We’ll be sending out updates regularly – the information may change as the situation changes and government policy develops – so the detail on the loan scheme just isn’t there yet.
We are hearing that banks are being more supportive of their clients who are adversely affected, of course whether that is just businesses which have a strong balance sheet and business model remains to be seen.
Loan Scheme
The British Business Bank will be launching the Coronavirus Business Interruption Loan Scheme (CBILS) to temporarily replace the EFG Scheme, with the aim of supporting UK businesses through this difficult time. Whilst many of the details of the scheme are not known yet, we do know the following:
– it will support a range of facilities including term loans, overdrafts, invoice finance and asset finance.
– Funding available from £1k to £1.2m and from 3 months to 10 years for term facilities.
– The lender (not the borrower) will be provided with an 80% government backed guarantee of the facility.
– To be eligible businesses must have a turnover of less than £41m, operate within an eligible sector (relatively few are excluded) and have a sound proposal to present, but may not have enough security to meet normal requirements.
There will no doubt be some discussions around what a ‘sound’ proposition represents. I would assume this means a business that up until the outbreak of this virus was viable and needs the funding to see themselves through this period of uncertainty. We are suggested to clients that they may need to prepare a forecast pre & post Coronavirus to demonstrate or evidence the impact – clearly this needs to tie into the historical accounts, plans and industry impacted.
There are over 40 accredited lenders on the scheme, and the initial approach should be to them – in most cases your normal relationship manager then. See attached link for more information and application forms.
If we can be of any help, please do get in touch.
HMRC:
The dedicated HMRC helpline for businesses and self-employed individuals who have difficulty with paying their tax due to COVID-19 promised at Budget 2020 is now in operation. The number of the helpline is 0800 0159 559. The helpline can assist with:
- setting up a time to pay arrangement,
- suspending debt collection proceedings, and
- cancelling late payment penalties and (unusually) interest.
We are being asked to help negotiate terms with HMRC – if of interest, please contact Sue Stephens and her team.
Paying sick pay to employees:
The Government will pass legislation shortly to allow small and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:
- – this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
- – employers with fewer than 250 employees will be eligible – the size of an employer will be determined by the number of people they employed as of 28 February 2020
- – employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
- – employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note
- – eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to those staying at home comes into force
We will keep you fully informed of any developments on when the repayment mechanism for employers will be finalised.
Business Rates
There will be a business rates retail holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.
Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible. A £25,000 grant will be provided to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value between £15,000 and £51,000. Any enquiries on eligibility for, or provision of, the reliefs should be directed to the relevant local authority. Guidance for local authorities on the business rates holiday will be published by 20 March.
We will keep you informed of these developments as and when they happen.
Support for businesses that pay little or no business rates
Additional funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBRR) has been announced by the Government. This will provide a one-off grant of £10,000 to businesses currently eligible for SBRR or rural rate relief, to help meet their ongoing business costs. If your business is eligible for SBRR or rural rate relief, 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. Guidance for local authorities on the scheme will be provided shortly.
Coping with Working from Home
With the Government recommending those that can, work from home, indeed a lockdown may occur, for some people it’s not the perfect set up. There is the obvious advantage of no commuting and technology means we can have more autonomy over our time but for some people we will need to monitor their mental health. Put simply working from home doesn’t work for everyone – it can put their mental health at risk, causing feelings of isolation and disconnection and the feedback and encouragement they receive form their fellow workers in the office can be critical to their productivity. Working remotely may create a pressure “to appear busy” or to be online throughout the working day. This can cause stress.
So, what do the experts recommend?
- Guidance will firstly be about technology and then setting the parameters that it’s OK to work in the morning and take a couple of hours out.
- Let people know they should set up a “work zone or space” and not the sofa!
- Encourage “self- care time” for meditation or exercise. One firm we know does a group video meeting with a personal trainer 3 times a week for basic fitness (let’s be honest we are all different shapes and sizes!).
- Hold a team Skype, GoToMeeting, Facebook Messenger call or other group telephone call for 20 minutes each morning at 9.00am. Seeing your co-workers is a boost and just to know “you are all in it together” helps.
- Encourage a down time of between 12 and 2 and no work after 5.
- Recommend no emails before 12 so people can get their heads down and do the processing or preparation of their normal work.
- Let people come into the office alone if they need a day away from home.
- Keep in touch
This is not a comprehensive guide and we’d encourage you to talk to your people about what they want and how the arrangements work for them individually.
Key Government information websites:
Government action plan:
https://www.gov.uk/government/publications/coronavirus-action-plan
Guidance on social distancing and stay at home:
https://www.gov.uk/government/topical-events/coronavirus-covid-19-uk-government-response
Travel advice:
https://www.gov.uk/guidance/travel-advice-novel-coronavirus
Support for businesses:
Tax helpling to support businesses who are concerned about paying their taxes:
Guide for employees,employers and businesses:
https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19
Budget 2020:tax-related documents:
https://www.gov.uk/government/collections/budget-2020-tax-related-documents
NHS Coronavirus (COVID-19):
https://www.nhs.uk/conditions/coronavirus-covid-19/
We will try to keep you up to date with the latest news. But I’m sure you’ll understand that Government policy is unfolding at a rate of knots, so we will do our best to keep you in touch – but bear in mind that many of last week’s announcements have already be consigned to the recycling bin of history.
