Following an increase in COVID-19 cases across the country and the threat of a second wave hitting us this Autumn, the Chancellor Rishi Sunak announced this week further measures to support businesses during these unprecedented times.
Coronavirus Business Interruption Loan Schemes
The Chancellor has announced yesterday the extension for applications to the Government’s three Coronavirus Business Interruption Loan Schemes (CBILS, CLBILS and Bounce Back Loan) and the Future Fund. The extension aligns all the end dates of the schemes to 30th November 2020 to enable more businesses to benefit from the schemes.
The Government will now also increase its guarantee from 6 years to 10 years for Bounce Back Loans and CBILs but the ability for businesses to extend their loans will likely be at lenders discretion.
The Government had announced previously a cut in VAT to 5% for businesses operating in the tourism and hospitality sectors to support them through the crisis. This VAT reduction has now been extended until 31st March 2021.
In addition, companies are now allowed to defer their VAT bill over 11 months rather than paying a lump sum in March 2021.
Job Support Scheme
The Government has announced yesterday a new job support scheme starting on 1st November 2020 and due to run for six months. The Job Support Scheme is designed to protect viable jobs in businesses who are facing lower demand due to Covid-19, to help keep their workforce employed.
The company will continue to pay its employee for time worked, but the cost of hours not worked will be split between the employer contributing a third, the Government through wage support also contributing a third caped at £697.92 per month and the employee will not receive the remaining third. Under the scheme, this will ensure employees earn a minimum of 77% of their normal wages, where the Government contribution has not been capped.
Employers using the Job Support Scheme will also be able to claim the Job Retention Bonus if they are eligible.
Guidance has been provided by the government to outline employer eligibility for the scheme.
How we can help
We would welcome the opportunity of supporting your business during these difficult times either in securing a COVID-19 loan or assisting more generally in planning and responding to the current crisis to ensure business continuity. We are currently assisting a number of clients in securing additional borrowings including situations where we have stepped into existing loan application processes to expedite, enhance delivery or increase the lending quantum.