By Mike Kienlen, Chairman & Partner, Armstrong Watson Accountants, Business and Financial Advisers

WELL, what a year 2020 has been! The pandemic has brought such uncertainty and challenge to UK trade. It has transformed the way that we work and live. With restrictions continuing, businesses will be wondering whether there will ever be an end to the stresses of keeping their company afloat.

A COVID-19 vaccine

With the vaccine rollout beginning, it brings great hope that by late Spring there will be a lifting of social distancing restrictions. This will give a boost to consumer-facing and travel sectors, especially hospitality and retail, which have borne the brunt of the job losses over recent months.

Bank of England support

The Government and the Bank of England remain focused on supporting the UK economy. A prime example of this is the extension of the furlough scheme until March 2021.

Additional breathing space for businesses

Further positive news is that the Government has reintroduced the temporary suspension of wrongful trading measures from 26th November 2020 until 30th April 2021, which will mean that if a company enters a formal insolvency process, the directors will not be held responsible if the company’s financial position worsens during this period.

In addition, in a measure to reflect the extension of the furlough scheme, the Government has announced a further extension to the suspension of the use of statutory demands and winding up petitions until 31 March 2021 and landlords will be unable to enforce their rights under their leases for the same period. Whilst not great news for landlords, it will allow businesses more time to get their affairs in order.

Finally, HMRC have announced that if you think you will struggle to repay your deferred VAT liability by 31 March 2021, you can opt in to a VAT deferral scheme which allows you to extend the repayments until March 2022 – you do need to opt into this scheme though, it isn’t automatic.

In conclusion

The pandemic is not over, but there are signs that 2021 will hopefully be an improvement on 2020. Continue to focus on cashflow, remember to act in the best interests of all stakeholders if your business is distressed and seek independent advice if you have concerns about the future viability of your business.

If you are concerned about your cashflow position or the future of your business, please get in touch with our team on 0808 144 5575 or email help@armstrongwatson.co.uk