ANNOUNCEMENT:

£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, 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 October 2020.

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 admin@actioncoach.com.

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: 21st November).

The summer economic update had the feel of a mini-Budget, with the Chancellor announcing a number of new measures as part of his “plan for jobs”.

The £160 billion spent by the Treasury so far on Coronavirus-related measures has constituted the first “protection” phase of the government’s response to the virus. The Chancellor told us that we are now in the second phase, in which the government will focus on supporting people to find jobs and on giving businesses incentives to create and protect jobs. The third “rebuild” phase will follow.

The Chancellor confirmed that the furlough scheme will not be extended any further, but he did announce that employers will be able to claim a jobs retention bonus for previously furloughed employees that remain employed until 31 January 2021. A number of measures were announced to help 16 to 24 year olds find jobs, and the construction sector received much attention, with the main announcement being a SDLT holiday until 31 March 2021. Finally, a much trailed VAT reduction was announced, with VAT due to fall from 20% to 5% in key parts of the hospitality and tourism sector until January 2021.

Although this was not a Budget speech, the Chancellor committed up to £30 billion towards these announcements, and it is clear that he has not put away the Treasury chequebook yet.

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.

Kickstart scheme

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

Tax (HMRC)

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:

  1. agreeing an instalment arrangement
  2. suspending debt collection proceedings
  3. 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.

VAT

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.

Suppliers

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”

Illustrative example:

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

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.

IR35 Delay

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

A £25,000 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 £10,000.

For businesses in these sectors with a rateable value of between £15,001 and £51,000, they will receive a grant of £25,000.

Your local authority will write to you if you are eligible for this grant.

Support for businesses that pay little or no business rates

The government are providing additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.

If your business is eligible for SBRR or rural rate relief, you will be contacted by your local authority – you do not need to apply. However, we are being informed that if you can make contact with your local authority and send a copy of your rates bill, showing your small business rates relief, you will get your grant quicker than if you wait to be contacted.

Funding for the scheme will be provided to local authorities by the government in early April.

You can find your local authority here .

Insurance

Businesses that have cover for both pandemics and government-ordered closure should be covered, as the government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres etc is sufficient to make a claim.

Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics.

Facebook Small Business Grants

Facebook have made $100m worth of Cash Grants and Ad Credits available to help Small Businesses through the disruptions caused by the Covid-19 global outbreak. They will begin taking applications in the coming weeks. In the meantime, a web-page has been set up where you can sign up for updates on when these grants become available.

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:

  • Music
  • Theatre
  • Dance
  • Visual Arts
  • Literature
  • 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.

 
Any questions or support you need please get in touch – let’s work through this together to ensure you and your business survive and thrive.