The Coronavirus Business Interruption Loan Scheme (CBILS)

Attached is some general information about the scheme. The advice is to go to approach your own bank initially. My Barclays manager has shared with me  the minimum information that would be required to proceed with a request – see below. Clearly this will require some assistance from us if you wish to proceed with an application.  

The  huge advantage that we will have to pull the necessary information together for those of you who use our Xero or other cloud based platform for your book keeping, is that we can see your numbers, they are up to date and we can link these into other tools we have to generate the reports to show the impact a downturn in trade may have, what additional funding is required and also project forward to prepare the necessary forecasts required – so please get in touch with us if you require our help in this.

The last 2 years trading accounts, with management accounts for 2019 if 2019 full accounts are not available

All Key Directors to complete as “statement of assets and liabilities and expenditure” documemnt

Explain what the key impacts of Coronavirus have been, not just ‘Coronavirus’ but some specifics e.g. loss of clients walking through the door, forced shutdown, staff sickness.

What are your largest costs currently e.g. staffing costs, business premises costs, stock and or/other debt costs and what are you doing/done to reduce these?

Does you have up to date cash flow forecasts? Please send these to me even if basic.

When the Pandemic is resolved, how long do they believe it will take to start recovery? What challenges will you face e.g. future loss of contracts/staff availability?

What changes is your business making in the short and longer term to help drive business performance back to either pre virus levels or beyond?


THE CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME

Coronavirus Job retention scheme

If you have employees who would otherwise be laid off during this crisis, you may want to take advantage of the Coronavirus Job retention scheme.  As yet there is no detailed guidance published on this – hopefully it will come out very soon. We have understandably received a large number of enquiries about how this might work and so this email is designed as an overview of what we know now, and some interpretation which I have gleaned from other professionals. I hope this helps you.  Also attached is some suggested wording for an agreement for an affected employee.


Furlough Leave Agreement


Coronavirus Job Retention Scheme

Business Risk and Financial Planning for COVID-19

Download our Business Risk and Financial Planning for COVID-19 document below:

Business Risk and Financial Planning for COVID-19

Coronavirus update 21.3.20

Last night the Chancellor stood in 10 Downing Street and announced some new support for small businesses.

At this point in time, we still do not understand the detail of the various measures that have been announced – rest assured we will update you as soon as things become clearer.

They can be summarised as…

Coronavirus Job Retention Scheme

HMRC will reimburse 80% of furloughed (basically another word for redundant) workers wage costs, up to a cap of £2,500 per person per month. HMRC are working urgently to set up a system for reimbursement as currently their systems are not able to facilitate payments to employers.

Under the new Coronavirus Job Retention scheme, government grants will cover 80% of the salary of PAYE employees who would otherwise have been laid off during this crisis. The scheme, open to any employer in the country, will cover the cost of wages backdated to 1 March 2020 and will be open before the end of April. It will continue for at least three months, and can include workers who were in employment on 28 February.

To claim under the scheme employers will need to:

  • designate affected employees as ‘furloughed workers’, and notify employees of this change. Changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation; and
  • submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal. HMRC will set out further details on the information required.
  • HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month.

While HMRC is working urgently to set up a system for reimbursement, we understand existing systems are not set up to facilitate payments to employers. Business that need short-term cash flow support, may benefit from the VAT deferral announced below and may also be eligible to apply for a Coronavirus Business Interruption Loan

VAT and Income Tax Deferral

The next quarter of VAT payments will be deferred, meaning businesses will not need to make VAT payments until the end of June 2020. Businesses will then have until the end of the 2020-21 tax year to settle any liabilities that have accumulated during the deferral period.

The deferral applies automatically and businesses do not need to apply for it. VAT refunds and reclaims will be paid by the government as normal.

If you want to take advantage of this then we suggest you should also cancel your DD for HMRC VAT via your online banking

Income Tax payments

The self-assessment tax payment you should be making on 31 July 2020 has been deferred until 31 January 2021.

To reiterate these are deferrals not write offs, so both the tax and the VAT will still be payable.

This is an automatic offer with no applications required. No penalties or interest for late payment will be charged in the deferral period.

The Time to Pay helpline has fallen over a number of times this week and has been unable to cope, so this relief is something that was already happening in practice anyway.

HMRC Time to pay

HMRC’s Time to Pay scheme can enable firms and individuals in temporary financial distress as a result of Covid-19 to delay payment of outstanding tax liabilities. HMRC’s dedicated Covid-19 helpline provides practical help and advice on 0800 0159 559. The helpline has been difficult to access so the VAT and the self assessment deferment schemes are automatic and you do NOT need to apply for them.

Support for businesses through the Coronavirus Business Interruption Loan Scheme

The interest free period on loans under this scheme was extended from 6 to 12 months.

As far as we can see all the rest of the reliefs have stayed the same.

You can get full details of everything that is currently available to small businesses (basically loads of loans!) here…

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-guidance-for-employees

Liric Coronavirus Catch-Up 

I am going to attempt an online meeting  to answer any questions you have about how this may affect your business. I will provide further details of this as soon as I can.

We will email separately with some practical advice to help you in this difficult time, but one thing we would say is to try and not worry about what has not yet happened. We are here to help and support you.

And a final word……Stay safe. Do what you can with what you have. Control what’s in your control. Help as many people as you can through this period with any spare resources you have, whether that’s time, money or love. This will not last forever, nor for very long and we will get through this… together… and be stronger at the other side.

Dont forget to join our WhatsApp group for latest updates and discussion   https://chat.whatsapp.com/EJhUepkQqm20pckeERxsG1

Lisa and the Liric Team

Liric Accountants

Covid 19 Support for Businesses from Liric – 19th March 2020

Hello

In light of the ever-changing situation around Covid-19, we wanted to share with you what support and help there is available. Apologies for the general nature of this email but we wanted to get something out before talking to you on an individual basis.

Liric Support…

Firstly, we created some capacity within the team to enable us to grow earlier this year. Whilst that capacity is available, we’re happy to support you on a case by case basis without charging standard rates. So, for example, if you are in an industry that has been severely affected already (travel, tourism, hospitality etc) we’d be delighted to help with some short-term cash flow projections or just act as a sounding board. Please let us know if you need any support like this and we can chat it through.

The Liric team is transitioning to working from home this week and it is likely that the office will not be open after Friday 20 March. Our focus over the last 2 years on moving our client’s businesses to a cloud accounting platform makes this much easier for both us and you. All team members have remote access to our office servers and telephone lines will be open as usual. Should your call go through to voicemail, please leave us a message, we will return your call.

If you need to drop something into the office, please call 07590 042 325 ( Lisa Mobile) before you leave to make sure there will be someone in to meet you.

All meetings going forward will be moved to the telephone or Zoom. We’ll ask what you prefer when we book the appointment.

Talking to several clients this week it is clear the community is already experiencing cancelled orders/events/contracts, supply chain issues and some challenges with cashflow.

What’s App Group…

This advice is a moving target so it is as up to date as it can be as we write this email. To make communication with us as instantly as possible, we have created a WhatsApp Group. You can join the group by following the link below ( we think easier if you do this direct from your phone):- 

https://chat.whatsapp.com/EJhUepkQqm20pckeERxsG1

We will then issue any updates on Government financial action, as soon as we have digested it, to this group with a follow up email. Please be aware if you choose to join this group:-

· Other people may be able to see your telephone number.

· We will not share confidential information in the group.

· Anyone that “spams” the group will be removed instantly without warning.

Review your overheads

If you are predicting cashflow difficulties it is sensible to review your overheads in the business and pause any spending you feel may not be necessary at this time. The first thing to do is categorise expenditure (both personal and business) into “essential” and “nice to have”. Once you have those numbers you can better appraise your situation and we can support you further with short term cash flow forecasts.

HR Dept

Our HR support is through Markel (formerly Abbey Tax). If you need any support relating to HR, please call 0345 250 0762 and quote reference “ABTAX” and state you are a customer of Liric.

Your own Bank

Contact your own bank, either your dedicated manager if you have one or your business call centre to discuss your options should you need a new or increased overdraft limit, asset finance, credit cards or other forms of temporary finance.

Other potential funding sources

Please note these are only a few of the options available to you and these do not form a recommendation by Liric.

Capital On Tap – https://www.capitalontap.com/en/

Funding Circle – https://www.fundingcircle.com/uk/

Iwoca – https://www.iwoca.co.uk/

NatWest Rapid Cash – https://rapidcash.natwest.com/

Satago – https://www.satago.com/

Turning now to the Government support…

In the Budget 2020, the Chancellor announced that a ‘Coronavirus Business Interruption Loan Scheme’ (CBILS) will temporarily replace the Enterprise Finance Guarantee (EFG), becoming available over the coming weeks.

It will operate in a similar way to EFG and be provided by the British Business Bank, but will offer more attractive terms for both businesses and lenders, with the aim of supporting the continued provision of finance to UK businesses during the Covid-19 outbreak.

As it stands, we do not know any more than this. More information will be available in the coming days and weeks, please click on the link below for updated advice:-

Coronavirus Business Interruption Loan Scheme – Temporarily Replacing the Enterprise Finance Guarantee Scheme

HMRC and Time to Pay

HMRC have launched a helpline to help businesses concerned about paying their tax due to coronavirus (COVID-19). Again, this appears to be a “work in progress”. You will find more details below, but if you have any concerns about making payment to the tax authorities please call us immediately for support.

https://www.gov.uk/government/news/tax-helpline-to-support-businesses-affected-by-coronavirus-covid-19

https://www.gov.uk/government/publications/support-for-those-affected-by-covid-19/support-for-those-affected-by-covid-19#to-support-businesses-experiencing-increases-in-costs-or-financial-disruptions

Official guidance for employers

For HMRC’s guidance for employers, please follow the link below:-

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/guidance-for-employers-and-businesses-on-covid-19

Statutory Sick Pay SSP Support

To support businesses experiencing increases in costs or financial disruptions:-

· The government will bring forward legislation to allow small and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19.

· The eligibility criteria for the scheme will be as follows:-

o This refund will cover up to two weeks’ SSP per eligible employee who has been off work because of COVID-19. Employers with fewer than 250 employees will be eligible.

o The size of an employer will be determined by the number of people they employed as of 28 February 2020. Employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19.

o Employers should maintain records of staff absences, but employees will not need to provide a GP fit note.

o The eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to self-isolators comes into force.

o The government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible. Existing systems are not designed to facilitate employer refunds for SSP.

The information above has been taken from the following Source:-

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/871900/Covid-19_Budget_fact_sheet_FINAL.pdf

Again, it is unclear how this will be organised and how quickly the payroll software will catch up with the situation.

We are more than happy to discuss your individual circumstances and advise on the best way forward.

We appreciate these are unprecedented and challenging times to be in business and we all face a period of uncertainty. No one can predict the future but we believe we can all pull together as businesses and support each other.

The Liric team are here to help you. If you need a sounding board, some advice or a steer in the right direction, then please don’t hesitate to get in touch.

Spring Statement 2019

The Chancellor’s Spring Statement took place yesterday. There was not a lot new apart from clarifying that MTD (Making Tax Digital) will not yet be rolled out for taxes other than VAT, which is coming in from 1 April 2019. We have summarised what was said, together with other topics of interest (‘Looking Ahead’) in our newsletter which we hope you will find of interest. Please download it here.

Our summary includes updated forecasts for the UK economy and public finances, as published by the Office for Budget Responsibility. The Chancellor pledged to bring forward the £700 million reforms for business apprenticeships, and also announced that a £26.6 billion ‘deal dividend’ would be made available to help boost the economy, providing a Brexit agreement can be reached.

For advice on any of the topics covered in our Spring Statement newsletter, and how they may have an impact on your business or personal finances, please give us a call on 01763 853 633.

Liric March newsletter

For all the updates from Liric, please click here.

Xero Gold Partner

Liric December newsletter

For the latest news and reminders from Liric, please click here.