GOVERNMENT ANNOUNCED SUPPORT FOR WET-LED PUBS
In summary support is for pubs that are "Wet-Led", that is pubs that derive less than 50% of their income from food, and is in the form of a one-off £1000 Christmas grant
The key. points are;
Check your eligibility and how to apply here >
APPLICATIONS NOW OPEN FOR SELF EMPLOYED INCOME SUPPORT SCHEME GRANT EXTENSION
Self-employed and need support?
The Self Employed Income Support Scheme Grant Extension will now open earlier than planned, you will now be able to apply from 30 November 2020 to receive 80% of average trading profits for the third grant covering November 2020 to January 2021
CJRS CLAIMS DEADLINE
EMPLOYERS: Note all Job Retention Scheme claims for the periods up to 31 October need to be made by 30 November 2020
Click here for more information >
UPDATE: EXTENDED SUPPORT FOR BUSINESSES THROUGH THE JOB RETENTION SCHEME
EMPLOYERS: The Coronavirus Job Retention Scheme has been extended until the end of March 2021. It will cover 80% of employees' wages (which will be reviewed in January 2021). Employers will need to pay NIC, PAYE and pension contributions etc.
Further guidance can be read here>
NEW GUIDANCE FOR SELF EMPLOYED
Self-employed and need support?
The Self Employed Income Support Scheme Grant Extension will now open earlier than planned, you will now be able to apply from 30 November 2020 to receive 80% of average trading profits for the third grant covering November 2020 to January 2021.
Full eligibility criteria are now available
Read the guidance here >
DEADLINE FOR CLAIMS
EMPLOYERS should note that all Job Retention Scheme claims for the periods before 1 November need to be made by 30 November 2020
Click here for more information>
CHANCELLOR ANNOUNCES SUPPORT TO PROTECT JOBS AND HELP BUSINESSES WITH CASH FLOW
Today the Chancellor announces further support for businesses and individuals as the government looks to manage the virus whilst protecting jobs.
We are in a very different position to back in March, when there were many uncertainties and the measure implemented were for immediate support and thought temporary. We now know that further restrictions are likely for the next 6 months, and the hence the support announced today.
The primary goal of the next stage is to protect jobs, yet the current Job Retention Scheme, more commonly known as "furlough" will finish at the end of October 2020. The new scheme is aimed at protecting genuine jobs, and not to support those that can only survive through the furlough scheme.
Lucinda Matkin of LM Insolvency welcomed the new scheme stating "it offered continued support in unprecedented times, but also acknowledged that support must be focused viable businesses" she went on to say" It is clear that not all jobs will be saved. nor all companies, but this is not possible for any government. The rate of insolvencies have been significantly lower than the previous year, with company insolvencies for the month of August 2020 being 43% lower than the same time last year. Likewise bankruptcies were also down 43% on the same month last year. These statistics illustrate the need to support what the chancellor termed viable jobs and not just those that can survive through the furlough scheme, as many businesses that would originally have been insolvent have in effect been given a lifeline, or the inevitable has been delayed"
So what is the continued support?
There are two elements;
Job protect comes in the way of a New Job Support Scheme with three objectives;
The scheme will run for 6 months from 1 November 2020 (follow on from the furlough scheme which will end). Its aimed at viable jobs, so is support for those working.
It is support for those working at least one third of their normal hours, which a company/employer will pay for as normal.
For the remainder which they do not work, the employee will be supported further by the government and the employer, with each contributing one third of the pay for normal hours not worked.
All small and medium sized businesses will be eligible to claim for the scheme, but large business will need to prove they have been affected with a fall in turnover. The scheme will also be open to those that did not utilise the furlough scheme.
The Job Retention Bonus and Kick Start Schemes remain in place and are unaffected by the new scheme.
CASH FLOW SUPPORT
The second part of the support announced today by the chancellor is aimed at support the cash flow of businesses, whilst they protect jobs.
There are no new loan schemes or grants announced rather an extension of existing schemes.
Bounce Back Loans
Bounce Back Loans gave a £38 billion boost to businesses, and originally were interest free for year and then repaid over 6 years. The "Pay as You Grow" announced today means these loans can now be paid back over a period up to 10 years, almost halving the monthly payments, companies also have options to make interest only payments for a period of time and take 6 months repayment holiday if really struggling. Further more these measure would not impact the credit score of a business using them.
Lucinda Matkin of LM Insolvency said "this will help businesses as they look to recover, but I hear of many businesses that took a minimal loan amount, thinking the impact would only be temporary, and under current terms are unable to top up that loan. Now that it is clear we face longer term restrictions, an option for those that had not utilised the support fully would have been extremely beneficial to those businesses that miscalculated the impact of the outbreak or the longevity of it"
Business Interruption Loans (CBILS)
The government backed guarantee has also been extended to 10 years for these loans, and the deadline for applying has been extended.
Over £30 billion of vAT was deferred to March 2021. To help cash flow rather than the a lump sum becoming due, companies will be able to spread the cost over 11 months interest free.
In addition the reduced VAT rate of 5% for the hospitality industry will remain at 5% until the 31 March 2021.
Self Assessment Tax
Deferred Self Assessment payments due January 2021, can also be spread over 12 months from next January, rather than a lump sum becoming due.
If you are still going to find managing cash difficult, having utilised cash reserves and are juggling reduced income with your outgoings, please do not hesitate to contact us at LM Insolvency, you have more options the soon you act.
Likewise if you have decided that you no longer wish to continue, we can talk you through the options available, whether insolvent (unable to pay all your debts including redundancies) or solvent (and looking to save tax on exiting your business). Email firstname.lastname@example.org or call 07972928153
A NEW GOVERNMENT BACKED BOUNCE BACK LOAN SCHEME FOR SMALL BUSINESSES UP TO £50,000
On 27 April 2020 the Chancellor announced a new Bounce Back loan scheme for small businesses hit by the impact on the pandemic, allowing businesses to apply for loans up to £50,000, with government guaranteeing 100% of the advance.
Despite the announcement by the Chancellor he is ‘unconvinced’ by universal government guarantee.
Rishi Sunak reiterated that he “remained unconvinced” of the case for rolling out a 100% government guarantee across all the state’s coronavirus loan schemes.
“We shouldn't ask taxpayers to bear all the risk of lending almost unlimited sums to businesses who may have very little prospect of paying those loans back – and not necessarily because of coronavirus, said the Chancellor. “Instead, the new Bounce Back Loans carefully target the extraordinary level of state support at those who need it most.”
So what is the New Loan Scheme?
Note: the guarantee is to the lender and not the business, the business will still be responsible for repaying the loan, and debt will still not be suitable for some smaller businesses
The loans will be easy to apply for through a short, standardised online application (just a two page form with no forward-looking business viability tests or eligibility criteria), making this a Fast Track process. The loan should reach businesses within days- providing immediate support to those that need it as easily as possible.
NEW MEASURES TO PROTECT UK HIGH STREET FROM AGGRESSIVE RENT COLLECTION AND CLOSURE
On the 23 April the Business Secretary announced high street shops and other companies under strain will be protected from aggressive rent collection and asked to pay what they can during the coronavirus pandemic.
The majority of landlords and tenants are working well together to reach agreements on debt obligations, but some landlords have been putting tenants under undue pressure by using aggressive debt recovery tactics. I personally have also heard of cases of companies struggling with potential rent increases despite the current outbreak.
This new legislation will be in force until 30 June, and can be extended in line with the moratorium on commercial lease forfeiture.
These measures come on top of a substantial package of business support measures, including a moratorium on evictions for commercial tenants for at least a 3-month period, which includes a suspension of forfeiture rights,which prevents all commercial tenants from being removed from their properties until 30 June.
Should you need assistance with negotiations or help and support considering the longer term options please do not hesitate to contact our Licensed Insolvency Practitioner for a FREE consultation on Tel: 07972928153 and email: email@example.com
THE TYPE OF INSOLVENCY CAN HAVE A SIGNIFICANT IMPACT ON EMPLOYEES, ESPECIALLY WHILST STAFF CAN BE FURLOUGHED
Employees and the future prospect of a business being able to continue trading after insolvency (i.e. through a sale of business) are key considerations in any insolvency, but that decision is even more important in these unprecedented times.
In simple terms, in a liquidation employment of employees tends to terminate upon appointment of the Liquidator, and the business usually comes to an end (i.e. no prospect of a sale of the business as a going concern). Whereas an Administration process provides protection under a moratorium for the business to continue trading, this includes retaining some or all employees with the hope many jobs will be saved by being TUPER transfer to a new company.
Under the current circumstances, with staff being furloughed, and the start date being crucial for any claim, the type of insolvency becomes more important. If a company is in administration, the administrator will be able to apply for support under the Cover Job Retention Scheme (like any other employer that qualifies) but only where there is a reasonable likelihood of the Administrator bringing the employee back to work after furlough.
In the first case to look at the Scheme the High Court in Carluccio’s Limited (in administration)  held that administrators who apply for a grant under the Scheme are able to apply funds to the payment of wages in super-priority to all other costs and expenses of the administration.
These means Administrators are able to utilise this scheme to cover costs of trading period (or lock down period whilst sold) if there is a prospect of saving jobs
If you are considering insolvency, please speak to a licensed insolvency practitioner to understand all the key decisions and the implications particularly at this time. We offer a free consultation and are happy to talk through the options available to directors call 07972928153 or email firstname.lastname@example.org