03.04.20 Small Business Support Grant Fund for East Suffolk
East Suffolk Council is now accepting applications from small businesses who have been affected by COVID-1 and also grants for retail, hospitality and leisure businesses with a rateable valueof less than £51,000.
02.04.20 Business Interruption Loan Scheme – latest developments
Rishi Sunak has announced an overhaul of the government’s bailout scheme for businesses. Banks will be banned from asking small firms for personal guarantees on loans and relax other rules to ensure businesses can access the money they need.
Today’s statement is an update to the scheme announced two weeks ago in which the chancellor declared that he state will underwrite 80% of the risk of bank loans of up to £5 million. The chancellor’s announcement has come about in light of reports that one in five small companies would not survive the next month.
Many businesses trying to use the emergency loan scheme have said banks are taking advantage of the scheme and being unreasonable in demanding personal guarantees and charging double-digit interest rates on business loans.
These are the main points:
- Rishi Sunak has said that banks are banned from requiring those taking out loans less than £250k to provide personal guarantees such as rights to their assets or property. Most big banks have already promised this but the government wants to ensure that all lenders now do so.
- The government will also remove a requirement for businesses to demonstrate that they have no other means of accessing funding.
- Larger firms with a turnover of up to £500m will also be eligible for more help, and the amended scheme will now offer government-backed loans of up to £25m to firms with revenues of between £45m and £500m.
- Businesses applying for the loans will still have to demonstrate that they were ‘creditworthy’ before the current crisis to ensure the government does not prop up failing businesses.
The chancellor is also said to be drawing up a support package for charities amid warnings that they face a £4 billion black hole. Charities have called on the government to set up a “stabilisation fund”.
A report by The Corporate Finance Network of accountants predicted that nearly one in five small companies will not be able to survive the next month due to the lockdown. This could result in nearly four million staff losing their jobs in May, it said. As many as 42 per cent of small firms could go bust if the lockdown lasts for four months or more, it added.
Research by the British Chambers of Commerce (BCC) has indicated that whilst most businesses have up to three months’ cash in reserve there are almost one in five businesses who have less than a month’s cash to keep going.
“The coronavirus pandemic has taken a heavy toll on business and economic activity across the UK,” Adam Marshall, the director general of the BCC, said. “While businesses have welcomed the unprecedented size and scope of the government support packages, our findings highlight the urgent need for that support to reach businesses on the ground as soon as possible. The majority of firms cannot wait weeks or months for help to arrive.”
02.04.20 Emergency Loan Scheme - Revamp
The government has conceded to pressure around its emergency loan schemes. One quite remarkable comment really stands out: “The Treasury said it had received more than 130,000 loan enquires from firms but fewer than 1,000 had been approved.” Read more here
01.04.20 Adviser LIVE: COVID-19 Job Rentention Scheme
Thank you to everyone who joined us earlier for the first of our series of webinars. Please find a recording of the webinar below. A copy of the questions and answers are available to view here
31.03.20 UK Supermarket Sales
UK grocery sales have risen
by 21 per cent over the last four weeks, with the sale of alcohol up 22 per cent. Frozen food and cupboard supplies have increased by 28 per cent.
The International Valuation Standards Council (IVSC) has set out a useful summary of dealing with valuation uncertainty at times of market unrest.
One of the main issues when dealing with valuation uncertainty is that a valuation is not a fact, but it is an estimate of the most probable of a range of possible outcomes based on the assumptions made in the valuation process.
30.03.20 Government support for larger businesses
In the last few days we have had a number of conversations with clients who are too big for the Coronavirus Business Interruption Loan Scheme (CBILS).
However, it is possible to obtain some liquidity via the Covid Corporate Financing Facility (CCFF), designed for larger companies. Loan Notes will be taken up directly by the Bank of England through the purchase by the BoE (through a Government company) of commercial paper (CP). Approaches should be made, in the first instance, to a bank on the approved list: https://www.ukfinance.org.uk/covid-19-corporate-financing-facilities
Find out more by visiting our Grants, Business Rates and Loans page.
29.03.20 Changes to the Insolvency Regime
On Saturday Alok Sharma MP announced changes to the insolvency regime, to enable UK companies undergoing a rescue or restructure to continue trading.
- Enabling them to buy supplies while attempting a rescue
- Temporarily suspending wrongful trading provisions retrospectively from 1 March 2020 for three months for company directors so they can keep their businesses going without the threat of personal liability
This is another move from the government aimed at reducing the burden on business and allowing directors "space" to keep things going.
It does not put a moratorium on the regulations all together, so seek advice from us if you are in real difficulty.
It is interesting that the UK approach, illustrated by the job retention scheme and the recent announcements for the self-employed, and now this, are all aimed at supporting employment and keeping jobs in place. Provisions in other countries, such as the US, have been more aimed at the benefits system, with an apparent acceptance that businesses will "go under" at this time. It is too early to say which measure will be most effective in the long term, but the clear aim of the UK government would seem to be to keep as many jobs in place so that the recovery, when it comes, will be as quick as possible.
29.03.20 Small Business Support Grant Fund for Babergh, Ipswich and Mid-Suffolk
The link to apply for the Babergh, Ipswich and Mid-Suffolk Small Business Support Grant Fund is now available
29.03.20 Retail, Hospitality and Leisure Business Grants Fund for Babergh, Ipswich and Mid-Suffolk
The link to apply for the Babergh, Ipswich and Mid-Suffolk Retail, Hospitality and Leisure Business Grants Fund
is now available
28.03.20 Annual Leave Rules Relaxed
Rules on carrying over annual leave
to be relaxed to support key industries during COVID-19. Meaning that workers who have not taken all of their statutory annual leave entitlement due to COVID-19 will now be able to carry it over into the next 2 leave years.
27.03.20 Job Retention Scheme
More details about the Job Retention Scheme have been announced. We have summarised the main points from the government website below:
- Employers can claim for 80% of furloughed employees' usual wage costs, up to £2,500 a month, plus the associated Employer NIC and minimum auto-enrolment Employer pension contributions on that wage
- Employers must have created and started a PAYE scheme on or before 28th February 2020 and have a UK bank account
- Furloughed employees must have been on the PAYE scheme on 28th February 2020 (this means that employees hired after the 28th February 2020 cannot be furloughed or claimed for in accordance with the scheme)
- To be eligible for the subsidy, when on furlough, an employee cannot undertake work for or on behalf of the organisation
- At a minimum, employers must pay their employee the lower of either 80% of their regular wage or £2,500 per month
- Whilst on furlough, the employee's wage will be subject to the usual income tax and other deductions
- Employers should discuss furloughing with their employees and make any changes to their employment contract in agreement with them. When employers are making decisions in relation to the process, equality and discrimination laws will apply in the usual way
- Employees can be furloughed for a minimum of 3 weeks
Read more about the scheme by visiting https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
26.03.20 The Self Employed Income Support Scheme
Rishi Sunak has unveiled a package of measures designed to protect the income of almost all self employed people in the UK. In his words: “You have not been forgotten.” These are the main points of the package:
- The government will pay people who make the majority of their income from self employment a taxable grant of 80% of monthly profits averaged over the past three years.
- The taxable grant will be paid by HMRC directly into the person’s bank account and will be capped at £2500 per month.
- The scheme applies to all self assessed people with annual trading profits of £50k or less.
- Payments will begin in June, backdated to March so people will receive three months’ grant in one go.
- The scheme will run for at least the next three months.
- Self employed people can access the business interruption loan scheme (as other businesses are able to), and self employed people can access Universal Credit in full if they need support before then.
- Self assessment income tax payments due in July can be deferred to the end of January 2021.
- Anyone who missed filing their tax return at the end of January will have another four weeks from today (26 March) to complete this.
- In order to avoid fraud, the scheme will only apply to people who have already declared themselves to HMRC as self employed and have a tax return for 2018/19.
Self-employed people do not need to get in touch with HMRC as the scheme isn’t yet open for applications. HMRC will contact eligible customers by the beginning of June, inviting them to apply.
One footnote: Rishi Sunak says he is treating the self employed like the employed, but “we must all pay in equally in future”. Does this herald tax reforms for the self employed who may lose some of their tax advantages in future?
More information on the scheme is available at
Watch our short video for a quick overview of the scheme
25.03.20 Business Interruption
One of various measures introduced by the government to help businesses in the current health crisis has gone live this week, namely the Coronavirus Business Interruption Loan Scheme or CBILS.
CBILS has been set up to provide small and medium sized businesses based in the UK who have a turnover of up to £45m with access to various types of lending (loans, overdrafts, invoice and asset finance) of up to £5m for a term of up to 6 years through the High Street banks and various other lenders. Find out more here
24.03.20 Statutory Residence Test
Changes have been announced to the Statutory Residence Test as a result of coronavirus. This legislation determines how many days you have to be in the UK to be classed as a resident for tax purposes. Some people try to keep below this level so that they are not UK resident and therefore only taxed on some of their income.
HMRC have relaxed the rules slightly to allow people to stay in the UK for exceptional circumstances such as them being in isolation or not being able to travel outside of the UK. More information here https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm11005
23.03.20 - Coronavirus Business Interruption Loan Scheme
The Coronavirus Business Interruption Loan Scheme (CBILS) has now opened. It will take loan applications and supports a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance facilities and can provide facilities of up to £5m for smaller businesses across the UK who are experiencing lost or deferred revenues, leading to disruptions to their cashflow.
CBILS: Key Features
- Up to £5m facility: The maximum value of a facility provided under the scheme will be £5m, available on repayment terms of up to six years.
- 80% guarantee: The scheme provides the lender with a government-backed, partial guarantee (80%) against the outstanding facility balance, subject to an overall cap per lender.
- No guarantee fee for SMEs to access the scheme: No fee for smaller businesses. Lenders will pay a fee to access the scheme.
- Interest and fees paid by Government for 12 months: The Government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.
- Finance terms: Finance terms are up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.
- Security: At the discretion of the lender, the scheme may be used for unsecured lending for facilities of £250,000 and under. For facilities above £250,000, the lender must establish a lack or absence of security prior to businesses using CBILS. If the lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so.
- The borrower always remains 100% liable for the debt.
23.03.20 - HMRC Update
- CBILS is available through the British Business Bank’s 40+ accredited lenders which are listed on the British Business Bank’s website https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/
- In the first instance, businesses should approach their own provider through the lender’s website.
- If a business is unable to access the finance they need from their usual provider, then they may also wish to approach other accredited lenders in the CBILS.
- The decision on whether your business is eligible for the CBILS is fully delegated to the 40+ accredited lenders, which include high street banks, challenger banks and asset-based lenders.
- If the accredited lender can offer finance on the usual commercial financial terms, without the need to make use of the scheme, then they will do so.
- Any queries by SMEs in relation to their specific circumstances must be directed to their lender or one of the participating CBILS lenders and not to the British Business Bank.
HMRC have launched basic details of the new measures announced by the Chancellor next week. All details at the following link: https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses
20.3.2020 - Moving towards "National Insurance for Business"
We expect Rishi Sunak to announce measures to subsidise wages to help millions of workers later today (https://www.bbc.co.uk/news/business-51969708
This marks a key move, away from just cash flow support and towards a more comprehensive underwriting of UK business at this time. Labour have urged the government to follow Denmark's plan and cover as much as 85 per cent of workers' wages for several months.
These are socialist measures that Jeremy Corbyn would only have dreamt of introducing before the start of this crisis.
20.03.20 - Fearware
Our IT, insurance and internal audit teams have all noted an increase in so-called "phishing" and ransomware emails both in private accounts and at work.
As of today the Cyber Intelligence services have reported a 400% increase in threatening emails attempting to extort money since the pandemic began.
We are constantly updating our IT security mechanisms as an organisation, however these emails are intended to make the recipients feel afraid, are becoming ever more sophisticated, and are simply about the criminal sender making money out of the crisis.
If you receive such emails most commecercial security software allows the user to report and block. That is what you should do.
However, you should also report these cases to Action Fraud and the National Phishing Crime Bureau.
We advise our clients to continue to be vigilant, more so at this time, in not clicking embedded links in emails from senders unless you are certain the email is valid.
20.03.20 - Companies House Filing Extension
Companies House have announced that companies can apply for an extension of up to 3 months when filing accounts, reports or confirmation statements to allow for delays to signing caused by Covid-19. Criteria will apply and it will only be granted if the extension is applied for before the original filing date. Other regulatory deadlines (FCA etc) may continue to apply.
19.03.20 - Bank of England, Interest Rates
This is a favourite chart of ours which we use in Budget Breakfast briefings and the like.
But at 2.30pm today the BoE base rate was reduced to 0.1% - its lowest point ever
This puts the current matter in to some sort of historical context.
It also means that the BoE has now run out of powder (it has long been a point of BoE policy and principle that base rates in this country will not go negative, as they have in certain parts of Europe). More telling, it means that the BoE it does not think last week’s fiscal stimulus at the Budget was enough.
Milton Friedman postulated the concept of “Helicopter Money” in the 1960s. Money through the letterbox (or falling from the sky) for every household, to fight deflation. An alternative to QE when a country is in a liquidity trap but has nowhere to go.
It might not come to helicopter money, but a further monetary stimulus just a week after the last unscheduled one, together with this historic rate, is unprecedented. It is not beyond the realms of possibility and we would not rule it out. This, along with some analysts saying it is possible we will see negative oil prices (Aramco will pay you to take oil) speaks to the scale of this crisis and how the rules are changing quickly. Please keep following us for further updates.
19.03.20 - Loans for SMEs
As of now the Government is treating this crisis as a ”cash flow” issue as far as business is concerned. The Chancellor’s main response in this regard, tweeted yesterday: ”We’re providing loans of up to £5million for small or medium-sized businesses, with no interest to pay for 6 months. Available from next week. Details: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/accredited-lenders/
We will provide clear instructions on how this is accessed, as soon as it is clear.
However, our view is a more appropriate policy response may be something akin to business interruption insurance. The Government, ultimately, needs to be the “insurer of last resort”. What is required is a National Insurance for Business rather than just cash flow relief.”