We’ve been talking to a lot of clients worried about the impact the Coronavirus is going to have on their business. Like the virus’s effect on individuals, the economic impact does not discriminate. It is affecting all businesses both small and large.
After talking to our clients, it’s clear that all businesses will be affected, some more than others depending on the strength of reserves or the sectors they are in. Therefore, the actions each business needs to take will be different.
Our advice to all clients has been to act now to limit the cash going out of the business and build up cash. The faster this can be done the more resilient the business will be and the more likely it will be to survive.
We thought it may be worth outlining some actions you can take now.
- Improve cash flow. We are recommending that a 13-week cash flow is put together to forecast what the cash position might be. The following article provides more advice on this. Coronavirus Action Point One – Build a Cash Flow
- Speak to HM Revenue & Customs to agree a Time to Pay deferral for PAYE and Corporation Tax liabilities that fall before the middle of May. At this point you are not discussing a proposal to pay but asking for time to come back to them with a proposal. To give you time to create a plan and see how the crisis unfolds we suggest that you give yourself to the end of June to go back and make firm proposals. The telephone number is 0800 024 1222 although we suggest you get a cuppa before calling as waiting times are around 45 minutes to an hour. Coronavirus Action Point Two – Speak to HMRC
- Understand the implications of the VAT deferment scheme and build into your cash flow the impact of deferring your next quarters VAT payment. NB Note that HMRC are still processing refunds as usual and if you pay your VAT by direct debit we would recommend you cancel it just to be on the safe side. Coronavirus Action Point Three – Understand the impact of the VAT deferment scheme
- Understanding the resources you need to carry on trading or if you have closed, dealing with employees is one of the most difficult and emotional tasks you need to do. Whilst the fine details of the Job Retention Scheme have not yet been announced, thinking about and taking action around furloughing employees is an important step as it could generate big cash savings. Coronavirus Action Point Four – Consider whether you need to furlough any of your team. Also read our HR teams early thoughts and FAQ’s.
- Speak to us! We have created two separate teams to help business owners through the crisis. One team that is dealing exclusively with Payroll and Employee issues and another dealing with Cash Flow and Funding. If you want advice or simply want to talk to somebody about where you are at, please call our team on 01522 81 5100 and ask to Speak to either Richard Hallsworth, Emma Murray, Jo Brown, Richard Grayson, Lucy Pitfield (HR advice) or Steph Smith (cash flow and funding).