CORONAVIRUS - SOME REASSURANCE BASED ON HISTORY - PLEASE READ MORE HERE
Most of the advice from Government is not definitive at the moment and Businesses may have to make decisions quickly.
So our best advice to clients is that you have to take whatever measures that you feel are required to get you through as best you can.
As long as you are fair and reasonable and you make sensible decisions that do not contradict rules and guidelines, we can help you argue why you took a decision at that point at a later date.
Advoco will continue to do our best to provide clients with as much up to date information as we can and we appreciate that this is a very challenging time.
We do not have all of the answers but we will do our best. We will give our best advice as practically and honestly as we can, in plain English.
Please review our Website and Facebook pages for general updates. We will try to do our best with individual enquiries but please look at these resources for general information.
We have outlined what we do know for sure at the moment, but as yet we do not have some of the detail.
Last night the government announced
- £330 Billion of business loans (repayable)
- £20 Billion of aid (not repayable)
- More Grants and further Business rates relief for certain types of businesses
- Mortgage holidays
- The minimum income floor for Universal Credit for the self employed has been suspended.
They said they will do whatever it takes and there will be more announcements in the coming days and they are looking to develop new forms of employment support. This was a very positive message, but there is very little detail.
In a separate announcement they have also delayed the new IR35 rules for a year. Whilst this is positive, most businesses have already prepared for the changes.
There is some general guidance from the Government
Contact the Business Support Line – 03004563565
Cashflow is going to be even more crucial than ever during this uncertain period. We recommend that our clients start by making an initial cashflow forecast for the next month. It does not need to be sophisticated.
Something simple and understandable is better than nothing or something too complex. Make notes of any assumptions. Use the last months bank statement as a guide to the typical transactions and the timing of them.
We recommend the following headings
Date Description Income Expenditure £ - Running Balance
If you can see a cashflow issue, look at ways to alleviate this in the short term by spreading payments and / or other income source but crucially not loans at this first stage
- Focus on your largest outgoings first, contact them and ask if they can help
- Contact banks and ask for a short term loan repayment holiday, this will extend the term of the loan
- Contact other finance providers and ask for a short term loan repayment holiday
- Consider deferring tax payments
- Contact the Local Authority about grants and hardship funds
- Contact the Business Support Line – 03004563565
- Contact your insurer and see if you have any insurance cover
- If you are Self employed contact JobCentre Plus about the assistance they may be able to receive
The situation is changing very quickly. Businesses need some time to make well informed decisions and these measures may help to give you some breathing space.
The longer term solution may be a Business interruption loan.
The Government has announced a package of Business Interruption loans
More detail later in this guide
We can help you apply for these, but the cashflow forecast above will be the starting point.
Defer Your Tax Payments
The Government has announced a Tax Helpline
A dedicated helpline has been set up to help businesses and self-employed individuals in financial distress and with outstanding tax liabilities receive support with their tax affairs.
We can help you approach HMRC for a payment arrangement (0800 0159 559)
However we are experiencing massive delays getting through.
Our advice is to defer any tax payments even if we cannot get it agreed over the phone with HMRC.
There will be a cash grant available to business that are currently claiming small business rates relief. We do not have any detail as to how this will be paid yet.
You can claim small business rates relief if your Rateable Value is less than £12,000 (rateable value is different to the rates actually payable)
You can find your rateable value from the VOA website
The government is temporarily increasing the business rates discount for certain business sectors in England, to 100% for 2020-21 for properties below £51,000 rateable value.
This will only apply to certain types of businesses and this will be reflected on your 2020/21 Rates Bill which will arrive in the post shortly.
RATES RELIEFS EXPLAINED - PLEASE READ MORE HERE
If you employ staff, please read the ACAS guidance.
If someone comes to work with the symptoms of CV or develops symptoms at work, please call Public Health England for advice on: 020 7654 8000. Advice will inevitably be to send staff home but as an employer you should call.
As an employer you will have to pay your staff Statutory Sick Pay (SSP) if they are off work and need to self isolate. You will be able to reclaim any SSP paid.
You are unlikely to get a FIT note and so we recommend that you ask the employee to put in writing why they are off ASAP. The reason for being off can include;
- they have coronavirus
- they have coronavirus symptoms, for example a high temperature or new continuous cough
- they have been told to self-isolate by a doctor or NHS 111
You should also ask them to provide regular updates.
If as an employer, you tell your staff not to come to work, when they are not sick, they are entitled to their normal pay.
If an employee does not want to go to work, employers should try to resolve their concerns or arrange for time off to be taken as holiday or unpaid leave.
If an employee refuses to attend work unreasonably, then it could result in disciplinary action.
If you need to close the workplace - Lay-offs and short-time working
You might need to close down the business for a period of time. Unless it says in your employment contracts or it is agreed with employees, you still need to pay their employees for this time.
If you think that you need to do this, it is important to talk with staff as early as possible and throughout any closure. Try to be reasonable and ask your staff to be reasonable in return. They will have their own financial pressures to consider.
Please speak to us before taking this step. It is important to follow certain procedures, to do this properly in order to protect your business
You do have the right to tell employees and workers when to take holiday if they need to. For example, you can decide to shut for a week and everyone has to use their holiday entitlement.
Employees are entitled to time off work to help someone who depends on them ie a child.
However there is no statutory right for this time off and therefore it can be unpaid.
The scheme, delivered by the British Business Bank, will support businesses to access bank lending and overdrafts.
The details regarding the Business Interruption loans will not be fully cascaded to the banks until next week. However, at the moment it would appear that these will be based around the EFG loan system.
- They will be repayable in the long term.
- Interest free for the first 6 months
- 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 primary guarantee will rest with the business owner and if you cannot repay you will be liable for the full balance outstanding.
- The Government will be the secondary guarantor and will guarantee up to 80% of the loan.
- The Government guarantee is only used if the primary guarantor cannot repay.
Consequently, these loans should be viewed with caution at this stage, pending the full details being released
HSBC have released a practical guide of points to consider, when reviewing your business response to the pandemic:
In addition to the above we have also:
- allocated a £5bn fund to help businesses that need support
- launched a helpline to support any queries (08000 121 614, open 9am – 5pm Monday to Friday)
In addition, we will also consider:
- offering repayment holidays to free up cash within your business
- reviewing overdrafts or trade loans to allow stock to be held for longer
- providing trade finance solutions to support you with your supply chains
Barclays have a dedicated Covid-19 helpline for customers who do not have a local Relationship Manager.
The number for the helpline is 08001971086, it’s open from 8am to 8pm Monday to Friday
Barclays have also advised that
We are looking to help with traditional Overdraft and for loans and commercial Mortgages above £25k we are looking to provide capital repayment holidays.
0800 731 6666.
T:0345 711 4477
Contact your relationship manager for a review
As an alternative for loans, if you are owed money from Customers / Clients, Invoice Finance may be an alternative funding source. James Bingham is an independent broker that we recommend;
Similarly if you have assets that are not currently financed, some Asset Finance may be of use, Andy Knight is an independent broker that we recommend;
First Capital Finance Ltd
Tel: 01202 434000
Mob: 07879 466 560
We do not receive any commission, we simply try to put clients in touch to help.