As more and more firms continue to open their businesses to the public, many business owners will begin to consider their future plans. While government assistance has clearly aided many businesses over the last year or two, there are still many hurdles to be faced, and knowing what they are and how to deal with them will be critical in ensuring that your business has the best chance of survival.
Although we have returned to a more normal state following the height of the Coronavirus pandemic, it is always a good idea to protect our companies in the event that the government imposes unpredictably strict measures and laws in the future, with the aim to provide a safer working environment for both our staff members and consumers.
In this simple guide, we will present some of the most essential tips and advice on how to protect your business during the Coronavirus pandemic so that you can use this information to strategise in a way that will further protect your business.
1 - Assess your business
We advise that you consider your company's cash flow and reserves, and create scenarios in order to prevent any issues that could occur in the long run.
Some companies will be able to cope for a while, while others will be put under pressure very immediately. It's critical to figure out how vulnerable you are. After that, you may start taking efforts to decrease your exposure as much as possible.
Be realistic and consider the following questions:
- How long can you live on very little or a non-existent income?
- What costs can you cut?
- When do you think you will require financial aid?
- Should you close for a while to save costs or stay open and make as much as you can?
You may require a prediction to examine your cash flow more thoroughly and since forecasts must be properly created in order to be accurate and provide you with the information you require, we advise you to speak with your accountant; Persona Finance can provide you with an experienced accountant who can discuss this aspect of your business immediately.
2 - Apply for government assistance
The government has offered two major tax breaks for small enterprises with physical locations. The goal is to help small firms that still have rent and fixed expenditures to pay, as well as those in industries that have been severely hurt by the unexpected decline in demand.
Many grants and subsidies have since been closed, but there are still open schemes that provide financial assistance such as the:
- Statutory Sick Pay Rebate
- Support for Businesses Paying Tax: Time to Pay Arrangement
3 - Business Interruption Insurance
The situation is as dire as it can be for pubs, clubs, theatres, and other businesses that have lost most or all of their clients as a result of government advice to the public to avoid them.
If you have business interruption insurance coverage, the government's suggestion to stay away from your premises should be enough to pay a claim.
4 - VAT Changes
Some firms may be due to a VAT refund on their next return if their income drops drastically. If this is the case, make sure you or your accountant completes and submits the form as soon as possible so that HMRC can help you with your cash flow.
If turnover falls below the £85,000 level in the previous 12 months, some small enterprises, particularly those that sell to the general public, may contemplate de-registering for VAT.
This means you might either lower your pricing to raise demand for your product or service, or maintain your prices the same but eliminate VAT as a cost to enhance your profits.
5 - Losses and Tax Refunds
If your company produces a loss, you may be able to deduct that loss from previously paid taxes, so chat to your accountant about if your year-end should be amended or your books should be filed fast so you may claim a refund and improve your cash flow.
We recognise that a large number of firms will face serious challenges and concerns in navigating this era of economic uncertainty due to the Coronavirus pandemic and its devastating effects on our businesses, but Persona Finance is ready and equipped with a team of experienced accountants who offer essential remote accounting services needed for your business.
For more information on our services or for other business and accounting queries, please contact Persona Finance at [enquiries@personafinance.co.uk].
