The Coronavirus has now caused all businesses to re-evaluate their finances and to consider whether or not they can continue trading, spending money when little or none is coming in.
How can we survive?
It seems that the best way is to stop all suppliers’ contracts and pay on an “ad hoc” basis, lay off staff and make redundancies… but there are hidden penalties.
- A contract with suppliers may have a termination clause that imposes a financial penalty, up to or exceeding the original contract price. Terminating may prevent a resubscription with the same supplier at the same price.
- Making staff redundant, or reducing hours, or laying off, may appear to make immediate savings but what you are allowed to do is controlled by your employment contracts and to deviate from this may cost you a lot.
So, is there an alternative?
The government has promised that “they will do whatever is necessary”.
Measures you can explore are as follows:
- For those who are entitled for sick pay as they self isolate then that may be recouped under the government’s relief package. For dealerships with less than 250 employees on the 28th February 2020 will receive a refund to cover 2 weeks per eligible employee. You will have to keep records as a sick note will not be required for that period.
- Business rates: For those with a rateable value between 15k & 51k per annum and are a retail business, may be entitled to a rates holiday or a grant of 25k. Enquiries should be made of your own local authority to check eligibility. Guidance note on the rates holiday will be published on the 20th March. Watch this space.
- The Coronavirus Interruption Loan Scheme: The Government have set up a scheme to be launched next week whereby business loans / overdrafts may be provided to cover cashflow. The loans will, be underwritten by the government (80%), with the first 6months being interest free. Subject to criteria to be announced, loans of up to 5million may be available. Details of the scheme will be published next week. Watch this space.
- Where businesses, and the self-employed, who are in financial distress they can apply for and may be eligible for support through HMRC’s Time to Pay Service. The need must have arisen from COVID-19. HMRC’s dedicated helpline may be accessed on 0800 0159 559.
Information about support available from the goverment has now been updated please follow the link below for the most recent news:
To access help and support for your business from the government click on the link below:
https://www.gov.uk/business-support-helpline
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