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

AS Government support starts to be reduced, now is a good time to highlight some potential pinch points for businesses.

Phasing out of the Job Retention Scheme:

The reduction in support for furloughed workers commenced 1st August with employers now responsible for paying employer National Insurance contributions and Employer Pension Auto Enrolment Contributions. As from 1st September employers will also have to contribute 10% of the 80%/£2,500 maximum salary of furloughed employees, increasing to 20% from 1st October before the scheme ends 31st October.

Removal of temporary suspensions:

On 30th September, the relief provided to commercial tenants with rent arrears, and the suspension of the ability to issue winding up proceedings will end. This means that landlords and creditors will be able to enforce their rights from 1st October.

Change in status for HMRC in insolvency procedures:

From 1st December, HMRC will rank ahead of floating charge creditors in an insolvency (they currently rank alongside trade creditors) and we suspect that this may have an impact on lenders’ appetites to be flexible around increasing working capital available for businesses with overdraft or invoice discounting facilities, especially where there are Crown arrears.


31st December is the date we will no longer be part of the EU. There is still significant uncertainty around what Brexit will look like, however it is fair to assume that if your business is involved in trade with the EU in some way, there will be some disruption.

VAT Deferral:

The end of the tax year (31st March 2021) sees the deadline for the repayment of deferred VAT. If it looks like your business will struggle to meet the repayment, speaking to HMRC early will help you achieve the outcome that you want.

In Conclusion:

There are many changes which will impact on a business’s cash flow over the next few months. Understanding your cash position should be now be a priority, especially if you have taken advantage of opportunities to defer your obligations. For those businesses which are planning on making reductions in headcount, there will also be additional costs to consider in respect of redundancy costs.

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