At some point the restrictions on business activity necessitated by COVID-19 will come to an end and life will begin to return to normal. Whilst the top part of your 2020 Income Statement may look a little bleak, I am pretty sure that the part where costs are accounted for and reported will have been busily chugging along throughout the closure period! It is therefore important that businesses do not allow the current restrictions to blind them to the story of their ongoing costs, these will need to be met one day and may impact significantly on your chances of a speedy recovery, return to creditworthiness and even your chances of survival. Over the next few weeks, I will be posting a regular blog about how you can keep your business trim and fit during this horrible lock down period, helping you to ‘bounce with the best of them’ (especially your competition) when the wheels start turning again.
Most suppliers, including service and utility providers, will be in a similar situation to you or certainly in a position to understand your need for a little more patience and flexibility from them in these days. HMRC have already announced the deferment of second instalment of income tax for the self-employed, moving the July 31 2020 payment date back to 31 January 2021. Businesses that cannot afford to pay tax bills due to coronavirus can also approach HMRC to see if they can agree a ‘time to pay’ agreement, although HMRC will want to discuss the specific circumstances which apply. If they agree with you, they will enter into an instalment arrangement and cancel any penalties or even interest which would otherwise be charged. A special helpline (0800 0159 559) has been set up to help and advise businesses, even operating on Saturdays! Businesses who are VAT registered are already automatically forgiven making any VAT payments from 20 March to 30 June and will have until the end of the 20/21 tax year to pay any liabilities which may have accumulated over the deferral period.
I am sure that you are all aware of the extension to the business rates holiday to all businesses in the hospitality and retail sectors, regardless of size or rateable value – so shops, pubs and restaurants, for example, will pay no business rates at all for 12 months. If your business is involved primarily in these sectors, and has a rateable value of between £15,000 and £51,000, you may well also be eligible for a grant (not a loan) of £25,000 and you should contact your local authority with any enquiries on eligibility or payment of these reliefs.
In my next blog I will look at some of the other costs which may be quietly accruing as you are not trading, and also cover some ‘business gym’ ideas to ensure that you return to the fray fit and ready to fly!
Andrew Gilliland is a Senior Lecturer in Business and teaches on all Business programmes at undergraduate and post graduate levels, acting as Programme leader for BA (Hons) Accounting and Business, and as module leader for Financial Management, Business Law, Financial and Management Accounting, and new specialist modules in Taxation and Audit.
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