Coronavirus Business Interruption Loan Scheme (“CBILS”)
This is basically a rehash of the Enterprise Finance Guarantee loan scheme (“EFG”). The key differences are the government are guaranteeing the lender for 80% of the loan amount as opposed to 70%. Also, the maximum loan amount is £5m as opposed to £1m on the EFG scheme. No interest will be charged on these loans for the first 6 months, however capital repayments will have to be made. Applications must be made directly to a British Business Bank (“BBB”) accredited lender, many of which the Corporate Finance Team have strong existing relationships with and can assist with financial forecasts, process management etc.
The products included are:
- Term Loans.
- Overdrafts.
- Invoice Finance Facilities.
- Asset Based Lending Facilities.
Eligibility criteria:
- UK based, with turnover of no more than £41 million per annum.
- Operate within an eligible industrial sector. (a small number of industrial sectors are not eligible for support).
- Be able to confirm that they have not received de minimis State aid beyond €200,000 equivalent over the current and previous two fiscal years.
- Have a sound borrowing proposal, but insufficient security to meet the lender’s requirements.
Full eligibility criteria will be published shortly.
Sick Pay
The government has brought forward legislation 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.
- The government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible.
SSP
is currently £94.25 per week. The refunds are likely to be a long process.
Businesses that pay business rates
- The government has introduced a business rates 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.
- Grants of £10,000 to £25,000 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.
Calculating the Rateable Value – https://www.gov.uk/calculate-your-business-rates
Support for businesses that pay little or no business rates
- The government will provide additional funding for local authorities to support small businesses that already pay little or no business rates because of Small Business Rate Relief (SBRR). 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.
You are eligible for SBRR if:
- your property’s rateable value is less than £15,000.
- your business only uses one property.
Calculating the Rateable Value – https://www.gov.uk/calculate-your-business-rates
HMRC Time to Pay tax
- All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time to Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
- If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559.
Given the circumstances HMRC will likely be more lenient on Time to Pay. Interest and late payment penalties can also be waived.
Insurance The advice on this is to check your insurance policy to see if it includes cover for both pandemics and government-ordered closure. The government have confirmed that their advice to avoid pubs, theatres etc is sufficient to make a claim, should you be covered for the above
