The BVCA response to the COVID-19 outbreak: Statement of Best Practice.
The BVCA sent out surveys to members to gain feedback on the impact Coronavirus is having on their firms and portfolio companies. We have used the information from the surveys to provide written evidence to HM Treasury on its financial packages and feedback to other Government departments on what the BVCA believes will help to support businesses through this period.
The BVCA is hosting webinars for our members about how the UK private equity and venture capital industry is responding to the outbreak, and how the BVCA is supporting its members and their portfolio companies during this time.
We have compiled official government guidance, as well as updates from other trade associations, to provide information for portfolio companies in the following areas:
The BVCA will continue to monitor the situation and provide members with relevant information.
View our webinars on the impact of COVID-19
In response to the global outbreak of COVID-19, the Chancellor has introduced a number of initiatives to help businesses access financial support to cover business interruption due to Coronavirus. The measures to date are as follows:
The UK government has published guidance for employers, explaining how to tackle the following:
On 23 March, the Government advised that people should avoid all unnecessary social contact and should stay at home other than for very limited purposes including: shopping for basic necessities; one form of exercise per day; any medical needs; and travelling to and from work for key workers. It has also advised all non-essential businesses to close and where people, companies are to consider their staff’s ability to work from home. The Government has advised that people will be dispersed and incur fines for failure to adhere to the new measures and the police and other relevant authorities will be monitoring the situation. This is will in place for a minimum of 3 weeks.
The Government has also published guidance specific to sectors that might see greater adverse impacts and may need to have greater precautions, such as healthcare, education and transport sectors. See the links below for sector specific guidance.
The Federation of Small Businesses has published guidance for small businesses to assist employers in understanding their obligations and help to manage staff and other business responsibilities. This publication addresses concerns around lay-offs, contract variations and, statutory sick pay.
On 28 March, the Government announced that it was suspending the wrongful trading law within insolvency rules to protect directors of companies who pay staff and suppliers despite insolvency risks. The changes are temporary for businesses undergoing a restructuring process, in this time they will not be put into administration and will continue be able to access raw materials.
Invest Europe has published information for its members on the policy measures being taken across markets in Europe.
The International Private Equity and Venture Capital Valuation Guidelines (IPEV) has published further guidance for firms regarding valuations in light of the Coronavirus.
The BVCA has been speaking to audit firms about the impact on audit opinions:
The Financial Reporting Council published guidance on audit issues arising from the Coronavirus pandemic. Audits should continue to comply fully with required standards. In current circumstances, additional time may be required to complete audits and it is important that this is taken, even at the risk of delaying company reporting. The FRC is considering additional guidance that may be necessary to support delivering audits in the next few months.
The ICAWE has published insight and further information on Coronavirus and its potential impact on audits and auditors.
According to the CBI, supply chain disruption has been significant, particularly manufacturing and logistics firms across different sectors. It had been mainly in China but production within Europe is now being directly hit. Some firms are utilising existing stockpiles and some firms have been able to source replacement components from elsewhere, but have had to consider cashflow, timing and margins of projects.
The Small Business Commissioners Office will continue to support businesses with invoice, payment and supply chain issues.
As a result of the Coronavirus, there is an increased risk of fraudulent activity. The charity anti-fraud Take Five has published advice to help increase awareness and inform businesses of the steps they can take to protect themselves during the outbreak.
On 23 March, the Foreign and Commonwealth Office advised all British people currently abroad to return to the UK now, if commercial flights are still available, as international travel is becoming limited. People are also advised to stay in their primary residence and avoid second homes or campsites.
The Government has advised that all non-essential international travel should be restricted for 30 days. This applies on a global scale. Any country or area may restrict travel without notice. The advice for specific countries is still available and can be accessed via the below link.
The Government has advised if changes or cancellation of travel is needed to:
On 17 March, the Chancellor announced that all measures put in place by the Government will qualify businesses to claim on their insurance. The Association of British Insurers has published a Q&A on Coronavirus, providing guidance on concerns around business insurance. The document also covers: travel insurance; trade credit insurance; pensions and investments; and income protection.
The FCA has published detailed information setting out its expectations for firms during the Coronavirus outbreak and how it intends to operate as the situation develops. It has stated that it expects firms to be taking reasonable steps to ensure they are prepared to meet the challenges presented by Coronavirus for business continuity. The FCA is also expecting firms to support customers and small businesses during this period, ensure that they remain transparent. The FCA have also published guidance of specific aspects of regulation such as SM&CR responsibilities, regulatory changes and insurance products. Firms are encouraged to ensure they are managing their financial resilience and liquidity, and to report to the FCA if firms believe they will face difficulties. In terms of how the FCA will operate, it has announced that it has extended the closing date for responses to all open consultation papers until 1 October 2020 and is rescheduling most other planned work.
Last updated: 6 April 2020
FOR FURTHER INFORMATION PLEASE CONTACT THE BVCA
+44 (0)20 7492 0400