As there is so much uncertainty with the spread of Covid-19 (coronavirus) and what impact this is going to have on the country and the world as a whole, we wanted to share some information with you in order to best ensure the continuity of your business.
Plan, test and communicate
- Cashflow
Consider the impact on your cashflow if demand should decrease or you need to close for a period and act now.
a) Contact your bank or other funding providers as soon as possible – we understand many banks are offering 6 month capital repayment holidays on loans and extending overdraft facilities
b) Make use of the HMRC Coronavirus help line and consider making ‘time to pay’ arrangements on VAT and PAYE payments. More information on government website here
c) Consider deferring any non-essential expenditure
d) Consider deferring any wage reviews or previously announced wage rises (watch national minimum wage regulations)
e) Business rates discount– do you qualify for a discount? As part of the Budget 2020 announcements, the following was announced:
- Increase the level of the retail discount to 100 per cent for eligible retail businesses occupying a property with a rateable value of less than £51,000;
- Expansion of the retail discount to include hospitality and leisure properties, with a rateable value of less than £51,000 (such as museums, theatres, gyms and hotels); and
- Increase the level of the pubs discount to £5000 for pubs with a rateable value less than £100,000.
f) Another Budget 2020 announcement was a new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, which will launch in a matter of weeks to support businesses to access bank lending and overdrafts. The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. So far, there is very limited information, however, HMRC are expected to release details in the coming weeks (hopefully sooner rather than later).
g) Consider your cancellation policy where bookings or orders are being cancelled – consider incentivising flexibility to attempt to obtain rebookings/reordering to a later date as opposed, discouraging outright cancellations.
h) In Budget 2020, a £3k grant was announced for businesses that qualify for ‘small business rates relief’. Details of how to claim this are awaited.
i) Review the terms of any lease you have for rented property/premises and liaise with your landlord regarding any scope for payment holidays etc.
- Employees
- Ensure all of your staff are aware of the latest accurate guidance and have a welfare strategy in place. If it is possible, put a plan in place so that those that can, can effectively work from home. Restrict non-essential travel, cancel non business critical meetings, look at home working and flexible working. However, ensure that homeworking does not compromise on management of data-protection, and IT security – if these cannot be managed as effectively as in the office, the process and methodology needs revising. Also check that your insurance covers staff to work from home.
- Review staff holidays to ensure it is taken and not stored up for later in the year when you need your staff at work.
- Review your staff sickness illness policy, and ensure staff are aware of entitlements and you are aware of what associated expenditure you will need to make in relation to absences resulting from the coronavirus situation.
- As part of the Budget 2020 announcements, it was announced that the government would reimburse businesses with less than 250 employees the statutory sick pay (SSP) cost for up to 2 weeks per employee. You should maintain records of staff sickness and SSP payments. A repayment mechanism has yet to be rolled out, but is expected.
- In the worst case, consider your options with employment law assistance regarding requiring staff to take unpaid leave, reduced working hours, redundancies (temporary or permanent) etc.
- IT
Ensure your IT infrastructure can accommodate increased demand for remote working e.g. do you have enough of the required licences? Cyber security and data protection will be key, check that your virus software etc will still operate from home.
- Insurance
Check your insurance documentation to assess cover for any perceived losses that can arise from the situation, and coverage for any risks that required changes to the business could create/enhance.
- Suppliers
Maintain good communication with your suppliers to ensure their continuity of supply. Consider checking alternative suppliers as a back-up.
- Customers and Clients
Communication is key to business continuity and customer reassurance. Manage expectations and advise of your business continuity strategy and contingency plans.
We are evaluating with clients where they foresee a significant business cost, disruption or failure in the worst case, and are assisting in the development of action plans and strategies to mitigate the risks. Please get in touch with your usual RRL contact if you require similar assistance and advice.