Plan to avoid a Covid-19 finance repayments crisis
An accountancy firm is concerned that businesses may struggle to make loan repayments and pay deferred tax and VAT unless they have a plan to meet their obligations in the wake of the coronavirus crisis.
Stafford-based Howards Chartered Certified Accountants says that managing cashflow is key to running a successful business operation, especially during a recession.
Clive Boult, accounts team manager at Howards, said: "The next few months look set to be very challenging and businesses that don't prepare well could easily run into financial difficulties.
"If you're struggling to meet payment deadlines take action promptly. Keep communicating and work with lenders, HM Revenue & Customs and your accountant or financial adviser to draw up a realistic payment plan."
He explained that businesses receiving support through a Bounce Back Loan, the Coronavirus Business Interruption Loan Scheme or regional council finance package should document when repayments are due and establish a regular, manageable repayments pattern.
It was also important to note dates to file VAT returns and when to pay tax, since late payment is likely to trigger a penalty charge.
Several tax deadlines fall on March 31 including deferred VAT payments due between March 20 and June 30, the second tax payment on account for 2019-2020 and the first payment on account for 2020-2021. Some people could face an adjustment to the second payment along with a balancing payment for 2019-2020.
Building up a cash reserve makes sense as it will provide the funds to pay loans and tax bills whilst also bringing business owners extra peace mind.
Howards was founded in 2005 following the merger of Barrington's and Wood & Co, two well-established and successful Stafford firms of accountants.
The senior team includess managing director Matt Bailey, director and commercial and taxation specialist Ryan Hudson, office manager and group company secretary Joanne Austin, senior managers Nick Archer and Darren Roberts and accounts team managers Clive Boult, Rachael Wilson, Joe Dimambro and Chris Glue.
