commencing 23 March 2020.
The scheme will be delivered by the British Business Bank and, as well as business loans, there are many other types of finance supported by the programme, depending on the provider. You can find out what type of finance is provided on the British Business Bank partner page.
For further information regards availability of finance products and eligibility criteria, please see the British Business Bank page.
As soon as we have further information, we will update you.
Business Rates and Cash Grants
The Business Rate Relief announcements in Budget 2020 have been extended so that the Business Rates Retail Discount will be available for all businesses occupying retail, leisure and hospitality properties for 2020/21, in most cases reducing the Business Rates bill for 2020/21 to Nil.
In addition, grant funding of £25,000 has been announced for smaller businesses occupying retail, leisure and hospitality premises. These will be businesses with a rateable value between £15,000 and £51,000.
Grant funding has also been announced of £10,000 for all businesses, whatever their sector, who already receive small business or rural rate relief. Businesses will not need to apply for grant funding, you will be contacted by your local authority.
As part of the business rates support package, the 100% relief for 2020/21 was extended to nurseries to support them through this difficult time.
Talk to HMRC
Among the series of support packages, the Government pledged in the Budget, was an enhancement to HMRC’s ‘Time to Pay’ arrangement scheme to help those with upcoming tax bills plan how they can pay with an individual plan. To support this, it has also launched a dedicated helpline - 0800 0159 559 – with increased staff numbers, to help those businesses and self-employed people who are concerned about not being able to pay their tax due to coronavirus.
Look at your insurance cover
Check your insurance policy to see if your commercial insurance includes Business Interruption , Supply Chain or Denial of Access cover. This may include cover in the event of your business being affected by a ‘notifiable disease’. The UK and Scottish Governments have declared that COVID-19 is a notifiable disease.
If you do feel you have some form of cover, speak to your insurance provider or broker and ask them how this would work in your particular circumstances.
It is inevitable that the Government will consider relaxing some regulations which apply to business. We will keep you updated regards changes which could impact your business.
The Government have already said that to support the food industry and help provide meals for people who need to self-isolate, the Government will be relaxing planning regulations to allow pubs and restaurants to start providing takeaways without a planning application.
Speak to our team
There are several ways in which we may be able to help. It’s always important to get good advice and that’s particularly true in turbulent times. If you need help please talk to us on 01206 576800. We can offer consultations, advice and support over the phone if you have any concerns about face-to-face meetings.
And please feel free to share this information with your customers to help them plan their business affairs during these challenging times.
Member since: 17th March 2014
Hello! I'm Penny from thebestof Sudbury, shouting about the best local businesses from Hadleigh through the Clare. When I'm not doing that, you'll find me knitting socks or tending to my 6 chickens