07 Aug COVID-19 SUPPORT
OUR PRACTICAL BUSINESS ADVICE: COVID-19
Here’s a quick summary of practical help announced by the government, you may be eligible for some & I have set this out in the following order;
Financial Assistance – Loans under the Coronavirus Business Interruption Loan Scheme
Applications have been open since 23 March 2020 and will initially run for 6 months. All SME businesses in all industries can apply.
Applications should be made directly to accredited lenders (the British Business Bank will be working to accredit new lenders). The lender has the authority to decide whether to offer finance under this scheme unless it can do so on normal commercial terms.
SMEs will qualify if the business:
• is UK-based
• has an annual turnover under £45 million
• has a borrowing proposal, which the lender would consider viable prior to the COVID-19 pandemic
• can evidence that it can trade out of any short-term to medium-term difficulty using this facility
Applications can be made with your bank directly and SMEs will pay no arrangement fees to access this finance. The government will pay for any lender-levied fees and cover interest payments for the first 12 months, lowering the initial repayments for smaller businesses. In addition, some lenders are likely to offer capital deferment schemes of up to 6 months as well.
Schemes will be available for both term loans of up to 6 years and overdraft or invoice financing for up to 3 years.
Term loans from £10,000 to £5m will be available under this scheme for a maximum repayment period of 6 years.
Borrowings of up to £250,000 can be accessed without security, at the lender’s discretion, and whilst the lenders will have a government-backed guarantee of 80% of the loan value, the borrowers will be liable to repay 100% of the debt.
Financial Assistance – Loans under The Bounce Back Loan Scheme (BBLS)
The Bounce Back Loan Scheme (BBLS) provides financial support to businesses across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak and that can benefit from £50,000 or less in finance.
The scheme is a part of a wider package of government support for UK businesses and employees. Read more at the Government’s Business Support website.
How it works
BBLS is available through a range of British Business Bank accredited lenders and partners, listed on the British Business Bank website.
A lender can provide a six-year term loan from £2,000 up to 25% of a business’ turnover. The maximum loan amount is £50,000.
The scheme gives the lender a full (100%) government-backed guarantee against the outstanding balance of the facility (both capital and interest).
The borrower always remains fully liable for the debt.
Employers – Furlough Grants
• Coronavirus Job Retention Scheme where all UK employers with a PAYE scheme will be able to access support to continue paying part of their employees’ salary for those who would otherwise have been laid off during this crisis. Sole directors and the Coronavirus Job Retention Scheme – how the government’s furlough scheme applies to owner-managed limited companies.
• You may get grant of 80% of small salary that we prepare/report for Dinara.
All Business Taxes
• VAT deferral for payments due up to 30 June.
• Time to Pay – all businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time to Pay Service.
• Changes to insolvency rules to help companies trade – announcement that changes will be made to enable UK companies undergoing a rescue or restructure to continue trading, helping them avoid insolvency.
Self-Assessment Tax Deferrals (2nd Payment on Account due 31.07.2020)
• Deferral of Self-Assessment payment – the self-assessment payment on account, that is ordinarily due to be paid to HMRC by 31 July 2020, may now be deferred until January 2021.
Small Business Grants
• Small Business Grant Funding for small businesses in England that already pay little or no business rates because of small business rate relief, rural rate relief and tapered relief.
Retail, Hospitality and Leisure business
• Business Rates Holiday for Retail, Hospitality and Leisure sectors in England for the 2020-21 tax year. From £10,000 Up to £25,000 per property Cash Grant for Retail, Hospitality and Leisure in England.
Non-Essential DDs / Costs
• It is also advisable to review business outgoings and put an hold on all non-essential outgoings, direct debits & costs.