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Written by:

John A Waller

Director

May 15 2021

My Business Has No Income Since Lockdown?

My business has no income since lockdown. Therefore, what options exist? Additionally, my company has been affected by the Coronavirus Covid-19 pandemic?

Please read ‘UK companies affected by Coronavirus (COVID-19)?‘. 

The team at HBG Advisory provides prompt Rescue Or Closure Options. For further information, please read the ‘simple business debt guide‘.

Free, confidential company director advice & support, 

So?

Before considering any further moves, consider you and your health, particularly your mental health.

Lockdown has affected many people in many ways. However, many business owners, due to stress, forget to consider themselves.

If you require a confidential chat on such matters, please contact Sally on 0800 612 5448. Who will listen in total confidence?

What options exist if my business has lost trade during the COVID-19 pandemic?

The Coronavirus COVID-19 pandemic series of lockdowns however has made it difficult for many businesses to continue trading throughout 2020 and through to the first quarter of 2021. The result of this impact being many companies facing an uncertain future as financial difficulties develop.

What can you do if your business has not produced income since the lockdown? 

Seek professional specialist insolvency advice to confirm the solvency of your existing limited company. Company Directors need to be aware of potential claims of wrongful trading if their business continues trading while insolvent. 

HBG Advisory practice as insolvency specialists, providing honest, impartial advice for you and your company, which has had a pandemic impact on business revenue since the inception of lockdown and the Coronavirus virus.

Primary sources of emergency funding when your business has run dry of cash flow?

UK Government-backed coronavirus loans:-

  • The Coronavirus Business Interruption Loan (CBILS) and 
  • The Bounce Back Loan.

They provided your business with government-backed funding to therefore support cash flow through the pandemic. However, the schemes ceased on March 31st 2021

The Recovery Loans Scheme(RLS) has replaced the previous loans supporting companies to gain further financial support in a loan, though not on the same former terms. Businesses may borrow from £25,000 – £10 m, with the UK government providing 80% security to the lender.

My business has no income since lockdown. How do I arrange alternative finance.

Invoice financiers and asset-based lenders are only two potential sources of emergency finance that could help your business survive. Alternative funding methods can be more flexible and quicker to access than other loans. However, it is essential that you select financing that fits your business.

Other UK government support for struggling businesses?

Many employees have remained on furlough despite their employers having a business not trading during the pandemic. It is worthy of note that the furlough scheme remains in place until the end of September 2021

Rishi Sunak allowed UK businesses and individuals negatively affected by the Coronavirus to defer some tax payments, namely VAT and self-assessment. Therefore, the deadline for VAT payments due from March 20th 2020 to June 30th 2020 extended to the end of March 2022, and you may pay by instalments up to this date if you arrange this before June 21st 2021.

My Business Has No Income Since Lockdown? – Are your creditors threatening legal action?

Suppose your creditors are pressing you for payment, and there’s a chance they might try to wind the business up. Therefore, consider aversive action, mainly if business recovery is likely to be prolonged.

Please contact the team at HBG Advisory to obtain professional assistance to protect you from wrongful trading, while also ensuring the company’s creditors are protected.

Options to consider include:-

Other measures if you have no revenues since the closure

Having HMRC as a creditor means you can negotiate a Time to Pay (TTP) tax arrears agreement. Access to HMRC’s ‘Time to Pay’ scheme is primarily an instalment plan. However, it has broadened through the pandemic and offers additional time to pay arrears of tax penalty-free.

For further reading on dealing with HMRC, please read ‘HMRC debt management‘.

Additional Restrictions Grant for UK businesses not covered by other grants offered?

UK Local authorities provide discretionary funding to businesses that aren’t eligible for other grants. Funding available to UK businesses:

  • Supplying:
    • Retail;
    • Leisure sectors;
    • Hospitality.
  • Events sector.
  • Requiring closure, but do not pay business rates.

Companies who are in:-

  • Administration, 
  • Insolvent or 
  • Struck off the Companies House;

Do not qualify.

How do I get this support if my business has no income since lockdown?

Please contact your local authority for further guidance on those grants currently available.

Protection if unable to pay your commercial rent?

The UK government announced that commercial tenants unable to pay rent directly related to the Covid-19 pandemic remain shielded from the threat of eviction.

Additionally, the UK government extended the prohibition on business evictions to June 2021. However, those businesses that remain able to pay rent should do so.

Obtaining support?

Commercial tenants and landlords are encouraged to agree on informal voluntary arrangements to meet payments.

The UK government launched a new code of practice in June 2020. The new code assists struggling UK businesses and landlords to compromise and work together on rent payment issues.

Further, the UK Government details this as protection from eviction if unable to pay commercial rent during the pandemic through the Coronavirus COVID-19 lockdown.

Note though, you must not consider the pandemic as a rent holiday, as those businesses subject to commercial rent remain still liable.

New Restart Grants

Since April 2021, a new ‘Restart Grant’ has been made available for businesses in England to assist with reopening firms on the high street after lockdown.

The Restart Grant provides businesses with a one-off cash grant of up to £18,000. Those who may apply include:

  • Restaurants;
  • Clubs;
  • Salons;
  • Hotels;
  • Gyms;
  • Pubs.

Those businesses classified as ‘non-essential’ may qualify for grants up to £6,000.

Finally

Cutting out your outgoings can release vital cash that helps your business move forward in these difficult conditions, as well as informally negotiating with creditors to reduce repayment.

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