Financial Support Update 9 April 2020

As we head towards an unusual Easter weekend, there are comparatively few new developments or announcements affecting business and finance. We see in the media that there are some suggestions that the government is considering a review of the lock down; it will be interesting to see how this might be achieved and the impact this might have on businesses.

This briefing note provides updates and commentary on the following issues:

  1. Small business grants: further update
  2. CBILS: update
  3. Job intervention scheme: update
  4. Business rates: reminder
  5. HMRC payments: reminder
  6. Government guidance
  7. And finally

Grants

We believe all councils (including Canterbury) have now updated their websites for you to enter bank details and claim the grant if you are eligible. Many of you have already initiated the claim process and some have already received payment.

Letters were being issued by Canterbury City Council from yesterday (8 April) so keep checking your post. If you believe you are eligible but do not receive a letter by 15 April (next Wednesday), you should contact the Council after this date to check the position.

Corona Business Interruption Loan Scheme (CBILS)

There has been further coverage in the media about the effectiveness of the scheme.

We have recently seen a couple of issues with the scheme:

  • The usual affordability rules apply. Future performance is being based on 2019 results, which may be a problem if 2019 also happened to be a difficult year.
  • Determining the amount of finance required and linking it to the impact of the crisis.
    The process is not swift and the banks will follow usual procedures. Although many initially looked to CBILS for emergency funding, it has become clear that the scheme is likely to be more important once initial cash reserves have been exhausted, in other words to carry companies through May/June and into the summer. If you have not yet looked at forward cash flow, we recommend you do so now and assess whether you need to look again at funding options. If you think you do, it is our view that you should take appropriate action sooner rather than later to allow time for the inevitable application and approval process.

Job intervention scheme

We understand an announcement is being made today that the HMRC portal will be launched on 20 April. For all our payroll clients, we have been recording relevant information in preparation to make applications on your behalf as soon as the service is available. Part of this process will be to enter details of the bank account to which any payment should be made. In every case, we will require you to confirm these details to us by completing a form on OpenSpace. For security reasons, we will not accept confirmation of bank details by any other method. You should note that any delay in confirming these details will delay your claim and payment. We will be uploading forms to OpenSpace over the next few weeks in readiness.

We firmly believe that businesses should use the scheme where they are entitled to do so and we will continue to help them in this.

We note that HMRC yesterday publicly urged workers to report their employers if they are still being asked to work after being furloughed, saying “employees must be completely furloughed by their employer, that means they should not engage in any work for that employer whilst they are on furlough”. They also issued this warning “…otherwise, afterwards we would seek to recover the money from them and depending on the nature of the behaviour, if it amounted to knowingly trying to defraud us then we would take criminal action against employers.” Clearly, in light of these comments, you must ensure that you are complying with the scheme rules.

Whether we deal with your payroll or not, if you need guidance, please contact us.

Business rates

Please remember that there are other additional grants and reliefs available in these difficult times. If you are struggling with cash flow, you should contact your local council to explain the situation and to find out what they can do to help.

HMRC payments

As you will undoubtedly be aware, any VAT liability falling due up to 30 June 2020 is automatically deferred and does not need to be paid until 31 January 2021. The same is not true for PAYE or corporation tax, both of which remain due as normal.

If you are experiencing cash flow issues and would like to defer these liabilities, you must ring HMRC to request a deferral. Use the dedicated hotline 0800 0159559 and not any other number. We understand that they are currently being very helpful.

Government guidance

We see this morning that the web guidance at gov.uk has been reformatted and is now more user friendly.

If you have the inclination to look, the business guidance can be found here:
https://www.gov.uk/coronavirus/business-support

And finally

We would like to thank everyone who is reading and responding to these updates. We hope that they remain useful and please do feel free to forward them on to anyone who you think might benefit. Please also check out other information on https://acklandwebb.co.uk/blog/

As always, we remain here to help and support you as far as we can. All of the team are working from home but are otherwise operating as normal. If you need assistance or further guidance, please let us know.

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