Avanti provides practical guidance for business affected by COVID-19

Avanti provides practical guidance for business affected by COVID-19

We hope this guide provides you with information on the latest changes due to Covid-19.  We are going to keep this up to date, keeping informing you and adjusting our services to meet the ever-changing climate.

Remember, deadlines still have to be met. We don’t want you getting any fines – so continue sending in your bookwork & vat so submissions are done on time. However, you can of course take advantage of the payment holiday now made available by the Government for the tax payments themselves.

Avanti are here for you and it is business as normal – albeit remotely

Update 25th March

Coronavirus Business Interruption Loan Scheme – Further information.

We wanted to share some further information which has been provided by the Government and some banks.

The key points are:

  • Loans are available from £25,001 to £5m
  • Available from 1-6 years
  • No interest is Payable for 12 Months
  • Capital Repayment Holidays are available for 12 months as well – so some clients will have no payments to make in the first year
  • Loans are limited to 25% of the business’ turnover in 2019, or double the annual wage bill

These criteria will probably vary from one lender to another. However, there may be other forms of finance which might assist your, for example working capital loans, invoice discounting, or capital raising against property.

Email: emmalouise.jones@avantigroup.uk.com who will pass on your enquiry to the correct person.

Advice for Employees and Employers

ACAS have posted some useful advice HERE.

However, if you want to talk to someone about H.R. challenges you may be experiencing, we have contacts who can assist. So email your enquiry to:

emmalouise.jones@avantigroup.uk.com who will pass on your enquiry to the correct person.

Advice for Companies from Companies House

If your company cannot file accounts on time:

Your company should take appropriate measures to make sure accounts are filed on time, like filing your accounts online if you’re able to.

If your accounts will be late because your company is affected by COVID-19, you can apply for an automatic and immediate 3 month extension to file your accounts. You must apply before your filing deadline.

Companies that have already extended their filing deadline, or shortened their accounting reference period, may not be eligible for an extension.

Late filing penalties

If you do not apply for an extension and your accounts have been filed late, an automatic penalty will be imposed. The registrar has very limited discretion not to collect a penalty.

Remember, HMRC have NOT extended any filing deadlines and we will therefore need to complete your account to finalise the tax returns. We are therefore advising clients to allow us to complete your work and file the accounts on time to avoid any potential fines.

Can my business claim on insurance for coronavirus related losses?

Every person in the country is being affected by coronavirus (Covid-19) and many businesses are suffering losses and face an unspecified amount of time of complete uncertainty.

In the case of losing takings and paying additional costs in relation to the Covid-19 outbreak, can businesses claim on their insurance?

Which businesses are suffering losses to Covid-19?

Organisations are doing the best they can to adapt as quickly as possible to facilitate remote working, help employees to take care of children, assist customers and to change their offering to best suit the marketplace but many will still have huge losses.

The government has now officially ordered the closure of:

  • Food and drink venues with consumption on-site
  • Pubs, bars, and nightclubs
  • Entertainment venues like cinemas, theatres and bingo halls
  • Museums and galleries
  • Spas and wellness centres
  • Casinos and betting shops
  • All indoor leisure and sporting facilities including gyms

And this still leaves many businesses with the ambiguity of whether they should continue to trade or not and whether they should send their staff home if remote working isn’t an option.

What business insurance will cover Covid-19 losses?

According to advice from the Association of British Insurers (AIB), not many businesses will have purchased insurance that covers losses due to an infectious disease, particularly not that of the Covid-19 pandemic. Many insurers will make you state the name of the infectious disease(s) that you want to cover for when you take out the insurance and Covid-19 is a new virus.

The AIB said, “Irrespective of whether or not the government orders closure of a business, the vast majority of firms won’t have purchased cover that will enable them to claim on their insurance to compensate for their business being closed by the coronavirus.”

Business interruption insurance

Generally, business interruption insurance will need to have been specifically requested to be added on to a business insurance package and even this will normally just cover if the premises or equipment is damaged by fire, flood or storms of if essential equipment breaks down.

Your business might be entitled to claim if it has bought a ‘non-damage, denial of access’ extension to a business interruption policy if infectious diseases are unspecified, or you have included ‘notifiable diseases’ (which Covid-19 has been made by the government) or if you have specifically included Covid-19. And your business should be covered if it has cover for both pandemics and government-ordered closure (if it has been ordered to close).

If you are in any doubt you should check your policy documents and with your insurance broker as to what cover you have.

What to do if your business isn’t covered by insurance? 

If like most businesses you don’t have any relevant cover, you may be able to take advantage of the government schemes to support businesses and individuals including:

  • Business loans that are interest-free for 12 months (extended from 6 months).
  • The paying of 80% of wages up to £2,500 a month for workers who aren’t working but are kept on the payroll.
  • A 100% business rates holiday for hospitality, retail and leisure businesses.
  • An increase in the grants available to small businesses and to retail, leisure and hospitality.
  • Mortgage holidays of up to three months for individuals.

Key takeaways 

  • If your business has been ordered to close, you should be covered by insurance if you have cover which states pandemics and government-ordered closure.
  • Check with your policy documents and your insurance broker as to what your cover states.
  • Most businesses don’t have the relevant business interruption insurance with the specific terms required.
  • Check if you are entitled to assistance from one of the government help schemes for businesses and individuals. These are likely to be updated and added to as the situation changes.

Further reading 

Furloughing Employees

Although not yet 100% confirmed, this is our understanding of Furloughing your employees: –

  • You furlough the employees in writing, we recommend you seek HR advice on any changes to your employees.
  • You continue to pay their wages until you can claim to be reimbursed.
  • The HMRC system is due to be setup for applications by the end of April with payments to be made by the end of May.

If you require any assistance keeping on top of the workload or require further details of these measures and how Avanti can help you, email your allocated accountant or emmalouise.jones@avantigroup.uk.com who will pass the message on to the correct person. 

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