As a result of the Tier system and now the current national lockdown, there have been several new measures announced to help support business and in particular there are various new Business Support grants which are being administered by local authorities.
A summary of the key support measures follows, and as some District Councils already have closing dates for applications you should not delay in making sure you are clear on what you may be entitled to.
You should also regularly check the Gov.uk website or speak with your client manager at R T Marke & Co Ltd to keep fully up to date.
Coronavirus Job Retention Scheme (CJRS or “furlough”)
This scheme has now been extended until 30 April 2021.
The rules have changed slightly, with currently 80% of gross wage costs (but not Employers’ National Insurance or Workplace Pension costs) being paid by the government for hours not worked.
The scheme is flexible, i.e. employees can be fully furloughed or work part time while being partly furloughed.
To qualify, employees must have been on the payroll at 31 October 2020.
The official guidance can be found here including details of how to calculate: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
Note that the previously announced “job retention bonus” of £1,000 for previously furloughed employees still retained, now appears to have been withdrawn as a result of this announcement.
If you have employees who you do not currently have sufficient work for, consider utilising this scheme to save your business money.
Business Support Grants – more “free money”
There are currently grants available for businesses as follows:
- Businesses in England in Tier 2 or Tier 3 who are/were open but with trade affected (Local Restrictions Support Grant – Open)
- Businesses in England who were instructed to close between 5 November and 2 December 2020 (Local Restrictions Support Grant – Closed)
- Grants for businesses in England who do not pay business rates (Additional Restrictions Support Grant).
- Grants for businesses forced to close under the latest National Lockdown from 5 January 2021. These will be both an extension of the Local Restrictions Support Grant (Closed) and an additional one off payment (The Closed Business Lockdown Payment).
These grants will be administered by Local Authorities, so have a look at your District Council website or contact them for more details. If you are in the Torridge or North Devon Districts, the details and claim forms can be found here:
https://www.torridge.gov.uk/article/18632/Business-Support-Grants
https://www.northdevon.gov.uk/coronavirus/business-support/business-grants/
Some of this grant funding is at the discretion of the local authorities, subject to more general eligibility criteria, so again, if your business has been impacted by Covid, contact your District Council to see exactly what support you could be eligible for.
Interest free “Bounceback” loans
We are still speaking with businesses who are unaware of these – again don’t miss out! These loans, which are for amounts between £2,000 and £50,000 (capped at 25% of business turnover) and are interest and repayment free for the first 12 months. More detail on the loans including eligibility criteria can be found here: https://www.gov.uk/guidance/apply-for-a-coronavirus-bounce-back-loan
As we have said previously, because of the ease of application, and the fact that they are interest and repayment free for 12 months, we strongly recommend that all businesses who have been impacted in some way by the Coronavirus consider applying, even if they do not currently foresee a significant problem with cashflow.
Clients are telling us that the application process, which is 100% online, can take as little as 15 minutes.
The gradual withdrawal of government support expected from April onwards, combined with deferred tax payments falling due and possible ongoing local lockdowns and other restrictions means that cashflow could be very tough for some businesses during 2021 even though their sales are returning to previous levels.
If a business takes out one of these loans and is then fortunate enough not to require it, it can simply be paid back next year before interest becomes chargeable.
Fraud warning
A reminder that sadly, fraudsters have viewed the Coronavirus as an opportunity to profit at the expense of both the Government and businesses. We have seen examples of quite realistic looking e-mails purporting to be from HMRC and referring to the VAT deferral scheme. No doubt others covering the various other Government support schemes will follow, so as ever if you are in any doubt whatsoever, contact your client manager at R T Marke & Co Ltd before opening an e-mail, and certainly before clicking on any links contained in it.
Other support
There are several options currently available for deferring tax and VAT bills. If you are concerned about your ability to pay a tax bill it is important not to ignore the problem. Agreements can usually be reached with HMRC even where no formal scheme exists.
If you would like to chat through all of the available support which may apply to your business, please do contact us – we are here to help and support businesses get through these unprecedented times.
Action Points:
- Consider whether you have employees you want to retain but do not currently have full time work for. If this is the case, consider furloughing them, to save money, even if they haven’t been previously furloughed
- Contact your Local Authority for the latest information on what business support grants you may be eligible for
- Consider applying for an interest free Bounceback loan as a safety net even if you don’t currently foresee cashflow problems
- Update your business forecasts to cover the next 12 months, including payment of any taxes deferred and repayments of any new loans taken out
Keeping up to date
We are also providing regular news and updates on Covid 19 support via our App. If you do not already have this, please download now from the Playstore or iTunes – search for “MyAccountants” (all one word) then enter our office postcode EX392AT (no space) when prompted for a password.
If you have any questions on any of the points above, or have any other questions or concerns you would like to discuss, please call your client manager.
We are here to help and support and while our offices are currently closed for client meetings, we are still undertaking client meetings by video conference and our reception is still open for records drop off.
Please stay safe and well.