COVID-19: Measures to help ease cashflow for limited company contractors

by | Apr 9, 2020 | Blog, Covid-19

What help can you get with cashflow?

For all business owners, cash really is king. Even if you’re a limited company contractor with barely any overheads, you are unfortunately not immune to cashflow strains during these troubled times. 

Because of this, the Government has announced a number of measures to help ease cashflow worries for businesses both large and small. Here we outline the schemes which are most relevant to limited company (PSC) contractors.

If you’re VAT registered…
VAT payments due between 20th March and 30th June 2020 can be deferred to March 31st 2021. If you wish to defer payment, you do not need to do anything apart from cancel your VAT direct debit, if you have one set up.

Although payment can be deferred, VAT returns must be made in the usual way. Please do ensure you keep your financial records up-to-date as we will process your VAT return in time for the usual deadines. Find out more.

If you need to delay self-assessment payment on account…
Payments on account which would be due by 31st July 2020 can be deferred to January 31st 2021. If you do defer payment, do consider how you will ensure the cash is available for the new deadline. If you think you will have difficulty saving the money, you can access a budget payment plan – let us know and we will help you.

If you have taxes due…
As the name suggests, the Time to Pay scheme enables you to negotiate additional time with HMRC to meet outstanding tax liabilities. Arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. If you think you will need to use the Time to Pay scheme, please get in touch and we will help you to calculate what you owe.  If you have a large Corporation Tax payment due in the near future, for example, this scheme could be useful.

If you’re liable for business rates…
If you occupy business premises but pay little or no business rates, you may be eligible for a one-off grant of up to £10,000 to help meet ongoing business-related costs. The grant applies to businesses in receipt of small business rate relief as of 11th March.

If you’re worried about paying your bills…
If you are concerned about cashflow, it’s important to work out your incoming and outgoing money as soon as you can. If this exercise results in the realisation that you are going to have difficulty paying any of the bills associated with running your business ie. utilities, broadband, insurance, then please speak to your provider as soon as possible. Some providers do have plans in place to ease the pressure on customers through Coronavirus.

If need a loan…
Whilst this is less relevant to limited company/PSC contractors, it’s worth knowing that there is a Coronavirus Business Interruption Loan Scheme. This is intended to support SMEs with access to loans, overdrafts, invoice finance and asset finance. The Government’s Business Interruption Payment will cover the first 12 months of interest payments and any lender-levied fees, giving small businesses the benefit of no upfront costs and lower initial repayments.

Here to help
We are here to help you manage through the Coronavirus pandemic. If you have any queries relating to your limited company/PSC finances or would like to find out more about any of the above cashflow schemes, please do not hesitate to get in touch.

JSA Group

Specialist outsourced accountancy and payroll services for recruitment agencies, freelancers, contractors and umbrella workers. We’ve built up expert knowledge and experience within the industry by supporting tens of thousands of customers for 30 years.

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