Ask the expert
Stephen Smith is the YorkMix finance and tax expert. He runs TaxAssist York, and is here to help you with all your money concerns
In this third lockdown the future remains uncertain for small businesses – and the Covid-19 pandemic shows no signs of relenting.
This six-step roadmap is designed to equip your small business with the tools it needs to get through this lockdown and look to a brighter future.
1. Reassess your business plan and cashflow forecast
Whether you’re a start-up business or well established, a sound business plan is important to protect your assets and stay profitable.
Challenge the current assumptions in your business plan and most importantly think about the cash you will need. Does your business need fresh finance?
Both the Bounce Bank Loan Scheme and the Coronavirus Business Interruption Loan Scheme have extended applications to 31 March.
2. Get to grips with your tax position
The last thing you want when trying to manage cashflow is an unexpected tax bill.
HMRC’S time-to-pay arrangement gives additional breathing space to settle your existing tax liabilities. For self assessment tax, you can apply online if you’re eligible or for other taxes, you can give them a call – all details are listed here.
There may be tax planning opportunities available to you – a downturn in trade or short-term losses may mean that you can claim a tax refund.
Contact us to see what help we can provide along with recommendations for other tax planning opportunities such as research and development tax credits which can reduce your overall tax bill.
3. Liaise with your suppliers
Keep talking to them to ensure current credit facilities are kept open and if necessary, talk about extending payment terms.
Consider your ordering levels and amount of stock and the range you hold – in the current uncertainty you may prefer to have cash in the bank rather than stock available.
4. Improve credit control
We can recommend a professional debt recovery service to chase outstanding sales invoices as well as advise on outsourcing your credit control to an expert with a proven track record of delivering long and short term debts. This means more money coming in and keeping your cash levels healthy.
5. Stay in close contact with your customers
One of your biggest assets are your existing customers. If your physical location is closed, let them know how they can continue to do business with you. Offer vouchers to pay for items or services later to improve your cashflow.
You can also ask longstanding customers to help you by referring you to others by leaving online reviews or recommending you via word of mouth to family and friends.
6. Marketing and networking
This lockdown may be the ideal opportunity to design and launch a new e-commerce store or website to act as an additional shop front for your business.
If you mainly advertise your services offline, you could consider talking to a digital marketing expert about advertising online using pay per click (PPC) and paid social advertising or even digital radio.
Networking with like-minded business owners can provide useful advice and customer leads which can assist your business going forward.
Most networking groups have moved online, with Zoom meet ups now the norm and many are free to attend.
Your questions to Stephen
We’ve had a number of questions sent in and Stephen has covered a couple of the key ones below.
Do you have a question for Stephen? Drop it in the comments below, or email it to [email protected].
I’m having trouble getting all my documents together to complete my tax return for the deadline on 31 January. Is there any way I can get an extension?
Luckily the government has just announced that they’re waiving the late filing penalty in February 2021, meaning that as long as you file before 28 February, you won’t be fined £100. However, they have not extended the deadline to pay your tax, so if you pay from 1 February, you will be charged interest until you pay in full. It is also worth mentioning that you must file your tax return before you can apply for the Time to Pay arrangement so it is still worth trying to file your return as soon as possible.
I’m struggling in this third lockdown to keep afloat. Is there any additional funding available when I’m forced to close again?
A: The government has announced updated funding via the local council and have updated their website with a few questions to see what support is available to you and the relevant link is here.
Stephen Smith FCCA is Managing Director of TaxAssist Accountants York