Ian Lloyd, Partner at the Bath office of Milsted Langdon Chartered Accountants gives his advice.
Businesses across the region are beginning to return to work in greater numbers as the Government slowly eases its coronavirus restrictions.
As companies prepare for what is being termed ‘the new normal’, they must consider and prepare for a variety of scenarios in the coming months.
The end of Coronavirus Job Retention Scheme
The Government has offered several loans and schemes to help businesses through this crisis, including the Coronavirus Job Retention Scheme. This has helped more than 1.14 million businesses furlough around 9.5 million workers, who continue to receive at least 80 per cent of their wages until 31st October 2020.
Once this scheme ends, employers will need to cover 100 per cent of their employees’ regular wage. This increase in operating costs may mean that redundancies must be made if there are insufficient funds or work to maintain a full workforce.
Ensure you have the funds to repay your VAT deferrals
If you’re a UK VAT-registered business that deferred VAT payments between 20th March and 30th June 2020 due to coronavirus, you will need to pay the deferred balance in full on or before 31st March 2021.
It is important to note that you could be penalised and charged interest if you cannot pay on time next year.
Planning for the future
Having up to date Management Accounts will assist with scenario planning, as knowing the businesses current figures means you are able to look ahead with greater certainty.
Business forecasting is now more important than ever, as there will be several challenges over the next six months which business owners should contemplate, including what would happen to your business if there was a second wave or local lockdown. Planning for these possible scenarios may mean you need to consider restructuring your business, which could involve looking at your staffing levels, how your business will operate, and putting measures in place to ensure businesses can respond quickly to any new crisis.
The outlook over the next six months may not be all negative. It could be the case there are several opportunities available for your business to take advantage of, with the possibility of trading up or diversifying.
Time to seek help
The next months are going to be difficult, even for the most successful businesses. It’s important you have an adviser who has the experience and expertise to deal with the challenges that may come your way. To find out how we can help and to receive a free of charge consultation, please speak to myself or my colleague Rachel Hotham, who is part of our Intervention and Restructuring team.
You can contact me by calling 01225 904940 or emailing: illoyd@mislted-langdon.co.uk
