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Category: COVID-19 (page 2 of 2)

Government launches support finding tool for business

May 18, 2020

The UK government launched an online platform to help businesses access financial support during the COVID-19 crisis.

The Coronavirus Business Support Finder Tool will guide businesses through the range of loans, tax reliefs and cash grants to combat the adverse economic effects of the COVID-19 lockdown.

The tool asks business owners to fill out a short online questionnaire. It then directs them to a list of financial support for which they may be eligible.

The tool takes the user through various questions about their business, including location, number of employees and turnover.

Chancellor Rishi Sunak said:

‘We’ve launched an unprecedented package of support to protect jobs, businesses and incomes during these challenging times. Millions are already benefiting and this new online tool will allow firms and individuals to identify what help they are entitled to in a matter of minutes.’

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HMRC releases guidance for self-employed scheme

May 14, 2020

HMRC has released guidance on the COVID-19 Self-employment Income Support Scheme.

Under the scheme, self-employed individuals will be able to claim a taxable grant based on an average of their earnings over the past three years. To be eligible, workers must have filed all relevant income tax self assessment returns; have traded in the 2018/19 and 2019/20 tax years, and intend to carry on trading in the 2020/21 tax year. Profits, based on an average of the last three years, must be no more than £50,000, and at least equal to any non-trading income, such as employment income, dividends or rental income.

Directors of their own companies who are paid through Pay as You Earn (PAYE) may be able to get support via the Coronavirus Job Retention Scheme.

HMRC began to contact those eligible in early May and invited them to apply online. Payments are scheduled to start later in May and run for three months, but may be extended if necessary.

Government launches small business micro loan scheme

May 11, 2020

On 4 May 2020 the government launched a micro loan scheme for small businesses as it continues to try and mitigate the economic damage caused by the coronavirus (COVID-19) lockdown.

The Bounce Back Loan Scheme allows small businesses adversely affected by COVID-19 to apply for up to £50,000, with the government guaranteeing 100% of the advance.

Businesses can apply for a minimum of £2,000, up to a maximum of £50,000 with the government paying the interest for the first 12 months.

Businesses will be able to access the loans through the existing network of accredited lenders and the government said it expects most applications to be approved within 24 hours.

Chancellor of the Exchequer, Rishi Sunak, said:

‘I know that some small businesses are still struggling to access credit.

‘They are, in many ways, the most exposed businesses to the impact of the coronavirus, and often find it harder to access credit in the first place.

‘If we want to benefit from their dynamism and entrepreneurial spirit as we recover our economy, they will need extra support to get through the crisis.

‘Some businesses will not want to take on more debt, which is why our focus has been on cash grants, tax cuts and tax deferrals. But for others, loans will be part of the answer.’

OBR predicts UK economy will shrink by over a third

May 5, 2020

The Office for Budget Responsibility (OBR) has warned that the UK economy could shrink by 35% this quarter due to the COVID-19 crisis.

The OBR said that the outcome was modelled on an assumption that the current lockdown would last for three months. It stated that a three-month lockdown followed by three months of partial restrictions would trigger an economic decline of 35.1% in the quarter to June alone.

The lockdown would push up the UK’s borrowing bill to an estimated £273 billion this financial year, or 14% of Gross Domestic Product (GDP).

However, the OBR said extra spending by the Treasury to support the economy was crucial to limit economic damage.

The OBR’s estimate followed a global economic forecast published by the International Monetary Fund (IMF), which predicted a 3% contraction in global growth.

Rain Newton-Smith, Chief Economist at the Confederation of British Industry (CBI), said:

‘This makes for bleak reading and stresses the need for the right policies to support our economy through this crisis. The need for co-ordinated global action to rebuild confidence has rarely been greater.

‘The government will also need to work with businesses and many parts of civil society here at home to create a plan to revive the economy once the lockdown is lifted.’ Continue reading...

HMRC urges businesses using VAT deferral to cancel direct debits

May 5, 2020

Businesses that have been affected by the COVID-19 pandemic and are seeking to make use of the VAT deferral have been urged to cancel their direct debits ‘as soon as they can’.

Businesses are advised to contact their bank to cancel their direct debits as soon as possible. UK VAT-registered businesses with a VAT payment due between 20 March 2020 and 30 June 2020 have the option to either defer the payment until a later date or pay the VAT due as normal.

A spokesperson for HMRC said:

‘For those customers who are unable to pay VAT due between 20 March and the end of June 2020, you have the option to defer that payment until 31 March 2021.

‘You will not need to apply for deferral as eligibility is automatic. Customers who normally pay by direct debit should cancel their direct debit with their bank if they are unable to pay. Please do this in sufficient time.’

The deferral does not cover VAT MOSS payments, and HMRC will not charge interest or penalties on any amount deferred. Businesses are still required to submit their VAT returns to HMRC on time.

Lenders relax evidence requirements for business interruption loan scheme applications

April 30, 2020

On 27 April 2020 the UK’s seven largest small business lenders announced they had relaxed their evidence requirements for applications to the Coronavirus Business Interruption Loan Scheme (CBILS).

The lenders will use their own information when processing and approving applications, rather than relying on businesses providing forecasts and business plans.

In a joint statement, the seven lenders and trade association UK Finance stated:

‘The reforms to CBILS announced by the British Business Bank and HM Treasury with the support of the regulators provide welcome changes that should enable banks to provide finance to businesses more quickly alongside other forms of support including capital repayment holidays.

‘Lenders are working hard to ensure we provide support swiftly and responsibly and we will continue to work closely with customers to help them identify the finance that is right for their business and financial circumstances.

‘Following the changes to the scheme announced today lenders will only ask businesses for information and data they might reasonably be able to provide at speed and we will not require the provision of forward-looking financial information or business plans from businesses applying for CBILS-backed lending, relying instead on our own information to assess credit and business viability.’ Continue reading...

Job Retention Scheme goes live

April 22, 2020

On 20 April 2020 the government’s Coronavirus Job Retention Scheme went live for applications.

The scheme allows businesses to furlough their employees, with the government paying 80% of their wages up to a maximum of £2,500.

The Coronavirus Job Retention Scheme is open for four months and was backdated from 1 March 2020 to the end of June. Chancellor Rishi Sunak stated that the scheme would be kept under review and extended if necessary.

There were applications from over 430,000 employers covering over three million employees in the first week of the scheme’s operation.

The Chancellor said:

‘We’ve taken unprecedented action to support jobs and businesses through this period of uncertainty, including the UK-wide Job Retention Scheme. With the extension of the coronavirus lockdown measures… it is the right decision to extend the furlough scheme for a month to the end of June to provide clarity.

‘It is vital for people’s livelihoods that the UK economy gets up and running again when it is safe to do so.’

Chancellor unveils help for self-employed workers

April 15, 2020

On 26 March, Chancellor Rishi Sunak announced a scheme to help self-employed workers who have been hit by the COVID-19 crisis.

Under the scheme, the government will pay self-employed people a taxable grant based on an average of their earnings over the past three years. The grant will cover up to 80% of earnings, up to a limit of £2,500 a month.

To be eligible, self-employed workers must have filed a tax return for the 2018/19 tax year and have average trading profits under £50,000 for the past three years. Directors of their own companies who are paid through Pay as You Earn (PAYE) are able to get support using the Coronavirus Job Retention Scheme.

The self-employed scheme will be available from June this year and will run for three months, but may be extended if necessary. In the meantime, the Chancellor said people can access Universal Credit, business loans or keep on working. HMRC will contact self-employed workers if eligible for the scheme and invite them to apply online.

Chancellor’s business support packages for coronavirus pandemic

April 10, 2020

On 17 March, Chancellor Rishi Sunak unveiled a £330 billion package of support for the UK economy as it combats the COVID-19 pandemic. The measures dwarf the £12 billion made available in the 2020 Budget. The package includes an increase in government-backed loans, higher cash grants, widened business rates relief for some sectors and mortgage holidays for struggling homeowners. The government has extended the Coronavirus Business Interruption Loan Scheme announced in the Budget from £1.2 million to £5 million, with no interest due for the first 12 months. On 3 April, the Chancellor announced changes to the loan scheme in order to make it easier for small businesses to access loans. The current Business Interruption Loan Scheme has been extended so more small businesses benefit. Lenders will be banned from requesting personal guarantees on loans under £250,000. Additionally, a new scheme has been announced to bolster support for larger firms not currently eligible for loans.

Changes to business rates as a result of the COVID-19 pandemic have been put into place as well as some grants. The latest information for businesses located in England can be found here. Information for businesses in the devolved nations can be found here: Wales, Scotland, Northern Ireland.

Commenting on the measures, Dame Carolyn Fairbairn, Director General of the Confederation of British Industry (CBI), said: Continue reading...

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