4:30 pm, April 16, 2020
UHY Hacker Young partners appeared on Car Dealer Live today (April 17) with critical information they’ve learnt from working with their dealer customers.
David Kendrick, corporate finance partner, and Paul Daly, audit partner for accountancy firm UHY Hacker Young, shared important advice with viewers.
The common theme was ‘cash is king’ with both adding that talking to your bank and applying for a business interruption loan now would make a huge difference later.
Commenting on the 2008-9 crash, Daly said that the businesses with more cash ‘came out stronger’.
‘Have a sensible short term cashflow in place,’ he warned. ‘It sounds obvious but when I’m talking to people there’s a lot who don’t realise what their monthly cost burn is.
‘The picture looks very different at the moment with no money coming in. You need to have a real handle on the cash burn.’
There has also been additional information from HMRC around furloughing, which both Daly and Kendrick were able to offer further guidance on.
Daly explained that as ‘the legal direction for HMRC has now been issued’ and explained that part of this is needing to get consent from staff to go on furlough.
‘Get that written confirmation, it doesn’t need to be backdated and can be done via email. The record making on this will be crucial.’
He said that ‘years down the line someone will look at it’ and advised that ‘because this guidance is ever changing, keep screenshots and records of what you.’
Kendrick added: ‘We had a long call yesterday with a specialist employment lawyer, and I think it’s very very grey and that’s not very helpful from a dealer perspective.’
There’s a lot of people in different positions making sweeping statements. Dealers need to take their own advice on this because each contract is different,’ he explained.
‘The worry we now have is that if you take a pessimistic view on this perhaps commission shouldn’t be included. We’ve spoken to some of the larger groups and I think a lot of them are taking the view that commission is being paid, but dealers need to be aware there is a risk.’
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