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Accura Accountants – Update

I do hope that you find my regular emails informative.

My goal is to offer advice and suggestions to assist every single one of our clients traversing through the minefield of legislation available. The sole aim, to enable you and your business to survive. Some people see the Government actions to be generous while other people believe that either no help / not enough help has been offered in their particular circumstances.

Commencing Monday, I will be sending daily emails to all clients setting out advice on what is available to each sector of society.

So that the information can be easily digested and clients can address their particular claims, I will also be giving advice on how to set about making claims, either directly yourself or via your personal contact at Accura Accountants.

I do not expect any client to have to wait for the general circulation before receiving information applicable to their own circumstances. Should any client wish to receive assistance, kindly write to me by replying to this email.

Please state in your email the topic you wish to discuss from the list below.

Kindly note that due to the magnitude of daily changes the below list will be ever evolving and subject to change.

  • Monday – Furloughed staff / Job Retention Scheme
  • Monday afternoon – Assistance to protect businesses if the offers by the Government are too little and or too late (CVA -Company Voluntary arrangement or IVA Individual Voluntary arrangement short to medium)
  • Tuesday – Universal Credit.
  • Wednesday – Business interruption scheme.
  • Thursday – Grants for businesses that pay little or no business rates.
  • Friday – Self assessment tax due by 31st July and the information that is required to ensure that tax payable January 2021 is based on actual and not estimated figures (post recovery from this saga).
  • Saturday – Companies House
  • Sunday – HMRC – PAYE
  • HMRC – VAT
  • HMRC – Corporation Tax

Currently, our office is closed although we are maintaining our switchboard together with vital staff (working from home) that will need to produce information and assist you with the various claims available.

Furthermore, each of your personal contacts /advisors are available via telephone or email at all times.

Each person as stated above has direct access to myself if further in-depth information is required.

I have been inundated with a number of similar repeat questions relating to:

Furloughed “staff and the possibility of sole directors making claims. Initially and logically I could not see that such offers could be claimed by a sole director, yet based on what I have noted, I suggest claims be made and HMRC will no doubt deliberate. Please remember and note everything on offer is always subject to deliberation by the Government/HMRC.

Secondly bank guarantee loans, to save time, I have copied below some extracts.

”The U.K. government’s rescue plan for small and medium sized companies may be only three days old, but there’s growing concern it won’t be able to stave off a wave of bankruptcies in the world’s fifth-largest economy, Bloomberg News reported. On Wednesday, a chorus of voices ranging from lawmakers to small business trade groups said the Coronavirus Business Interruption Loan Scheme, or CBILS, is too reliant on commercial banks and their traditional underwriting methods to rapidly deliver cash to desperate companies. Critics also said it was sowing confusion and frustration by requiring business owners to put up their personal assets to secure loans in what may be the early stages of a severe economic meltdown. “This program is going to be too slow, too cumbersome, and too complicated”

The claimants may have to show they have exhausted other potential sources of cash such as equity investors, which will take time. Not only will directors have to prove their businesses were stable before the crisis struck, they will also have to forecast how the pandemic will affect their cash flows for the next two or three quarters.

Please see my original comments in recent emails in respect of accounts and cash flows together with projected accounts.

Uncertain Conditions

Clients will need advice on how to prepare the applications and information required for due consideration.

On Wednesday, Sunak, Bank of England Governor Andrew Bailey and Christopher Woolard, the interim chief executive of the Financial Conduct Authority, wrote a joint letter to the heads of Britain’s banks urging them to “extend lending despite the uncertain economic conditions.”

Responding to the letter, Stephen Jones, the CEO of UK Finance, the banking industry trade organization, said lenders were committed to supporting the economy “through this temporary shock to the fullest extent.”

But the difficulties around the security needed for CBILS loans may deter business owners from using them, or it will come down to individual banks to be Judge & Jury.

Under the program, lenders cannot ask borrowers to put up their primary residences as collateral but virtually everything else be it second homes, automobiles, furniture or securities.

On reflection this area of assistance is not as originally believed when delivered by the Chancellor.

Interest Rates

While a 12-month holiday on interest is attractive, CBILS permits the banks to set rates where they see fit. It is estimated most major banks will settle on rates at 4 to 5 percentage points above the Bank of England’s benchmark, which is close to zero.

Other lenders may price the loans north of 10% as the market develops.

Responding to the criticism of CBILS, the British Business Bank said it was based on an existing guaranteed loan program for small companies that has worked well since 2009. A spokeswoman said companies would have to produce a “sound borrowing proposal” to qualify and that lenders are free to decide what information they require to analyse applications.

There will be an obvious delay in responding to requests for assistance and these delays and eventual deliberations could well come TOO LATE.

Opinions are one thing, yet practice is another. Sensibly the Government should have given a 100% guarantee to take away from banks their deliberation, BUT this definitely would have led to abuse.

“The government’s intentions are correct and this program may help larger businesses but it was introduced as a solution for all businesses, and that it is certainly not the case”

Although I am somewhat cynical, let this NOT put clients off from making an application ASAP to your personal bankers.

As stated previously, clients will need, your last prepared accounts, management accounts together with cash flows and projected profit and loss accounts, setting out 2 scenarios

1/ If business and life itself had not been destabilised by Covid 19

2/ The effect on financials as a direct result of Covid 19

Figures as noted in 2 above and the benefit and recovery provided by the loan.

Using figures in 2 above, insert a few lines to demonstrate the benefit of such financial assistance.

Would all clients note that the submission MUST be as clear as possible because bankers will have numerous viability reports to consider and if they cannot follow the figures, inevitably they will refuse funding based on non-commerciality.  

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