Since March 23, the UK has been in lockdown as a response to coronavirus, severely hampering businesses and disrupting their finances. There’s been a sigh of relief at the easing of the lockdown, for some businesses at least, but there are obviously still major anxieties rippling across the country.
As seasoned bookkeepers, We’ve certainly seen our fair share of tough times for small and medium-sized businesses – with the Financial Crisis of 2007-08 still prominently in our minds. But, even despite serious setback Covid-19 has dealt to businesses, there are ways we can move to adapt and offset some of the financial disruption it has already caused.
What can UK businesses do?
The Coronavirus Job Retention Scheme for all UK employers
Since the initial days of the lockdown, the UK Government has been reimbursing 80% of the salary of furloughed workers, who cannot complete any work for the employer. Coming as a surprise to many on May 12, UK Chancellor, Rishi Sunak, announced that the scheme would be extended until October 2020.
Furloughed workers will continue to be paid up to £2,500 until the end of July, at which point the scheme will continue, but with greater flexibility. For businesses, this means they can start to bring their employees back into work as the lockdown eases and the economy reopens. So, if you’re employees are back at work, even part time, your business can begin to share some of the financial burden of paying them.
As bookkeepers, we can ensure that all of your financial data is meticulously compiled through Xero Bookkeeping, making it straightforward to apply for a reimbursement from the government. Additionally, you’ll have all of your financial data accessible, at any moment in time, giving you a clear picture of how your business’ is performing financially. This should allow you to bring back your employees as soon as it is financially viable to do so. If you’re feeling under pressure, our emergency bookkeeping will enable you to get your finances back in order as quickly as possible.
Deferral of Tax Payments to HMRC
For almost every business in the UK, cash flow will have been impacted as a result of the COVID-19 pandemic. This is, of course, no fault of your own and the UK Government recognises this. Therefore, UK businesses are able to defer certain VAT and income tax obligations, as well as a certain number of other taxes that had a set time limit to pay.
Income tax payments due on 31 July 2020 may be deferred by businesses up to 31 January 2021, whereas VAT payments due between 20 March 2020 and 30 June 2020 can be deferred until a later date.
While these deferrals are a welcome relief for businesses trying to operate amidst this crisis, it’s important to remember they do have to be paid at some point. This means it’s more important than ever before to ensure all of your tax-deductible bills and receipts are meticulously stored to help your business recover in the coming years.
Through Hubdock, our emergency bookkeeping service will ensure every tax-deductible expenditure is carefully logged before being uploaded to Xero and becoming part of your financial overview there. This is essential in helping your business overcome the financial disruption this pandemic has caused and will enable your business to maintain an organised approach to bookkeeping long into the future.
At Time Wise VA, we know that every business is different, but through experience we’re able to get to grips with the intricacies of every business we work with quickly and without delay. If you require emergency bookkeeping to help get your financial situation back in order today, we’re here to help. Please contact us now to learn more.