To say that 2020 has been a difficult year is clearly a colossal understatement. And we sit here contemplating a winter where our health and economic wellbeing are set on what seems like an unstoppable collision course. Whilst the Government have made several mistakes in the handling of this crisis I, for one, would not want to be in their shoes as they attempt to navigate a path that inevitably has to compromise in both areas. 66 million people with 66 million different opinions and several million new-found “experts” in epidemiology…
As accountants, we are doing what we do best and helping our clients deal with the economic fall-out of COVID-19. It has come in waves, much like the virus. Firstly we saw the panic from some businesses – do we need to close, make everybody redundant, cut our losses? Then came the very welcome measures (most notably the furlough scheme and the government backed loan schemes) that have bought so many businesses and individuals much needed time.
I, like several others, forecast “cliff edges” that would bring catastrophic job losses and business failure if not addressed. The end of furlough. The repayment of HMRC deferrals. Interest and capital payments falling due on borrowings that were taken on to get through the initial period of lockdown.
Thankfully in the last few weeks additional measures have softened all of those cliff edges but we do have to be careful not to be lulled into a false sense of security. Simply kicking the proverbial can further and further down the road.
As with many things in life, sound planning can help. Anecdotally, for example, a number of businesses have been able to steady or even improve their cash flow during this period and have plans in place to lower or defer outgoings. . However, it is now more important than ever for businesses to prepare for Q2 next year. As the economic stimulus starts to unwind plans will need to be in place to ensure businesses are strong enough to move forwards. And lest not forget. If this coincides with a period of economic rejuvenation in the Spring (as we all sincerely hope) then we could see the added complication of more cash being required to finance growing businesses’ working capital.
If you would like any support with formulating plans or, would simply like to use us as a ‘sounding board’ for existing plans, please speak to us. We can help.
On a practical and personal level, every Ensors office has remained “open” throughout the lockdown period albeit with vastly reduced numbers of people attending and a focus on working safely and predominantly from home in accordance with Government guidance. We all have the technology to work “anywhere” with phones, emails and other correspondence all routed seamlessly to our colleagues. Our colleagues have been great at finding innovative ways to make things happen and they remain available to deal with the usual, and the out of the ordinary, questions that you may have.
In this edition we focus on a number of topical issues.
Landlords have had a very tough ride post-lockdown and Matt Herd looks at ways in which tax planning can be used to help at this time.
The last Chancellor’s budget in March is long since forgotten but there were some significant changes to Entrepreneurs Relief that are worth knowing if you are considering the sale of a business.
When is a van not a van? Yvonne Graham explains the outcome of a recent tax case that clarifies previous guidance on this subject.
There is also the usual dose of tax and VAT updates and the chance to “meet” our newest and aforementioned Tax Director, Matt Herd. Matt’s a great guy and joined us a few months pre-lockdown, quickly settling in to become an important part of the team.
Thank you for taking the time to read our latest Newsletter.
David
