Month: January 2021

Following a rapid rise in COVID infections, from today 5th January 2021, England has been placed into a new lockdown. Following this the Chancellor has announced £4.6 billion lockdown grants of new lockdown grants to help support businesses forced to close. The lockdown in England is expected to last until March with a review not due to take place until the February half-term. There are also similar lockdowns across Scotland, Wales and Northern Ireland.

https://www.gov.uk/government/news/46-billion-in-new-lockdown-grants-to-support-businesses-and-protect-jobs

The new financial support announced sees the introduction of a new one-off top-up grant for retail, hospitality and leisure businesses worth up to £9,000 per property. The intention is to help businesses keep afloat until the Spring. This means that some 600,000 business premises across all nations of the UK will receive the one-off cash payment.

The amount businesses in England will be able to claim from their Local Authority for one-off top-ups depends on their rateable value:

• Small businesses with a rateable value of or below £15,000 will be able to claim £4,000.
• Medium-sized businesses with a rateable value between £15,000 and £51,000 will be able to claim £6,000.
• Larger businesses with a rateable value over £51,000 will be able to claim £9,000.

£4.6 Billion Lockdown Grants Announced and The Chancellor also announced that another £594million will be added to a discretionary fund to help support other firms affected. The money will be allocated to Local Authorities and the Devolved Administrations to support other businesses not eligible for the grants outlined above.

The Chancellor, Rishi Sunak said:

‘The new strain of the virus presents us all with a huge challenge – and whilst the vaccine is being rolled out, we have needed to tighten restrictions further. Throughout the pandemic we’ve taken swift action to protect lives and livelihoods and today we’re announcing a further cash injection to support businesses and jobs until the Spring.

This will help businesses to get through the months ahead – and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen.’

The previously announced grants package for businesses is still available and the above measures are in addition to this.

Feel free to contact us to book an appointment if you are looking to know more about this news.

As we expect the coming year/s will be tough for the business. It is really crucial that businesses should plan their activities very carefully and prudently.

If you have managed to retain profits in your business this fat-on-the-bone will help to see you through loss making periods as we endeavor to emerge from COVID disruption, hopefully, later this year.

How long these reserves may last depends on how effectively you manage the process.

If you are impacted by COVID disruption, you will need to ensure that you avail yourself of any Government funded grants via your local authority and wage costs can be 80% covered by the extended furlough scheme. But these will not cover all your fixed costs.

Accordingly, planning is absolutely vital.

You need to figure what your short-term prospects for trading are likely to be and then quantify the minimum level of costs that you will need to carry in order to meet:

Existing fixed commitments, rent for example, and

Other variable costs to deliver any future trade.

If these calculations reveal that you will be trading at a loss for an extended period the only way your business can survive is if:

Your retained profits and personal capital introduced cover these losses, and or

If reserves are exhausted, are you prepared to borrow funds – Government bounce-back loans for example – to fund the excess losses?

We are helping business in devising a business strategy that will ensure that thee business survive during this crises times.

Feel free to contact us to book an appointment.