Coronavirus Support Update – 2 May 2020

Please find below an update on the key Coronavirus Support Schemes, including the introduction of the Bounce Back Loan, in addition to more on our Strategic Partners, Fee Protection and an updated Scam warning.

In case of interest, on the blog side, we have created new articles on:

• What Insurance Do I Need For My Business; and
• Changing from a Sole Trader to a Limited Company Director.

We will continue to keep you updated as more information about the existing support packages, or any new packages become available here and across blogs and across social media (Facebook, Instagram, LinkedIn and Twitter).

Given how many and how complicated these measures are, here are three key resources to help you navigate your way around:

• Fill out the online questionnaire and find out what Coronavirus Support Schemes you may be eligible for;
• Not sure if you could be entitled to any benefits under Universal Credit, during the Coronavirus? A great place to start is entitledto to go through what help might be available. Whilst there are other similar resources, this is the one we have found the most helpful for clients; and
• Contact us, you can schedule a Phone or Zoom call directly with Jon, simply by clicking on the relevant link. This link can also be found on Jon’s email signature. In particular, if you are not sure whether CBBLS or CBILS are for you (more below), it would be good to talk this through and potentially involve one of our Strategic Partners in the discussion to ensure you get the best support possible.

Please be reassured, especially at this time, that we are here to help you and we want to help you in any way we can. Whilst we are all remote working, it is very much business as usual. Our thoughts are with you and yours. If, however, there is anything else you would like to see us do, please just let us know.

Coronavirus Bounce Back Loan Scheme (CBBLS)

Whilst Rishi Sunak has not (yet) bowed to the pressure from Business Leaders, Accountancy Bodies and other Lobbyists to make the CBILS (see below) 100% guaranteed, as he “remains unconvinced” it would make a difference, he has introduced a new scheme for small businesses which is indeed 100% backed by the Government.

Announced on Monday 27 April, the CBBLS scheme will be live from Monday 4 May where small businesses can borrow up to 25% of their turnover, between £2,000 and £50,000, simply by filling out a two-page self-certification form online. The loans will be interest-free for the first 12 months and it will be administered through the British Business Bank again. Whilst information is limited and coming through hour-by-hour, we understand:

• the interest rate is capped at 2.5%;
• the loan term can be up to 6 years;
• with no payments in the first 12 months;
• the first wave will likely be by direct applications to your existing business bank. If you are not already registered for online banking, we recommend you register as soon as possible;
• this is likely to open up after the first week or two to other approved lenders;
• applications will likely involve a lot of self-certification as attachments are not thought to be possible; and
• these loans will be excluded from the UK leverage ratios, so together with the 100% government guarantee, there are even fewer reasons for the loans not to fly out.

Given the speed in which this has been agreed, and will seemingly go live within a week, much is to be commended here. However, there is a lack of clarity on who is eligible e.g., if you have turnover over £200,000 would you still be eligible? or is the length of time the business has been trading relevant?

Also, there will be some businesses, who will be eligible for both the CBBLS and CBILS. If this might be you, please get in touch so we can discuss this further.

We have also updated our blog on lending to support you.

Coronavirus Business Interruption Loan Scheme (CBILS)

Offering SMEs loans up to £5m, interest-free up to 12 months and personal guarantee free for up to £250,000, the Government and British Business Bank continue to work hard to improve this scheme. We understand from the introduction of the CBBLS the minimum level has moved up to £50,001.

This week we have seen:

• More lenders join their panel of approved lenders, so there are now over 50 participants in the scheme; and
• The seven largest lenders on the panel this week relaxed their evidence requirements. They will now be using their own information when processing and approving applications, rather than relying on businesses providing forecasts and Business Plans to reduce the application burden and speed up the approval process.

Despite these improvements, the number of CBILS agreed was 8,638 or £1.33bn, down from more than 9,000 the previous week or £1.45bn. Of 52,807 loans applied for, almost 28,000 are still to be approved. In total now, more than £4bn has been delivered to over 25,000 businesses, but this is a long way from the £350bn support package it was first headlined to be.

Again, not sure if you should look at CBILS or CBBLS please get in touch so we can discuss this further, to understand what would be best for your business.

Coronavirus Job Retention Scheme (CJRS) or Furlough Scheme

Whilst again we must commend the great work the government and HMRC have done to get such a big scheme up and running so quickly, there are still a few teething issues we have been made aware of. These include:

• There is currently no way to amend an application;
• Some applications have incorrectly been rejected due to historic national insurance liabilities, contraire to the guidance; and
• The support, whilst well-meaning, is not as quick or complete as we would hope.

As a result, currently, where a resolution cannot be found, an appeal has to be made in writing, which further slows the process. These issues are, however, very much the exception rather than the rule and HMRC are being as supportive and understanding through this, as can be expected.

A British Chambers of Commerce (‘BCC’) survey found that 71% of firms had furloughed their employees, up from last week’s figure of 66%, with 30% furloughing 75% and 100% of their workforce. If you need any further help here, with templates or applications, please get in touch today.

If you are doing it yourself, do look at step-by-step guide. And whilst HMRC’s calculator had some issues, HMRC are working around the clock to correct any errors. Our top tip here would be to ensure you have all the information you need to hand, as the system times out after 15 minutes so you would have to complete the application again.

Given the cost of this scheme, it cannot continue indefinitely, but with the uncertainty of how long lockdown will continue, there are calls for furloughed employees to be able to carry out work on reduced hours, to allow a gradual return to work. However, calls for dividend income for Directors to be included under this or the Self Employed Income Support Scheme (SEISS) remains the loudest voice for change here.

Self-Employed Income Support Scheme (SEISS)

Whilst there isn’t much of an update here, over the next couple of weeks there should be a lot of movement, with potentially eligible individuals being contacted by mid-May and payments in one lump sum starting from the beginning of June (backdated to cover March, April and May). We remain hopeful that this will be extended for four months, in line with the CJRS, after the lockdown was extended, but this has not happened yet.

If you are looking to make a claim, ensure that you have:

• Self-Assessment Unique Taxpayer Reference (UTR) number;
• National Insurance Number;
• Government Gateway user ID and password (we have gone through and checked we have agent access for all clients. Where we don’t we have applied to HMRC so watch-out for a code and please share as soon as you receive it); and
• Bank account number and sort code for the grant to be paid into.

Whilst you can continue to work under this scheme, you will have to have been adversely affected by the Coronavirus to apply. In the claim, you will be confirming this to be the case.

There remain many who are ineligible and whilst the Chancellor admitted he “cannot help everyone” we still hope this will be revised. Worryingly, 156,000 have registered as self-employed since 5^th April 2019, of which 83,000 are over 60, 25,000 are new mums and 38,000 50-59-year-olds. Additionally, a lot of work continues with calls for dividend income for Directors to be included here, or under the CJRS, as noted above.

Although there are still gaps in the guidance, if you have any questions here, please get in touch today.

The Discretionary Fund: Especially For Small Businesses

Whilst many have benefited from a taxable grant of £10,000 for businesses who received small business rate relief or rural rate relief, or £25,000 for those in the retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000, many have been left behind here.

Fresh off the press today, a discretionary fund has been set up to help accommodate small businesses (i.e., less than 50 employees) previously outside the business grant funds scheme, who have ongoing fixed property-related costs.

For example, if you:

• Have a rateable value of £15,000 or more and are not in the Retail, Hospitality or Leisure sector;
• Use Shared Spaces;
• Are a regular market trader;
• Small charity; or
• Bed and Breakfast (who pays council tax).

However, this is provided as guidance and it is down to local authorities’ discretion how they distribute it, based on local economic need. Grants of:

• £25,000;
• £10,000; or
• Less than £10,000

can be granted based on impact from coronavirus. We will keep you updated with any further information here, but we would recommend if this could be you that you get in touch with your local authority as early as possible to improve your chances of getting funding here, especially as it is a discretionary fund.

VAT Deferral

Under the Coronavirus Support Schemes, it is possible to defer your any VAT owing between 20 March 2020 and 30 June 2020. If you are due to pay VAT on 7 May and want to defer this, remember to cancel your Direct Debit (if you pay by this method). There is no need to apply as it is an automatic entitlement. We recommend you then re-instate your Direct Debit before your next payment is due, if you cancel it to take care of the deferral.

Tax Helpline

If you are struggling or going to struggle to pay your Self-Assessment tax return (Income Tax), VAT, PAYE or Corporation Tax, beyond the above measures remember HMRC have set up a specific helpline designed to help on 0800 024 1222. It is open Monday to Friday 8am to 4pm, except for Bank Holidays. Agreements can be reached to pay over instalments, with the first payment delayed by up to three months.

In challenging times, seeking assistance from HMRC’s dedicated helpline to provide valuable support and potential arrangements for paying your Self-Assessment tax returns, VAT, PAYE, or Corporation Tax; consulting with a self-assessment accountant can also offer tailored guidance to navigate these financial challenges.

Other Measures

The other key measures where there have not been any substantial updates, but we include as a re-cap are:

• Future Fund;
• Charity Support;
• Coronavirus Large Business Interruption Loan Scheme (CLBILS);
• Deferring Income Tax Payments;
• Prevent your business from being evicted;
• Statutory Sick Pay Relief; and
• Universal Credit.

Strategic Partners

Not only is our team here to help you, especially at this time, but we also have many Strategic Partners waiting in the wings. These include:

• Debt Advisors;
• Financial Advisors;
• HR Consultations;
• Marketing & PR specialists;
• Mortgage or lending Brokers;
• Legal advisors;
• Liquidators or business recovery experts; and
• Virtual PAs

…to name but a few. If you need any additional help, please get in touch with us.

Fee Protection Insurance

We have spoken to our Insurance Company and they have confirmed that they will cover all the additional work we do in relation to the Coronavirus Support Schemes, so if you have a policy with us, please be reassured of this.

We are expecting to see a substantial increase in checks and enquiries from HMRC, once things return to more normal circumstances, as they seek to fund the exceptional measures which they have rolled out during the Coronavirus crisis.

If you haven’t already taken up our offer this year, it isn’t too late. Get in touch if you want to find out more information, or to get a bespoke quote for this service, please get in touch with us.

Scams

Please be even more vigilant than usual here. The UK’s National Cyber Security Centre (‘NCSC’) has removed more than 2,000 online Coronavirus scams in a month, including 471 fraudulent shops, 555 malware distribution sites and 200 phishing sites, seeking access to personal information, including bank details.

Some surveys suggest phishing emails have increased by up to 667% with targeting specifically on the Job Retention Scheme, but attention will likely shift to the Self-Employed Income Support Scheme as this goes live.

If you receive texts, calls or emails claiming to be from HMRC, offering support here, it is highly likely to be a scam, so be careful. If in doubt don’t enter any details. More information about spotting and reporting scams and phishing can be found here.

Talk to Jon?

At this time, we are inundated with queries as we seek to help as many people as possible. Therefore, if you wanted to speak with Jon directly, we are trialling Calendly to make appointments. If this goes well, we will look to roll this out further across the team.

Therefore, if you want to schedule a PHONE or ZOOM call, simply click on the relevant link. This can also be found on Jon’s email signature.

Black and White Accounting

This is a difficult time for everyone and we must come together to get through this. Our thoughts are with you, your family and your friends especially at this time.

If there is anything we can do to help you at this difficult time, please do get in touch by contacting Black and White Chartered Certified Accountants, populate the “Got a Question” form on the right, or call us on 0800 140 4644.