Tuesday March 24, 2020
Our Chief Executive Geoff Rowley outlines the state of play, and the support we are providing to businesses, as the UK comes to grips with the evolution of coronavirus
‘Unprecedented’ is the word I have heard so often in the last week – so often because it is true. The financial crisis that began in 2008 was supposed to be the major test of this generation. And yet, we are faced with something so entirely new and fast-moving that it has the potential to eclipse its impact in the space of a few short weeks.
But, while these are indeed ‘unprecedented’ times, we should take comfort that we have the experience of the last decade to draw upon as the UK economy enters a new phase characterised by business interruption.
In the coming days and weeks, as the effects of government intervention begin to ripple through the economy, we will be continuing to support businesses to the hilt – providing guidance and sharing our knowledge as more measures are introduced – to help them through what, for many, will be a challenging period.
To that end, we will imminently be launching a dedicated webpage to provide regular updates and insights including webinars and guidance from our Restructuring, Debt Advisory and Corporate Finance teams. This will be a source of practical, operational and financial advice to businesses and their management teams affected by the challenges we are seeing, regardless of whether they are an existing FRP client.
We have all, no doubt, been watching the Prime Minister’s daily updates with great interest and advice is already factoring in the monumental levels of business aid being put into effect by the government. To date, this includes:
- The Coronavirus Job Retention Scheme
- Deferring VAT and Income Tax payments
- Statutory Sick Pay relief for SMEs
- 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England
- Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
- Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
- Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
- New lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
- HMRC Time To Pay Scheme
These schemes all have different levels of complexity and challenge. For example, when deferring taxes it will be impossible for many businesses to forecast if their future cashflows will be sufficient to meet historic liabilities and how deferred payments will be made-up again. A similar situation will also apply to the Business Interruption Loan Scheme that will be administered through 40 funders and will require a direct link to the outbreak, as well as evidence of viability and the capability to trade out of the current situation. We will of course be on hand to interpret and provide guidance on every line of support and relief alongside the day-to-day running of businesses.
As we bring this information to you in the coming weeks, I would encourage employers to think of their people first. Today, that means focusing on the Coronavirus Job Retention Scheme; changing the status of affected employees that would have been otherwise laid off so HMRC can reimburse the majority of their wages. Not only is it the right thing to do by families but it will also reduce the speed at which spending throughout the economy inevitably slows.
These are indeed unprecedented and evolving times. But, with more changes to come, they are also a time for us to support one another in new and unparalleled ways. For us, that means helping business large and small to address whatever challenges the future may bring.
It is a time for us to support one another in new and unparalleled ways.Geoff Rowley Restructuring Advisory