COVID-19 Webinar for the Ambassadors

Posted by on 8 Apr 2020

Our webinar was full of great advice for businesses in Rochdale - click here to view it

As Rochdale Borough Council (RBC) chief executive Steve Rumbelow told an audience of local business people: “This is the sort of crisis none of us have ever experienced.”

The uniqueness of the situation was underlined by the strangeness of the scene. Steve sat underneath Dippy the dinosaur at an all-but deserted Number One Riverside.

Next to him on screen, but miles apart in reality, were experts in employment law, tax, insurance and business funding from prominent local businesses, alongside host Chris Maguire.

Like so many other interactions at the moment, this special panel discussion was conducted via video conferencing. The audience of Rochdale Ambassadors was scattered around the region, tuning in from living rooms, kitchen tables and home offices.

Useful advice for business

They were there to hear from the experts. Questions for the panel flooded in from the 121-strong audience. With orders slashed and supply chains failing, businesses wanted informed answers on a range of topics.

The discussion ranged from business rates and grants to the small print of business interruption insurance and the complexities of furloughing staff.

There was lots of useful advice. Steve confirmed that RBC had £46 million in grants to help struggling businesses in the borough, of which £17.5 million was already “out of the door”. He urged businesses to visit the Council’s website for the relevant information and paperwork.

And if there was an overarching message to Rochdale businesses from the expert panel, it was to act quickly. Start having conversations now, whether with HMRC, the council, your insurance broker or your landlord.

SORN could cut insurance costs

Anthony Rollins, CEO at Atlantic & Pacific Insurance Group, said that, while it was worth asking the question, it was unlikely that businesses would be able to claim business interruption insurance, because COVID-19 had not been on the government’s prescribed list.

But he had better news on other fronts. For example, registering your vehicle fleet as off road using SORN (Statutory Off Road Notification) could lead to a large reduction in insurance costs. But your vehicles had to be kept off the public highway.

Act quickly on tax

Lisa Wilson, tax partner at Cowgills chartered accountants, reminded the audience that, while businesses had been given a VAT holiday, and freelancers could defer ‘on account’ payments due in July, the tax would still have to be paid eventually.

PAYE and corporation tax were unaffected, she continued, and some companies would have difficulty paying them. Lisa’s advice was to speak to HMRC quickly. “The earlier you have the conversation, the sooner a time-to-pay arrangement can be put in place,” she said.

Lisa added that it might also be possible to claw back some corporation tax, and businesses with an R&D function could claim credits sooner by accelerating the submission to HMRC. Capital allowances might be treated in a similar way. Talking to your accountant now was a good place to start, she added.

Three steps to Business Interruption loans

The Business Interruption Loan scheme was another popular topic. Benjamin Day, head of funding at Cowgills, pointed out that, while the Government was guaranteeing the scheme, the banks were still lending the money.

He said that banks wanted to see three things when businesses applied for a loan; how was your business trading before the outbreak, the effect of coronavirus on your business, and what you’ve done to cut costs.

The last point was key, said Benjamin. “Make your business as lean as possible for the best chance of success.”

Furlough in practice

Inevitably, many of the questions were around furloughing staff, and the details of the Government’s promise to cover 80% of the wages of affected employees.

Paul Dixon, partner at Rochdale solicitors Molesworths Bright Clegg, pointed out that, while furloughed staff could not carry out any productive work for their employee, they could continue with education and training. This applied equally to apprentices.

Paul said that, when applying to furlough staff, businesses needed to be able to show that there was no work for an employee to do. He advised applying through the HMRC portal as soon as possible.

Paul also urged employers to talk to their staff. Employers are still required to pay furloughed staff all of their wages or salaries, but many businesses would struggle to cover the 20% not covered by the government.

“Talk to your employees. Many will understand the situation and prefer to live on 80% of wages till the end of the crisis than lose their jobs altogether,” he said.

Glimmers of hope

There was much more, including advice on backdating furlough payments, swapping employees in and out of furlough schemes, and rolling holiday entitlements into next year. You can view the complete webinar here.

There were glimmers of hope at a difficult time, too. Steve confirmed that, while the official opening of the Riverside retail and leisure complex had been postponed, the M&S food hall was now open for business, and Boots would be opening as soon as possible.

With the dinosaur standing proud behind him, Steve added that the council was already in negotiation with the Natural History Museum to extend Dippy’s stay in Rochdale. When the world reopens for business, Rochdale will be ready.