In recent months, so much has changed and not least of all for businesses across the UK. Millions have been forced to step away from their livelihoods for a prolonged period and the large majority will likely be looking toward a future inherently different from the one they envisaged at the turn of the decade.
There is little doubt that the economy is in crisis, and that businesses, employers and the self-employed will face new challenges in both the short and long-term. However, whilst for some these challenges will be a product of the need to rebuild their business from the ground up, for others they will be linked to the need to meet increased demand and to accommodate sudden growth. Given either set of circumstances, the ability to adapt and accommodate change is critical.
Key considerations for businesses recuperating, rebuilding or booming:
We’ve said many times before, ‘cash is king’ and now more than ever effective cash flow management is imperative. Despite the concessions that have been made – for example, the opportunity to defer VAT and income tax payments – these liabilities will still need to be fulfilled later.
Cutting unnecessary outlay, spreading liabilities out, improving credit control, diversifying income and taking time to prepare detailed, accurate forecasts can all be useful undertakings. A dear understanding of your bigger financial ‘picture will enable you to make good decisions for the future of your business and income, whether you are recovering, rebuilding or faring well.
Consider whether you are making use of the Government-backed schemes and financial support that you qualify for. From furloughing provisions and income support for the self-employed, to grant funding and loan schemes; as we emerge on the other side of the crisis these measures will be as important as they were at the outset. Speaking to a professional can be key to understanding how to access the support and whether there are any obligations that may arise later as a result.
Tax planning can be beneficial, at a time when asset values have dipped, and tax policy is called into question. A restructuring of your tax affairs may, all of a sudden, be more affordable and, more generally, a proactive approach to planning can keep you one step ahead of any changes in legislation.
Outsourcing one or more of your key functions – for example, payroll or bookkeeping – can actually help you to reclaim capacity to focus on running your business, to eliminate any concerns that you might have about compliance and also to reduce costs in the long-term.
Cutting through the noise With official Government guidance being updated regularly and questions over the future of the economy and tax policy, it can be difficult for businesses to cut through the noise.
Partner, George Hay Chartered Accountants