Coronavirus: Managing your business through unprecedented times

Whilst we have had lots of advice about how to protect ourselves from the virus we thought it would be worth providing some advice about how to tackle business continuity issues arising from coronavirus. Please do contact any of us if you need advice or want to talk through concerns/options. This update will cover; employees, cashflow and expenditure (inc loans and financial support and taxes) and continuity.

Employees
We have consulted our HR firm in regards to employee leave and pay during the current period, and the advice at the moment is not to set out a policy to your employees in regards to dealing with coronavirus but just to react as the government changes things. Small businesses will not be able to cope with the costs if they start setting out their stall too early.

Sick pay
Currently employers as a minimum are required to pay employees SSP (Statutory Sick Pay) when they are off sick for four or more days or more in a row. It is not payable for the first 3 days of absence but thereafter it is payable for up to 28 weeks. In light of the government’s recent announcement regarding SSP, emergency legislation is expected to be passed at some point in the immediate future to pay employees SSP from the first day of absence. In last week’s budget the chancellor has stated that the government will reimburse small employers any SSP they pay to employees, for the first 14 days of sickness. We expect this to be a temporary measure to help insulate businesses against the impact of coronavirus. Statutory sick pay is currently paid at £94.25 per week.

Time off for a dependant
Absences from work may also occur when a member of staff needs to take time off work to help a dependant, particularly if it is an emergency or unexpected event, such as a school closure or to help a family member who is in self isolation. Employees have a statutory right to take a reasonable amount of time off work to help dependants in an unexpected event. There is no limit to the length of time an employee can take off work as long as it is reasonable in the circumstances. As with sick pay there is no statutory right to full pay although some discretion may be offered by employers.

Communication
Communication is vital for employers to help prevent the spread of Coronavirus. Regular updates about what your business is doing to protect members of staff will help, as well as sign posting individuals to relevant contacts, explaining the importance of discussing matters with colleagues and to put in place contingency measures.

Company shutdown
If someone at work has coronavirus it is not essential to close the workplace. We have been told that Public Health England’s Health Protection team will contact the business to discuss the case, identify anyone who has been in contact with the individual with coronavirus, to conduct a risk assessment and provide advice on actions to take in the workplace.

However, the situation may change if you’re medically advised to temporarily shutdown your business or if your business suffers from a reduction in demand. One option in such a scenario is to consider short time working on a temporary basis. Alternatively you could consider laying off employees i.e provide your employees with no work or pay. If you have written contracts of employment in place with your employees it is worth checking these to see what reference, if any, is made to short time working or layoffs.

Cashflow and Expenditure
Being able to keep the business going with reduced/no income is a considerable challenge, here are some things to consider:
1) Postpone expenditure that is not essential including any planned capital expenditure
2) Keep personal expenditure to a minimum
3) Check limits on overdraft facilities – do you have any headroom to use?
4) Cancel staff overtime and extra shifts; plan to run the business (if open) with minimal employees
5) Use this as an opportunity to review expenditure levels to identify other costs which could be reduced or cut
6) Loan repayments – if you foresee that these may not be paid, contact your lenders early (before defaulting); contacting them now is a good idea as they will shortly be inundated with requests for repayment holidays.
7) Banks and finance providers – they are being given substantial Government support to provide low cost loans including repayment holidays to affected businesses. We have heard that Barclays are offering 12 month repayment holidays on existing loans of over £25k; other banks will likely do similar.
8) Paying taxes – HMRC have boosted their ‘time to pay’ service which has existed for many years for tax payers who are struggling to pay on time. This enhanced service is another option; rather than paying your VAT bill, PAYE/NI, Corporation tax, Income tax bills as they are falling due between now and the coming months, consider contacting the ‘time to pay’ service to agree a payment plan. We are expecting them to be far more obliging now than ever and their interest rates are low on late payments. We would always recommend contacting them before tax payment becomes due. We can provide the contact telephone number and your reference for this.

Business Continuity
Ensuring you still have a functioning business during these times and beyond the peak of coronavirus is vital – you can take additional steps to help:

Sole traders and limited companies (with just one director) – we strongly recommend you have a second signatory on your business bank account and for companies; that you appoint a second director (a director does not have ownership of the business – they do not have to have shares). If you become incapacitated or worse still, die, banks can freeze bank accounts and those left behind to sort out the business will find it very difficult and long winded; this is a lot to handle on top of the emotional stress this would cause.

If you are particularly concerned, write a rough plan as to the main aspects of running the business including main contacts, bank login details, etc so that someone else can attempt to organise things if you are ill and unable to do yourself.

What are we doing at Hudson LM
• Our systems are set up so that each one of us is able to work from home and make and receive calls, just as we would from the office.
• We also use zoom.com for online video meetings and screen shares so for any clients not wishing to visit us or for us to visit them we can continue to conduct our regular meetings via this method (providing you have internet access)
• We are here to support and guide you and your business; please do not hesitate to pick up the phone or email for advice. Even if we are forced to close our office in Whittington, as above, we will all be working from home.