Tomorrow, we celebrate our fifteenth birthday. As we rejoice in our longevity, it seems ironic to be closed. After surviving the financial crisis and the Icelandic ash cloud, the Coronavirus has well and truly halted our operation. After so much uncertainty last year (in relation to Brexit), February showed real promise. It was one of the best months in the entire history of DrivenByQ. It was quickly brought to a stop though. Suddenly, 100+ weekly bookings fell to just two and then none.
Instead of planning what we could do for our fifteenth birthday, I was frantically reading online, watching the television, emailing our accountant and posting in forums. Eventually, the only chance of survival was to depend on the Government’s job retention scheme, there was little other choice but to close. It is temporary though and highlights the importance of our structure. Luckily we are a Limited Company with directors on a salary.
As well as the directors, we have employees on the payroll. We have overheads which will continue to demand payment as revenues dwindle. While many people in our industry are already out of cash, we are afforded some breathing space. Thankfully, as most of our work is carried out on account, we still had two months of payments waiting to hit our bank account. It was enough to pay all our bills and email our customers before closing the doors.
So why close if we have staff to pay? It comes down to a word I had never heard before this crisis – furlough. By closing down and giving our employees nothing to do (known as being furloughed), we are able to access a grant towards 80% of their pay for the next three months. This is useful as our profits last year were not so great. It would have been the same for anyone who invested back in to their business, including the self-employed.
The difference for furlough pay is that our 80% grant is based on what was received as an employee in February 2020 (through PAYE). For anyone self-employed, it is based on what annual figures they submitted to HMRC over a three year period (2017/18/19). It is quite a considerable difference if you were purchasing assets or investing in your business. Unwittingly, a self-employed owner manager would have reduced their level of support by reducing their profitability.
For the rest of our team, it is a concern but there is light at the end of the tunnel. Whereas most self-employed drivers in our area deal mostly in cash, the team which support DrivenByQ are paid by BACS. It means they typically pay more tax than other drivers but they are eligible for 80% support of their profits. So closing the doors and sitting at home is the best course of action. It is different to what we expected for a fifteenth birthday but it is the safest against the pandemic.