BAR Affiliate Wellers Accountants provides an overview of the government finance initiatives
available to UK small to medium-sized enterprises (SMEs), and some advice on how to combat
cashflow issues caused by the coronavirus (Covid-19) pandemic.
June 2020 Removals & Storage 27
Coronavirus Business Interruption Loan
The Government has unveiled a package of £330bn
in state loan guarantees to help the private sector.
The Coronavirus Business Interruption Loan Scheme
(CBILS) helps small and medium-sized businesses
access working capital – including loans, overdrafts,
invoice finance and asset finance – of up to £5m in
value and for up to six years.
The funding was made available through
commercial banks from Monday 23 March. The banks
receive a guarantee on 80% of the value of the loans
that are issued, which should mean they are more
willing to lend by reducing their exposure to the risks of
potential defaults. The Government will cover the initial
12 months of interest payments on these loans.
To qualify for CBILS, applicant businesses must:
• Be based in the UK
• Have an annual turnover of less than £41m
• Have a sensible borrowing proposal and sufficient
security to meet the lender’s requirements.
We recommend you get in touch with your business
bank manager to discuss the options available,
including a ‘bridging’ overdraft to assist with
immediate cashflow issues.
Bounce Back Loans
Bounce Back Loans enable micro- and small business
entities and sole traders to borrow 25% of their turnover
up to a total of £50,000 with a 100% government
guarantee. This includes a 12-month interest-free
period and a quick decision-making facility. Interest on
the loan will only need to be paid after the first year, and
the Government will also cover all fees in year one. The
application does not involve any forward-looking or
complex eligibility criteria, something that has slowed
down some applications for the CBILS and incurred
costs for many. The loan scheme does not even require
proof of turnover.
Loan terms will be up to six years with no repayments
due for the first 12 months. It is worth noting that this is
a separate initiative to the CBILS, meaning that you will
not be able to access both. To be eligible, you must:
• Be based in the UK
• Have been impacted negatively by Covid-19
• Not be a ‘business in difficulty’ as of 31 December
The Coronavirus Job Retention
The Coronavirus Job Retention Scheme (CJRS) is
available for all UK employers. It is administered as
a grant from the Government to help employers pay
part of their employees’ salaries by keeping them on
the payroll instead of making them redundant during
the crisis. The CJRS was due to expire at the end of
this month; given the likelihood of a slow economic
recovery out of lockdown it has been extended to the
end of October (see page 11).
Until the end of July, the Treasury is covering 80%
of the salaries of employees kept on by their employees
for up to £2,500 per month. From August, there will be
amendments that have yet to be detailed to support a
transition period in which people return to work.
Claims can be backdated to 1 March. To access the
CJRS you will need to:
• Identify the employees who would have been made
redundant as ‘furloughed workers’
• Notify these employees of this change
• Submit information about furloughed employees,
along with their earnings, to HMRC through its
Statutory sick pay
The Government has reduced waiting days for Statutory
Sick Pay (SSP), meaning it is available to employees
from day one of sick leave. This is for an initial period
of eight months. Employees who are self-isolating will
be entitled to SSP from day one. Your business can
reclaim the first 14 days of SSP from the Government if
you employ fewer than 250 staff. Employees do not need
GP notes to make claims.
VAT payment deferrals
Support is being made available to businesses by deferring
Value Added Tax (VAT) payments for three months. This
applies from 20 March to 30 June and applies to all
VAT-registered traders. There is no need to apply for this
scheme; it will happen automatically. Businesses will
not need to make a VAT payment for the specified period.
Instead, they will have to the end of the 2020/21 tax year
to fulfil their liabilities for the deferral period.
Of note, HMRC will not suspend collection of direct
debits for payments of VAT. If you have a direct debit
mandate in place for this, you will need to contact your
bank to cancel it before payment is due to be collected.
After that, you will need to remember to set it up
again at the appropriate time. You will need to pay the
accumulated VAT by the end of the 2020/21 tax year, so
be sure to continue to file your returns by the due date.
Any VAT refunds or reclaims to you will be settled by
the Government in the usual way.
Income Tax deferral
All taxpayers with a second self-assessment payment on
account that is due on 31 July 2020 can defer Income
Tax payment until 31 January 2021. There is no need
to apply for this scheme; it will occur automatically.
It is not necessary to be self-employed to be eligible for
The deferral applies to taxpayers registered in the
2018/19 tax year on which the payment on account is
based. If you qualify for the deferral and you have set up
a direct debit mandate to make payment on account for
31 July 2020, then you should consider cancelling it.
The deferral period means there will be no interest
charges or penalties for late payment.