COVID-19 update from Moorcrofts
Businesses across the UK and the globe are facing an unprecedent situation because of Covid-19 and we wanted to provide an update for all our clients and colleagues on what this means for you, and how we can continue to assist your business during these uncertain times.
Our investment in up-to-date IT infrastructure enables all our staff to work safely, and we are fully operational whilst remaining committed to ensuring an ongoing service to clients across all areas of our business. Our core message to you, is that we are here for you ready to offer any advice and assistance you need in this troubling time.
We have highlighted below several issues for business owners and managers to consider over the coming days, weeks and months:
Finances and Cash
The Government has announced a number of funding schemes. For small businesses, this means loans up to £5million in value, with the government covering the first 6 months of interest. Further details will be released by the Government on 23rd March 2020. More information can be found here.
Once we have the detail of funding schemes, you should check the terms of any credit or lending facility to ensure you are clear when repayments are to be made and that you do not breach any financial covenants/warranties. We can help to review these.
Existing Creditors and finance providers
you will be approached by creditors about repayment – all businesses are trying to preserve their cash position. Flexibility is going to be key for business to continue, and communication is vital. Making contact with your creditors, banks, lenders or HP providers as early as possible will help with transparency during this time – lenders may be willing to support you in the short/long term.
speak to HMRC about deferring VAT, Corporation Tax, PAYE and NIC – it may be a long wait to get through, but they seem to be offering maximum flexibility to firms that are struggling.
look at the terms of your key contracts. Knowledge is power, and knowing what each party’s obligations and rights under contractual arrangements during this time will be invaluable. We can help to assess whether cancellation/suspension rights or force majeure provisions are engaged and also how to best comply with any formal notification requirements.
Changes in law
the Government may take further law changes to assist particular sectors and small businesses. Staying alive to these will ensure you can continue to plan, and we plan on helping by sending updates as and when they occur.
Tenants of commercial premises will have to continue to pay the rent and other sums due under their leases. The ability to meet these payments will be affected by the current situation and it is in both Landlords’ and the Tenants’ interests that businesses continue to operate. We suggest you make contact with your Landlord to see if they will agree to monthly rather than quarterly payments (most leases will require the next quarter’s rent to be paid on 25 March) or even a temporary payment break.
Check your lease terms to see if you have a option to break the Term early and seek legal advice as to how to do this if required.
Keep Open clauses
some leases have “keep open” clauses. If the Government enforces a total lock down the requirement to comply with law should override this obligation, however, make sure you review these carefully. Owners and tenants should also consider the issue of security should the Government require all employees to work from home, and leases may contain specific requirements as to security if premises are closed for an extended period.
Sick pay and salaries
Consider what Government assistance is available for employment costs e.g. recovery of statutory sick, announcements on more government measures to help with salaries are expected today.
PAYE and NIC
HMRC is assisting some businesses by allowing time to pay or postponing payment of PAYE and NI.
Employment contracts: review to see to see what flexibility there is for lay-offs, reduced working hours, taking paid leave and salary deductions.
Ensure your policies are clear about where and when your employees can work, and ensure key management are clear on these. Keep in close contact with employees who are working from home, they will feel isolated and uncertain in these difficult times.
We continue to work with our clients to assist business continuity during this crisis. Each of our legal experts is on hand and ready to assist your business in dealing with the impact of Covid-19. If you would like to discuss any of the above or any other issues you are facing, please feel free give us a call.