While running your own business can bring freedom and fulfilment, it also comes with increased responsibility – not least where money’s concerned.
Without the security of sick pay and a CEO responsible for the business’s overall success, it's harder for small business owners to keep their heads above water when cash flow dips.
Here are a few practical things you can do if something affects your ability to keep money coming into your business.
If you’re experiencing unexpected financial difficulty, you could consider contacting HMRC’s Time to Pay service. It’s available to all businesses in financial distress that have outstanding tax bills.
If your bill is less than £10,000, you can ask to pay in installments online. If you can’t do that, the Self Assessment helpline number is 0300 200 3822. It’s open Monday to Friday, 8am to 8pm and Saturday, 8am to 4pm.
You can contact the Payment Support Service on 0300 200 3835 during the same opening hours, if it gets to the stage where you receive a letter threatening legal action.
Some mortgage lenders may be in a position to offer you a mortgage payment holiday for a few months. If you're a homeowner and your earnings have become unstable due to a change in circumstances, this can help lower your outgoings.
Normally, eligibility will be based on things like your financial situation, your mortgage contract, and your lender's terms. You should speak to your mortgage provider or an independent financial advisor for guidance.
It’s worth noting that during the Covid-19 (coronavirus) pandemic, the government has made it possible for people affected to apply for a three-month mortgage payment holiday. As landlords can also apply for this payment holiday, there's a three-month ban on starting eviction proceedings for non-payment of rent.
If you're a tenant and are struggling to pay your rent, you should speak to your landlord to see if you can come up with a rent repayment plan.
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If you’re forced to stop offering your services for a while – for example, because of coronavirus, or a fire or a flood – you might find yourself struggling to keep money coming in.
Selling vouchers is one way some businesses manage to keep at least some cash flowing when an unforeseeable crisis happens.
Your loyal customers will want to support you through a crisis, helping you get back to business as usual as soon as possible.
The annual deadline for filing your Self Assessment tax return online is 31 January, but it’s worth keeping your return in mind all year round.
By keeping a detailed record of all your allowable expenses, you won’t let any business costs you could’ve claimed for slip through the net.
Learn more about the expenses you can claim if you’re self-employed or run your own limited company, and consider downloading free (or paid) accountancy software to help you keep track of the cash coming in and going out.
If things get to the point that you're struggling with debt, you can get in touch with the Business Debtline. This charitable support service gives free debt advice to self-employed people and small businesses in England, Wales and Scotland.
Their website says that more than 50 per cent of the businesses they support stay in business after receiving their advice.
Small businesses, defined as those with fewer than 50 employees, can get in touch with The Small Business Commissioner (SBC) about problems with late payments. The SBC specifically deals with complaints about larger businesses (those with more than 50 employees) delaying payment to small businesses.
Their job is to make non-binding recommendations on how the parties should resolve their disputes.
For more information on support specific to the Covid-19 pandemic, visit our small business coronavirus support hub.
We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer
4 March 2020 • 2-minute read
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