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Here is the up to date government Covid-19 advice.
Here is some General Coronavirus Advice
The Self-Employment Income Support scheme (SEISS) has been extended for a further three months.
Eligible self-employed people (eligibility criteria remains the same) will be able to claim a second and final SEISS grant in August. This is a taxable grant worth 70% of your average monthly trading profits for three months. It will be paid in a single instalment and is capped at £6,570 in total.
You do not need to have claimed the first grant to be eligible for the second, as circumstances may have changed.
Claims for the first grant are to be made no later than 13th July (a grant valued at 80% of your average monthly trading profits for three months and will be paid in a single instalment). It is capped at £7,500 in total.
You must make the claim(s) yourself, but we can support you.
The CJRS will remain open until the end of October, there are however some gradual changes that will be introduced over the following months. The changes can be broken down into three areas:
Cut-off | From 30th June, the scheme will be closed to new entrants.
Flexibility | From 1st July, more flexibility in the scheme meaning furloughed employees can be brought back on a part time basis.
Contributions | From 1st August 2020, employers will have to contribute to furloughed staff wages. This will gradually increase in September and October.
The scheme will no longer allow an employer to furlough a member of staff who has not been previously been furloughed before 30th June, for at least a full period of three weeks.
This means that the final date by which an employer can furlough an employee for the first time will be 10 June for the current three-week furlough period to be completed by 30 June.
However, please be aware that employers will have until 31 July to make any claims in relation to the period to 30 June.
From 1 July 2020 you can bring previously furloughed employees back to work part time. This will provide more flexibility. In this situation, the government will pay 80% of the hours NOT being worked. The employer is responsible for paying the salary for hours worked.
There are no minimum stipulations in relation to hours than can be worked / not worked to allow the flexibility to aide businesses to re-engage furloughed staff.
These arrangements of hours / shifts should be agreed in writing and cover a minimum of a one-week period at a time.
When claiming CJRS, a minimum period of a week should be reported, although you can claim for longer periods of time if you wish to. Employers will be required to submit data detailing the usual hours an employee would be expected to work in a claim period and actual hours worked.
From August, the government grant provided through the job retention scheme will be slowly tapered.
June and July
The government will continue to pay 80% of wages (up to a cap of £2,500). They will also pay Employer National Insurance (ER NICs) and pension contributions for the hours the employee does not work.
The government will continue to pay 80% of wages (up to a cap of £2,5000).
Employers will now pay ER NICs and pension contributions.
The government will pay 70% of wages (up to a cap of £2,187.50).
Employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500.
The government will pay 60% of wages (up to a cap of £1,875).
Employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500.
The scheme facilitates access to finance for mid-sized and larger businesses with a group turnover of more than £45m affected by the coronavirus outbreak. The maximum amount available through CLBILS to a borrower and its group has now increased from £50m to £200m. Term loans and revolving credit facilities over £50m will be offered by CLBILS lenders which have secured additional accreditation. The maximum size for invoice finance and asset finance facilities remains at £50m. Companies borrowing more than £50m through CLBILS will be subject to further restrictions on dividend payments, senior pay and share buy-backs during the period of the loan.
Further information on changes introduced today, including new provisions on seniority of CLBILS facilities, can be found on the CLBILS page on the British Business Bank website. Please note that we have introduced a new, in-depth FAQs section for businesses, which has the full details of the changes to the scheme. This information can be shared with your SME clients and networks, but please note that any queries by SMEs in relation to their specific circumstances must be directed to their lender or one of the accredited CLBILS lenders and not to the BBB.
OTHER BUSINESS FINANCE SUPPORT OPTIONS
You can also find details of other government measures to support public services, people and businesses through this disruption on the Government’s Business Support website.
In addition, the British Business Bank and The Institute of Chartered Accountants in England and Wales (ICAEW) have created new content to help businesses that are facing financial and operational challenges as a result of the coronavirus outbreak. You can view this regularly updated guidance at the Business Finance Guide website.
The government has heeded criticism that certain businesses were not able to access any support and were falling through the cracks. They have subsequently made £617m worth of funding available, in an attempt to rectify this.
The grant is for businesses that have fixed property related costs and is entirely at the discretion of the local authority based on economic need.
The funding is being handled by the local authorities for them to distribute to small businesses who have previously fallen outside grant eligibility. The funding is to cover instances where businesses do not directly pay business rates, making them ineligible for either the small business grants fund or the retail, hospitality, and leisure grants, or for instances where council tax is paid instead of business rates.
The Future Fund uses an online platform for applications, which today publishes its set of standard terms and eligibility criteria for borrowers, investors and solicitors to view in advance of opening for applications from Wednesday.
The new Future Fund will support innovative UK companies with good potential, that are essential in ensuring the UK retains its world leading position in science, innovation and technology. These companies typically rely on equity investment and are currently affected by Covid-19.
Until now these companies have been unable to access other government business support programmes because they are either pre-revenue or pre-profit. The financing supports companies facing a significantly extended length of time between funding rounds, due to the impact of the current economic situation.
Developed by government and delivered by the British Business Bank, the Future Fund will help these companies through the current period of economic disruption and recovery, so they are able to continue their growth trajectory and reach their full economic potential.
The Future Fund online platform will be open for applications from Wednesday 20th May.
I do hope the above guidance and attached information on the Future Fund is helpful and we will continue to share information with you as and when it becomes available.
Download the Future Fund Factsheet here.
The online portal to make a claim under the Self Employment Income Support Scheme (SESS) will open on Wednesday 13th May.
You will need to check that you are eligible NOW using the link below.
You will then be given a date from which you can apply.
The scheme will allow you to claim a taxable grant of 80% of your average monthly trading profits (based on the last 3 tax years) up to a maximum of £2,500 per month, capped at £7,500 in total. This will be paid out in a single instalment.
Some reasons your business may have been adversely affected by Coronavirus can include, but are not limited to:
You must receive at least half of your total income through self employment and have annual trading profits of no more than £50,000.
You can use the online tool to find out if you’re eligible to make a claim. CLICK HERE to check your eligibility.
We can help you if you need us too.
You will need:
The online service will be available on Wednesday 13th May.
You will need the following in order to be able to make a claim:
You must keep a copy of all records including (amount claimed / claim reference number / as well as the evidence that supported your claim regarding your business being affected by covid-19.
Additionally, you will be required to report the grant claim on your self assessment tax return, eligibility for universal credit and any tax credit claims.
If you are having concerns about your cash flow position, or are thinking ahead to your future cash flow position, a Bounce Bank Loan can be a very quick and affordable solution, ensuring you can meet your obligations and continue to trade. Accessible, affordable and flexible support.
The scheme is aimed at small and medium-sized businesses that have been impacted by Coronavirus (COVID-19), it offers access to loans of up to £50,000 but the amount is capped at 25% of your 2019 total turnover.
** Please note that any business that has already taken out a Coronavirus Business Interruption Loan of £50,000 or less can apply to have these switched over to this generous new scheme.
The period of sickness must have started on or after:
The amount you can reclaim will be £95.85 a week.
NB. If you’re an employer who pays more than the current rate of SSP you can only claim the current rate amount.
You must keep records of all the statutory sick payments that you want to claim from HMRC, including:
NB. You are required to keep these records for at least 3 years following any claim you submit.
In summary, the new Bounce Back Loans are aimed at the UK’s smallest businesses and will provide them access to loans of up to 25% of their turnover (a max. of £50,000) within 24 hours of applying.
The new Bounce Back Loans will be 100% guaranteed by the Treasury, meaning the government will take on all the default risk. They will be available from Monday 4th May at 9am.
This announcement was only made at 4pm this afternoon and the details are at this stage limited, we will continue to update you as developments occur.
As ever, we are here to assist you in any way we can. Please get in touch with your Account Manager if you would like to discuss your options.
QAre businesses with private equity investment eligible under the CBIL Scheme, subject to them meeting the CBILS eligibility criteria?
If a business has a private equity investor, even where that investor holds a majority or controlling stake, they can still be eligible for CBILS.
When assessing the £45m turnover eligibility threshold, the business will be considered separately to the private equity investor, and its other investments. If the business’s turnover is below that threshold, they can be eligible for the CBILS, provided they meet the other eligibility criteria.
To determine the maximum amount available to a business under CBILS, the business is treated as standalone from its private equity investor, and the other businesses it may have invested in. Therefore the £5m maximum loan size applies to that business only.
QCan companies that have received support from the Enterprise Investment Scheme (EIS) apply for CBILS?
Companies that have received funding through EIS are in principle eligible for support from CBILS, provided that they satisfy the other criteria.
QAre financial services firms eligible for CBILS?
In principle they are eligible, including non-bank financial institutions, (secured and unsecured lenders); FCA-regulated financial intermediaries (such as credit brokers, finance houses, equipment renting/leasing businesses, financial intermediation firms); and firms that offer independent financial advice/services on financial matters (for instance accountants, auditors, mortgage brokers).
However, deposit-taking banks, b¬uilding societies and insurers writing contracts of insurance as principal are not eligible for CBILS.
QAre membership organisations eligible for CBILS?
Business, employer, professional, religious or political membership organisations or trade unions are in principle eligible.
QAre housing associations eligible for CBILS?
Housing associations which are partly or mainly grant-funded will not be eligible.
QAre public-sector organisations eligible for CBILS?
If the organisation is classified as a public-sector organisation by the Office of National Statistics, it is not eligible for CBILS.
QIf a company with UK employees exports over 80% of its services, does this class as a UK business activity?
Yes, it does. This would be a UK trading activity even if the company’s income comes wholly or mainly from exporting.
QAre exporters eligible?
Export businesses are in principle eligible and welcome into the scheme. [For loans under £30,000, the loan cannot be used for certain activities outside of the UK. A borrower may self-certify the loan isn’t going to be used for these purposes.]
QIs an SME based overseas eligible?
An SME which is foreign-owned is in principle eligible to apply for CBILS, provided it is trading in the UK (not just selling into the UK and has the core of its business operations in the UK); and uses the CBIL Facility to support its business activity in the UK. The same is true for an SME which has UK ownership but is registered abroad.
QWhat kinds of businesses are eligible for the CBIL scheme?
Business with turnover of £45m or less are eligible under CBILS. AN SME can also be a sole trader or a partnership, as well as a limited company, under the CBILS definition.
QWhat is ‘turnover’ for the purpose of checking eligibility for CBILS?
If it is a sole enterprise it is the turnover of the applicant only, as shown in the latest set of accounts. For applicants acting as part of a group, that have partners or linked enterprises, the turnover assessment should take the latest turnover of the applicant, as shown in their accounts, together with the turnover of any linked enterprises, any partners of any linked enterprises, any enterprises linked to any of the applicant’s partners and any enterprise linked to the applicant’s linked companies.
QWhat is a “sole enterprise”?
A sole business (for the purposes of CBILS) is one that holds no more than 25% of the capital or voting rights (whichever is higher) in one or more other businesses; and/or other businesses hold no more than 25% of the capital or voting rights (whichever is higher) in them; or it is not linked to another business according to the criteria for ‘linked enterprises’.
In addition, certain investors may individually have a stake of up to 50% in the business and it may still be considered a sole business : public investment corporations, venture capital companies and business angels (provided the investment is less than €1.25m), universities and non-profit-making research centres, institutional investors, (including regional development funds),or autonomous local authorities (with an annual budget of less than €10m and fewer than 5,000 inhabitants).
QWhat is a “linked” businesses?
Linked businesses form a group by controlling the majority of voting rights of an enterprise, either directly or indirectly; or being able to exercise dominant influence over an enterprise.
Enterprises are linked when one holds a majority of the shareholders’ or members’ voting rights in another; or can appoint or remove a majority of the other’s administrative, management or supervisory body; or there is a contract between them enabling one to exercise a dominant influence over the other; or one can exercise sole control over a majority of shareholders’ or members’ voting rights in another. A typical example is a wholly owned subsidiary.
An enterprise is indirectly linked to a business if it is directly linked to an enterprise that is linked directly to the business.
QWhat is a “partner” business?
A “partner” business is an enterprise that has certain financial partnership with another, without one exercising effective direct or indirect control over the other. They are not sole enterprises or linked enterprises.
This is the case where both hold 25% or more of the capital or voting rights in each other; and are not linked to other enterprises. Among other things, their voting rights in each other do not exceed 50%.
QDoes CBILS require that eligible companies generate a certain percentage of annual turnover from trading activities?
An eligible SME must generating more than 50% of its income from trading – the sale of goods or services. CBILS is not designed to support shell companies.
QIs a company that derives income from property eligible for CBILS?
If it derives more than 50% of its income from commercial activity that generates turnover, whether or not this is with the intention of making a profit. This includes real estate SMEs that derive income from property, (including real estate investment companies).
QIs a CBIL Facility available to existing customers of participating lenders or can an SME who is not an existing customer still apply?
CBILS is open to all eligible borrowers – a business does not need to be an existing customer of the lender you are approaching.
QWhat businesses meet the ‘business in difficulty’ criteria?
A ‘business in difficulty’ is one that, as at 31 December 2019, had:
QWhat does the accumulated losses criteria for a ‘business in difficulty’ mean?
The CBILS definition of a “business in difficulty” includes businesses that have accumulated losses, that are greater than half of their subscribed share capital, as at 31 December 2019.
For a limited liability company this means having accumulated losses greater than half of its capital, if deducting accumulated losses from the company’s reserves leads to a negative amount that exceeds half of the company’s subscribed share capital.
These criteria do not apply to SMEs that, on 31 December 2019, had existed for less than three years. That means that certain fast-growth businesses may not be eligible for the scheme (unless they are less than three years old).
QWhat are ‘collective insolvency proceedings’?
These are as defined by the Commission Regulation (EU) 2015/848 of 20 May 2015, rather than the definition of “insolvency proceedings” in the Insolvency Act 1986. This means:
The “voluntary arrangements” above include company and individual voluntary arrangements.
Receiverships, members’ voluntary liquidations and schemes of arrangement (under Part 26 of the Companies Act 2006) are not included.
QWhat does ‘fulfils the criteria under its domestic law’ mean in collective insolvency proceedings?
There is no official guidance from the European Commission on what this means, but if a borrower is the subject of any of the proceedings listed above, or is not subject to any insolvency proceedings, but meets the criteria above, the borrower should be categorised as a “business in difficulty”.
QWhat defines rescue aid or restructuring aid?
Rescue or restructuring aid is normally the subject of a specific State aid approval from the European Commission. For the avoidance of doubt, aid provided under the Enterprise Finance Guarantee Scheme is not rescue or restructuring aid.
QWhat criteria must a company that is not an SME (because it has 250 or more employees) meet to not be considered as “in difficulty”?
For the two years prior to 31 December 2019 the book debt to equity ratio was greater than 7,5; and its EBITDA interest coverage ratio was below 1.0. A business must meet both to be classed as ‘in difficulty’. SMEs are not required to meet these solvency ratios.
QWhich companies can be classed as SMEs for the ‘business in difficulty’ definition?
This can include self-employed people; family businesses; and partnerships or associations regularly engaged in an economic activity. A micro, small or medium-sized if it employs fewer than 250 people and has an annual turnover of no more than £45 million.
QShould the tests for a ‘business in difficulty’ be on an individual or group basis?
You should calculate these on a group basis.
QAre there any exceptions to the accumulated losses test?
The accumulated losses test does not apply if the business is an SME that, on 31 December 2019, had existed for less than three years; or is a trust or unincorporated association.
QAre there any exceptions, to a business having to be a ‘business in difficulty’?
For facilities under £30,000, the ‘business in difficulty’ test does not apply as a facility of this level is considered to involve a de minimis amount of State aid.
QHow do the business in difficulty test apply to a charity or non-profit organisation?
If a charity or non-profit organisation provides goods and services and is a limited liability company or an unlimited liability company, the test should be applied as with other companies. Where it undertakes its activity through a subsidiary, the tests should be applied on a group basis. If it is a trust or unincorporated association, the accumulated losses test does not apply.
We have prepared a few action points we would like you to consider. At all stages, it is important to fully understand which, if any, options are available to you. You may not need to act on them, but it will serve you well to be very prepared and able to act quickly.
At all times, please keep communicating with us.
The fundamental requirement for any business, will be your understanding of your cashflow situation. Technology allows us to operate in real time to give you a clear understanding of your cash flow position.
Do you use software such as Fluidly for your cashflow projections? It is a free cashflow forecasting tool, is compatible with Xero and QuickBooks Online. It is free for up to 3 months forecast or £30 per month for up to 12 months with our partner discount. We can invite you to Fluidly if we have access to your Xero or QuickBooks Online subscriptions.
If Fluidly isn’t suitable, we recommend you speak to your software provider to see whether you have a cashflow forecasting module available for the software that you currently use.
If you need more advanced forecasting functionality, then speak to us about forecasting tools that we have partnerships with or to speak to us about template spreadsheets for cashflow forecasting for one-off forecasts.
It has never been more important to have a full 360 of your cashflow position.
Q. What is your cashflow position?
Q. Have you contacted you bank regarding Coronavirus Business Interruption Loan Scheme?
Q. Have you contacted your bank to ask, in principle, your ability to increase your overdraft should you require it?
Employers can claim for 80% of furloughed employees’ usual monthly wages, up to £2,500 a month plus national insurance contributions and minimum automatic enrolment employer pension contributions on that wage.
Q. Are you planning on furloughing any of your staff?
You will be required to contact HMRC regarding the staff you are Furloughing.
Q. Have you considered how you will cover any potential shortfall of the furlough in case there is a delay in receiving the benefit from HMRC.
HMRC coronavirus helpline details updated. The telephone number for HMRC’s coronavirus (COVID-19) helpline is 0800 024 1222.
Make sure you have your UTR (unique tax reference), Company registered office and address to hand.
Q. Are you liaising with suppliers? Are there any gaps in your supply chain?
Q. Are you planning to take advantage of the TTP scheme? Have you contacted HMRC?
Q. If so, have you applied for a one-off grant of £10,000?
Business rates have been abolished for this year, and a £25,000 grant is available to certain businesses operating in small premises (with a rateable value between £15,000 and £51,000).
This can be accessed through your local authority, please login and register.
If so, you may now be eligible for Universal Credit for self-employed (equivalent rate to Statutory Sick Pay). Additionally, Universal Credit has also been expanded by an extra £1,000 a year.
Q. Read more here >>> and apply if you qualify. Have you applied?
Have you spoken with your landlord? The government has announced that no business will be forced out of its premises if it misses a rent payment in the next three months, however it is always best to communicate.
Q. Have you spoken with your landlord?
Q. Have you spoken to your lender?
Whilst VAT payments are delayed – it is still important to continue to submit in order to ensure continuously UpToDate figures. This is an automatic scheme and no application is required.
Are you able to claim on your insurance against Covid-19?
Q. Have you checked your policy with your insurer/broker?
Q. Are there currently any overheads or subscriptions you don’t need / can renegotiate?
The Government released updated guidance yesterday evening (26th March) in relation to the Job Retention Scheme and “furloughing” employees. Here we explain how this will impact you and your employees in more detail together with detail on those unanswered questions which we have all been asking about.
If you wish to see our previous FAQs on this matter, please click the link below:
We previously mentioned that any employer in the UK can claim:
However, those claiming must have created and started a PAYE payroll scheme on or before 28 February 2020 and have a UK bank account.
Employers can only claim for employees on the payroll as at 28 February 2020 and claim back the lower of:
The 80% calculation is based on the employee’s gross salary as at 28 February 2020
Each employment will be treated separately for these purposes and so the grant will apply to each employer individually
To claim, the employer will need to submit:
Those who pay themselves a salary and dividends through their own limited company are not covered by the scheme but will be covered for their PAYE salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.
If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you MUST do this by 23 April 2020 (please note that HMRC will use data on 2018-19 returns already submitted to identify those eligible and will risk assess any late returns filed before the 23 April 2020 deadline in the usual way).
If you claim tax credits you’ll need to include the grant in your claim as income.
The scheme will be backdated to 1 March 2020 and open initially for three months unless extended.
Here is a detailed list of frequently asked questions and answers to help guide you through what this means for your business. At present there are a lot of unanswered questions, so we eagerly await further information as to how this works.
Any employer in the Country will qualify for the scheme, whether small, large, charitable or non-profit.
The scheme will apply to all those on PAYE including zero contract staff.
To obtain the grants, you as the employer will need to:
The employee must remain on the payroll rather than dismissed for redundancy. It is not clear whether anything can be done for those already dismissed as redundant or given notice of redundancy. We are awaiting further guidance on this.
Measures, included in the emergency Coronavirus Bill currently going through Parliament, will mean no business will be forced out of their premises if they miss a payment in the next three months.
Further information can be found on the government’s website.
The key points to observe from the announcements today are:
A further notable positive, was the 3 month mortgage holiday which has been promised, which will hopefully relieve some of your concerns regarding your staffs situation as well as your own.
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