In addition to funding and tax, the PBR contained several initiatives and restrictions that are less well-known but will have direct consequences for SMEs, especially those who have experienced mixed fortunes, rely on trade credit insurance or are suffering temporary cash flow difficulties.
Managing losses in a volatile trading period: The PBRannounced a temporary extension of the Loss Carry Pack scheme until November 2010 for Limited companies and businesses that remain unincorporated after the 2009/10 tax year. Basically this means that if your company experienced an erratic trading year, with a period of loss occurring inside your official trading year followed by growth afterwards, you can do something about it. For example, if the growth occurred in the 3 month period following the trading year, you can extend your trading year to 15 months to show an overall profit, demonstrating a healthy business to your stakeholders. This is quite a complex process, however we will be happy to explain how it would work in relation to your business.
Act now to secure favourable Trade Credit Insurance rates: From the start of 2010 the Government will no longer be under-writing insurance cover for new customers, so Trade Credit Insurance rates will increase. The scheme provides insurance top up cover for 5 months where suppliers have faced reductions in private sector insurance since October 2008. If this is important to your business it would be worthwhile fast tracking an application this year if possible. Talk to us about making it happen.
Cash flow support: This seemingly minor aspect of the PBR could make a real difference to small and medium sized companies. The Business Payment Support Service has been extended to help viable companies faced with temporary cash flow difficulties to spread tax payments, and the Government has pledged to keep it open for as long as necessary. This is fantastic news for SMEs as it allows us to negotiate the best possible terms for clients, especially at this time of year when cash flow can be more of an issue. Contact us to discuss whether you could receive more favourable payment terms.
How the banks will help: As expected, RBS and Lloyds’ banking commitments will remain in place until March 2011. Also, a new Bank Customer Charter will increase the transparency of bank fees and cap lending charges for SMEs.
