Protecting Cash Flow in your Business

The impact is not uniform

Some businesses will find they have unexpected opportunities. Take Louis Vuitton for example; repurposing its perfume and cosmetic gel production lines to make hand sanitizer and online retailers experiencing a surge in demand. 

However most businesses will initially be preoccupied with short-term cash preservation and cash-flow, together with managing emerging new risks. Subsequently, they will seek to position themselves for the future, beyond the immediate crisis.

Tax Payments

One of the biggest cash-flows in any business. Significant cash flow positive results can be created in a wide range of ways with some of the most well-known being:

• R&D tax credits
• VAT planning
• payroll or benefits planning
• Time to Pay arrangements
• creating tax losses from a fall in asset values

New Risks & Risk Management

Businesses will be dealing with new areas of risk and risk management, which may mean their structures need to be adapted, debt restructured, investment plans altered, or supply chains modified. All of these issues will have a tax dimension and we can work with you on them. 

Positioning for the future

In any economic disruption once the immediate steps are taken to protect the business, and to cover risk, there are generally opportunities to prepare or improve the business for the aftermath of the crisis.

A fall in share prices will mean stock options or other incentives are ‘underwater’ having lost their incentive effect. They can be reset to retain and incentivise key staff at no cash cost and get a tax deduction along the way in some cases. Supply chains may need to be changed or rebuilt or there may be opportunities to accelerate business transformations that were already underway.

At a personal level, falls in the value of assets may provide an opportunity for passing assets down through generations.

Protecting first, with good cash-flow and risk management, and then positioning for the future beyond the crisis.  You will be thinking of all these things and more and we are here to help.

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