Future-proofing your business when the future is uncertain
As businesses across the country implement their continuity and maintenance procedures in these unprecedented times, they may also face an unfamiliar slump in trading as the current health climate ensures that commercial business services take a back seat in customers’ priorities.
The effects of Covid-19 on businesses are still emerging and there is a gradual process of change which businesses are coming to terms with as they focus on futureproofing their business. One possible benefit of a fall in trading is the opportunity it presents for businesses to address those internal housekeeping tasks that may have previously been overlooked – the time to “do it later” is now.
How can my business use the time we have more effectively?
We have considered a number of such housekeeping tasks below for your business to think about updating and organising during a period where time may be one of the unexpected benefits:
Updating your business affairs
It is important to consider:
- whether statutory / government bodies and authorities such as Companies House and HMRC are aware of all relevant changes that have been made to your business, such as updated director’s details or a new PSC, for a company. Further information on running a limited company can be found on the government website.
- whether your statutory registers are up-to-date and both they and the existing Companies House records reflect your company’s current standing
- whether your company’s articles of association are in need of updating – it would be beneficial to review these to ensure you are acting in accordance with the same i.e. do you have enough directors appointed? Have all proper procedures been followed, for example, when issuing new shares?
- if it would be beneficial for your business to update or put in place a shareholders’ agreement
- whether you have diarised all of your property maintenance obligations (periodic decorating, etc) under any leases you may have.
Updating your commercial documents
Given the ever-developing and changing nature of the business of trading, particularly in light of the impact of COVID-19, it is always important to keep on top of your contractual arrangements. Depending on the nature of your business, you may be more reliant or more heavily impacted by changes in trading practices or rules and it is important, if you have not already, to ensure your terms and conditions adequately protect your business and its objectives.
Documents to consider updating could be:
- your website terms and conditions (particularly if you sell goods via your website and need to amend the delivery terms in the short term)
- any supplier and customer contracts you have in place (depending on how long ago these contracts were formed, they may need updating in accordance with applicable data protection laws (GDPR)
- employee policies, particularly concerning working from home practices, if the impact of COVID-19 has proved to be a success in your business, so you consider that working from home will increase in the future
- applicable regulatory disclosures
- disclosure statements
- codes of business conduct.
You may also want to consider the force majeure provisions your business has in place in its commercial contracts. Force majeure provisions seek to provide a contractual default position for unforeseen events which prevent or delay a contract being fulfilled. They aim to protect parties from liability for delayed or non-performance of their obligations under the contract following an unforeseeable event, and in some circumstances can provide an opportunity for the unaffected party to terminate the agreement if the event carries on for a specific period of time.
It is important to periodically review your business’s banking arrangements, particularly at the current time considering the Bank of England’s reduced base interest rates. This could include including checking for any unused facilities (e.g. a dormant overdraft facility) and updating the mandate regarding who is your business is a signatory.
COVID-19 considerations for your business
- The government’s extension on VAT payments – The government is providing support to all UK businesses by deferring VAT payments due for 3 months. This applies to all payments from 20 March 2020 until 30 June 2020 and the deferral of the VAT amount will be due at the end of the 2020/2021 tax year. HMRC’s Covid-19 helpline confirms that this refers to 5 April 2021. VAT refunds and reclaims will be paid by the government as normal. If your business normally pays such payments by direct debit you should cancel the direct debit as soon as possible so that HMRC do not attempt to automatically collect on receipt of your VAT return.
- Three-month extension for filing accounts – From the 25 March 2020 businesses have been given the option to apply for a 3-month extension for filing their accounts. Under normal circumstances, businesses that file accounts late are issued with an automatic penalty, however this measure has been taken so that businesses can prioritise managing the impact of COVID-19. Whilst your business will have to apply for the 3-month extension to be granted, citing issues related to COVID-19 will allow for an extension to be granted immediately. Applications can be made online and will take around 15 minutes to complete. More guidance can be found on the government website.
- Data protection and protecting your employee data – In light of current COVID-19 concerns and the government’s guidance for employers and businesses, business are expected to protect employee data, and in particular, health related data to a higher standard than that expected in the usual course of business. It is important that in spite of increasing COVID-19 related concerns that you keep in mind that your business is not asking its employees for more information than is completely necessary, and that where information is not relevant to the purpose for which it has been collected that it is deleted. Your business can also consider whether it can offer an internal service via which employees can confidentially report any COVID-19 related concerns.
- Data protection and protecting your customer data – depending on your business, you may be gaining medical information about your customers. For example, you might learn about underlying health conditions if it is relevant to the goods/service you are providing to that customer. You should ensure that you do not store this information unless you have the customer’s express prior consent, as this is special category data and can only be held if you have the relevant consent. As with all personal data, it is important that you only hold the data for as long as you need it, so make sure you have the practical steps in place to delete such data at the relevant point.
Contact our Corporate and Commercial team for more information.
Our Corporate & Commercial team are on hand to advise you accordingly. We are also offering a fixed fee for many of the corporate and commercial services mentioned above. If you require advice or a quote for our fees, please contact the team at IBB on firstname.lastname@example.org or call 01895 207264 .
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