Supporting Your Business Through Covid-19

Posted by Emma Robison on Apr 1, 2020 7:15:26 PM
Emma Robison
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With numerous calls from our clients, asking how and what support is out there for their business, I thought I would offer a round up blog, to ensure you are all aware of the support that is currently available.

We are an SME ourselves and understand the sheer scale of the issues that you are currently facing.  The BFS (UK) Ltd family are here to help keep you, your family and your business stay safe through these turbulent times. Let’s get through this together. Pick up the phone, drop us an email but don’t sit there on your own - we really are here to help!

I have summarised 5 critical pointers that, if not already, you should be considering.

 

1. Coronavirus Business Interruption Loan Scheme (CBILS)

This is a Government backed scheme to help businesses affected by Covid-19. A list of accredited lenders can be found on the British Bank website, however, the lending criteria may vary from lender to lender. A point to note here, the Big Four Banks; Lloyds, Barclays, HSBC and NatWest, will NOT take personal guarantees as security for lending below £250,000.

The demand is high for CBILS facilities and therefore phone lines and branches may not be able to handle enquiries in person.

What should you do:

  • Choose a Lender, reviewing the options via the accredited lenders of the scheme
  • Check your eligibility
  • Check your financials are up-to-date to include:  Cash flow forecast, latest management information, bank statements
  • Draw a document together giving an overview of your business: what you do, how Covid-19 has affected you, if you have Furloughed Staff, contract put on hold
  • When writing your Business Plan, consider and document how the CBILS loan will help you trade out of your short- and medium-term difficulties.  Ensure the figure asked for is realistic.

The amount of information required can be overwhelming, however, please do not hesitate to contact us if you need support.

To assist you with making an application, we have compiled the following toolkit:

  •  CBILS Interactive Toolkit (with checklist)
  •  CBILS Completed Information Application Sample
  •  CBILS Interactive Information Application Template
  •  Cash Flow Forecast Template

Click here for your download

 

2. Deferring VAT and Income Tax Payments

This is an automatic scheme and no UK businesses are required to pay VAT until the 30th June 2020.

What should you do:

  • Ensure you submit your VAT in the usual manner
  • Cancel your DD

All Refunds and Reclaims will be processed in the usual manner.

If you are struggling to pay your Time to Pay Arrangement, please contact us.

 

3. Coronavirus Job Retention Scheme

Under this scheme all UK employers with a PAYE scheme will be able to access support to continue paying part of their employees’ salary for those that would otherwise have been laid off during this crisis.

To qualify for the ‘Furlough Grant’, employees must have been on the payroll on the 28th February 2020. Employees that are full, part and on flexible or zero house contracts qualify.

The Government will fund 80% of Furloughed workers wage cost, up to a cap of £2500 per month, plus the associated NIC and Minimum Employer Auto Enrolment Pension Contributions. It is up to you, the Employer, whether to fund the difference of the 20%.

What should you do:

  • You do not have to place all your employees on Furlough. (The minimum length of time for being furloughed and qualifying for the grant is 3 weeks. You can choose who applies to the scheme within your business
  • You will need to notify the Furloughed employees in writing of this change to their employment status in accordance with the exiting employment law and contract.
  • They can no longer work for your business. They also, cannot accept or be paid for any work for another business.
  • Keep accurate records. You will need to calculate the amount you are claiming and will only be able to submit one claim every 3 weeks.  This is the minimum length an employee can be furloughed.
  • Claims can be backdated until the 1st March 2020, if applicable

How to and what you will need ready to make the claim:

The process will be through the HMRC portal, this is expected to be live at the end of April 2020.

You will need:

  • Your PAYE reference number 
  • The number of employees being furloughed 
  • The claim period (start and end date) 
  • The amount claimed (per the minimum length of furloughing of 3 weeks) 
  • Your bank account number and sort code 
  • Your contact name 
  • Your phone number

Once HMRC has received your claim and you are eligible for the grant, they will pay it via BACS payment to a UK Bank Account.

You must pay the employee all the grant monies you receive for their gross pay, no fees can be charged.

You should make your claim in accordance with actual payroll amounts at the point at which you run your payroll or in advance of an imminent payroll.

If you have questions, please do not hesitate to contact us.

 

4. Payment Holidays on Current Finance Agreements

If you require payment holidays on your Current Finance Agreement, Asset Finance or Loans, varying banks will offer support.  Either 3 month payment holidays or reduced payments of Interest only.

What should you do:

  • Compile a list of all the Agreements
  • Lender
  • Amounts
  • Agreement Number

Have your cash flow forecast ready and provide an overview of how Covid-19 has affected your business, together with latest management figures and bank statements.

If you are unsure how to compile this or require support talking to lenders, please do not hesitate to call.

 

5. Self-Employment Income Support Scheme, due to Covid-19

  • You can apply if you’re a self-employed individual or a member of a partnership and have acceptance on the below criteria:
  • Your Income Tax Self Assessment tax return for the tax year 2018-19
  • Traded in the tax year 2019-20
  • Are trading when you apply, or would be except for COVID-19
  • Intend to continue to trade in the tax year 2020-21
  • Have lost trading/partnership trading profits due to COVID-19

Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment.

This is determined by at least one of the following conditions being true:

  • having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income
  • having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period

If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.

If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you must do this by 23 April 2020.

HMRC will use data on 2018-19 returns already submitted to identify those eligible and will risk assess any late returns filed before the 23 April 2020 deadline in the usual way.

The above information will hopefully assist you in these initial steps and as I noted at the start of this, we are all here for each other. 

I thought it would be useful to remind you of our sister business, White Label Resources Ltd, who are offering support to our clients in Back Office Solutions including Cash Flow Forecasting and Outsourced Credit Control. Please let me know if you would like any more information on this.

Our mobiles are on, and we have a number of members of staff who are able and willing to help you discuss the support tools or have a general chat about the obstacles you are hitting.

Whilst the landscape is forever changing (sometimes daily), we will get through this and I would ask you all to keep you and your families safe and we will contact you when any new information becomes available.

 

Topics: Covid-19

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