How Businesses Have Been Effected By COVID-19
Please remember you are not alone, the vast majority of businesses around the world and across most industries are affected by or going to be impacted by the fallout of covid-19
Clearly some of you will be hit harder (and more quickly) than others, with the impact being felt in aviation, tourism and events some weeks back as travel restrictions and bans on large gatherings came into play in many countries and then acutely felt in the last few weeks domestically across leisure, hospitality, retail, amongst others, as the UK government’s restrictions on citizens’ mobility continued to tighten.
As a business you need to consider your own set of circumstances, business owners and directors should:
be diligent and obtain as much information as can be reasonably acquired – will the supply chain hold up?
Will employees be able to work or could they be redeployed if their role diminishes?
Is the business’ strategy still viable?
get control of your finances – refresh cash flow forecasts and stress test them;
assess options for liquidity; be proactive in debt management; consider any tactical options to defer costs with exploration of payment plans with suppliers etc.
make decisions on an informed basis with a group of people who can sense check the reasonableness of decisions made.
consider whether it is appropriate to seek professional advice – having professionals on-side would no doubt add credibility to the ‘reasonableness’ of decisions made.
And most critically, keep records of the things that are taken into account at the time decisions are made.
A full range of business support measures have been made available to UK businesses and we have informed you of these in previous emails.
Here is the link to the HMRC where you will find the full report plus any updated current information:
A further important point to note for Company Directors
The government has suspended wrongful trading rules to enable company directors to keep their businesses going without the threat of personal liability.
Wrongful trading is when directors allow a company to keep trading even when they know that the company is unable to pay its debts. Under normal circumstances, a company's creditors can sue the company's directors personally for wrongful trading. However, in light of the current climate, the government has suspended the wrongful trading rules for a three-month period beginning on 1st March 2020.
Whilst the Government are advising everyone to self-isolate (this should be adopted) please do not feel isolated from your business or Gundry Stone as your accountants and friend.
If you have any concerns please email no matter how small, we will get back to you in due course.