The uncertainty caused by coronavirus has impacted every industry across the UK, with businesses of all sizes united in feeling the effects of Covid-19, lots of work is being put on hold, or even wiped out entirely in some cases.
The unforeseen circumstances mean the role of an accountant is arguably more important than ever, as clients are in constant need of clarity on what, if any, Government support they are eligible for.
While the situation is constantly changing, there are some vital areas where accountants can and should be advising their clients to potentially help reduce the impact of coronavirus on their business right now.
Here, Joanne Harris, Technical Commercial Manager at specialist accountancy firm Nixon Williams, highlights five tips for accountants looking to best support their clients in the wake of COVID-19.
Help clients clarify the support available
In recent weeks, the government has announced a number of support options to help sustain the economy as businesses battle the impact of the coronavirus pandemic. With so many schemes and updates being released almost daily, it is essential that you keep your knowledge up to date so you can offer the best possible advice to your clients.
They include the Coronavirus Job Retention Scheme (CJRS), which allows businesses to furlough members of their workforce rather than make redundancies, with the government covering 80 per cent of their wages until June, up to a maximum of £2,500 per month On its first day, the CJRS portal saw more than 67,000 applications within its first 30 minutes of opening.
Following calls for further support for self-employed workers, the Self-Employed Income Support Scheme (SEISS) was also introduced. It allows the self-employed to claim a grant of 80 per cent of their trading profits up to a maximum of £2500 per month and is expected to open to applicants in May.
Another form of support introduced was the Coronavirus Business Interruption Loan Scheme (CBILS), which supports small and medium sized businesses with finance of up to £5 million. The loan is repayable with interest, but the Government will cover the first 12 months of interest payments and any other charges from the lender.
A recent extension to this scheme has seen the Chancellor announce the launch of a Bounce Back Loan for small businesses. Businesses must choose between the two schemes, but loans of up to £50,000 are available and the Government intends to make sure funds are delivered ‘within days’. These loans are guaranteed in full by the government and so no personal guarantee is needed.
Different businesses will be eligible for varying aspects of support, so each client’s options should be reviewed on a case-by-case basis, with the long-term impact of committing to a business loan, or choosing to furlough considered beforehand.
An updated resource for the support being offered by the government can be seen here.
Offer clear advice on cash flow
One of the first things any business should do in a crisis is reduce any unnecessary overheads. An accountant’s role in this is crucial, as they will be able to audit all outgoings and advise on payments that could be stopped or reduced.
A cash flow forecast will also provide clarity on the actions business owners or managers need to take, which could range from furloughing staff to renegotiating tenancy fees and insurance policies.
This will also help reveal any future issues a client could face with suppliers or rolling contracts, allowing them to find possible solutions now instead of dealing with more uncertainty as the weeks roll on.
Late payments should also be chased as a matter of urgency, and payment plans can be offered where a client’s customers are struggling to pay an invoice in full. With many businesses having outstanding invoices due to coronavirus, this step is more important than ever.
Ensure each client stays compliant with HMRC
As thousands of companies go through the process of applying for Government support, steps should also be taken to ensure all tax affairs have been fulfilled.
The slowdown of the economy caused by coronavirus has given many business owners more time, and this should be used wisely to get accounts up to date, before planning for forthcoming tax bills. Accountants can help their clients reach a quick conclusion of their accounts with earlier reminders, whilst highlighting the value of sorting their tax affairs sooner rather than later.
The government have allowed all business with a VAT payment due between 29th March and 30th June to defer their payment to 31st March 2021 and have deferred self-assessment payments due in July 2020 until the 31st January 2021. It is worth stressing that this is a deferment and the liability will fall due at a later date. Clients facing difficulties in paying their tax bills can also apply for support through HMRC’s Time to Pay Service.
Take advantage of relaxed restrictions and extra deadlines
Clients must be informed of the steps the Government has taken to try and ease pressure on the economy and UK businesses, which range from financial freezes to planning application changes.
Business rates on the high street have been cut to include hospitality and leisure businesses with a rateable value of up to £51,000, and a further discount of £5,000 has been offered to pubs with a rateable value of £100,000.
The annual filing of company accounts, reports and confirmation statements to Companies House has also been given a deadline extension to help struggling businesses. Companies impacted by COVID-19 are now able to apply for an immediate three month extension.
However, not all businesses are eligible, so it’s essential to check the terms and conditions to avoid a potential fine.
Stay in touch to show your value
During these uncertain times, advice from a trusted accountant is vital. Making yourself as readily available as possible and communicating well with clients is one of the best ways to help them through the coronavirus crisis.
Setting up regular Zoom or Skype calls to keep clients well-informed will instil confidence, as well as keeping them knowledgeable about further developments.
It’s an incredibly busy time for accountants but maintaining a high level of service will be valued by clients long after lockdown restrictions have been lifted. Use your time now to demonstrate how crucial your services are to a clients’ day to day business operations.
Joanne Harris, technical commercial manager at specialist accountancy firm, Nixon Williams