In March started the biggest risk to the economy that I have ever experienced in my working life.
I spent most of late February and early March watching and waiting with anticipation whether the dreaded Coronavirus was going to affect the UK.
To be fair the writing was on the wall looking at Europe, but I still hoped we may get off likely. Fast forward to March 23rd and Boris ordered the entire UK to go on lockdown.
At Cooper Lomaz we have been following daily every press conference to help us decide on our next move; few days before lockdown we took the decision to close our three offices and with the help of our IT department we setup home working for our employees.
Being a recruitment business, this so undoubtedly was going to affect our revenue. More watching of press conferences followed and thankfully our government (love em or hate em!!) finally threw us all some lifelines.
VAT – This was a biggie that will help in the short-term. Vat payments due in quarter two have been deferred to the end of Q1 2021. We must not forget that this is still a debt, but from a cash flow perspective, it should have helped hundreds of thousands of businesses across the UK.
PAYE – Deferral of PAYE payments for at least three months equally a fantastic measure for cash flow. I have never seen the HMRC be so kind and understanding! Again though this debt is still owed and we are yet to know how soon it will need to be repaid.
Job retention scheme – In my opinion, it has offered the UK workforce the greatest benefit. The government is paying wages up to 80% of the earnings capped at £2500 for furloughed staff - a word that none of us was familiar with before this. It is estimated that approximately 8.4 million people have been furloughed in the UK therefore, this has no doubt saved a lot of jobs and added financial security for many who may have found themselves redundant during this pandemic.
CBIL’s and Bounce Back Loans – The coronavirus business interruption loan and the later announced bounce back loans have also been available to businesses; although the CBIL’s I believe is more for failing businesses with the added pressure of personal guarantees. Thankfully, this was relaxed on the first £250k which I am sure it was welcome news by some businesses.
Cost-saving measures – Rents are a huge overhead that I believe some landlords have been flexible on with payment holidays or deferrals. All other overheads should be reviewed to ensure the bare minimum has been paid such as subscriptions, IT and advertising.
In addition to the support from government, we have taken a proactive approach to business - working hard with our clients and candidates in areas where we are able to provide consultancy, support and advice. We have also taken a strategic approach to protecting our business and our people for the mid to longer term by focusing where we have been able to drive revenue success and that has been primarily within key tech clients, our key account clients, the NHS / Public sector and our European operation.
I believe in the last three months it has been vital for business leaders to be creative with cash management and this will have to continue to ride out the tide of Covid-19 and beyond!