Talking to several clients this week it is clear that some are already experiencing cancelled orders/events/contracts, supply chain issues and some challenges with cash flow.
Please take below actions if you are experiencing cash flow issues:
Review Your Overheads
If you are predicting cash flow difficulties it is sensible to review your expenses in the business and pause any spending, you feel may not be necessary at this time.
You may also need to cut your personal expenses if necessary, to support your business.
Recently the Chancellor has announced support for small businesses due to the financial impact of Coronavirus nationwide. They can be summarised as the following:
Coronavirus Job Retention Scheme
HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per person per month. HMRC are working urgently to set up a system for reimbursement as currently their systems are not able to facilitate payments to employers.
Self-employment Income Support Scheme
HMRC will reimburse 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months. HMRC will calculate amount based on your 2018-19 self-assessment tax return.
HMRC will contact you if you are eligible for that.
VAT Payments have been deferred from 20th March 2020 until 30th June 2020 and any unpaid VAT liability accumulated during the period must be paid by 5 April 2021.
Personal Tax (Self-Assessment)
Self-assessment tax payment (second payment on account) due by 31 July 2020 has been deferred until 31 January 2021.
Support for businesses through the Coronavirus Business Interruption Loan Scheme
Govt has set up temporary loans to support small medium-sized businesses. There is no interest payable under this scheme for 12 months. Businesses can access these loans through British Business Bank. Click here to get full details of the scheme and eligibility criteria
Time to Pay Service
Businesses and self-employed people facing financial issues can get support with their tax affairs through this service.
Please call HMRC’s dedicated helpline: 0800 0159 559 for support.
Statutory Sick Pay SSP Support
Businesses will be able to claim SSP for first two weeks paid to employees.
The eligibility criteria for the scheme will be as follows:
- This refund will cover up to two weeks’ SSP per eligible employee who has been off work because of COVID-19. Only employers with fewer than 250 employees will be eligible
- Employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
- Employers should maintain records of staff absences, but employees will not need to provide a GP fit note
- The eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to self-isolators comes into force
- The government will work with employers over the coming months to set up the repayment mechanism as soon as possible
Support for Retail, Hospitality, Leisure Businesses and Nurseries
Govt will introduce business rates holidays to help businesses in the retail, hospitality and/or leisure sector and nurseries. You don’t need to do anything to access the scheme as this will automatically apply from April 2020.
Cash grants for retail, hospitality and leisure businesses
There are two grants announced so far for businesses in retail, hospitality and leisure sector:
- £10,000 for businesses with a rateable value of under £15,000
- £25,000 for businesses with a rateable value of between £15,001 and £51,000
The information above has been taken from here
Talk to AudTax for Advice
We are more than happy to discuss your individual circumstances and advise on the best way forward. We appreciate these are challenging times to be in business and we all face a period of uncertainty. No one can predict the future, but we believe we can all pull together as businesses and support each other.