Financial Support Update 17 April 2020

Following confirmation of a three week extension to the UK lock down, we review latest developments and provide reminders of key issues to bear in mind for the next few weeks.

This briefing note provides updates and commentary on the following issues:

  1. Small business grants: last call
  2. CBILS: further thoughts on cash flow
  3. Job intervention scheme: update and reminder
  4. Planning for the restart: thoughts for happier times
  5. Self employed income support scheme: reminder
  6. Other information
  7. And finally

Grants

All councils are now paying out the available grants to small businesses and businesses in the retail, hospitality and leisure sectors.

If you believe you are entitled to either grant, you should by now have submitted your bank details on your local council’s portal. We recommend that you do not wait for a letter to confirm eligibility but check this by accessing the portal.

If you are unsure whether you are eligible, we strongly recommend you contact your local council by phone and explain your circumstances. Based on feed back given to us, we understand that councils are keen to help wherever possible.

CBILS and cash flow

In light of the extension of the UK lock down by another three weeks, we believe that businesses should be taking another close look at cash flow and should be forecasting the position through to the end of July and beyond, as we believe this is when many businesses will start to feel real cash flow pressure. Clearly much will depend on the sector in which you operate and how long we continue to remain in lock down, but it would be much better to start planning for “worst case” now rather than when it is too late. Do bear in mind the following:

  • Many businesses have enough in reserve to be comfortable for short periods but not for long term survival.
  • The small business grant offered a boost to reserves but will undoubtedly be used quickly and at present does not look like it will be repeated.
  • The current Job Retention Scheme has now been extended to the end of June which offers further relief but, at some point, businesses will need to finance salaries themselves or consider one-off redundancy costs.
  • There is no indication yet from government on when non-essential retail, leisure and hospitality restrictions will be lifted.
  • Once restrictions are lifted, any sudden increase in customer demand will create a urgent need for working capital.

Over the past week or so, we have been working on loan applications under CBILS. As we have mentioned in previous updates, the process is not always quick and acceptance is not guaranteed. If you have any doubt about the reliability of your business cash flow over the next six months, we would strongly recommend you look at CBILS as a way of getting through any period of challenging cash flow and do so sooner rather than when it is too late.

Although we would agree that increased borrowing is not ideal and probably a last resort for most of us, it is infinitely more preferable to collapse.

Job retention scheme

You will undoubtedly know that the HMRC portal is being launched next Monday (20 April). If you are dealing with your own claim, make sure you have all the information you need to make your claim, including online access to your HMRC gateway. You should have received an email from HMRC detailing the information you need to have available.

If we are dealing with your claim for you, please make sure you have provided confirmation of bank details so that we can process your claim without delay. As you will be aware, for security reasons, we will only accept details via OpenSpace.

If you need any help or need any specific information, let us know.

You may have seen that the scheme was extended from 28 February 2020 to 19 March 2020. It was suggested that this would cover a further 100,000 employees by including those individuals starting a new job between 1 and 19 March. Unfortunately, the small print of this change means that only employees who were notified to HMRC by 19 March will be covered; this effectively excludes any new employees paid monthly, as they would not have been notified by that date.

Planning for the restart

For those of you in retail, hospitality or leisure and many other sectors, the prospect of a restart may sadly be some way off yet. For other businesses, there are signs from Europe that there may be light at the end of the tunnel. Now may be the time to start planning for the restart and to make sure you are ready to maximise opportunities when that happens.

We noted above the possibility of increased pressure on cash flow. Other key tasks might include:

  • Maintain/re-establish contact with customers to confirm reopening arrangements
  • Contact suppliers to check plans for opening. Review security of supplies, including consumables
  • Update risk assessments to reflect changing circumstances for safe working and trading
  • Re-establish contact with staff and make arrangements for graduated or wholesale return to work
  • Consider future business development in light of changing (changed) economic climate

Self employed income support scheme

Although it seems a long time since the scheme was announced, the scheme has not yet been implemented, so please do not worry if you have not yet heard anything. Remember that the scheme is being operated on an automatic basis by HMRC, so you should be contacted directly by them by mid May.

Payments are expected to be made by early June, so unfortunately a little more patience is required.

Other information

If you need help with risk assessments or HR issues, we have arrangements with HR consultants who are offering free access to their software and document library for the next three months. Let us know and we will put you in touch.

For the duration of the crisis, our friends at J&J Systems are offering free on line training on a range of topics including Word, Excel and Cybercrime issues. The offer is available to staff, friends and family and is a great way to use free time productively. If you are interested, please contact us for further details.

And finally

We are always grateful for all feedback and contributions and hope that these notes continue to be helpful. Please do feel free to forward on to anyone who you think might benefit. Unless anything radical is announced in the meantime, our next update will be issued in two weeks’ time. In the meantime, check out other information on https://acklandwebb.co.uk/blog/

As always, we remain here to provide help and support as far as we can. All of the team continue to work from home but are otherwise operating as normal (or in some cases, as normal as young children will allow!).

If you need assistance or further guidance, please contact any one of the team.

DM

17.4.20

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