Latest on coronavirus job retention scheme, VAT, business interruption loans
With the economic disruption deepening for businesses across the UK, the Chancellor once again announced a number of new economic measures to support businesses, individuals and employees.
Coronavirus job retention scheme: what and who does it cover?
The Chancellor announced the Coronavirus Job Retention Scheme, which will be accessible for all businesses, regardless of size. The details of the scheme include:
- The government will pay up to 80% of furlough workers’ salary (up to a cap of £2,500 per month)
- This is a grant and the first grants will be paid within weeks; it should all be up and running before the end of April
- The pay will be backdated to 1 March 2020
- The scheme will run for a maximum of 3 months and most important to note that employees cannot work during that period.
- This will be working via an on line portal, details of which are to be announced
VAT
All Q1 VAT payments will be deferred:
- There will be no payments between now and the end of June
- Businesses will have until April 2021 to pay this back
- This is a £30bn package available to all businesses
If you have a VAT direct debit, it is recommended by the CBI this is cancelled. If you already have ‘Time to Pay’ arrangements in place, ensure you have contacted the office you are dealing with.
Business Interruption Loans
The British Business Bank now has 40 lenders standing by to start this process however they all received information at 4.30am on 23rd March so many are still rapidly putting their specific scheme information in place.
Banks have pledged to get the right advice and support to businesses but expect that this might not be instant.
- Loans are available for up to £5m
- No interest payable for 12 months as this will be covered by Government and any bank charges will also be taken care of under the scheme via a special grant
- Government will back 80% of the value of each loan
You are eligible for the scheme if:
- your business is UK based, with turnover of no more than £45 million per year
- your business meets the other British Business Bank eligibility criteria
The scheme is now open for applications. To apply, you should talk to your bank or one of the 40 accredited finance providers (not the British Business Bank) as soon as possible, to discuss your business plan and access on line via your business banking site.
If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow. The full rules of the scheme and the list of accredited lenders are available on the British Business Bank website.
