£90,000 Funding Grant For St Albans Businesses Now Extended
Grant Funding Scheme for Businesses affected by COVID-19 Increased to £120,000
In response to the Discretionary Fund for businesses affected by COVID-19 finishing on the 14th of June 2020, ActionCOACH St Albans are pleased to announce our Grant expansion and extension.
As many businesses re-opened for the first time since lockdown, the focus is on maintaining a sustainable business model. ActionCOACH St Albans created a £90,000 business fund to be used for business support services. It was so successful that additional funding has been secured and the total pot is now £120,000 with the deadline for applications also extended to February 2021.
Business Coaching is the key to sustainable growth and businesses are invited to apply for grants with a value of £6,000. The Grant will contribute towards the investment for one to one Business Coaching.
Business coaching has been proven across the world to enhance; team efficiency, profitability and a reduction in working hours for business owners. Already in St Albans, businesses have during this time increased profitability by 400% whilst reducing owners time in the business by 60%.
The Grant is discretionary based and aimed at supporting businesses which would have a larger impact on the community. As such an eligibility criteria of 10 employees within the applicant’s business with an annual turnover of at least £750,000 is required. It is likely we will need additional information from local businesses to enable us to make these payments. If you believe you may be entitled to a grant, please submit your details to us at firstname.lastname@example.org.
As the country remains in lockdown to combat the spread of the Coronavirus, we will continue to update the below document with all the latest information you as a business owner will need. Please keep reading to discover the financial support that your business may be eligible for and details on how to apply.
We’ll continue to update this as any new information becomes available (Last update: 14th January).
Chancellor announces £4.6 billion lockdown grant package
Chancellor Rishi Sunak has announced a new £4.6 billion package of grants to support businesses through the latest national lockdown.
UK businesses in the retail, hospitality and leisure sectors are to be given one-off grants worth up to £9,000.
The payments are expected to support 600,000 business properties across the UK. A further £594 million will be made available to councils and devolved nations to support businesses not covered by the new grants.
The Chancellor said:
‘The new strain of the virus presents us all with a huge challenge, and whilst the vaccine is being rolled out, we have needed to tighten restrictions further.’
‘Throughout the pandemic we’ve taken swift action to protect lives and livelihoods and . . . we’re announcing a further cash injection to support businesses and jobs until the spring.’
‘This will help businesses to get through the months ahead – and crucially it will help sustain jobs so workers can be ready to return when they are able to reopen.’
Internet link: GOV.UK news
Extension of the Job Retention Scheme
Chancellor Rishi Sunak has extended the Coronavirus Job Retention Scheme (CJRS) until the end of April 2021.
Businesses adversely affected by the coronavirus (COVID-19) can make use of the CJRS until the end of April, with the government continuing to pay 80% of employees’ salaries for hours not worked. Employers will only be required to pay wages, national insurance contributions (NICs) and pensions for hours worked, and NICs and pensions for hours not worked.
Additionally, Mr Sunak stated that he is extending COVID-19 business loan schemes until the end of March 2021. Businesses will be given until the end of March to access the Bounce Back Loan Scheme (BBLS), Coronavirus Business Interruption Loan Scheme (CBILS) and the Coronavirus Large Business Interruption Loan Scheme (CLBILS). These schemes had been due to close at the end of January.
The Chancellor also confirmed that the 2021 Budget will be delivered on 3 March 2021 and will outline the next phase of the government’s plan to combat COVID-19 and protect jobs.
The Chancellor said:
‘Our package of support for businesses and workers continues to be one of the most generous and effective in the world – helping our economy recover and protecting livelihoods across the country.
‘We know the premium businesses place on certainty, so it is right that we enable them to plan ahead regardless of the path the virus takes, which is why we’re providing certainty and clarity by extending this support.’
Internet link: GOV.UK news
HMRC has issued some guidance to taxpayers that deferred their VAT payments between 20 March and 30 June 2020 and still have payments to make.
HMRC is advising taxpayers who deferred their VAT payments to:
- pay the deferred VAT in full on or before 31 March 2021
- or opt in to the VAT deferral new payment scheme when it launches in 2021
- or to contact HMRC if they need more help to pay.
Taxpayers can pay their deferred VAT in full by 31 March 2021. There is no need to contact HMRC. However, if taxpayers want to use the new payment scheme they will need to opt in. The new online opt in process will be available in early 2021. Taxpayers will need to opt in themselves as this cannot be carried out by tax agents.
Where taxpayers opt in to the VAT deferral new payment scheme instead of paying the full amount by the end of March 2021, they can make up to 11 smaller monthly instalments which are interest free. All instalments of the outstanding amount must be paid by the end of March 2022.
In order for taxpayers to use the scheme they must:
- still have deferred VAT to pay
- be up to date with their VAT returns
- opt in before the end of March 2021
- pay the first instalment before the end of March 2021
- be able to pay the deferred VAT by Direct Debit.
Taxpayers must prepare to opt in by:
- creating their own Government Gateway account if they do not already have one
- submitting any outstanding VAT returns from the last four years. You will not be able to join the scheme if you have not done so
- correcting errors on their VAT returns as soon as possible. Corrections received after 31 December 2020 may not show in their deferred VAT balance
- ensuring they know how much they owe, including the amount they originally deferred and how much they may have already paid.
Internet link: GOV.UK guidance
Self-Employment Income Support Scheme
HMRC is advising the self employed that the Self-Employment Income Support Scheme (SEISS) has been extended. Taxpayers who were not eligible for the first and second grant will not be eligible for the third.
To make a claim for the third grant the taxpayer’s business must have had a new or continuing impact from coronavirus between 1 November 2020 and 29 January 2021, which they reasonably believe will have a significant reduction in their profits.
The third taxable grant is worth 80% of a taxpayer’s average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £7,500 in total.
The online service to claim the third grant is open. Taxpayers should make their claim from the date HMRC give taxpayers either by email, letter or within the service. Eligible taxpayers must claim the third grant on or before 29 January 2021.
The grant does not need to be repaid, but will be subject to Income Tax and self-employed National Insurance and must be reported on the taxpayer’s 2020 to 2021 Self Assessment tax return. Taxpayers must keep evidence to support their claim.
Internet link: GOV.UK guidance
Extended Furlough Scheme
Further guidance on the use of the furlough scheme was released on Tuesday, confirming the earlier announcement that the scheme was to be extended until the end of March 2021.
Overall, it the rules are fairly similar to the way the scheme worked before.GLass jar full of money, tipped over and spilling
Key points of note:
From 1 November 2020, employers can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month.
In November and December 2020 and January 2021, employers will only be required to pay National Insurance Contributions and pension contributions, making the extended CJRS more generous than the previous version of the CJRS.
There is increased flexibility through use of flexible furlough from the start, as such there is no minimum furlough period.
Employees do not need to have been furloughed before in order to be placed into the scheme during the extension.
However, all employees will need to meet the eligibility requirements.
If employees were on your payroll on 23 September 2020 and were made redundant or stopped working for you afterwards, they can also qualify for the scheme if you re-employ them. The safest way appears to make it clear that employment is not continuous i.e. ensure a break of at least one week ending with a Saturday.
Employers can put retrospective agreements / backdated agreements for furlough from 1 November 2020, but only providing they have this agreement in place by Friday 13 November 2020.
From December claims for staff serving their notice period may be excluded from the scheme. Whilst this has yet to be confirmed, it would be consistent with the Job Support Scheme prior to its postponement where claims were not to be permitted for those serving a notice period.
Staff who wish to return from maternity leave early to be put on furlough need to provide at least eight weeks’ notice of their intention to do this, and their employer cannot place them on furlough until the eight weeks are up.
Rules on taking annual leave whilst furloughed to remain the same – all holiday must still be paid in full.
Where staff fall ill it will be the employer who decides whether to keep them furloughed or whether to class them as on sick leave and therefore start paying them SSP if they qualify.
The guidance on calculating your claim can be found here.
As we know, the furlough scheme has seen many amendments since it was originally implemented, and there are plans to review the scheme in January 2021 so we advise employers to continue to be vigilant and keep a close eye out for changes going forward.
The Kickstart Scheme has been introduced with the aim of creating new jobs for those aged 16 to 24 who are considered to be at the highest risk of long-term unemployment. It offers employers 100% of the National Minimum Wage (or National Living Wage) for 25 hours per week for 6 months, employer National Insurance contributions, and employer minimum automatic enrolment contributions. You can find out more about the Kickstart Scheme or apply here.
Other job measures
The Chancellor announced a wide range of other measures aimed at supporting, protecting and creating jobs. Included among these measures were further funding to support traineeships, work placements and apprenticeships, and substantial additional funding for Jobcentres to help unemployed people find jobs. In total, these measures are projected to cost £1.6 billion. For more information about coronavirus government statutory sick pay, go to the Department for Work & Pensions website here.
VAT for the hospitality and tourism sectors
Two temporary VAT cuts were announced for particular sectors of the economy. These will both apply from 15 July 2020 to 12 January 2021, and will both see VAT rates cut from the standard 20% rate to the reduced 5% rate.
The cuts will apply to the following:
– Supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafes and similar premises across the UK
– Supplies of accommodation and admission to attractions across the UK.
Further guidance on the precise scope of these cuts will be published shortly.
Financial Opportunities and Support Available
For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021. You are eligible for this if you’re self-employed. It’s also an automatic deferral so there’s no need to make an application.
In addition, 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. This has recently been scaled up to ensure all firms and individuals have access to this. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
If you are concerned about being able to pay your tax due to COVID-19, HMRC have setup a dedicated Tax Helpline: 0800 0159 559
For those unable to pay due to COVID-19, HMRC will discuss your specific circumstances and explore:
- agreeing an instalment arrangement
- suspending debt collection proceedings
- cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately.
We would encourage all clients who are forecasting cash-flow issues due to COVID-19 to contact HMRC. They will be looking for a cash-flow forecast that shows the issue to approve payment holidays. If you need help creating this please contact us.
All UK businesses that are VAT registered can now defer their VAT payments. You don’t need to apply, it’s an automatic offer where businesses won’t need to make a VAT payment during the period 20th March – 30th June 2020. Taxpayers will be given until March 31st 2021 to pay. VAT refunds and reclaims will be paid by the government as normal.
Banks and Loans
Banks are also increasing credit lines and overdrafts and in some cases they may even offer repayment holidays. If you are predicting cash-flow issues please contact all of your suppliers now to ask about relaxing payments.
We are also seeing some improved terms in cases of businesses renegotiating supplier payments and even improved pricing.
Business Interruption Loans
The Coronavirus Business Interruption Loan Scheme gives SME’s (with a turnover of at least £100,000) access to loans, overdrafts, invoice finance and asset finance of up to £5 million for up to 6 years. The Scheme is open until 31st January 2021.
The government will also 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.
The government will provide lenders with a guarantee of 80% on each loan (subject to pre-lender cap on claims) to give lenders further confidence in continuing to provide finance to SME’s.
To apply you will need to speak to your bank or one of the approved lenders listed here. After a review of the system, applications will now not be limited to businesses that have been refused a loan on commercial terms, as had previously been the case. Banks have also been banned from asking company owners to guarantee loans with their own savings or property when borrowing up to £250,000.
Larger firms with a turnover of up to £500m will also be eligible for more help. The revamped scheme will offer government-backed loans of up to £25m to firms with revenues of between £45m and £500m.
Firms will have to prove that they are viable businesses which have been trading successfully, but just need extra support to deal with short term difficulties caused by the current disruption. Some firms may not be successful. We can help you get the necessary cash-flow forecasting and planning in place. If you’d like to arrange a call to discuss, then please contact us.
UPDATE The Business Bounceback Loan Scheme
Please note that as of 2 November, the Government has announced that the Bounce Back Loan Scheme (BBLS) will be extended until 31 January 2021. In addition, the Chancellor also announced new Pay as You Grow measures for borrowers who have accessed the Bounce Back Loan Scheme.
From 10 November, it was announced participating lenders in the scheme are able to offer smaller businesses across the UK a ‘top-up’ to their existing Bounce Back Loan if they originally borrowed less than the maximum amount available to them.
Apply via 50 accredited banks. Best to apply via your own Business Bank for a quicker decision. Check Online Banking from 9am. Please note this is aimed at businesses with 10 employees or fewer and you must have been in business as at 1 March 2020. Your business must not have been in financial difficulty in December 2019. Further note:
1. No guarantee required
2. No security required
3. If defaulting at any point then HMRC will retrospectively check applications for misrepresentation and potentially go down the route of fraud so again, only apply if you have an intention of paying it back.
4. Simple form. Can apply even if already applied for the BILS. Will changeover later. If you have the loan from the BILS then you can ask for it to be converted.
5. Money in a few days (that’s the one that’s going to be a crazy one for the banks to handle but let’s see)
The following is from the Financial Times this morning.
“So, what will happen if a business cannot afford to repay the bounce back loan? Banks will chase borrowers who default in the normal way, seeking to seize property or other assets. If they cannot recover the money, they will approach the British Business Bank and activate the government guarantee. The British Chambers of Commerce said 30 per cent of its members could not afford to pay loans back. Suren Thiru, head of economics at the British Chambers of Commerce, said: “Serious consideration must . . . be given to the expansion of grant schemes for firms unwilling to take on more debt repayments”
If your annual turnover is £100,000, you could borrow £25,000 over 72 months with the first 12 monthly repayments of £0 and 60 monthly capital repayments of £416.67. Interest is charged each month against the amount outstanding at an annual interest rate (fixed) of 2.5%. This means the first payment of capital and interest would be £469 at month 13 (this represents the highest capital and interest repayment). Total amount repayable by you will be £26,589 (the total amount repayable excludes the Business Interruption Payment).
The Covid-19 Corporate Financing Facility
For larger companies, the Bank of England will buy your short-term debt.
This will support your company if it has been affected by a short-term funding squeeze, and allow you to finance your short-term liabilities. It will also support corporate finance markets and ease the supply of credit to all firms.
Further information on this will be provided when we know more.
For further advice regarding sick pay and how best to support your employee’s should they self-isolate, the ACAS website has issued the following information – https://www.acas.org.uk/coronavirus
Coronavirus help for self-employed
The Self-Employed Income Support Scheme (SEISS) will financially support those registered as self-employed.
To find out more and apply for Universal Credit, please visit the gov.uk Universal Credit page
Are you SELF-EMPLOYED? My briefing on the new Coronavirus Income Support scheme – who qualifies, freelance issues, agency workers, limited companies and more.
Now including subtitles…
NOTE: I missed one point. If your avg income's over £50,000, you can't get it.
Please share! pic.twitter.com/nlpEHIRO8V
— Martin Lewis (@MartinSLewis) March 31, 2020
Mortgage payment holidays of up to three months have also been introduced by many lenders as a way to ease the financial burden.
Support has also been pledged for renters, so if you rent, please speak to your landlords.
The government has also announced that it will delay the implementation of the new IR35 reforms that were due to be brought in for all freelance workers.
A Business Rates Holiday
A business rates holiday has been introduced for 2020-21 for retail, hospitality and leisure businesses with a rateable value of over £51,000.
Businesses that received the retail discount in 2019-20 will be re-billed by their local authority as soon as possible.
Those businesses eligible for the newly expanded retail discount and/or the new pubs discount may need to apply to their local authority to receive the discount.
A rates holiday has also been introduced for all early years nurseries.
You don’t need to take any action. This rates relief will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge. They’ll do this as soon as possible.
You can estimate the business rate charge you’ll longer have to pay this year using the HMRC business rates calculator.
The Retail and Hospitality Grant Scheme
Up to a £9,000 grant will be provided to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value between £15,000 and £51,000.
Properties that will benefit are those operating:
- as shops, restaurants, cafes, drinking establishments, cinemas and live music venues.
- for assembly and leisure.
- as hotels, guest & boarding premises and self-catering accommodation.
For businesses in these sectors with a rateable value of under £15,000, they will receive a grant of up to £8,000.
For businesses in these sectors with a rateable value of between £15,001 and £51,000, they will receive a grant of up to £9,000.
Your local authority will write to you if you are eligible for this grant..
Financial Support for Artists, Creative Practitioners & Freelancers
The Arts Council are making £20 million worth of grants available to individuals working in the cultural sector, including artists, creative practitioners and freelancers.
Those whose main work is in the following areas may be eligible:
- Visual Arts
- Combined Arts
- Museums practice
- Libraries (activity that helps deliver the Universal Library Offers)
This includes choreographers, writers, translators, producers, editors and freelance educators.
More details can be found on the Arts Council Website.