GUIDANCE FOR OUR CLIENTS – CORONAVIRUS (COVID-19)
Post Author:
Rona Burns
Date Posted:
March 17, 2020
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In these uncertain times we wanted to reach out to all our clients to let you know we are here to offer support and guidance over the next few months.
Health and wellbeing are the most important things right now. We are therefore following UK Government Guidelines and have made the decision that our people will be working remotely from today, 17 March.
We will continue to complete your accounts, VAT, payroll and tax returns in a timely manner.
If you and your staff are working remotely and / or struggling to keep your records straight then please let us know. We can install a variety of Cloud based solutions to help and if you can scan and email documents to us, we can help in posting them.
If you need anything let us know. Our business depends on your business and we must all pull together during the next few weeks.
Here are some key issues you need to consider at the present time:
Follow your duties as an employer
Employers have a responsibility to the health and welfare of their staff, particularly those that may be at high risk of contracting coronavirus. In addition, employees have a duty to take reasonable care of their own health and safety and that of the people they work with. They must cooperate with their employer to enable them to comply with their duties under health and safety legislation. If any of your staff are feeling ill or have come into contact with potentially infected people, then you should request that they stay at home. Employees will be entitled to Statutory Sick Pay (SSP) in this scenario under new temporary SSP Regulations. Employers are advised to keep checking the current government advice and to refer employees to it where they may be concerned about their individual risk.
Of course some employees will choose to self-isolate, require time off to care for relatives, and care for children if school closures as and when these are announced. Section 57A of the Employment Rights Act 1996 gives employees the right to a reasonable amount of unpaid time off work because of the unexpected disruption or termination of arrangements for the care of a dependant. If practicable, employers should be flexible by permitting affected employees to work from home, or to alter their working hours on a temporary basis. It is unlikely to be reasonable to treat absences from work in those cases as unauthorised or as a disciplinary matter unless the employer has reasonable grounds for believing, based on compelling evidence, that they are using the virus as an excuse not to attend work.
Employers may choose to go further than the advice from the Public Health bodies and, as a precautionary measure, ask employees to stay away from work when they are not sick or are not self-isolating in accordance with current Public Health advice. In those cases, employers will need to pay employees their normal salary for this absence. This is because the absence is at the employer’s request and is not sickness absence.
It may be a possibility that due to a downturn in work, and thus the number of staff required, that you need to make a temporary change to your employment contracts. This may include a reduction on working days or hours, a temporary pay cut, or removal of benefits. Any changes should be discussed with your employees beforehand.
You will need to seek advice from an employment lawyer or HR specialist before taking any action.
Loss of income due to closure
A lot of businesses will find themselves losing revenue.
Think about how your business insurance will work if your business closes due to an outbreak of the virus. Check your policy wording, as standard policies may not include any protection if your business suffers due to an outbreak of disease, regardless of circumstance. Many commercial policies will include Business Interruption cover. Once you have confirmed that you have Business Interruption cover, you will need to check whether you have an extension for “notifiable diseases”. If you have this in your policy wording, you will need to reach out to your broker/insurer to confirm whether Coronavirus is covered. The UK Government has declared COVID-19 as a notifiable disease.
Government Grants and Business Rates Relief
At the Budget last week, the Chancellor announced measures to support businesses in England through this difficult period. This included a number of reductions to business rates. The UK government has announced that small businesses in England that already pay little or no business rates will be eligible for a one-off coronavirus grant worth up to £3,000.
The Scottish Government has also allocated £80 million to provide grants of a minimum of £3,000 or more for businesses in sectors most affected by the Covid-19 outbreak. We are still awaiting further information about this and will provide an update as soon as possible.
Speak to HMRC if you can’t pay your tax on time
HMRC have set up a special helpline to support business who are struggling to pay their taxes due to the coronavirus outbreak.
If you fall into this category we suggest that you contact them as soon as possible. Their number is 0800 0159 559. Further information can be found here: https://www.gov.uk/government/news/tax-helpline-to-support-businesses-affected-by-coronavirus-covid-19
Speak to your bank
If your business is running into financial difficulties it is important that you speak to your bank.
Many lenders will consider a capital payment holiday (interest remains payable) and working capital facility, but only to viable business that can prove serviceability and repayment of any facility.
The banks expect their clients to think carefully about how best they will adapt to the current crisis. Their current guidance seems to be to expect 3 to 4 months of disruption.
This is of course unchartered waters, but the indications so far are that the banks do want to help. Before contacting your bank you need to consider:
- How you think coronavirus will impact your business
- Project the impact financially, particularly on cashflow. The banks cannot do this for you. You need to be clear what you think the impact will be
- Provide a coherent explanation as to what support you need and how you expect to be able to repay additional borrowings as your business recovers and why the support is needed. This needs more than coronavirus as the reason e.g sales down X%, but no reduction on salary costs
- Up to date annual accounts and management information is likely to be needed in most cases for any requests, but this will be on a case by case basis. The banks may adopt a pragmatic approach depending on scale of request.
Both high street banks and independent finance brokers may be able to help your business. We can put you in touch with lenders if you wish, but please act now and don’t delay.
Coronavirus Business Interruption Loan Scheme
If your bank cannot help the Chancellor announced a new ‘Coronavirus Business Interruption Loan Scheme’ (CBILS) at the Budget last week. This scheme will become available over the coming weeks.
It will be provided by the British Business Bank, but will offer more attractive terms for both businesses and lenders, with the aim of supporting the continued provision of finance to UK businesses during the Covid-19 outbreak. The CBILS will provide the lender with a government-backed 80% guarantee against the outstanding facility balance.
As well as loans, there are many other types of finance supported by the programme, depending on the provider.
The types of support offered will be term facilities, overdrafts, invoice finance facilities and asset finance facilities.
Further information can be found here:
This is an incredibly difficult time for everyone and the objective for everyone should be to stay safe, look after each other and try to come out the other side with as little disruption to your business as possible. Talk to us – we are all in this together.
Photo by Markus Spiske on Unsplash
The information in this blog provides only an overview of HMRC guidance and legislation in force at the date of publication and no action should be taken without consulting the detailed HMRC guidance and legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this blog can be accepted by the firm.
