Here are some of the FAQ’s we’ve been discussing with clients this week. We don’t currently have all of the answers, but we know that some of these questions can’t wait, so where we have been vague, please understand that as legislation and guidance is released, this information is subject to change. If you can wait for further guidance to be released, please do. Last updated 01/04/20.
Should I cancel my VAT direct debit?
Yes, if you wish to defer your next vat payment, we understand it is best to cancel your direct debit with your bank, this will mean resetting it up later but there is no other way to tell HMRC you wish to defer your VAT.
As a reminder you don’t need to pay any VAT from 20th March to 30th June. Use the payment date, not the quarter end date to know what period this covers.
Do I need to be a retail, leisure or hospitality business to get the £10K cash grant?
No, this is available to all businesses currently in receipt of small business rates relief. Please do check you are registered with the council for business rates, if you’ve recently moved or set up your business.
However, larger businesses do need to be in this industry to access a grant. Updated guidance regarding the business rates holiday and who can will receive this can be found here.
How do I claim the cash grant?
Council are setting up forms on their website for you to complete and sending out letters to those eligible. The grant should be processed automatically but they are asking for your bank details (in some cases requesting copy bank statements) and to make a state aid declaration in order to speed up the process. If your council is below, you can click the link to go to the form.
What if I can’t pay my tax bills?
If you call the TTP helpline 0800 0159 559 you should be able to get HMRC to defer your outstanding tax liabilities.
We have heard that this system is struggling to cope with traffic, so expect some waiting time when you call. As usual there will be a bit of luck involved as it is unlikely HMRC staff will all be in sync when they are so busy, however we have had clients getting helpful responses this week.
What should I say when I call?
We would advise you to come up with a plan based on what you can afford before you call. They are more likely to agree to your proposal if you sound like you have put some thought into it, and you are less likely to agree to something you later realise you cannot afford to pay. Give us a call first and we can confirm what you currently owe and help you to come up with a proposal for when you call HMRC.
Generally it seems that they are able to defer payments for up to three months, but they may extend this depending on how long the impact of the coronavirus lasts.
What if I’m not sure if I need to do this yet?
As with all of these measures, you might want to make this call now, even if you think you might not have, just to give you some peace of mind and something less to worry about. However, don’t call until your payment is due, or they will ask you to call back.
Can I get a loan under the Coronavirus Business Interruption Loan Scheme?
Since launching on the 23rd March, there has been a lot of publicity about banks not necessarily being helpful with providing these loans. If you meet the criteria for a loan under normal lending, it is unlikely that they will offer you a loan under this scheme. However the big four banks have now promised not to take personal guarantees for loans under £250,000 after being heavily criticised for their initial tactics.
Obviously this doesn’t sound like an ideal solution and most companies won’t envy the prospect of coming out of all this in debt. However, in the short term, particularly if waiting for grants and furlough reimbursements to come through, it might be useful to consider.
Our understanding is that banks are asking for prior year accounts, up to date management accounts, and possibly cash flow projections. We also believe that you will be expected to have taken all other available government reliefs and this should be factored into your cashflows.
How will my business survive?
Make sure you take advantage of every offer of support, to ensure your cash flow position is as strong as possible. Loans, deferral of VAT, CJRS, and cash grants will all help you get through this period. In many cases, there will be work waiting for you on the other side, and things will get back to normal.
We would advise doing a cashflow for at least three months so you know what you are dealing with. We can send you an excel template that might be helpful with this.
Just to reiterate, none of this information is concrete yet, so please take advice from your own Accountant before taking any action, as what’s best for your business may be different from everyone else and your Accountant will know you best.