Carson McDowell offers businesses practical financial business advice amid COVID-19 crisis

19 March 2020


It will come as no surprise to you that we have seen a surge in calls from clients in dire need of advice about their response to the current Coronavirus crisis.

Unfortunately for some, the decision has already been taken to close their doors and announce temporary lay-offs to staff. Measures announced by Chancellor Rishi Sunak and then clarified by the NI Executive were welcome but we still need to see more detail to understand how it will help properly address business needs in Northern Ireland.

The Government’s package of measures, and those announced by Deputy First Minister Michelle O’Neill are designed to support businesses and workers through this period of uncertainty and to mitigate against the economic emergency caused by the virus. It remains to be seen however whether or not the package will be enough.

So, what practical actions can businesses be taking themselves? Our advice is as follows.

  • Invest more time in your accounting and credit control functions. Do not stop issuing invoices and where appropriate chasing debtors for payment. It makes sense to prioritise cash flow maintenance in the coming months.
  • Cut back on unnecessary spend, protect cash but importantly do not cut back on important spend. Focus on where best cash can be used. It is important to forecast and run scenario testing on cash flow. All of this is in an effort to stabilise your liquidity position.
  • Bring cash under central control, tighten cash collection and monitor customer credit limits tightly. Make use of all permitted delays in tax payments to HMRC.
  • Keep channels of communication with your creditors open. This cuts both ways. There is a better chance of getting through this crisis if suppliers and their customers, landlords and their tenants and banks and their borrowers work together and are open about what is required and indeed what is possible in these difficult times.
  • If you are a company Director, you must remember your duties to your creditors as well as to your shareholders. Careful consideration should be taken in constrained times to taking on further financial liabilities, if there is any doubt as regards future ability to pay due to the businesses solvency.
  • Considering the need to apply to one of the two streams of low cost lending to be announced formally as running from start of next week. There is to be a new lending facility, low cost and easily accessible for larger business and an extension of the Business Interruption Loan Scheme for SMEs to £5m with no interest for the first 6 months.
  • Review where you stand as regards the business rates holiday. It would appear that as at the time of writing this needs a little further translation for NI as the Chancellor announced 12 months whilst Conor Murphy was working to a more limited 3 month timeline.
  • Check whether Business Interruption Insurance covers a pandemic situation. The Chancellor announced that the Government’s guidance to date does activate such policies.
  • If you are a small business, with a rateable value of up to £15000, consider whether one of the Government’s 700,000 announced £10,000 grants is available to you. Medium sized firms, those with a rateable value between £15,000-£51,000 in the retail, tourism and hospitality sectors can apply for a £25,000 grant. It is expected that 4,000 businesses can avail of this. These schemes will be administered by the Department for the Economy and Invest NI, working with the Department of Finance and the LPS.
  • Advise your employees to investigate the possibility of a 3 month mortgage holiday with their lender to potentially ease their short term financial concerns.
  • Don’t be afraid to contact the HMRC Time to Pay Helpline 0800 0159 559 if required. Be proactive in this regard if at all possible. There is the potential to agree instalment arrangements and to negotiate the suspension of debt collection proceedings.
  • We appreciate that many employers are having to consider temporary lay-offs or even redundancy. This is possibly the largest body of advice that our firm has been covering this week. You should note that at the time of writing the Government’s Redundancy Payments Services Office was closed for a deep clean. It is thus better to try to access their website for information in the short term.

Whether you are a business in need of advice in financially constrained circumstances, a company Director with a difficult financial decision to make, or simply wondering what your rights are with regards to seeking forbearance on a business or personal loan, please do not hesitate to contact Darren or his team here at Carson McDowell for advice.

*This information is for guidance purposes only and does not constitute, nor should be regarded, as a substitute for taking legal advice that is tailored to your circumstances.