The COVID-19 pandemic has left hundreds of tourism businesses across all six of Cumbria’s districts scrambling for information about the support available on how to protect cash flow.
Since government measures have resulted in many businesses being closed until further notice, Cumbria Tourism has taken more than 1,000 enquiries from those seeking advice on how to mitigate the effects of the pandemic.
In efforts to help, Cumbria Tourism is working with strategic partners, accountants and consultancy firm Lamont Pridmore to highlight the recommended options for business to consider. At the top of the list, a strategy meeting with accountants and/or financial advisers should be arranged, to discuss a delay or deferment of PAYE, NIC, VAT, Corporation Tax and Income Tax payments.
Lamont Pridmore Chief Executive Graham Lamont, says, “HMRC may also agree instalment arrangements, suspension of debt collection proceedings or the cancellation of penalties and interest. Businesses should also arrange bank loan and mortgage repayment holidays of up to three months, while three month HP and lease holidays with asset finance companies should be considered. Small hotels, B&Bs, guest houses and shops are entitled to a business rates holiday, and eligible businesses should be contacted by their local authority to discuss this”.
Eligible businesses in the hospitality, leisure and retail sectors with rateable values between £15,001 and £50,999 can also apply for a one-off cash grant of £25,000 via their local authority, with a £10,000 grant also available for those with rateable values of up to £15,000.”
Graham continues, “Businesses need to reduce all other non-essential costs and financial outgoings as quickly as possible, calculate how much money is needed to meet the level of costs and outgoings for the next six months, then amass the resources to meet all outgoings. Eligible businesses can also apply to the Government’s Coronavirus Business Interruption Loan Scheme for between £1,000 to £5 million, then gain funds from other sources like credit facilities, bank overdraft, sale of surplus assets or loans from friends or relatives to meet their needs for the next six months.”
If cutting staffing levels is needed, businesses should take advantage of the Coronavirus Job Retention Scheme for a grant to reimburse 80% of furloughed workers PAYE costs, capped at £2,500 per month. Alternative options include negotiating hours, salary reductions or unpaid leave, where it is legal to do so. Staff can also be asked to take any outstanding holidays, defer start dates and to consider short-time working, redundancy or lay-off.
“Staff can also be asked to reduce their own personal expenditure including taking a three-month mortgage, rent, HP or leasing scheme holiday”, Graham says. “Company directors can also access support through the CJRS if they pay themselves through PAYE and designate themselves as furloughed. The down-side to this though, is that they won’t be able to carry out their own job, which may well be unfeasible, and it won’t cover dividends or other performance related income.”
The self-employed can access the Coronavirus Self-Employed Income Support Scheme which will pay up to 80 per cent of their average monthly trading profits, if less than £50k per annum, capped at £2,500, to cover at least the three months from March.
Cumbria Tourism feeds updates to the government on a daily basis to strengthen the case for further funding to help affected businesses. More information from Lamont Pridmore is here and you can find Cumbria Tourism’s Coronavirus resource hub here.