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COVID-19 and effects on your business - RKH Accounting CC blog

Support for your business

COVID-19 and effects on your business

Up until today RKH Accounting has remained silent with regards to the COVID-19 treat in our mists.  Until now this treat has only affected a hand full or us, as from 27 March the treat will affect us all. 

We have therefor put into place various measures to lighten the financial burden of our clients and assist to the best of our ability by utilising the resources made available by government to help the continuity of our clients business’s and our own business.

 

We are hopeful that this threat and lockdown will be limited.  We fully support the government’s methods to stop the spread of this pandemic.

 

We  would like to ensure our clients, that we will still continue our business, although we will be working remotely.  We urge you as a client to approach this lockdown as an opportunity to focus on items in your business that you do not normally get time for.  Take into account things that you can do remotely to keep your business active in this trying time.  Please feel free to contact us should you require any assistance or advise.

 

We urge you not to panic unnecessary, with planning and monitoring and the common goal to survive, “this too shall pass”.  We pray that all of us will not only survive but become stronger in our business, to be available in our industries once this crisis passes.

 

Resources that are available to SSME’s are as follows:

 

  • Coronavirus Debt Relief fund

To assist businesses during this difficult time, the Department of Small Business Development has launched a debt relief fund to help mitigate the impact of the economic shutdown caused by the coronavirus on small, micro and medium enterprises (SMMEs).

The fund is aimed at providing relief on existing debts and repayments.  For SMMEs to be eligible for assistance under the debt relief fund, the applicant must demonstrate the direct link of the impact or the potential impact of Covid-19 on business operations.  This facility will also assist entities to acquire raw material, pay labour and operational costs. All these interventions will be structured to match the patterns of the SMMEs cash flows, as well as the extent of the impact suffered. 

To qualify for access to the fund, businesses will be required to register on the SMME South Africa platform here.

Some of the details which companies are required to share include:

  • Annual turnover;
  • Shareholders (including current BEE standing);
  • Number of employees;
  • Employee demographics;
  • Sub-sectors

In future, the database will also be used to apply for both financial and non-financial support, access information about business opportunities, and access market opportunities.  Alongside the new fund, department will also launch a ‘Business Growth/Resilience facility’ which has been specifically created to enable continued participation of SMMEs in supply value-chains –  particularly those which manufacture or supply items which are in demand due to the pandemic.

This facility will offer working capital, stock, bridging finance, order finance and equipment finance, and the amount required will be based on the funding needs of the business.

President Ramaphosa said the government will put measures in place to assist local businesses which will be negatively affected by the restrictions implemented during the lockdown.  Money will be spent to save lives and to help businesses survive, and Ramaphosa noted that the Rupert and Oppenheimer families have each donated R1 billion to the cause.  “We call on large business in particular to take care of their employees,” the president said.  R200 million will also be made available to small and medium businesses in the tourism sector who have been hit hard by travel restrictions, he said.

  • Employee cost
  • There is a temporary deduction on UIF for employers which will reduce you UIF bill.
  • UIF funds to be extended to workers in SMEs and vulnerable firms and whose companies cannot provide support.
  • Provide a tax subsidy up to R500 pm for employees earning below R6500 pm.
  • Accelerate employment tax incentive reimbursement to twice per year. 
  • Tax compliant business’s with turnover of less than R50 million will be allowed to withhold 20% PAYE and provisional tax liabilities without penalties and interest.
  • In terms of the Basic Conditions of Employment Act, if the employee is sick and is therefore in self-quarantine or self-isolation, ordinarily the employee will be entitled to sick leave for this period.
  • However, the employee may be required to produce a medical certificate. If the employee's sick leave is exhausted, the employer may place the employee on unpaid leave or depending on the terms of the employment contract, tap into the employee's annual leave.
  • If the employee is subjected to self-isolation or quarantine, at the behest of government, which now applies in certain instances, it is arguable that the employee would not be entitled to his or her salary from the employer.
  • Companies therefore need to take appropriate steps in their workplaces to comply with these obligations. An employer's consent is required to work from home, but due to the current crisis, more and more employers are requesting their employees to work from home. In cases where an employee is forced to work from home, but does not have the tools, the employer will still be obliged to pay the employee's salary.
  • On whether employers can force workers to take annual leave during this time, the experts said generally speaking, the employer may determine the timing of annual leave and therefore force one to take annual leave.
  • Finance institutions
  • This support could include deferring payments or part thereof for a suitable period, extending existing loan periods or extending additional credit to manage short-term cash shortfalls.   Clients are encouraged to contact to contact us on 0860 555 111 or small business clients can speak directly to their dedicated relationship banker if they need to restructure their debt or change their payment arrangements as a consequence of covered-19,” explains Managing Group Executive for Retail and Business Banking at Nedbank Ciko Thomas.
  • Standard Bank announced that it will offer a three month payment holiday for students with loans and small businesses with a turnover of less than R20 million  The bank says this offer will be extended to clients who are in good standing on their loan repayments.
  • FNB, which is owned by FirstRand, reaffirmed its commitment to help small and medium enterprises' (SMEs) individual customers whose financial position was adversely impacted by Covid-19.
  • An Absa spokesperson says the bank will continue to evaluate the impact of Covid-19, including its economic impact, on an ongoing basis. “While it is too soon to speculate about the impact on defaults, we are looking at various possible scenarios and related actions that may become necessary should customers find themselves in financial difficulty.

These are the businesses that can operate - https://www.iol.co.za/news/politics/coronavirus-lockdown-in-sa-these-are-the-businesses-that-can-operate-45431834

We will do our utmost best to keep you informed on any changes and new development that might affect you as a business.

The virus is a threat, but unemployment and hunger can kill many more if we let the economy fail. Lockdown does not mean shutting your doors. 

"When the going gets tough, the tough get going" - in 21 days we will be fitter and leaner and ready to take over the world. 

We will be available to help, with most of the items to assist clients in applying for assistance.  Please do not hesitate to contact us should you have any concerns or need any advice regarding your business.