Coronavirus Business support 24.04.20
I thought it would be useful to go over all the government schemes and give you a bit of feedback from what some of our clients have encountered to help others.
Firstly, many of our clients seem to be feeling very flat which is understandable given that a lot of business owners have had to furlough all their staff and think about their financial difficulties as well as their own financial difficulties. That’s a lot of stress on company owners, particularly those that aren’t getting help under the limited company scheme. We’ve spoken to a lot of clients not about tax or their accounts, we’ve just been making sure they are OK.
There are a lot of business that receive money on credit terms from their customers that might be building up a surplus of cash or their overdraft might be get getting a bit lower. If you haven’t planned out your cash flow don’t make any buying decisions at the moment. I did a video blog post last week about this important issue.
You could be receiving payment on 60 or 90 days’ from customers but it will actually be September time when you are going to run out of cash, so plan ahead and think about how much you need to borrow, get funding in place or look at actions you need to take to manage that cash shortfall.
Don’t be lulled into a false sense of security with a lot of money in the bank at the moment and then get into trouble in September think about your cash flow.
Self Employed Grant
If you are Self Employed HMRC will write to you in the middle of May and you will receive your money at the beginning of June, you can’t do anything until that date I’m afraid so it’s just a case of waiting for your money. Remember, you can still work (if you are allowed to under the lock down rules) and you will still quality for the grant.
If you have a payment on account that is due on 31st July 2020 this can be deferred until 31st January next year. A lot of self-employed clients have been really worried about the level of payment due next year. What we suggest is that businesses defer their July payment and then, when things are back up and running, just chip away at that tax bill paying money in each month so you are not hit with the stress of a huge tax bill after Christmas.
Business support grants
Local councils’ portals should all be open. Locally here Shropshire Council and Telford & Wrekin Council are paying on client grants, we have a couple of clients who have had problems with their claims. The main reason has been because they have changed their bank account so the bank details on the claim don’t match the details the council has on its records.
Unfortunately, there’s a big queue of claims waiting to be processed. If you try and phone it’s quite difficult to get through, so we suggest you email the council so they can confirm that your claim has been received and is being processed.
If you are going to struggle paying your business rate bills in April, May or June we suggest you phone up or email the council and negotiate a rate holiday. That would mean those three payments are wrapped up in future payments when you are back up and trading again.
There is some good news for Landlords that let out property short term or for holidays with Airbnb or through other platforms. You should be registered for business rates with your local council and therefore may qualify for Small Business Rate Relief. If you do, you will also qualify for the £10,000 grant.
We’ve got a couple of clients £10,000 better off after making an application but remember the correspondence and reminders will be going to the property that you rent out so if you are not inspecting the property regularly you are not going to see the reminders.
Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme for furloughed workers portal is open and we have successfully made all the claims for our clients, we’ve not been charging for this but some accountants are charging a ridiculous amount, up to a quarter of the claim. Personally, I don’t think it is fair to be charging in this time of crisis.
You can claim for furlough workers in advance, so if you are running a payroll at the end of May and you want to make a claim beforehand you just need to advise your accountant to run your payroll a bit earlier to get the money back.
You do need to have been registered and to have made a submission to HMRC by the 19th of March. We’ve had a couple of clients who have unfortunately been caught out by that as their PAYE has been withheld or the didn’t quite get their RTI submission in by the 19th March and they therefore do not qualify for this support
If you are a Childcare Provider, or if you are a business that deals with protected children and you receive government funding, your claim under the furlough scheme is restricted. Please refer to the guidance . The rules state if you are a childcare day nursery, you can only claim the proportion of costs that relate to private income i.e. you can’t make a cash surplus on the government grant that you get.
This has affected a couple of our clients who have prepared a cash flow forecast based on getting full furlough money before HMRC issued this additional guidance. So if you are a childcare or nursery provider, and you are not aware of this restriction, speak to your accountant as you may have to pay back the grant In future if you have over claimed.
Your VAT Payment is automatically deferred so, if you have got a VAT return due in the next 90 days it has been deferred but do check if you are set up for direct debit to pay VAT and make sure you cancel your VAT direct debit to defer your VAT bill.
Coronavirus Business Interruption Loans
Finally just a few words about the Coronavirus Business Interruption Loans, these are taking ages to process. The feedback we are getting is that it’s not great, some people have been successful, it seems to be pot luck depending on what bank you are with, Barclays and NatWest seem to really proactive.
However, due to the the level of applications, banks are only dealing with existing customers. So just to give you a bit of guidance into the level of loans you are eligible for, you are looking at 25% of last years’ turnover or double the wage bill which may or may not be enough for your business.
So this was a brief update on government business support available as at 24 April which I hope you have found useful. Take care, stay safe and if you feeling a bit flat please pick up the phone and talk to someone, together we can get through this.