Briefing 5 – 1st May
We hope you are all staying safe and well. We have not issued a Briefing for a couple of weeks so just wanted to touch base with you all to provides updates where it is appropriate and Brief on developments
Bounce Back Loans Scheme (also known as Micro Loan Scheme)
On 27 April the Government announced a new initiative aimed at supporting small businesses.
The new Bounce Back Loans Scheme, will allow businesses to borrow from £2,000 up to a maximum of £50,000, or 25% of turnover, with a maximum term of 6 years.
Loans will be interest free for the first 12 months.
The Government will provide lenders with a 100% guarantee for the loan and pay any fees and interest for the first 12 months.
No repayments will be due during the first 12 months.
The loans will be easy to apply for through a short, standardised online application.
Loans should reach businesses within days – providing immediate support to those that need it as easily as possible.
The Scheme will launch for applications on Monday 4 May.
Firms will be able to access these loans through a network of accredited lenders but we would suggest you try your commercial bankers first.
The new Scheme will run alongside the existing Coronavirus Business Interruption Loan Scheme (CBILS) and Coronavirus Large Business Interruption Loan Scheme (CLBILS).
The Government also announced that it is taking additional steps on the Coronavirus Business Interruption Loan Scheme (CBILS) to ensure that lenders have the confidence they need to process finance applications quickly, including removing the per lender portfolio cap for the Government guarantee and changing the viability tests so that all the banks will need to assess is whether a business was viable pre COVID-19.
The element in respect of the new Bounce Back Loans that we do not yet know is:
If your businesses turnover exceeds £200,000 will you be barred for applying for this loan?
We should find out on Monday 4 May.
If the above exclusion does not appear in the small print and you wish to borrow a sum lower than £50,000 to support your business, our local bank managers are suggesting you park your CBILS loan application, if you have submitted one, and resubmit using the Bounce Back Scheme as the hurdles for approval are far lower.
We also provide updates on other Business Support measures
Coronavirus Business Interruption Loans Scheme
As a Practice we have been assisting clients with Loan applications throughout April. Local managers have been requesting Cashflow Forecasts to support any claims. We currently have a 100% success rate on loan authorisation where our Projections and Narrative Overview have been submitted alongside the generic CBILS application. In turn, clients now have the funds in their bank accounts to support their businesses for the next phase of the restrictions.
Please do not leave your applications too late. Local managers are quite bogged down now with applications so it would be our advice that you prioritise making a claim now, even if need is a little further into the future. If you need help with the process, please call or email us so that we can assist you with all elements of the claim, the cash flow forecast, the management information and commercial narrative that will be required.
Business Support Grants
We have seen many claims now paid out. If you submitted your claim more than 10 days ago and still have not received your Grant, we would suggest you maybe contact your Council for an update.
Coronavirus Job Retention Scheme (Furlough claims)
Our Payroll team have been inundated, (and we would like to publically sing their praises as they have worked tirelessly to support you all). We can confirm for the period to 30 April 2020 all claims notified have now been lodged and some clients have already received funds.
Self-Employment Income Support Scheme
We expect to start hearing from HMRC on the claims process in mid to late May – cash is still expected in June.
HMRC have issued some changes on how they will calculate the payaway, since we last briefed. Particularly impacted are those where you had a loss in one of the 3 averaging years. However, we are suggesting we park further paragraphs on this Relief until we have the comprehensive detail on the route to the money.
For all self-employed individuals we would request you get your books and records to us now, just in case any information from the 19/20 tax year is required in order to make the claim.
We would also flag – for all subcontractors working in the Construction Industry, who we assess will be due CIS refunds, we are prioritising your work to try and get your refunds to you ASAP to aid your cashflow. So again, please get your books and records in now.
Self-Assessment Tax Returns – Payments on Account
As advised in our Briefing dated 24 March, we would again remind you that all Self-Assessment payments on account, currently due by 31 July 2020, can be deferred until 31 January 2021. No Penalties or Interest for late payment will be charged in the deferral period.