On The Spot Blogs
Coronavirus Dates To Remember – Just like yesterday’s Valentine date, make sure you don’t miss them!
As we approach Budget day on 3 March, it’ll be nearly a year since the Chancellor’s first Budget which included his initial Coronavirus measures. These escalated pretty quickly into quite a package of measures, which no-one could have predicted.
Here’s our round-up to check through what might still be available for you. In particular, you may find it helpful to focus on Bounce Back Loans and Local Authority Grants.
BBLs - Loan – apply by 31 March 2021
Borrow between £2k and up to 25% of turnover up to £50k, very easily with no fees or security and pay annual interest of only 2.5% after 12m, with no repayments due for the first 12m.
These remain the best loans a small business will ever receive and must be worth considering. We’re seeing the cash give small businesses valuable breathing space so they can focus on re-grouping and re-launching, as restrictions permit.
Pay As You Grow improvements announced by the British Business Bank on 6 February, appearing to apply to existing BBLs borrowers, allow repayments to be delayed by a further 6m and after making only one repayment the option to pause repayments for up to 6m.
This is in addition to the existing choices to extend the loan term from 6 to 10 years and/or pay interest-only up to three times during the loan term.
CBILs - Loan – apply by 31 March 2021
Designed for small businesses requiring finance for up to £5m, with no personal guarantees required for loans under £250k and even over £250k your home cannot be taken as security. No fees or interest due for the first 12m. These loans may also be extended to a term of up to 10 years.
Local Authority Grants - current
There are six schemes currently available:
- Closed Businesses Lockdown Payment – from 5 January 2021
- Local Restrictions Support Grant (Closed businesses) – businesses affected by Tier restrictions from 2 December
- Local Restrictions Support Grant (Open businesses) - hospitality, accommodation and leisure businesses
- Local Restrictions Support Grant (Closed businesses) – businesses affected by November and from 5 January national restrictions
- Local Restrictions Support Grant (Sector) - nightclubs, adult entertainment venues and similar
- Additional Restrictions Grant – discretionary
For example, a small local authority discretionary Additional Restrictions Grant may be available to a home based business which has been severely impacted throughout, such as an events business.
Business Rates Holiday (retail, hospitality & leisure) – to 31 March 2021
Might this be extended in the Budget? We’ll let you know on 3 March…
Full or Flexible Furlough – to 30 April 2021 – claim within 2 weeks of each month
The government continues to pay 80% of furloughed non-working hours, the employer paying only employer NIC and pension contributions. Remember to claim within the specified 2 week date of the month end for each claim.
SEISS 4.0 – to 30 April 2021 - claim details due by 3 March 2021
Details of the fourth self employed grant covering February, March and April are due to be announced by Budget day.
VAT Deferral – to 31 March 2021 or up to a further 12m - apply from 23 February
VAT due between 20 March and 30 June 2020 is due by 31 March 2021 unless you apply to join the new interest-free instalment deferral scheme between 23 February to 21 June 2021.
VAT Rate Reduction (hospitality & tourism) – 20% to 5% - to 31 March 2021
This increases gross profit margins helping small businesses deal with other aspects of the virus such as bringing in safety measures or adapting their business model. Another one to look out for on Budget Day.
Income Tax Returns – extension to 28 February 2021
Apparently there are still quite a few to be submitted! If 28 February is missed, the usual £100 penalty is due, even if no tax is due, escalating after that for continuing delays.
Income Tax Deferral – apply before 2 March 2021.
If you’ve missed the 31 January payment deadline make sure you pay or enter an online deferral agreement before 2 March 2021 [EDIT: NOW AMENDED TO BY 1 APRIL 2021], to avoid a 5% surcharge. If you owe more than £30k in total, you’ll need to contact HMRC to agree a bespoke payment plan – known as Time To Pay.
Other Taxes -Time To Pay – case by case – as early as possible
This has always existed for taxpayers in difficulty. Approach HMRC as early as possible to agree a realistic payment plan.
Businesses have done well to keep going and many have improved their entire business model for the long term. Make sure you get the help for your long term success while you can.