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Accounting Specifics July 2021

Accounting

Covid restrictions are being lifted, the weather seems to be turning summery, most of the UK is vaccinated, people are going on holiday, the Olympics is yet to come, football has come home and the economy is on the uplift. So, there is plenty to be cheery about.

On the other hand, we are still dealing with the aftermath of Brexit, footfall may still not be up to previous levels, cash reserves may have been depleted and debt levels may have risen, directors may have delayed or reduced their own income, eCommerce may not have been a one hundred per cent substitute for normal business, supply chains are still struggling with restrictions and plenty has to be done to accelerate business up to prior levels.

These are some things worth looking at in the next few weeks:

Business Recovery Loan: Your business may be eligible for a business recovery loan if you can show that a) it would have been viable but for Covid; b) it has been adversely affected by the pandemic; c) it is not in collective insolvency proceedings. The amount which can be obtained will vary, but loans with a repayment term of 6 years are available, as is invoice financing with a repayment term of 3 years. To apply, you should approach one of the accredited lenders and fill in their forms. We can help with the required financials and financial forecast.

Self Assessment Payments on Account: This is just a reminder that Self Assessment tax obligations are split into semi-annual payments based on your prior year tax bill (PAYE and Class 4 NI). Unlike for January which includes an adjustment (balancing payment or refund), July’s payment is a straightforward amount equal to half of the tax due on your 20/21 income. You can adjust your payment on account, but do so soon: payment is due by 31 July.

Rates Assessments: When Covid struck, the government introduced a 15 month business rates holiday for retail businesses, which ended on 30 June 2021. For the following 9 months until April 2022, retail businesses may be awarded a 66% discount on their business rates at the discretion of local authorities using their relief powers under section 47 of the Local Government Finance Act 1988. Ordinarily, rate payments are required in either 10- or 12-month instalments, but as rates for your business may have been 100% discounted for the first three months of the financial year, your local authority will apply a new payment plan for the remaining 9 months of the year.

Working capital requirements: You may want to consider whether your available funds will meet the short term cash requirements of your business and what you can do to cover any gap. If you have concerns with this, please let us know and we can follow up to see if we can think of measures you can take to bridge the working capital gap.