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.
VAT
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.
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.
VAT
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.
The Government cancelled the Autumn Statement this week providing a welcomed sense of relief to business owners looking to sell. A small window of opportunity now exists to sell before the predicted threat of increased Capital Gains Tax (CGT) rates.
Following changes to the Entrepreneurs’ Relief scheme announced in March 2020 and the increased public spending during the COVID-19 crisis, the Government was expected to announce an increase in CGT with potential alignment of CGT rates with income tax rates. This would have meant that shareholders selling a business would be taxed at up to 45% for a disposal rather than the current rates of up to 20%.
Cancellation of the Autumn Statement has given business owners the benefit of a few more months to take advantage of one of the lowest tax regimes entrepreneurs and business owners have ever enjoyed. Therefore, if you are contemplating a transaction in the short to medium term, whether it is a full or partial exit, there is a strong case to investigate bringing this forward and concluding a transaction within the current tax regime in advance of the next Budget.
In addition to cancelling the Autumn Statement, the Government has also announced new support measures for businesses suffering from the COVID-19 crisis including an extension of the Coronavirus Business Interruption Loan Schemes application deadline until 30th November 2020 and a new job support scheme. You can find more information here.
Please feel free to contact our team to discuss your particular circumstances if you require assistance with acquisitions,disposals or fundraisings.
The Government cancelled the Autumn Statement this week providing a welcomed sense of relief to business owners looking to sell. A small window of opportunity now exists to sell before the predicted threat of increased Capital Gains Tax (CGT) rates.
Following changes to the Entrepreneurs’ Relief scheme announced in March 2020 and the increased public spending during the COVID-19 crisis, the Government was expected to announce an increase in CGT with potential alignment of CGT rates with income tax rates. This would have meant that shareholders selling a business would be taxed at up to 45% for a disposal rather than the current rates of up to 20%.
Cancellation of the Autumn Statement has given business owners the benefit of a few more months to take advantage of one of the lowest tax regimes entrepreneurs and business owners have ever enjoyed. Therefore, if you are contemplating a transaction in the short to medium term, whether it is a full or partial exit, there is a strong case to investigate bringing this forward and concluding a transaction within the current tax regime in advance of the next Budget.
In addition to cancelling the Autumn Statement, the Government has also announced new support measures for businesses suffering from the COVID-19 crisis including an extension of the Coronavirus Business Interruption Loan Schemes application deadline until 30th November 2020 and a new job support scheme. You can find more information here.
Please feel free to contact our team to discuss your particular circumstances if you require assistance with acquisitions,disposals or fundraisings.
