A cliff edge is approaching fast – but there’s still time to hit the brakes…
SPOILER – it’s the end when, pursued by the police, the two heroines decide to drive off the cliff together rather than be caught by the police.
So when any cliff-edge scenario appears, it’s now shorthand to call it a “Thelma and Louise” situation.
We mention this because amidst all the confusion and worry about pandemic restrictions being tightened even further along with the accompanying economic consequences, there’s a cliff edge approaching businesses in 86 days time.
Actually more than one:-
March 31st Deadlines
- Business Rates relief for retail, leisure and hospitality businesses expires
- Temporary VAT cut for hospitality travel accommodation expires
- Repayments due to begin for BBLs, CBILs and CLBILs
- Deferred VAT payments come due
- Moratorium on landlords evicting commercial tenants ends
- Moratorium on creditors issuing statutory demands or winding-up petitions ends
April 30th Deadline
- Furlough scheme ends
- Personal responsibility for directors for Wrongful Trading reinstated
With the third national lockdown announced this week, the government has also unveiled additional financial support in the form of one-off grants for retail, hospitality and leisure businesses.
There is also additional funding for local authorities and devolved administrations to support businesses affected by the restrictions that are not eligible for these grants.
Regardless of these temporary support measures, the ultimate end date is quickly approaching for all of the Covid-19 financial support measures.
As well as creditors being able to issue statutory demands for payment and winding-up petitions to enforce them again, landlords will also be able to begin eviction proceedings against their commercial tenants for non-payment of rent.
Not only that but HMRC will be demanding repayment of any outstanding VAT amounts for 2020 that were deferred until this date as well as the VAT rate for businesses.
A month later sees the final end of the Coronavirus Job Retention Scheme/Furlough as well as the return of personal responsibility for wrongful trading.
The Bounce Back Loan (BBL) scheme and Coronavirus Business Interruption Loan Scheme (CBILS) have, to date, supplied over 1.5 million companies with over £63 billion of money to stay afloat which was a measure of their success but the amounts borrowed have to be repaid, regardless of whether the borrower’s business has recovered enough to afford them.
A lot of businesses are on life support at the moment.
But experts fear this is merely forstalling the inevitable.
Colin Haig, president of R3, the trade body for the insolvency and restructuring industry said:
“We simply don’t know what the impact of additional tiers, lockdowns and the developing virus situation will be on insolvency numbers.
“However, we’re quite sure that it’s still a question of when, not if, in 2021 there will be the uptick in insolvencies we are expecting.”
Thelma and Louise is fiction. Entertaining but still fiction. Which is why suggesting they pump the brakes, turn around and live to fight another day might be sensible advice but boring cinema.
Running your business, paying your bills and staff and trying to trade in the most onerous circumstances for nearly a century is reality. So doing the sensible thing and getting expert help before problems become emergencies is the right decision.
We can begin to work with you on the issues you’re facing and give our expert view on what can be done to solve them. Right now is one of the best times in years to get advice and help thanks to some of the tools available to insolvency professionals.
Once we all get through these latest restrictions on our lives and businesses, then you could be in the perfect place to enjoy the benefits from people going out and spending again.
Including popcorn back at the movies!