Coronavirus – continuation of business

The impact of coronavirus is so wide-ranging that it is likely to have a considerable impact upon the operations of virtually every business, whether through staff absences, loss of business, supply chain problems or travel restrictions.

To help you ensure that your business is resilient to the crisis and ready to bounce back stronger in the future, we have put together the following guidance.

Your staff

Communication with your staff should be your first priority, ensuring they understand how you expect the coronavirus crisis to affect the business and what measures you anticipate may be required.

Ensuring that your staff are able to work is likely to require considerably more flexibility than is usually the case.

Where the nature of an employee’s work means that they can work from home, you should ensure that logistics are in place to allow them to do so as and when this is necessary.

Where an employee is unable to work from home, you should ensure firstly that you mitigate the risk of coming into contact with coronavirus. Steps you can take here include:

• Making sure that any employees who are unwell or who have family members who are unwell stay away from the workplace.
• Ensuring that staff members who are present wash their hands regularly and thoroughly and only cough or sneeze into tissues or the crooks of their elbow.
• Step-up the cleaning regime, paying particular attention to surfaces and door-handles.

Your operations

You should have plans in place for a range of scenarios, given the current crisis. Steps you can take to ensure the continuation of your business might include:

• Review your contracts with suppliers and customers to see what flexibility is available;
• Be prepared to renegotiate existing contracts where needed – it may be better to change the terms of a contract than to lose it altogether;
• Communicate early with stakeholders, including clients, suppliers and banks where you consider that you may not be able to meet your obligations;
• Seek opportunities – think about what you can offer that others cannot.

Your finances

The UK is seeing an unprecedented amount of disruption due to the current coronavirus outbreak and in response the Chancellor has announced a number of measures to help businesses deal with this crisis.

Understandably, business owners will be concerned during these difficult times, but they must take practical steps now to help protect themselves, their business and their staff.

To help, we have put together a checklist to give help and advice on how to try and mitigate
some of the impact of COVID-19:

• Liaise and notify customers, suppliers, contractors and trading partners of your contingency plans
• Defer tax payments by agreement with HM Revenue & Customs (HMRC), for:
  • PAYE
  • NIC
  • CIS (Construction Industry Scheme)
  • VAT
  • MGD (Machine Games Duty)

• Defer business rate payments or claim business rates reliefs, if applicable, via your local authority
• Agree to rent and expenditure deferrals
• Prepare new or updated bank facilities, including capital holidays
• Consider using the Government’s business interruption loan scheme
• Defer capital expenditure
• Defer finance payments, hire purchase and leasing
• Accelerate income
• Update credit control procedures
• Reduce stock levels
• Review insurance policies
• Review all contractual obligations and advanced orders
• Review your business’s terms & conditions

Tax payments 

HMRC is offering time to pay applications and may even waive interest and penalties on late payments for those struggling to make tax payments.

To help with the surge in applications it anticipates, HMRC has established a dedicated helpline manned by more than 2,000 personnel to help businesses and self-employed individuals in financial distress, who may have outstanding tax liabilities.

Those who call the line will be offered advice, as well as other options including:

• instalment arrangements
• suspension of debt collection proceedings
• cancellation of penalties and interest where a business has administrative difficulties contacting or paying HMRC immediately.

The line will be open Monday to Friday from 8am to 8pm, and Saturday from 8am to 4pm.

If you run a business or you are self-employed and concerned about paying tax due to the impact of coronavirus, you can call HMRC’s helpline for advice on 0800 0159 559.

Coronavirus Business Interruption Loan Scheme 

The business interruption loans announced at last week’s Budget have been significantly extended allowing small businesses to borrow up to £5 million to pay rent, salaries, suppliers or purchase stock.

The loans will be interest-free for the first six months, thanks to a pledge from the Government to cover interest payments during this period.

The scheme will be delivered by the British Business Bank, a state-owned body tasked with supplying credit and finance to small and medium-sized businesses.

The Government has said that these loans will be accessible from next week and it will be releasing information on the process required to apply for a loan soon.

Large firm liquidity

Many businesses work in a supply chain that supports much larger businesses.

To ensure these larger firms can continue to make payments to smaller firms and survive this ongoing economic situation, the Government will launch a major new scheme backed by the Bank of England to help them bridge coronavirus disruption to their cashflow through loans.

Businesses must continue to monitor the financial health of customers and suppliers to ensure that they do not experience disruption from the closure of another firm.

IR35 

The Government has confirmed that the introduction of the off-payroll rules, or IR35, to the private sector will now be delayed from 6 April 2020 to 6 April 2021.

Chief Secretary to the Treasury, Steve Barclay, told Parliament that the suspension was a response to the COVID-19 pandemic, but confirmed it would still go-ahead next year.

Business rates and grants

The Government has pledged £20 billion of business rates support and grant funding to help the businesses worst-affected by the outbreak of COVID-19.

This includes:

• Abolishing business rates for all businesses in the retail, hospitality and leisure industries in England for the next 12 months.

• Increasing the grants to small businesses eligible for Small Business Rate Relief announced in last week’s Budget from £3,000 to £10,000.

• Offering additional grants of £25,000 to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value over £15,000 and below £51,000.

This funding will be made available to local authorities to distribute in their local area.

The process for applying for grants may differ from authority to authority and most have not yet made it clear how they intend to deliver this support.

Business rates support is expected to be available from the start of next week and we will keep you updated on the process for applying for funding as the situation becomes clearer.

Insurance

Insurance firms have been told that Government advice regarding the restriction of visits to pubs, clubs and theatres etc. is sufficient for businesses to make a claim on their insurance where they have appropriate business interruption cover for pandemics.

Takeaways

The food industry, including pubs and restaurants, will see a temporary relaxation in planning regulations that will allow them to start providing takeaways to customers without a planning application to help support those needing to self-isolate.

Further steps 

The Chancellor said the Government is committed to protecting individuals and businesses from the effects of the global economic emergency created by the coronavirus pandemic and has made it clear that these initial measures are just the start of the Government’s plans.

The Chancellor is also seeking new legal powers in the Covid Bill to offer whatever further financial support the Government decides is needed.

Contact us now for specialist legal advice on keeping your business running during the coronavirus crisis.