How Lancashire businesses can reduce the impact of Covid-19
It’s almost impossible to escape the impact of Covid-19 as a business in Lancashire at this current time. From the property and construction industry to the service and hospitality sector, many North West businesses have been significantly affected.
For those operating in Lancashire and throughout the North West, Government support packages are available to assist and reduce the impact of COVID-19. There are also a wide range of proactive actions businesses can take now to help in the short and long-term.
Support available for firms in Lancashire
At Alexander & Co, our team of chartered accountants and specialist business advisors are offering specific coronavirus business guidance, along with other tax advisory services, during this difficult time.
We believe COVID-19 Government schemes should be explored by all businesses throughout the North West, but they are only part of the solution.
All businesses, including those in the property sector, need to look at the wider picture of how they are operating, not just now, during working restrictions, but what they are planning for the future. They should have a strategy in place to ride out the current restrictions and return as strong as possible when the market begins to show signs of normality. Cash flow will be key and this can be strengthened by maximising tax reliefs, having access to finance and reviewing businesses structuring and operations.
There are various Government support packages available to support firms in the property industry, but a lack of understanding of the required information may be leading to difficulties in accessing these.
Careful planning and analysis could help Lancashire businesses survive throughout this pandemic
Four Government relief packages to take advantage of
There are four key relief packages that Lancashire businesses can take advantage of:
- The Coronavirus Job Retention Scheme - if necessary, businesses may use this government scheme to furlough staff, meaning the Government will cover up to 80% furloughed staff’s salaries.
- Self Employed Income Support Scheme - Subject to criteria (you must have submitted a 2018/19 tax return by 23 April 2020 to be eligible), the self-employed could receive a payment from the government of up to 80% of profits for at least 3 months.
- Coronavirus Business Interruption Loan Scheme (CBLIS) – Various loan schemes are available to SMEs who meet the eligibility criteria.
- Deferral of VAT payments – Are you a VAT registered firm? UK VAT registered businesses, with a VAT payment due between 20 March 2020 and 30 June 2020, can request to defer their payment until a later date without interest or penalties. However, VAT returns will still need to be returned to HMRC on time.
Aside from government-backed schemes, how else can businesses in Lancashire reduce the impact of COVID-19?
Alexander & Co are keen to stress the importance of exploring other options outside of government-backed coronavirus schemes. These could include:
- Explore available tax reliefs and credits - by doing so, you can free up important cash flow. Interestingly, just 6.4% of Research & Development Tax Credits claimed in the last tax year were claimed by businesses in the North West.
If you’re an SME with a qualifying R&D project, you could claim back up to a 230% tax deduction on the amount spent on R&D expenditure.
- Budgeting and planning - is your business operating a period of downtime during COVID-19? Now could be a great time to review your budgeting and planning for the year ahead.
- Business restructuring - similarly, this period of downtime could present restructuring opportunities to improve productivity, efficiency and profitability.
- Ensuring management information, including accounts, are up to date will be key to understanding how your business operates. This will be required when applying for finance, including CBLIS.
- Explore all funding options - aside from Government-backed schemes, use this time to review your existing financing options.
Careful planning and analysis could help Lancashire businesses survive throughout this pandemic and come out the other side in a much stronger position.
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