IMPORTANT INFORMATION AND PRACTICAL ADVICE

I know that by now you would have received countless emails from multiple mailing lists in light of COVID-19, and for the most part I can imagine most provided little to no comfort as they may not have related to the struggles that you and your friends, colleagues and family may be going through.

Do not treat this email like the others you have received. This has been sent to you to translate what the Governments daily updates actually mean for your business, and practical advice for you as to how to reduce the damage that this will inevitably cause the vast majority of businesses worldwide. This email will take you through some of the options which you have, and knowing that there are options will help you sleep at night.

At present, the Government are providing daily updates relating to COVID-19, and though a lot of these measures have not yet been supported by the fine print (as we know, the devil is always in the detail), we have compiled below a list of the ‘headline points’ broadcast in the media and have hopefully condensed this into manageable pieces to digest.

Please remember that we are here to talk to you in any capacity that we can, be that to offer financial guidance/business advice, or if you simply need to chat to somebody to discuss the issues that you are facing. We are here for you- all you need to do is pick up the phone or drop us an email. No one is alone and we will be with you every step of the way, providing updates and advice as and when we are able to.

Practical Advice

Review Mortgages

  • Most of the major lenders (check to see if this applies to you) have pledged to offer support by the provision of a mortgage ‘holiday’ for a set period of months. If you decide to take advantage of a mortgage holiday offered by your lender, our understanding is that this will not affect your credit score, but we recommend you check with them before taking this option.

  • Many lenders will waive penalties for late mortgage payments.

Is it time to re-mortgage?

  • Mortgages are based on historic data, and it is safe to assume that 2020 will be painting a bleaker picture compared to 2019. Though we may see exceptions given by lenders in the future when reviewing your 2020 figures, it is worth exploring re-mortgaging now based on the likely far more favourable 2019 figures for your business.

  • Interest rates have been cut as an emergency measure- the cost of finance is cheaper, and there is therefore increased likelihood that you can find a more competitive mortgage offered to you than if you are to defer re-mortgaging for a few months/year.

  • With potentially more spare time, this could be an ideal time to review and act.

Review Loans/Overdraft/Savings Accounts

All of the major lenders have implemented several measures to help those affected by:

  • Credit Cards No fees for missed payments on credit cards, refunds on credit card cash advance fees and providing increased temporary credit card limits

  • Fixed Term Savings Account Can be withdrawn without financial penalty

  • Loans Can be deferred for up to three months

  • Overdraft Increased overdraft facilities

Find out what your lender has to offer so that you know what you are able to utilise should you need to.

Do you rent as opposed to own a home?

  • The BBC have reported this afternoon that the government will bring forward legislation to protect private renters from eviction, in the event that they are not able to make their rent payment for the month.

  • We expect emergency legislation to be brought forward ASAP, and so when further information is provided we will let you know.

Get your business up to date ASAP

At this point, many of you will have had contracts put on hold or cancelled, and as a result do not have work lined up. This would be an easy time to put heads in sand and put business obligations to the back of your mind- this is understandable, but there is no need to do this. Remember that we are here, as always, to do this for you.

Examples of the following potential immediate obligations that your business has could be:

  • VAT Return submission

  • Company Account filing

  • Making Tax Digital Quarterly Reporting- now including non VAT registered businesses from April 2020 onwards

  • Payroll filing

It is vital that we continue to complete the above for you so as to ensure not only that you comply with UK law, but also for you to know ASAP what your upcoming liabilities are with HMRC to help your cash-flow planning. More detail below, but there are options available to your business should you not be able to make payment of your VAT/TAX/PAYE/NIC liabilities such as ‘Time to Pay’ arrangements- you will not be able to set up a payment plan however, without knowing what the actual liability definitely is. I know that the last thing you want to think of or worry about is your next VAT Return or tax payment- but the more control and awareness we all have, the better we can help you and your business get through this.

Review what benefits you or your family may be entitled to

The landscape has changed considerably over the years in relation to benefits, but for those out of work or self isolating and self employed, we would recommend establishing if you or your loved ones are eligible for any of the following state benefits:

Check your (now cancelled?) contract

  • Many of you will be faced with cancelled contracts and the obvious question is ‘am I able charge a cancellation fee as this isn’t my fault’- the answer is most likely no, but please send us your contract to review this for you.

  • Whether you are able to charge a cancellation fee will be dependent on if there is a clause in your contract that effectively indemnifies the engager from contracting you- this clause is known as ‘Force Majeure’ and covers amongst many other things out of the scope of control from production, ‘Acts of God’.

  • Please contact us to discuss the specifics of your situation in detail so that we can provide you with tailored advice.

Review any insurances that you have in place (e.g. income protection or similar, holiday cover etc)

  • For those out of work due to cancelled productions- check your insurance to see when, if at all, you can start to claim and do this immediately.

  • For those out of pocket financially due to cancelled trips- again, check your insurance to see if any or all of this can be included within a claim.

Note that we have seen a sharp increase in insurance providers drastically changing their policies to exclude COVID-19 and associated illnesses – ensure that you know what your policy covers and what you are paying for.

Government Emergency Measures – Potentially Useful to You

Corona Virus Business Interruption Loan

  • Government backed loan aimed at long term viable business’s affected by COVID-19. Not yet available but is aimed at small and medium sized businesses, offering a life-line loan with 0% interest for six months. 

  • More details to be confirmed over the coming weeks

HMRC Dedicated Helpline- for those directly affected by COVID-19.

  • You may or may not know that it is possible already to have an arranged payment plan with HMRC, applying to both TAX/VAT liabilities. It also only applies should you have a legitimate reason as to why you cannot make the full payment. In our experience, we have found HMRC on the whole to be reasonable and considerate when discussing/negotiating payment plans. We expect this to continue with the dedicated helpline.

  • We would ordinarily call HMRC on your behalf, but due to recent changes are unlikely to be able to set up the plan itself. With that in mind, please give us a shout so that we can prepare you for the call and arm you as much as possible for the call.

  • Once fully prepped by us, the number to call is 0800 0159 559.

Tax/VAT Payment Deferrals?

  • There have been talks of deferring future liabilities on short term basis to ease cashflow concerns. As nothing is confirmed though, we need to ensure that your affairs are up to date so as to be in a position where we can discuss your financial affairs with HMRC, and if needed negotiate a payment plan. Again, will keep you posted on this as and when any further news is released.

DELAY to IR35 Legislation

  • As part of the emergency measures, the Government have delayed the implementation of new IR35 legislation for the private sector until 1st April 2021. This should enable contracts to be far simpler to agree as and when you are able to begin contract talks again, but please ensure as always that you contact us so that we can review the contract in full to advise you as to how best to proceed.

Statutory Sick Pay (SSP)- Limited Companies Only

  • For those company directors who either have employees or are the sole employee- you are able to pay SSP from day one of being ill/ isolated as a direct affect of COVID-19, and the Government will reimburse your company to the value of up to fourteen days (i.e. the self isolation period), at the current rate of £94.25 per week

  • For further information in relation to process to follow- please contact your team member, or seehttps://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses

  • In real terms, you will be reimbursed to a total value of around £190 but do not expect this cash back immediately- the Government have confirmed they have neither the processes or facilities in place to make these refunds at the moment.

Business Rates Relief (BRR) and Cash Grant

  • If you pay business rates read on, as this next point is relevant to you. If you do not pay business rates- ignore the below.

  • Business rates are charged on most non domestic properties such as shops, offices, pubs and warehouses. The Government has waived the rates for certain businesses (pubs, shops, hospitality etc) on a temporary basis in order to help their cashflow.

  • If you do not have to pay Business Rates at the moment, no relief or cash grants will be given to you- this is only relevant to those who currently pay business rates. 

Are you a Landlord?

  • Nothing set in stone yet, but Government have stated provisionally that they will bring forward emergency legislation to protect private renters for eviction. This will have an impact on your rental income, and presumably then also impact repayment of the mortgage you may have on the rental property.

  • No further details as to if Government have acknowledged the cashflow impact this will have on landlords of the rented properties.

  • We will update you as and when we hear more and delve into small print when released.

Mental Health is IMPORTANT

You would be forgiven if at present you thought that the Government has not done, and is not doing, enough to support (financial or otherwise) the hundreds of thousands of freelancers operating within the UK. The level of anxiety you may be facing is not to be underestimated and this I can assure you is the same for the 400-500 businesses that we look after- YOU ARE NOT ALONE. Please find below links to charities who can provide either/both financial or emotional support through this challenging time:

Film + TV Charity https://filmtvcharity.org.uk/?utm_source=earned&utm_medium=email&utm_campaign=general2019

MIND https://www.mind.org.uk/information-support/helplines/

Money Advice Services https://www.moneyadviceservice.org.uk/en/tools/debt-advice-locator#telephone-debt-advice-services

Though we officially act for you in a professional sense, please know that we care about you as a person. Whether we have looked after you for six months or twenty five years is irrelevant- WE ARE HERE FOR YOU. We have based our twenty five years in business on helping those that need it in any way that we can, and giving back to those that are vulnerable. It’s important to reiterate my point above- we are here to talk to you in any capacity that we can, be that to offer financial guidance/business advice, or if you simply need to chat to somebody to discuss the issues that you are facing.

We are also more than happy to provide free advice to any of your family/friends/colleagues that may need some guidance as to how best their business can deal with this pandemic. 

As we all know, the situation for everybody within the UK is evolving on a daily basis Blue Skies will continue to operate throughout these times (be that working remotely or in the office), and will continue to update you via email as to any further updates that we believe may impact your business in both the short and long term.

Sincerely,

Team Blue Skies

Lucky 14 Design & Marketing