The Chancellor has set out a package of temporary, timely and targeted measures to support businesses through this period of disruption caused by COVID-19.
We have gathered some of the most frequently asked questions regarding the support available for businesses to help members understand what the government are offering, including:
– The Bounce Back Loan Scheme (launched 4th May 2020);
-The Coronavirus Business Interruption Loan Scheme;
-VAT deferrals;
-COVID-19 Corporate Financing Facility;
-Support for the self-employed;
-Small business grant scheme.
These FAQs are checked and updated on a regular basis. The last update was made on 4th May 2020. For information on the Coronavirus Job Retention Scheme, click here. In addition, Build UK has teamed up with KPMG to provide guidance on tax measures introduced by HMRC in response to Coronavirus, including Time to Pay, business rates and property‐related grants, income tax deferral, VAT, and corporate tax which we would recommend that all members take a look at – download the guidance here.
[su_spoiler title=”What is the ‘Bounce Bank Loan Scheme’?” open=”no” style=”default” icon=”plus” anchor=”” class=””]
On Monday 27th April the Chancellor has announced a new loan scheme for small to medium businesses which launched on Monday 4th May. The Bounce Back Loan Scheme will allow
SMEs to borrow between £2,000 and £50,000.
Like other loans that have been announced, the Bounce Back Loan Scheme will be delivered through a network of accredited lenders. To summarise:
– The government will guarantee 100% of the loan and there won’t be any fees or interest to pay for the first 12 months;
– Loan terms will be up to 6 years;
– No repayments will be due during the first 12 months;
– The government will work with lenders to agree a low rate of interest for the remaining period of the loan;
– You cannot apply if you’re already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS).
For full details of the loan scheme, including eligibility visit the government website – click here.
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[su_spoiler title=”What is the ‘Coronavirus Business Interruption Loan Scheme’?” open=”no” style=”default” icon=”plus” anchor=”” class=””]
In March 2020, the government announced a temporary Coronavirus Business Interruption Loan Scheme (CBILS), delivered by the British Business Bank, to support businesses to access bank lending and overdrafts. This temporary scheme will offer loans of up to £5 million for SMEs through the British Business Bank (via more than 40 commercial lenders).
Access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to 6 years. The government will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.
The government will also provide lenders with a guarantee of 80% on each loan (subject to a pre-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The scheme will be delivered through commercial lenders, backed by the government-owned British Business Bank. There are 40 accredited lenders able to offer the scheme, including all the major banks.
On Friday 3rd April 2020, in a move prompted by increasing calls from business owners, Chancellor Rishi Sunak announced that the Coronavirus Business Interruption Loan Scheme was to be revamped.
This follows days of pressure from the business community that financial support is not getting through sufficiently quickly, or at all, to those who need it most. It is believed that just £145million of the £330billion in financial support has been lent so far.
The Chancellor’s reforms include:
– The removal of the need for businesses to show that they can’t get a loan on normal commercial terms before they qualify for the loan scheme;
– Banning the requirement of personal guarantees for loans of up to £250,000;
– Although personal guarantees can be sought for loans over £250,000, they will be limited to 20% of any amount outstanding on the lending after other recoveries from business assets;
– Making operational changes to speed up lending approval;
– A new Coronavirus Large Business Interruption Loan Scheme.
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[su_spoiler title=”Who is eligible for the ‘Coronavirus Business Interruption Loan Scheme’?” open=”no” style=”default” icon=”plus” anchor=”” class=””]
You are eligible for the scheme if:
– your business is UK based AND
– has a turnover of no more than £45 million per year AND
– meets the other British Business Bank eligibility criteria.
To maximise the support available, the Chancellor announced on Friday 3rd April that he is extending the CBILS so that all viable small businesses affected by COVID-19, and not just those unable to secure regular commercial financing, will now be eligible should they need finance to keep operating during this difficult time.
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[su_spoiler title=”How do I apply for the Coronavirus Business Interruption Loan Scheme?” open=”no” style=”default” icon=”plus” anchor=”” class=””]
The scheme is now open for applications. All major banks are offering this scheme. To apply, you should talk to your bank or one of the 40 accredited lenders (not the British Business Bank) as soon as possible, to discuss your business plan. You can find out the latest on the best ways to contact them via their websites. Please note that branches may currently be shut down to enable social distancing.
The full rules of the scheme and the list of accredited lenders are available on the British Business Bank website.
If you have an existing loan with monthly repayments, you may want to ask for a repayment holiday to help with cash flow. The government has given a clear direction that they expect banks to support businesses at this difficult time.
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[su_spoiler title=”It’s been reported in the press that the Coronavirus Business Interruption Loan Scheme is actually difficult to access – is this true?” open=”no” style=”default” icon=”plus” anchor=”” class=””]
On the 1st April 2020 a press briefing was held by the Business Secretary Alok Sharma. In the hours prior to the briefing, the press had focused on reporting the prediction of around 80,000 small business potentially collapsing within weeks if they were unable to access promised government funding support.
Mr Sharma reassured businesses that this was a priority for the government, they had listened to their concerns and would be taking action which would be outlined by the Chancellor “over the next few days”.
On the 3rd April, Chancellor Rishi Sunak announced a revamped version of the CBILS to remove sticking points. To find out more, click here to visit the government website.
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[su_spoiler title=”What is the Coronavirus Large Business Interruption Loan Scheme?” open=”no” style=”default” icon=”plus” anchor=”” class=””]
A new Coronavirus Large Business Interruption Loan Scheme, announced by Chancellor Rishi Sunak on 3rd April 2020 will offer 80% government guarantees on loans of up to £25 million to businesses with an annual turnover of between £45 million and £500million (the ‘squeezed middle’ who fell between the previously announced schemes of support for SMEs and larger businesses). These loans will be offered at commercial lending rates and further details will be announced shortly.
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[su_spoiler title=”What will the interest rates be for the Coronavirus Business Interruption Loan Scheme after the initial 12 months?” open=”no” style=”default” icon=”plus” anchor=”” class=””]
Following the Chancellor’s announcement of the revamped CBILS on 3rd April 2020, Mel Stride, Chair of the Treasury Select Committee, was asked about business owners’ concerns about the rates of interest which could be applied after the initial 12-month interest-free period. He said the Treasury would have to apply pressure on banks to ensure that the interest charged after that time was fair, proportionate and reasonable and this was going to be a major focus for them.
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[su_spoiler title=”Is my business eligible for the VAT deferral?” open=”no” style=”default” icon=”plus” anchor=”” class=””]
On Friday 20th March the Chancellor, Rishi Sunak, announced new support through deferring VAT for ALL UK businesses. Between 20th March and 30th June 2020, businesses will not be required to make a VAT payment. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. For more information, click here.
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[su_spoiler title=”Is the COVID-19 Corporate Financing Facility for larger firms only?” open=”no” style=”default” icon=”plus” anchor=”” class=””]
The Coronavirus Business Interruption Loan Scheme supports UK based businesses with a turnover of no more than £45 million per year, whilst under the new Covid-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies.
This will support larger companies if it has been affected by a short-term funding squeeze, allowing them to finance their short-term liabilities. It will also support corporate finance markets overall and ease the supply of credit to all firms.
To find out more, click here.
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[su_spoiler title=”I’m self-employed and looking to defer my Income Tax Self-Assessment” open=”no” style=”default” icon=”plus” anchor=”” class=””]
For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021. This is an automatic offer with no applications required. No penalties or interest for late payment will be charged in the deferral period.
HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities.
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[su_spoiler title=”What are the details of the extension of the ‘Time to Pay’ scheme?” open=”no” style=”default” icon=”plus” anchor=”” class=””]
HMRC have also scaled up their Time to Pay scheme for all businesses and individuals who are in financial difficulty as a result of Covid-19 and have outstanding tax liabilities. Under this scheme, arrangements can be agreed on a case by case basis depending on the individual circumstances of the individual’s/businesses’ financial situation and liabilities.
To access the scheme call HMRC’s dedicated helpline: 0800 0159 559. Please note, the BWF has heard reports that the waiting time for calls is high due to the volume that the HMRC team are experiencing. Please be patient, the HMRC team are working hard to help all UK businesses.
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[su_spoiler title=”I’m self-employed, how can I access more government help?” open=”no” style=”default” icon=”plus” anchor=”” class=””]
On Thursday 26th March, the Chancellor Rishi Sunak unveiled a package to help those who are self-employed. He announced that self-employed workers can apply for a grant worth 80% of their average monthly profits to help them cope with the financial impact of coronavirus.
The money – up to a maximum of £2,500 a month – will be paid in a single lump sum, but will not begin to arrive until the start of June 2020 at the earliest.
To summarise:
-Self-employed people will be able to apply for a grant worth 80% of their average monthly profits over the last three years, up to £2,500 a month.
-At least half their income needs to have come from self-employment as registered on the 2018-19 tax return filed in January – anyone who missed the filing deadline has four weeks from 26th March to get it done and still qualify.
-The scheme is open to those who earn under £50,000 a year.
-Unlike the employee scheme, the self-employed can continue to work as they receive support.
-The money, backdated to March, will arrive directly into people’s banks accounts from HMRC, but not until June.
-The grants will be taxable, and will need to be declared on tax returns by January 2022.
-Company owners who pay themselves a dividend are not covered.
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[su_spoiler title=”What is the small business grant scheme?” open=”no” style=”default” icon=”plus” anchor=”” class=””]
The Small business grant scheme is funding of £10,000 for all business who are already in receipt of small business rate relief or rural rate relief.
Under this scheme, local authorities will be able to provide additional support to any small business that already pays little or no business rates because of small business rate relief (SBRR), rural rate relief (RRR) and tapered relief.
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[su_spoiler title=”How can the small business grant be accessed?” open=”no” style=”default” icon=”plus” anchor=”” class=””]
When details were first released the government advised that businesses would not need to submit a claim as local authorities will be writing to all eligible businesses.
We would strongly advise members not to wait to be notified of this but check their local authority website to see if they can apply online and if not call their local authority to check eligibility and timescales for payment.
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[su_spoiler title=”Am I covered as a business with my insurance?” open=”no” style=”default” icon=”plus” anchor=”” class=””]
We would recommend members contact their insurance company to check the status of their own company insurance to ensure you are covered for any business interruptions as part of your Policy.
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[su_spoiler title=”What is the Coronavirus Large Business Interruption Loan Scheme?” open=”no” style=”default” icon=”plus” anchor=”” class=””]
Please add this additional text so it reads well – also check the rest of the webpages to make sure the links provided are in the correct places, or need updating or just need to be added.
From 26 May 2020, large businesses will be able to borrow up to £200 million through the Coronavirus Large Business Interruption Loan Scheme (CLBILS), after the Government increased the maximum loan size from £50 million. Companies borrowing more than £50 million will be subject to restrictions on dividend payments, senior pay and share buy‐backs during the period of the loan, including a ban on dividend payments and cash bonuses, except where they were previously agreed.
https://www.gov.uk/government/news/larger-businesses-to-benefit-from-loans-of-up-to-200-million
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