Published: June 29, 2020 | Updated: June 29, 2020
Great advice on getting your business back up and running again from the experts at Inspire
Chris Downing, Director of Inspire, the business and tax advisers, answers your questions.
Question: How do I get my business back up and running again?
- Now is absolutely the time to take stock of systems, processes and costs within your business, which may have grown out of control over recent years.
- It’s a good idea to take the opportunity review the strategic direction of the business – think about why you started the business in the first place; what did you set out to achieve, what does your core team look like and what resources do you need to reach your objectives?
- Cash flow is vital. If your business has been closed or the order book heavily impacted by Covid, you will need cash to get the ball rolling again. You will likely need to be providing goods and services to customers immediately, but won’t be seeing payments for 60-90 days.
- A detailed rolling 12-week cash flow forecast will help get you on the right track and make sure there’s cash there when you need it.
- Growth may be slow initially, plan carefully to make sure that the business will be viable lower levels and that planned growth is sustainable.
Question: I still have some of my staff on furlough leave, when will I have to start contributing to the payments?
- The government’s Job Retention Scheme will continue to pay 80% of salaries (capped at £2,500) of furloughed employees in June and July. In August, the 80% claim will still exist, but employers will have to pay the employer’s National Insurance and pension contributions. In September, the government will pay 70%, with employers paying 10%. The final month of the scheme is October, when the government will contribute 60% and the employer 20%.
- The scheme will change from 1 July, employers will be able to bring people back part-time and claim furlough for the non-working time. For example, if an employee has a normal five day working week, the employee can work two days per week (and be paid normally by the employer), and be furloughed for three days (with the employer being able to claim for the three days of non-working time). It doesn’t have to be the same part-time hours each week.
- The number of employees you can claim for in any single claim period, starting 1 July, cannot exceed the maximum number of employees that you claimed for under any claim ending 30 June.
- Employees will continue to accrue holiday, whilst on furlough. You can ask employees to take holiday while they are on furlough (any days taken as holiday will have to be topped-up to full pay).
- No new entrants will be allowed to the scheme after 30 June. Therefore to qualify after three weeks, the employee needed to have been placed on furlough by 10 June (if they hadn’t been on furlough at any point earlier in the scheme).
- Employees who have returned from parental leave after 10 June can still be furloughed under the new scheme.
Question: I opted to defer my VAT payment at the start of the outbreak, what are my options now?
- Back in March, HMRC offered businesses the option to defer VAT payments due between 20 March and 30 June 2020 until 31 March 2021, if they were unable to pay on time, due to the impact of Coronavirus – without incurring late payment interest or penalties.
- The option to defer ends on 30 June, meaning that all VAT returns with a payment due date after 30 June must be paid in full, on time.
- Remember that even if you defer a payment, you must continue to file your VAT return on time.
- My advice, if you’re still having difficulties paying, is contact HMRC as soon as possible, to make arrangements. Or if you need help with this, do reach out to the team at Inspire.
Got a question for Chris? The team at Inspire has much experience at advising business owners in good and more challenging times. Call 01202 717867 or email firstname.lastname@example.org.