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COVID 19

Coronavirus Business Interruption Loan Scheme (CBILS)

The CBILS went live on 23rd March 2020 and will initially be running for 6 months. 

CBILS provides the lender with a government-backed 80% guarantee against the outstanding facility balance, potentially enabling a ‘no’ credit decision from a lender to become a ‘yes’. To be eligible, you need to:

  • Be UK based with turnover of no more than £45 million per annum

  • Operate within an eligible industrial sector (a small number of industrial sectors are not eligible for support) but for most sectors this will be available

  • Have a sound borrowing proposal, but insufficient security to meet a lender’s normal requirements

  • Be able to confirm that they have not received de minimis State aid beyond £200,000 equivalent over the current and previous 2 fiscal years

These loans will enable qualifying businesses to access loan from £1,000 to £5 million, with the government covering up to 80% of any losses with no fees and no interest for the first 12 months.

These measures are to encourage lenders to lend in these troubled times but the business taking out the finance remains responsible for paying back the entire loan. It isn’t clear if the banks will ask for normal security on the remainder of these loans (normally they may ask to have a charge over company assets or personal guarantees).

Finance terms are from 3 months up to 10 years for term loans and asset finance and up to 3 years for revolving facilities and invoice finance.

There may be short term, pre-approved facilities such as an overdraft available for you immediately. This would need to be discussed with your bank.

Other Actions To Help Your Business Cashflow:

1. VAT deferral 

2. Current lending - speak to your finance lenders to ask for repayment holidays.

3. Time To Pay Service - 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 this service by HMRC.

4. Businesses paying rates below £15,000 - you will be contacted by your local authority for a £10,000 grant.

5. Rates and grants for retail, hospitality and leisure businesses - if you have a business premise you will get a 12 month rates relief period from April 2020 to March 2021. If your rates are between £15,000 and £51,000 you may also be entitled to a £25,000 grant. Speak to your local authority to ensure your business type held with them is correct. 

Coronavirus Job Retention Scheme (CJRS)

If you cannot maintain your current workforce because your operations have been severely affected by coronavirus (COVID-19), you can furlough employees and apply for a grant that covers 80% of their usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and pension contributions (up to the level of the minimum automatic enrolment employer pension contribution) on that subsidised furlough pay.

This is a temporary scheme in place for 4 months starting from 1 March 2020, but it may be extended if necessary and employers can use this scheme anytime during this period. It is designed to help employers whose operations have been severely affected by coronavirus (COVID-19) to retain their employees and protect the UK economy. However, all employers are eligible to claim under the scheme and the government recognises different businesses will face different impacts from coronavirus.

The Coronavirus Job Retention Scheme is changing:

From 1st July, employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim CJRS grant for their normal hours not worked. When claiming the CJRS grant for furloughed hours employers will need to report and claim for a minimum period of a week.

The scheme will close to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full 3 week period prior to 30 June.

This means that the final date by which an employer can furlough an employee for the first time will be 10 June, in order for the current 3 week furlough period to be completed by 30 June. Employers will have until 31 July to make any claims in respect of the period to 30 June.

The scheme updates mean that the following will apply for the period people are furloughed:

  • June and July: The government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything.

  • August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.

  • September: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed.

  • October: The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.

Self Employment Income Support Scheme (SEISS)

The scheme will allow you to claim a taxable grant of 80% of your average monthly trading profits, paid out in a single instalment covering 3 months, and capped at £7,500 altogether. This is a temporary scheme, but it may be extended.

If you receive the grant you can continue to work, start a new trade or take on other employment including voluntary work, or duties as an armed forces reservist. 

 

The grant will be subject to Income Tax and self-employed National Insurance. HMRC will work out if you’re eligible and how much grant you may get.

The online service is available now. If you’re eligible and your claim is approved you’ll receive your payment within 6 working days.

HMRC have an online checker to see if you are eligible for the income support for self-employed. You will need your Unique Taxpayer Reference (UTR) and your National Insurance number to check. 

 

Please CLICK HERE for the link to HMRC's eligibility checker.

EXTENSION OF SEISS:

The Self-Employment Income Support Scheme is being extended. You’ll be able to make a claim for a second and final grant in August 2020.

 

If you’re eligible the second and final grant will be a taxable grant worth 70% of your average monthly trading profits, paid out in a single instalment covering a further 3 months’ worth of profits, and capped at £6,570 in total. (The online service for the second and final grant is not available yet.)

For further business support regarding Covid-19 please do not hesitate to contact us.

Need more details? Contact us

We are here to assist. Contact us by phone, email, post or via our social media channels.

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