Government support available in the wake of Covid-19

Special Report Government support available in the wake of Covid-19 April 2020

Government support available in the wake of Covid-19

As the Coronavirus pandemic forces the UK population to stay at home, companies and employees alike are left with uncertainty regarding cash, debt and staff. The Government has set out a wide-ranging package of measures to support businesses through this period of disruption. The measures include £330bn in loans, £20bn in other aid, a business rates holiday, deferred VAT payments (until 30 June 2020) and grant funding for SME’s, retailers and pubs.

These measures now also include the Self-employment Income Support Scheme.

Government backed loans

Coronavirus Business Interruption Loan Scheme (CBILS)

The temporary Coronavirus Business Interruption Loan Scheme launched on 23 March 2020 and supports small and medium- sized businesses (those with turnover under £45M) with access to loans, overdrafts, invoice finance and asset finance of up to £5 million over six years. The scheme is now open for applications. All major banks and a variety of other lenders are offering this scheme. James Burdekin, a Senior Associate in our Corporate team discusses these loans further here.

[It is anticipated that the Chancellor will shortly announce updates to the CBILS, which are expected to include:

• a removal for the requirement for personal guarantees for loans less than £250,000 • a cap on personal guarantees on loans above £250,000 to 20% (being the proportion of the loan which is not guaranteed by the government) • a relaxing of the lending criteria to allow more businesses to access the scheme by removing the test as to whether the applying business could otherwise access finance]

Other Measures

Statutory Sick Pay Changes to SSP so that: • SSP is payable from day one of the illness (rather than day four) • 2 weeks of SSP costs for employees absent due to Covid-19 will be underwritten by the government HMRC Tax Deferrals VAT payments to HMRC owed between 20 March and 30 June 2020 can be deferred until the end of the tax year.

Income tax self-assessment payments due on 31 July 2020 will be deferred until 31 January 2021

HRMC have also set up a dedicated helpline for business struggling to pay tax due to Covid-19. The helpline number is 08000241222. For those looking to access the CBILS scheme, we understand that applications to HMRC for deferrals will assist in evidencing loan requirements. Business Rates Relief A one-year exemption to business rates will apply to all businesses in the following sectors: • Retail, hospitality and leisure • Nurseries on OFSTED’s Early Years Register For further information around measures announced in relation to business rates, please see the article from our Real Estate team, here.

Government backed loans

Coronavirus Business Interruption Loan Scheme (CBILS)

The temporary Coronavirus Business Interruption Loan Scheme launched on 23 March 2020 and supports small and medium- sized businesses (those with turnover under £45M) with access to loans, overdrafts, invoice finance and asset finance of up to £5 million over six years. The scheme is now open for applications. All major banks and a variety of other lenders are offering this scheme. James Burdekin, a Senior Associate in our Corporate team discusses these loans further here.

[It is anticipated that the Chancellor will shortly announce updates to the CBILS, which are expected to include:

• a removal for the requirement for personal guarantees for loans less than £250,000 • a cap on personal guarantees on loans above £250,000 to 20% (being the proportion of the loan which is not guaranteed by the government) • a relaxing of the lending criteria to allow more businesses to access the scheme by removing the test as to whether the applying business could otherwise access finance]

Covid Corporate Financing Facility (CCFF)

Filing of Accounts Accounts due for filing after 25 March 2020 which are impacted by Covid-19 will be eligible for a three-month extension to their filing date. Applications must be made via the Companies House website prior to the filing deadline. Changes to Insolvency Laws The Government has proposed temporary changes to insolvency laws in response to the issues businesses are facing during the Covid-19 crisis. These include the temporary suspension of wrongful trading provisions for company directors.

For further information on these proposals, please see the article from our Insolvency team, here.

If you have any concerns about the anything mentioned in this report, please contact email Michael at michael.hall@keebles.com.

Michael Hall Partner

e: michael.hall@keebles.com

T +44 (0)114 276 5555 keebles.com For a list of our offices visit our website.

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