by Dani Trudeau
The real test of your character comes out when times are hard. This can be the worst and the best in humanity. I think we are all well aware of the negative actions of some so we are focusing on the positive and practical. We are reaching out to our incredible network, exploring solutions, pulling together and checking in on one another. Please get in touch if you need help with anything (micro to macro) or if you have some good ideas you need help implementing or sharing.
As we are mostly made up of freelancers, we need to look that ball of anxiety in the face and then find solutions, one challenge at a time. Not only do we need to navigate potential financial difficulties, we have to think about how to be at home with our children and other working from home housemates. Furthermore, we need to protect our mental wellbeing and we think this is where community is really put to the test and is at its best.
We have some good practical considerations below from our pals at Senscot Legal and Macdonald Henderson.
1) HMRC- If you have Corporation Tax, Personal Tax, VAT and PAYE liabilities, then you could approach HMRC to delay payments for them – they may be willing to negotiate a payment plan.
2) Suppliers-You may wish to approach your suppliers to extend credit terms.
3) Customers-Can you approach customers if you currently have credit terms, can you ask them to pay quicker?
4) Loans/ Bank overdrafts- If you currently have outstanding loans, would you be able to negotiate a payment holiday? Do you have an overdraft facility with your bank, and can you increase it in the short term? (From experience, the telephone waiting times are long so get a book or podcast going in the background).
Please remember, for the 4 points detailed above, you must ensure that you have an agreement with the relevant parties that you are planning to defer payment. In the case of customers, propose more favourable terms. Be aware that if you do not negotiate an agreement, it could result in a breach of contract.
Your staff-The closest business relationship you have is with your staff. But hard decisions will have to be made if you are looking at a downturn in revenue. You may have to consider a reduction in staff pay to see you through the coming weeks.
The impact will depend on what you consider will be the revenue reduction. You may even have to ask staff to reduce their hours in line with the revenue reduction.
If the outlook becomes bleaker, redundancies may have to be considered. But remember, you will have to factor in redundancy payments.
Where can you find further help? -Both the UK and Scottish Governments have published a set of measures to help a business through the inevitable downturn.
The Scottish Government set up a dedicated advice helpline – 0300 303 0660 and introduced a set of supportive measures:
The UK Government has also announced measures to alleviate the effects of COVID-19
Here are a couple of Government web sites that are well worth a look.
Government Support for Employees and Benefit Claimants
Coronavirus Guidance for employees and employers
Government guidance to employers and businesses
Please remember keeping an open dialogue with suppliers, customers, staff and HMRC is key to building positive working relationships and managing your business through difficult times.