New support measures announced in September 2020
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How to ‘furlough’ employees and company directors
We are guiding many clients through the process of ‘furloughing‘ employees. In addition, as we have previously indicated, company directors are also eligible to be furloughed – and we are guiding our clients through this process too.
An update has been made by the Government to the Job Retention Scheme (or ‘80% scheme’) which you can see here and officially confirms:
- company directors are eligible to be furloughed.
- the minimum period for each employee to be furloughed is 3 continuous weeks (the word continuous is part of the updated legislation).
- employees can be furloughed multiple times, but each claim is for a minimum of 3 continuous weeks.
The information required by an employer in making a claim on the HMRC portal is:
- your ePAYE reference number
- the number of employees being furloughed
- the claim period (start and end date)
- amount claimed (per the minimum length of furloughing of 3 consecutive weeks)
- your company bank account number and sort code
- your contact name
- your phone number
There are still some questions that the update doesn’t answer. Specifically, these are:
- when the online portal for making a claim will be ‘live’ – HMRC guidance still refers to ‘the end of April’, but is not specific.
- whether the 3 continuous weeks (requirement) can span a month, so that employees can return to work for short periods of time, but employers can continue to claim furlough.
- how quickly payments for furlough will be made.
Do you need more help in furloughing staff?
We are looking at launching a new specific service to help clients make their furlough claims in the correct way. If this is of interest please email Murray Patt now so that we can assess the level of demand – and then provide the necessary resource in-house to support you.
Supporting our clients
Murray Patt, our founder, is focused on supporting clients in this challenging period:
“Over the last few weeks we have all been shocked with how coronavirus has had an impact on our respective businesses.
“Whilst we are all in unchartered territory I have some basic rules for you to consider, in trying to get through this period. It may be that not all of these are relevant to you, but there will be some aspects which will help you to think clearly going forward.”
My top-ten-tips are as follows:
- “Cash is king”. Businesses do not fail through making losses – they fail when they run out of cash.
- Forecast your cashflow. Predict your future cashflow as best you can, & schedule this out using excel/similar tools. I recommend doing this for a 12 week period & monitoring it daily vs actual.
- Cash injection. Be prepared to inject monies into your business & talk with your bankers at an early stage for support. Through fundingcircle.com our clients can secure a discount on standard loan rates, with a rapid decision-making process.
- Government loan/grant schemes. Whilst these schemes are very welcome, it will take time for them to get up & running – therefore do not rely on them. Further, if they are administered by the banks/local authorities, who are already struggling for staff, then expect them to be slow & cumbersome.
- Loan repayment holidays. Talk with your funder(s) & see if you can arrange a payment holiday on your existing loans.
- Employment contracts. Review your staff contracts, & see what scope there is to make changes & save cost. However, please consider the knock-on effect on them.
- Paying suppliers. Talk with them &, if you can, agree revised terms in the short-term.
- Be selective with cancelling discretionary expenditure. We will eventually come out of the other side of this, & therefore do not terminate arrangements now, which you may regret in a few months time.
- Plan in advance. If some form of restructuring to your business is required, then the sooner you take some professional advice the better.
- Talk, talk, talk. Don’t be afraid to talk with us, & other business owners. The more we share our experiences the better for everyone.
Murray Patt says:
I suspect that things will get worse before they start to improve again, but they will improve – the uncertainty is the timescale for this. The team at AK&Co are there to support you & we will always make time to speak with you. Every day is a steep learning curve, & we will get through this eventually.
Coronavirus – an update for clients
With the concerns surrounding the COVID-19 outbreak we wish to reassure our clients and contacts that Alexander Knight & Co remains fully operational and open for business.
- We are following all appropriate UK Government guidance to ensure the wellbeing of our employees, their families and our clients.
- We have robust contingency plans in place to ensure that client work can continue with minimal disruption. Our plans will ensure the continuity, integrity and level of service that we provide to help you meet your business objectives and priorities during this time.
- As part of our business continuity plan all our team have laptops and are able to operate remotely if required. They can be contacted via email or phone in the normal way.
- We operate in a paperless environment and so all client records and transactional documents are held electronically and can be accessed remotely and securely.
- We are are still operating face to face meetings and site visits but if you would like to use other methods of communication during this time then we have video and/or telephone conferencing services available.
Alexander Knight & Co are here to support you and your business operations during this time.
Coronavirus tax credits for your business?
Coronavirus tax credits should be introduced for businesses that suffer from the impact of coronavirus – as well as more measures to assist SMEs.
The Italian government has introduced tax credits for businesses effected by coronavirus and tax experts say the UK should follow suit to lessen the impact for SMEs.
The Government has now announced an action plan which includes help for businesses. In our view, this should include tax credits for firms who have been hit especially hard like in Italy where firms who see a 25% drop in revenue as a result of the virus can secure further tax breaks.
Impact on business
We are in uncharted waters with regards to the impact of the virus on UK businesses. We know that the FTSE100 has been volatile but we also need to look at the impact on SMEs who are the backbone of the economy.
Tax credits should be introduced for firms who get hit hard and they should be announced in the Budget next week. With companies doing their very best to take precautions to protect their staff we must give SMEs all the support and confidence they need.
