Friday evening saw another round of funding and measures introduced by Chancellor Rishi Sunak to support businesses across the UK.
- The headline announcement was the unprecedented announcements of the Coronavirus Job Retention Scheme, which will see HMRC reimburse 80 per cent of furloughed worker wage costs up to a cap of £2,500 per person.
This level of government intervention is unheard of, unexpected and will be a game changer for many businesses and employees. At the very least will buy them breathing space and some time to plan.
Questions initially remained around whether people who had already been made redundant could be brought back on. But now we have clarity and the scheme will be backdated to March, so businesses can take their employees back on and furlough them to qualify for grants!
But what if in three or six months’ time there’s no alternative but to make them redundant after all, will the government expect a claw-back? Are businesses happy to take the risk of a higher redundancy payment in the future?
- The deferral of VAT payments for the current quarter is also very welcome, whilst the money will still have to be paid by April 2021 this is a significant cash flow boost at exactly the right time for the vast majority of UK businesses.
The Government is hoping that this will go some way towards easing the pain of delay on implementation of the Job Retention Scheme grants for VAT registered businesses.
The self-assessment tax payments due to be made on 31 July 2020 has been deferred until 31 January 2021 too.
It is worth noting, these are deferrals – and the tax will still need to be repaid!
- Another welcome measure was the extension of the interest free period on loans in the Coronavirus Business Interruption Loan Scheme (CBILS) from six to 12 months.
CBILS will be available for loans of up to £5 million. Finance terms are up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.
At Burgis & Bullock we have invested in a lending portal to enable businesses to make a single application, which will be filtered to more than 100 of the major UK lenders!
There is still more to be done for the self-employed and small limited companies, but hopefully there will more to be come on that front in the coming days and weeks.
- Burgis & Bullock’s entire team are here to help with the current crisis and support with any forecasting or loan applications.
Keep safe and stay as positive as possible!