It is, without doubt, an unsettling time but as trusted advisors, we remain committed to supporting individuals and organisations through this period of change.
One element of that is ensuring our clients and other organisations receive the necessary financial assistance that is available from Government, which continues to evolve daily as new measures are introduced by the Treasury.
To keep you up to date with the latest news, we will be issuing weekly briefings to inform you of the initiatives that have been implemented to aid businesses through the disruption resulting from COVID-19.
We are all in this together and we at Champion remain fully operational to help you and your business.
1. Business Interruption Loan Scheme
A new Coronavirus Business Interruption Loan Scheme (CBILS) delivered by the British Business Bank (BBB) will enable organisations to apply for a loan of up to £5million, with the Government covering up to 80% of any losses with zero fees. Businesses can also access the first six months of this loan interest free, as the Government will cover the interest payments during this initial period.
In addition to loans, other finance options supported by CBILS include:
- Term facilities
- Overdrafts
- Invoice finance facilities
- Asset finance facilities.
The scheme will offer attractive terms for businesses and lenders, with the aim of supporting the continued provision of finance to UK companies during COVID-19. Terms for loans and asset finance facilities are three months to ten years, whilst revolving facilities and invoice finance are up to just three years.
Are you eligible?
Businesses must be:
- UK-based, with a turnover of no more than £41million per annum
- Operate within an eligible sector (a small number of industrial sectors are exempt)
- Have a sound borrowing proposal but insufficient security to meet a lender’s normal requirements
- Have not received de minimis State Aid beyond €200,000, equivalent over the current and previous two fiscal years – this is a complex point and refers to the receipt of any previous Grants and Tax Reliefs, which we can assist you with clarifying
How to apply?
We are being assured that the process is simple and should take no longer than a standard loan application. With an expected rollout from w/c 23rd March 2020, the Champion team are on hand to help you understand what type of facility your business needs and will benefit most from, and to support with the preparation of borrowing proposals.
Participating Banks and Lenders
The BBB website is a great source in identifying participating lenders across each region and offer, at www.british-business-bank.co.uk.
2. Insurance policy claims for business interruption
Subsequent to the Government’s announcements on 17th March the ABI (Association of British Insurers) have released the following statement on Business Insurance:
“Irrespective of whether or not the Government orders closure of a business, the vast majority of firms won’t have purchased cover that will enable them to claim on their insurance to compensate for their business being closed by the Coronavirus.
Standard business interruption cover – the type the majority of businesses purchase – does not include forced closure by authorities as it is intended to respond to physical damage at the property which results in the business being unable to continue to trade.
A small minority of typically larger firms might have purchased an extension to their cover for closure due to any infectious disease. In this instance an enforced closure could help them make a claim, but this will depend on the precise nature of the cover they have purchased so they should check with their insurer or broker to see if they are covered.”
We would recommend you refer to your own Insurer for further clarification.
3. Other support available
Statutory sick pay relief packages are on offer for SMEs with fewer than 250 employees as of 28th February 2020, for each eligible employee who has been off work because of COVID-19. Whilst there is no defined system of repayment set up as yet, the Government has confirmed that it will work with employers over the coming months to establish a repayment mechanism.
In the meantime, businesses should maintain records to support details of:
- The eligible employee who has been off work because of COVID-19. A refund of SSP will cover up to two weeks off ill
- Staff absences and payments of SSP. However, employees will no longer be required to provide a GP fit note
- The eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force
- Employers will be able to reclaim expenditure for any employee who has claimed SSP as a result of COVID-19
A 12-month business rates holiday for all retail, hospitality and leisure organisations in England. 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 must be made to the relevant local authority and guidance for councils on the business rates holiday will be published by 20th March.
Grant funding of £10,000 for all businesses in receipt of small business rate relief or rural rate relief to help meet ongoing costs. If you are eligible for small business rate relief or rural rate relief, you will be contacted directly by your local authority – you do not need to apply. Funding for the scheme will be provided to local authorities in early April and guidance on the scheme will be published shortly.
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 will be agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
HMRC will waive late payment penalties and interest where businesses experience administrative difficulties contacting HMRC or paying taxes, due to COVID-19.
4. 12-month delay to IR35 reforms
Whilst not a form of financial support as such, many private sector contractors and their clients will breathe a sigh of relief having heard the Treasury’s announcement to delay the planned changes to Off-Payroll Working (IR35) that were due to come into force on 6th April 2020.
We’re urging all affected clients and contractors to contact your local Champion office or speak with our specialist sister company, Champion Contractors on 0161 703 2549.
Please remember that this is a delay to the reforms and not a cancellation, with the changes to IR35 in the private sector now due to come into effect on 6th April 2021.
You can rest assured that is it business as usual here at Champion Accountants.
For more information on the above and to discuss the impact of COVID-19 on your business, then please call your local Champion office.
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