Keeping our clients updated with practical business advice during the Covid-19 pandemic.

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Cash is King: Managing business and personal cashflows

Cash is king

Cash is King: Managing business and personal cashflows

Business focus

Loans (Coronavirus Business Interruption Loan Scheme)

At the Budget, the government announced the Coronavirus Business Interruption Loan Scheme, which has since been expanded to enable businesses to access credit of up to £5m. The loans will be obtained through normal banking providers, with the government guaranteeing up to 80% of the amounts extended. Rishi Sunak announced on Friday that the interest-free period would be for at least 12-months. At present, it is not known what the interest rate will be after the 12-month period.

For many businesses, this will be the first time that they have sought finance from the bank.  If you need any assistance at any stage of the process, please do get in touch with your usual Creaseys contact.

Payment of tax liabilities

Many companies will have looming corporation tax bills as a result of a successful recent year; more will have obligations with regards to PAYE and VAT. The government has set up a dedicated help line (0800 0159 559) to help businesses spread payment of tax liabilities over a longer period.  

The government has also announced that VAT payments are deferred until 30 June 2020, with liabilities required to be settled by 31 March 2021. No interest will be charged on any payments deferred until 1 July, any unpaid liabilities after 1 July 2020 would be liable to interest at 3.25%. Businesses should continue to submit VAT returns during this period.

Support for employees’ wages (Coronavirus Job Retention Scheme)

All UK employers can access support to pay employees, who might otherwise have been laid off. The support is 80% of each qualifying employee’s wage up to £2,500 a month. Qualifying employees are those designated as “furloughed”. This effectively means any employees asked to take temporary leaves of absence, but who are retained on the payroll. 

Employers will be required to submit certain information to HMRC about furloughed employees. In the coming days, HMRC will be setting up a new online portal where this can be done, as well as providing details of how reimbursements will be issued to employers. 

Business rates relief and grants

Businesses in the retail, hospitality and leisure industries will be eligible for grants of up to £25,000 if the rateable value of their premises is between £15,000 and £51,000. These businesses will also benefit from the waiving of rates for the next 12 months.

Other businesses which are eligible for Small Business Rates Relief will be eligible for a grant of up to £10,000. 

Statutory Sick Pay (“SSP”)

Employers are likely to have staff members sick or required to self-isolate in the coming months. The government is now allowing small and medium-sized businesses to reclaim SSP paid to employees for time off as a result of the coronavirus. This will be from the first day of absence up to 14 days per employee. Previously, the employer was responsible for payment of SSP, without reimbursement from HMRC.

The SSP repayment will not be received through the Real Time Information payroll submissions for the moment. The government will be releasing details of exactly how the repayment will be made to employers in the coming days. We expect the repayment will be issued to employers in the same way as the Coronavirus Job Retention Scheme

Companies House deadlines

Businesses affected by the pandemic can now apply to Companies House to request an extension to file their accounts, reports and Annual Confirmation Statements. The maximum extension is three months, but stringent conditions apply – the most important being that any appeal must be lodged before the entity’s filing deadline. Companies House has advised that if directors cannot file on time as a result of coronavirus (e.g. self-isolation), they can apply for an extension and they will automatically be granted a two-month period of grace; they may be given longer (up to the three-month maximum currently enshrined in company law), depending on circumstances.

If you are concerned that you won’t have your accounts filed on time, speak to us as soon as possible, so that we can help you to avoid late-filing penalties where possible.

Individual focus

Payments on account

The Government has stated that the second payment on account due by 31 July 2020 will be deferred until 31 January 2021 for self-employed individuals, effectively making the amount due by 31 January 2021 the balance between the first payment on account due 31 January 2020 and the final tax liability. This is an automatic deferral with no applications required. No penalties or interest for late payment will be charged if you defer payment until January 2021, provided you are self-employed.

Mortgage payments

Key to many of us will be support for mortgage and rental payments. The government has announced that those struggling with mortgage payments will be entitled to a three-month payment holiday. The skipped payments will be spread over the remaining life of the mortgage, giving a cashflow boost now for a small uplift in future payments. 


The government has also announced that the extension of IR35 into the private sector has been delayed for a further year until April 2021. This will be a relief for many contractors, as well as businesses who rely on them. 

Self-employed taxpayers 

So far, the measures announced have not given self-employed taxpayers the same level as income support as employees; last week, the government committed to providing the self-employed the equivalent of SSP, which is £94.25 per week. We expect the government to communicate details of additional support extended to self-employed workers this week, which we’ll keep you appraised of.

We will continue to keep you updated in the coming days, weeks and months, as the government releases more detail on the policies summarised above, as well as details of any new policies. We cannot emphasise enough again that “cash is king”, and the preservation of liquidity is critical during the current challenges.

Please get in touch with your usual contact if you’d like any assistance with the support available. While most our team are working from home, we all remain fully contactable by email, mobile or on software such as Microsoft Teams or Skype, so we can have video meetings and conference calls with you to support you during these challenging times.

Please note that the information above is based on our understanding and interpretation of the government’s guidance as of 5pm on Monday 23 March 2020.  Changes to government guidance on a daily basis may mean that this information is not accurate or complete beyond this time.