There has been much commentary around the Government’s proposals to inject cash into struggling businesses. However, business owners should also consider seeking agreements with third parties to delay or restructure outgoings.
The Chancellor Rishi Sunak has stated that all businesses and self-employed people in financial distress due to COVID-19, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.
These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. HMRC has a dedicated helpline for those seeking additional information and guidance: 0800 0159 559.
Where there are other significant outgoings, such as rent, businesses may wish to agree a payment arrangement. This could help them get over any immediate cash flow issues whilst maintaining occupation and enabling the business to trade through this uncertain period.
Whilst there is no obligation for a landlord to agree any request, they may be receptive to reaching an agreement if it prevents them from potentially being left with empty premises and no willing new tenants to occupy it.
This applies equally to debt, where lenders may be agreeable to relaxing payment terms, agreeing interest holidays and changing other terms should it improve their chances of being repaid in full once the effects of the pandemic have lessened.
The Government has also extended the 100% business rates holiday for the next 12 months to cover all retail, hospitality and leisure businesses in England – not just those up to the £51,000 Rateable Value as was previously advised.
A £25,000 grant will also be provided to retail, hospitality and leisure businesses operating from smaller premises, with a Rateable Value between £15,000 and £51,000.
Businesses should contact their local authority directly for further information.
*The information set out in this article is correct at the date of publication (20 March 2020). The effect of coronavirus on businesses is a fast-changing area and so it is important to obtain legal advice to ensure you are properly protected.
If you have any questions regarding the impact of the Coronavirus upon your business or are seeking up-to-date legal advice, contact Paula Eckton on 01202 294 566 or email PaulaEckton@steeleraymond.co.uk.
Alternatively, our entire Company and Commercial Team are available to answer any queries you may have. Please call 01202 294 566.
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