Tips from an award winning accountant - Managing the current difficulties & leveraging your business





Jonathan Amponsah CTA FCCA is an award-winning chartered accountant and tax adviser

who helps UK SMEs.


We are seeing more businesses reopening as lockdown slowly lifts although some will be

running at lower capacity than before the pandemic. If your business was able to do well

during lockdown, that is fantastic. However, if this hasn’t been your experience you may be

concerned for the survival of your business.


Let’s look at way to help your business survive and how to leverage it in the current

circumstance. I have included links to some free templates, tools, white papers and

resources to help you save heaps of time, reduce your stress and get through the crisis.


Creating an Action Planner

You’ll need an action planner such as a spreadsheet listing all the government grants, loans

and deferred payment options available to you. Then take a look at where you can save

money (tax, agreeing longer payments terms with suppliers, rent, staff etc.) and where you

can make more money (new business ideas, speeding up customer payments etc.). Also

review your tangible assets. Can these be leveraged?

To save time, you can download the ‘Peace of mind financial action planner’ here:

https://www.thetaxguys.co.uk/client-area/  This contains a Financial Survival Checklist and the

Government Stimulus Planner. Grab it and work through the 16 areas with your accountant.


Applying for government support

Ask your accountant about the help available and check to see where you qualify.

For example, if you’re sole trader/freelancer there is a grant available. It’s important to

understand your own financials and the scheme rules before applying. If you’re eligible,

you’ll have received a letter from the government. This scheme opened on 13 May 2020 and

you need to register for an online account and prepare to file the claim. It’s worth getting

help from your accountant so your paperwork is right – not just on the claim, but on your

tax returns also.

If you run a limited company (including one-man band companies) there is help available.

This keeps changing, so watch out for the dates and deadlines. Speaking to your accountant

can help ensure you include everything necessary for your business in your plan.

You will find both action planners and furlough paperwork templates here:

https://www.thetaxguys.co.uk/client-area/ 


Cutting cost without undermining your business

Even where you have no income for, say three months, unless you plan to close your

business, there are some expenses you may want to leave alone or even increase when your

competitors are cutting back (for example, smart marketing).


If cost-cutting is necessary, create a spreadsheet with all your expenses and then look at

each in turn and see where you can cut back. A few small cuts can make a big overall

difference and will often be less damaging to the business than one or two large cuts.

Ensure you understand your cashflow and what ‘target’ you need to reach to survive.

You can read more about cost cutting here;

https://w ww.thetaxguys.co.uk/2020/04/24/how-to-cut-costs-without-crippling-your-

business/


Cashflow

Once you’ve reduced your costs and you know where your income will come from in the

next 6-12 weeks (including income from the government), you’ll have a 12-week cashflow

forecast. This document is the basis of your business moving ahead. Stick to it. If you’ve

decided to cut some costs - cut them. If you’re going to ramp up the marketing or add a new

service – do so.


Adapting your Business Model

Successful businesses are always adapting, leveraging and taking advantage of new

commercial opportunities. This has never been truer than in the current situation. You may

have heard of businesses taking their goods and services to their customers at homes or

adapting and taking their products and services online. Restaurants that didn’t offer take-

away service or delivery, now do. Spas are selling their exclusive creams and serums direct

to their customers. How can you adapt your business to “make lemonade out of lemons”?


Analysing demand now to gain new customers

How can your business solve some of the current pressing problems posed by the

pandemic? If you’re a services business, can you productise parts of what you do and sell

these at reduced prices for now? For example, can you run your craft workshops online via

Zoom etc.? Mail out the craft items and then everyone logs on to make them together.


Anticipating problems/trends

Even after lockdown is fully lifted, it’s unlikely business will ever be quite the same again.

The way we do business has changed and some of those changes are here to stay – at least

for the short to medium term. For example, social distancing and increased hygiene

awareness. If you run construction or space consulting business, how are you preparing now

to help businesses solve these challenges in the workplace? And if you’re a marketer, how

are you preparing your clients with the right messaging to market their business

successfully?

A great way to be inspired with new ideas about how to adapt your business and spot the

upcoming trends is to look at what other successful businesses have done. Read business

books and good news business stories to be inspired or you can download a white paper

here: https://www.thetaxguys.co.uk/client-area/ which covers 16 ways to leverage your

business based on 16 UK companies who are taking advantage of new commercial

opportunities.


Potential Tax Savings

Did you know there are at least 10 areas to save tax during a pandemic? Ask your

accountant about these to see if you qualify for any. They include:

1. Negligible Value Claim (Get a tax refund if an asset you purchased has gone down in value)

2. Normal Loss Relief (Generate a tax refund from last year)

3. Terminal Loss Relief (Generate a tax refund from the last 3 years)

4. Company closure and paying 10% tax (Don’t overpay your tax bill in this difficult time)

5. Research and Development Tax Credit (Are you missing out on generous tax cuts? Would

your new business re-invention lend itself to tax a refund?)

6. Early tax filing (File your returns early to secure eligible tax refunds)

7. VAT bad debt relief (Reclaim any VAT you’ve paid on bad debt)

8. Realising capital losses (If an asset you hold has gone down in value, consider selling it)

9. Passing assets to the next generation (If an asset you hold has gone down in value, consider

passing it on)

10. Transferring assets at low values (If an asset you hold has gone down in value, consider

transferring it to, say, your company)

In conclusion

Remember that whether you are a business owner, manager or team leader it is important

to look after your own wellbeing and mental health during difficult and stressful times.

There are plenty of useful article and resources from medical experts online. For inspiration

on getting through difficulties I recommend Norman Cousins (‘Anatomy of an illness’) and

Viktor Frankl (‘Man’s search for meaning’).


ABOUT THE AUTHOR

Jonathan Amponsah CTA FCCA is an award-winning chartered accountant and tax adviser

who helps improve businesses. He is the CEO of The Tax Guys.

www.thetaxguys.co.uk

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