Company rescue advice and Covid-19 support for limited companies
Last Updated: Tuesday 4th January 2022
The COVID-19 coronavirus pandemic has affected lives and livelihoods across the globe and hundreds of thousands of UK businesses have been left considering what the impact will be both in the short-term and also looking further ahead.
Many companies, partnerships, and sole trader businesses simply do not have the financial breathing space to manage an emergency cash flow situation – and this is the threat that COVID-19 poses to businesses across the country in a wide variety of industries and sectors - both during the lockdown last year, and also as they begin to navigate the equally challenging times which lie ahead.
So how can your business cope from the continuing financial impact of the Covid-19 Coronavirus?
Talk to your business support network
- Your business insurance might provide the cover you need if your business had to stop trading during the lockdown period. Check your policy wording as you might have Business Interruption cover in your commercial insurance policy – speak to your insurer if you’re not sure. Once you have confirmed that you have Business Interruption cover, you will need to check whether you have an extension for “notifiable diseases”.
- Talk to your bank about possible emergency finance options. The Recovery Loan Scheme is designed as a direct replacement for the CBILS and Bounce Back Loan schemes which were made available to qualifying companies at the start of the pandemic. The Recovery Loan Scheme currently gives small and medium-sized business access to a loan of up to £2m, with the government providing security to the banks worth 70% of the value of the loan. The scheme will remain open until the end of June 2022.
- If you have fallen into arrears with your tax liabilities, you may be able to take advantage of the extended HMRC Time to Pay Scheme which gives businesses additional time and breathing space when it comes to settling their tax bills including VAT, PAYE, and Corporation Tax.
- Talk to the Government through their business support helplines, of which some are dedicated to coronavirus. They are designed to help small businesses with advice on how to minimise/cope with the impacts of coronavirus. The phone number is different depending on your business location:
England: 0300 456 3565
Scotland: 0300 303 0660
Wales: 0300 060 3000
Northern Ireland: 0800 181 4422
Get free professional advice
- Take time to understand the options available to you and your business if cash flow worsens and the business becomes insolvent; that means there isn’t sufficient funds to pay bills as and when they fall due – such as suppliers, HMRC, or payments towards your Bounce Back Loan. Speak to one of our licensed insolvency practitioners completely free of charge and find out what options might be available to you.
- Talk to a ‘Time To Pay’ specialist that can defer your tax payments to HMRC. When cash flow problems arise, companies often struggle to pay corporation tax, VAT, and/or PAYE on time. Our specialist HMRC Time To Pay team can negotiate on your behalf and have an exceptional track record in cementing more palatable payment terms between UK businesses and the taxman.
- If your business is experiencing a downturn in trade, restructuring your business operations could provide more time going forward to get back on your feet. Mitigating losses is key in times of financial distress so take advice on which parts of your business could be streamlined or cut back. Look into subscriptions and contracts that you could do without at the present time.
- There are also formal procedures available to companies in the form of a Company Voluntary Arrangement (CVA) which shield businesses from creditor pressure and allow them to settle unpaid debts over time. A CVA is a type of restructuring procedure and can sometimes lead to Administration which protects a company and its creditors from further losses and aims to resurrect the business and ensure continuation of trade and employment.
- And finally – if the regrettable situation of insolvency arises and your company has no option but to liquidate, company directors can get a free assessment for possible director redundancy pay of which the average payout is around £9,000.
Free business rescue and recovery advice from Begbies Traynor
If you would like specialist advice on any aspect of business rescue, turnaround, or possible recovery methods, the experts at Begbies Traynor are here to provide free advice and support. For a free confidential discussion with one of our experts advisers call us on 0333 009 6852.