01745 586360
Mar 27
AM I ELIGIBLE FOR FINANCE UNDER CBILS?
The scheme is designed to support smaller businesses (SMEs) who do not meet a lender’s normal lending requirements for a fully commercial loan or other facility, but who are considered viable in the longer-term The announcement on the Gov.uk website lists the various measures available and who is administering them https://www.gov.uk/government/publications/businessessupport – it is comprehensive and updated as they add additional measures but we have put some of the current main ones below:
- The Coronavirus Business Interruption Loan Scheme has been expanded from £1.2m to £5m backed by an interest waiver for the first twelve-months. More detail on how this will work is set for release early this week. https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/
- The coronavirus job retention scheme – all UK employers will be able to access the scheme and it is set up to continue paying part of their employees salary that would otherwise have been laid off during this crisis. This scheme is accessed via HMRC, these employees are designated as furloughed; we are waiting for updates as to how this will work. Currently we are told that up to 80% of furloughed workers wage costs, up to a cap, of £2,500 per month will be reimbursed by HMRC.
- VAT – VAT has been deferred for three-months, the deferral scheme will apply from 20 March to 30 June 2020. Note the use of deferred not cancelled, we would urge you to prepare your VAT as normal so you know what the liability is and we can then plan for it appropriately.
- Income tax – for income tax the July payment on account will be deferred until January 2021. Please note the use of the word deferred, in some cases the January 2021 payment will be larger as a result and we will need to plan how this is going to be managed. To allow us to do this for you we will need to get accounts done in a timely manner to see what the liabilities are and if we can reduce the tax position for you; many businesses will be incurring losses and if we can get the accounts prepared we will be able advise on how best to use these losses.
- Grants to small businesses eligible for Small Business Rate Relief will be £10,000. If your business is eligible for SBRR you will be contacted by your local authority – you do not need to apply. Funding for the scheme will be provided to local authorities by Government in early April.
- Grants for retail, hospitality and leisure business’ operating from smaller premises – there will be a further £25,000 grants for retail, hospitality and leisure businesses operating from smaller premises, with a rateable value over £12,001 and below £51,000.
- Time to pay – HMRC operate a time to pay service where businesses experiencing problems with the payment of their tax bill may be able to agree payment terms with HMRC, this is being scaled up currently.
- Statutory sick pay (SSP) – the Government have announced that small and medium sized businesses will be allowed to reclaim SSP paid for sickness absence due to COVID-19. As always there are conditions have a look https://www.gov.uk/government/publications-support-for-businesses#support-for-businesses-who-are-paying-sick-pay-to-employees
- Rates will be waived for businesses in the retail, hospitality and leisure businesses, for the next 12 months.
- There will also be support for liquidity among large businesses, with a major new scheme being launched by the Bank of England to help them bridge coronavirus disruption to their cashflows through loans – see bank section above.
- There was also clarification that Government advice to avoid pubs, clubs and theatres is sufficient for businesses to claim on their insurance where they have appropriate business interruption cover for pandemics in place. The Association of British Insurers have issued a statement on business insurance cover here https://www.abi.org.uk/news/news-articles/2020/03/statement-on-business-insurance-and-coronavirus/
- To support the food industry and help provide meals for people who need to self-isolate, planning regulations will also be relaxed to allow pubs and restaurants to start providing takeaways without a planning application.
- Other short lenders – we can put you in contact with funders who may be able to provide various loans and funding options.
- If you are not a limited company, you may be entitled to other benefits and would refer you to the Citizens Advice website for more assistance. This would include Directors of a limited company but not the company itself.
Action points
- Do not make any long-term decisions, especially about the sale of assets, cessation of the business without speaking to us first.
- Do bring your accounts up to date so you are aware of future liabilities – in times of crisis it is always easy to defer your accounts, or VAT but this is the best time to get your affairs up to date. Once you know what the tax bill is you can plan the payment of this appropriately.
- Do speak with us about business losses – maybe we can reclaim some earlier paid tax from HMRC.
- Do check insurance policies – for example are you or your staff covered by any sickness claim, is there a loss of earnings claim?
Other issues
- Struggling to pay mortgage, credit cards etc. – Three-month mortgage holidays and credit card forbearance are available for those who are struggling. If you may struggle to keep up with your bills and keep food on the table, speak to your lender as soon as you have a grasp of your cash flow.
- Struggling to pay rent – speak to your landlord, Boris Johnson has said that private and social renters will be protected from eviction for three- months in emergency legislation.
- Buy to let – payment holidays on buy-to-let mortgages will be available for up to three- months on the understanding that the benefit is to be passed to the tenant.
Charities – For anyone involved with charities: https://www.civilsociety.co.uk/news/coronavirus-what-charities-need-to-know.html
Government guidance is changing all the time the link to the latest advice is https://www.gov.uk/guidance/coronavirus-covid-19-information-for-individuals-and-businesses-in-wales#welsh-government-support-for-businesses
This list covers a wide range of topics and clearly the situation is changing day by day, the links and information is correct at the time of writing but if further help is announced, especially regarding the self-employed, we will contact you again. If there is something you are concerned about, please do get in touch and we will try to help as this document is primarily about information not advice. Please do have a look at the options and speak to us for advice before proceeding with a course of action, for example some options available to you will be more expensive than others.
