We asked Gavin Spencer at Beach Accountants to help us answer this one.
Here's his response...
Furlough stops in June
I think we have to be mindful that the assistance the Government is providing lasts until the end of June 2020, the furlough for employees has been released today, 20 April, and will be paid in 6 days giving the second form of relief, the first was hopefully for the businesses with premises claiming their Grant from the Government at either £10000 or £25000.
The money for self employed of course is not available until June, so the biggest struggle is getting to that point first to ensure they can survive.
Then you have the CBIL loans that have been relaxed on the rules also.
Cash flows and cloud accounting software have never been so important as they are today, and if any business is not set up this way, then now is the time, just in case there is a second wave of the virus, bearing in mind the HMRC are making this compulsory by either 5 April 2021 or 2022 anyways, then small businesses should be maximising that potential and benefits now, and using their time wisely.
What happens next?
When the funding stops, the Government is expecting a recession and small businesses are normally the first ones to suffer.
However, I read an article the other day about a parable, it summed up that, if you believe there will be a recession, you believe there is a recession and you will run your business as if you are in recession. So the First thing to do is, believe in positivity and believe in opportunities and plan your business. People are being reminded to buy British so make the most of this wave of interest in your business before it disappears. To prepare for the future, START NOW, don't view lockdown as a holiday or a burden, see it as TIME, time that you don't normally have to think and plan your business.
You have been given an EXTRA 3 WEEKS to decide on the changes to your businesses, be that your website, how you run your accounting records, what clientele to target, because if you don't use this time to plan the future of your business, someone else will.
Be hungry for success
You have to be hungry for success, determined that it's not just beating the present climate, it is about succeeding in it. After the present funding, the Government will NOT have any further funds I believe, so it's up to YOU to make the future bright and positive, know where you are with your accounts figures and cash flow and make sure you have a well thought out Business plan.
There has never been a more important time to communicate with your Accountant.