Month: May 2020

There has been considerable commentary in the media about this support initiative as business owners – struggling to cope with the reduction in their cash resources due to the COVID-19 outbreak – are finding it difficult to secure support from their bank.

Readers will be encouraged by the Chancellor’s recent comments when he confirmed that personal guarantees should not be requested for loans under £250,000.

The government’s offer to guarantee 80% of loans taken out and cover all the set-up and interest charges for the first year of the loan remains an attractive solution for businesses that need the additional liquidity.

If you are considering an application you will be required to produce certain evidence to back-up your request. This is likely to include:

• Management accounts
• Cash flow forecast
• Business plan
• Historic accounts
• Details of assets

The above requirements will vary from lender to lender.

An alternative scheme for micro-sized businesses

Smaller businesses may decide to apply for the “Bounce-Back” Loan Scheme that is now available. Loans can be obtained between £2,000 to £50,000 but limited to 25% of turnover.

These smaller loans are 100% guaranteed by government and with no fees or interest charges payable for the first year.

General Register Offices are currently operating with reduced capacity and with government guidance to social distance and stay at home, new parents are advised not to visit them. They can however still claim Child Benefit without having to register their child’s birth first to ensure that they do not miss out.

If they already claim Child Benefit, they can complete the form or add their new-born’s details over the phone on 0300 200 3100. They will need their National Insurance number or Child Benefit number.

Child Benefit claims can be backdated by up to 3 months.

This announcement is timely as Child Benefit payments increased from 6 April to a weekly rate of £21.05 for the first child and £13.95 for each additional child. Child Benefit is paid into a parent’s bank account, usually every 4 weeks.

Only one person can claim Child Benefit for a child. For couples with one partner not working or paying National Insurance contributions (NICs), making the claim in their name will help protect their State Pension.

The following announcement was recently made by Companies House:

Businesses will be given additional support to help them meet their legal responsibilities under changes announced today (16 April 2020).

Companies House will temporarily pause the strike off process to prevent companies being dissolved. This will give businesses affected by the coronavirus outbreak the time they need to update their records and help them avoid being struck off the register.

In addition, companies issued with a late filing penalty due to COVID-19 will have appeals treated sympathetically.

Today’s announcement builds on measures already implemented by the Secretary of State for Business, Energy and Industrial Strategy, which give businesses the ability to apply for a 3-month extension to file accounts with Companies House.

As part of the agreed measures, while companies will still have to apply for the 3-month extension to be granted, those citing issues around COVID-19 will be automatically and immediately granted an extension.

1 May 2020 – Due date for corporation tax due for the year ended 30 July 2019.

19 May 2020 – PAYE and NIC deductions due for month ended 5 May 2020. (If you pay your tax electronically the due date is 22 May 2020).

19 May 2020 – Filing deadline for the CIS300 monthly return for the month ended 5 May 2020.

19 May 2020 – CIS tax deducted for the month ended 5 May 2020 is payable by today.

31 May 2020 – Ensure all employees have been given their P60s for the 2019-20 tax year.

1 June 2020 – Due date for corporation tax due for the year ended 31 August 2019.

19 June 2020 – PAYE and NIC deductions due for month ended 5 June 2020. (If you pay your tax electronically the due date is 22 June 2020)

19 June 2020 – Filing deadline for the CIS300 monthly return for the month ended 5 June 2020.

19 June 2020 – CIS tax deducted for the month ended 5 June 2020 is payable by today.

Low interest rates announced for Bounce-Back Loan Scheme (BBLS)

This new scheme announced last week, was the subject of a letter from the Chancellor (1 May 2020) to the accredited lenders who have been instructed to facilitate the scheme since 4 May 2020.

In his letter he said:

In my statement to the House of Commons on Monday I announced the government’s intention to launch a new scheme, the Bounce Back Loans Scheme (BBLS). I am writing to clarify the approach I am taking to a number of matters relevant to the design and operation of BBLS before its launch on Monday.

He followed with the following clarification on pricing:

As a 100% guaranteed loan scheme, the price of BBLS is critical to its success: together, we need to ensure that these loans are affordable and accessible. As such, and incorporating a range of data, I have come to the decision that the rate should be set at 2.5%.

Readers who have been contemplating the value of this scheme to their business will be further encouraged by this announcement on interest rates. 2.5% interest cost together with the government’s 100% guarantee, no interest cost or fees and no loan repayments in the first year, make this an attractive proposition.

However, business owners contemplating this, or any other form of loan funding should undertake a basic risk assessment to ensure this is the most effective way to fund your business during this difficult time.

We can help if you need assistance with preparing cash-flow forecasts or other projections.

Scotland announces lifeline support schemes for businesses

£100m of additional grants for smaller businesses in Scotland was announced last week, 30 April 2020.

In a published news update posted online 30 April 2020, three schemes were announced:

• £34 million Newly Self-Employed Hardship Fund, managed by Local Authorities, will be allocated to the newly self-employed who are ineligible for UK support (as they became self-employed since April 2019) – but are facing hardship – with £2,000 grants
• £20 million Creative, Tourism & Hospitality Enterprises Hardship Fund, managed by the Enterprise Agencies with support from Creative Scotland and VisitScotland for small and micro creative, tourism and hospitality companies not in receipt of business rates relief with grants of up to £25K.
• £45 million Pivotal Enterprise Resilience Fund managed by the Enterprise Agencies providing bespoke grants and wrap around business support to viable but vulnerable SMEs who are vital to the local or national economic foundations of Scotland.

The Scottish Government is also providing £1 million to top up Creative Scotland’s Bridging Bursaries in the not-for-profit sector.

These are welcome additions to the other UK grants on offer to counter COVID-19 disruption in Scotland. Perhaps the Chancellor in London will take note of the Newly Self-Employed Hardship Fund as this is equally relevant to the other sectors of the UK.