Grants, Business Rates and Loans

Loan guarantees
A government-backed loan guarantee scheme announced in the Budget has since been
twice enhanced. The government will now provide loan guarantees up to “an initial” £330
billion for all sizes of businesses:

  • For large firms, the Bank of England is launching a Covid Corporate Financing Facility (CCFF), which “will provide funding to businesses by purchasing commercial paper of up to one-year maturity, issued by firms making a material contribution to the UK economy". 
  • For small and medium sized businesses. The loan limit on the Coronavirus Business Interruption Loan Scheme (originally announced in the Budget at £1.2 million) is now £5 million. No interest will be due for the first twelve months and lender-levied fees will be covered. The scheme will be delivered through commercial lenders, backed by the British Business Bank. Eligible SMEs must be UK-based with turnover of not more than £45 million and meet “the other British Business Bank eligibility criteria”.
Coronavirus Business Interruption Loan Scheme (CBILS)
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 taken up directly by the Bank of England. "Commercial Paper" as it is called. 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

There is paper work to deal with, and the main hassle for most organisations not listed on a regulated market will in be obtaining a proxy for a public credit rating that is acceptable to the Bank of England.

The minimum loan note is £1m and there is good Q&A at the Bank of England here: https://www.bankofengland.co.uk/news/2020/march/the-covid-corporate-financing-facility 

Basic eligibility is:

- be a non-financial company
- be UK incorporated, including companies with foreign-incorporated parents
- have a genuine business in the UK
- have significant employment in the UK
- have their headquarters in the UK
- be able to demonstrate that it was in sound financial health prior to the impact of the coronavirus

A company may also need to demonstrate that it:
- generates significant revenues in the UK
- serves a large number of customers in the UK or
- has a number of operating sites in the UK

A company does not need to have issued commercial paper prior to using the CCFF.

Insurance cover

Most commercial insurance policies are unlikely to cover pandemics or unspecified notifiable diseases, such as COVID-19.

However, those businesses which have an insurance policy that covers government ordered closure and pandemics or government ordered closure and unspecified notifiable disease should be able to make a claim (subject to the terms and conditions of their policy).

Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their insurance broker.

Off-payroll working in the private sector (IR35)
Also on 17 March, the Chief Secretary to the Treasury, Steve Barker, said in a statement to the House of Commons that the start date for the new IR35 tax rules would be deferred to 6 April 2021.

Time to Pay (TTP)

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 have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559.

Business Rates Retail Discount
All shops, cinemas, restaurants, music venues and business operating in the leisure and hospitality sectors will have no business rates to pay in 2020/21. 

On 17 March the Chancellor also promised an additional cash grant of “up to £25,000 per business” to  businesses with a rateable value of less than £51,000 – i.e. those that would  have benefited from the old version of Business Rates Retail Discount Scheme. 
 

£10,000 will be given through the grant to businesses in the retail, hospitality and leisure sectors with a rateable value of £15,000 or less.  

£25,000 will be given through the grant to businesses in the retail, hospitality and leisure sectors with a rateable value of over £15,000 and under £51,000.  

Exclusions to Retail, Hospitality and Leisure Business Grant Fund 

  • Business properties which are occupied for personal use, such as private stables and loose boxes, beach huts and moorings
  • Car parks and parking spaces
  • Businesses which as of the 11 March were in liquidation or were dissolved.
  • Properties with a rateable value of over £51,000
  • Only one grant may be awarded per property

Apply to Babergh, Ipswich and Mid-Suffolk Council
https://my.ipswich.gov.uk/AchieveForms/?mode=fill&consentMessage=yes&form_uri=sandbox-publish://AF-Process-7058a543-c6a0-444c-9006-644690fb7dc5/AF-Stage-60a83e92-af01-4359-88bd-5e28d963a073/definition.json&process=1&process_uri=sandbox-processes://AF-Process-7058a543-c6a0-444c-9006-644690fb7dc5&process_id=AF-Process-7058a543-c6a0-444c-9006-644690fb7dc5

Businesses already eligible for small business rates relief
There will be a flat £10,000 cash grant for each business that already benefits from zero or reduced business rates because of small business rate relief.

£10,000 will be given through the support grant to: 

  • properties in receipt of rural rate relief 
  • properties in receipt of small business rate relief  

Exclusions to Small Business Grant Fund

  • Businesses whose rates are calculated with the small business rate relief multiplier, but who do not receive small business rate relief, will not be eligible
  • Business properties which are occupied for personal use, such as private stables and loose boxes, beach huts and moorings
  • Car parks and parking spaces
  • Businesses which as of the 11 March were in liquidation or were dissolved.
Apply to Babergh, Ipswich and Mid-Suffolk Council
https://my.ipswich.gov.uk/AchieveForms/?mode=fill&consentMessage=yes&form_uri=sandbox-publish://AF-Process-951827e3-3a3d-470c-a8bf-894c1d698927/AF-Stage-7aabf496-9add-472a-83f6-c7c0c77e4914/definition.json&process=1&process_uri=sandbox-processes://AF-Process-951827e3-3a3d-470c-a8bf-894c1d698927&process_id=AF-Process-951827e3-3a3d-470c-a8bf-894c1d698927
Get in touch
If you would like more information on the scheme or you wish to discuss any grants, loans or business rates please get in touch with Luke Morris by calling 0330 058 6559
Email Luke