Covid19 Guide

How to cope with Covid19 business disruption, now and in the aftermath

Managing your business has become increasingly complex as the Covid19 pandemic takes hold. Finding the government schemes to help business can be frustrating, and many businesses face uncertainty ranging from disruption to insolvency. The following guide is designed to help you find the help you need to manage your business during and after the Covid19 crisis.

The Government has put in place a number of significant measures to make it possible for businesses to cope with the impact of closures during Covid19. Read the Government Guidance.

The Job Retention Scheme allows you to furlough employees that you do not want to have to make redundant but whom you cannot afford to pay whilst your business is closed.  There are a number of choices but the main impact is that the Government will cover 80% of the normal wages of the employees chosen for furlough for an initial period of three months from 01 March 2020.  You can decide to top up the pay, but you do not have to do so.

If you need to defer your VAT you can do this for up to three month without having to seek authority from HM Revenue & Customs and without any interest or penalties being applied.

There are Business Interruption Loans that can be accessed to help you make changes and work a way through the disruption.  Loans will be backed by the Government up to 80% and recent guidance suggests that business owners cannot be required by the Bank to give personal guarantees as well.  The Government will also pay the interest on the loan for up to 12 months.

Business Rates holidays are available for some businesses and small businesses may already have been told that the local authority will be making grants available of up to £10,000 that do not have to be repaid.  Information is on the Government website on eligibility for the Grants is available.

For larger companies there is also the Covid19 Corporate Financing Facility which can enable the finance of short -term liabilities  and ease the supply of credit.  The Government’s Guidance is valuable reading.

Which expenses are taxable: If you have staff working from home this will have put you to cost and you can find helpful advice here on which items are taxable or non-taxable.

There are other measures that provide help for the self-employed and we recommend that you read the above guidance.

If you need time to pay your self assessment tax payment on account due on 31 July 2020 as a result of the impact of the coronavirus , then you may defer payment until January 2021.

There is also Time to Pay from HM Revenue & Customs if you are struggling with any tax payments and you are directed to the Helpline: 0800 0159 559.

Relaxation of the Insolvency Laws during Covid19

Every director knows how important it is to make decisions and act in a way that is most likely to promote the success of the Company for the benefit of all of its stakeholders, including creditors.  They equally know that when you get it wrong, the result can be to pierce the corporate veil and end with personal liability.

Directors know that in these difficult times there will be enormous hurdles to overcome and no one wants to have to cease to trade, but  equally no one wants to be found guilty of wrongful trading, by continuing to incur credit when the business is insolvent.

The Government has already suspended the wrongful trading provisions of the Insolvency Act 1986 backdated to 01 March 2020, they have put together new rules to stop suppliers from cancelling contracts and thankfully there is also provision for a moratorium which will prevent creditors from taking enforcement action whilst the owners seek advice and consider their options.  A new form of scheme of arrangement is also being put in place and the regulatory bodies for insolvency in the UK are assisting with the introduction of these measures.

Contact our insolvency team to assist  you with consideration of the options for your business.