Covid-19 Business Update 10 – Thursday 30th April 2020
Following our previous update on 16th April 2020, please find below notable changes that have been released via gov.uk.
Bounce Back Loans
A new loan scheme is being introduced to help small and medium-sized businesses to borrow between £2,000 and £50,000.
• The government will guarantee 100% of the loan and there won’t be any fees or interest to pay for the first 12 months.
• Loan terms will be up to 6 years.
• No repayments will be due during the first 12 months. The government will work with lenders to agree a low rate of interest for the remaining period of the loan.
• The scheme will be delivered through a network of accredited lenders.
You can apply for a loan if your business:
• is based in the UK,
• has been negatively affected by coronavirus,
• was not an ‘undertaking in difficulty’ on 31 December 2019.
You cannot apply if you’re already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS).
This scheme is expected to open next week on Monday 4th May 2020 when we should also receive full details of the application process.
If you wish Lishmans to undertake an application on your behalf please send an email to register your interest email@example.com
Self-employment Income Support Scheme (SEISS)
We advised you of this scheme in update 4 (27th March 2020) and there has been very little new information provided by HMRC since that date . However we thought it would be useful to recap on what is known.
This scheme will support self-employed individuals (including members of partnerships) whose income has been negatively impacted by COVID-19. It will be open for an initial three months.
It will provide a grant to self-employed individuals or partnerships, worth 80% of profits up to a cap of £2,500 per month.
The grant will not need to be repaid but it will be taxable and subject to Income Tax and National Insurance contributions. It will be classed as income in your self-assessment calculation for 2020/21.
To be eligible for the scheme you must meet all the criteria below:
o Be self-employed or a member of partnership;
o Have lost trading/partnership trading profits due to COVID-19 and confirm that your business has been adversely affected.
o Filed a tax return for 2018-19 as self-employed or a member of a trading partnership
o Have traded in 2019-20 and be currently trading at the point of application (or would be except for COVID 19) and intend to continue to trade in the tax year 2020 to 2021
o Have trading profits of less than £50,000 and more than half of your total income comes from self-employment.
One of two methods can be used to calculate the total income from self-employment
1. Trading profits and total income in 2018/19
2. Average trading profits and total income across up to the three years between 2016-17, 2017-18, and 2018-19.
HMRC will use the average profits from tax returns in 2016-17, 2017-18 and 2018-19 to calculate the size of the grant
To access the scheme you should NOT contact HMRC now.
HMRC will contact you by mid May if you are eligible for the scheme and invite you to claim using the GOV.UK online service. It is not yet clear if we will be able to do this on your behalf but we are assuming we will.
Once HMRC has received your claim and your grant is approved they will contact you to tell you how much you’ll get and the payment details, with payments being made in early June .
You will only be able to claim using the gov.uk online service. If you receive texts, calls or emails claiming to be from HMRC, offering financial help or a tax refund and asking you to click on a link or to give personal information, it is a scam.Return to our Dedicated Page for Covid-19 Client Updates