As our continuous commitment to support our clients and other UK businesses, I have outlined further information about Coronavirus Job Retention and Business Interruption Loan schemes below.
If you have any questions or require assistance, please feel free to get in touch with us.
At Gains, we are determined to help as many businesses as possible get through the difficult time and bounce back stronger.
Coronavirus Job Retention Scheme – Key Information
- All UK businesses and charitable organizations registered for PAYE are eligible for this scheme
- To qualify, employees must not have worked during the furlough period and have been paid via PAYE scheme in the previous months
- HMRC will reimburse 80% of furloughed workers wage costs, up to £2,500 per month per employee
- The initial period for this relief runs from 1st March to 30th June 2020 but will extend if necessary
- Employees who remain on the payroll but are sent home as there is no work to do are classed as furloughed workers. Employees working reduced hours are not classed as furloughed workers
- Furloughed worker details and earnings information needs to be submitted to HMRC through a new portal, which will be available over the next few weeks
- Unless the employment contract covers, otherwise employers need to get employees agreement to classify them as furloughed workers
- It is a good practice to have furlough agreements in writing including
- Furlough start date
- A review date of furlough status
- Call-in option in case the employer needs additional workers
- How to keep in contact during the furlough period
- Freelancer & self-employment individuals also could be eligible for a monthly amount, which is lower of £2,917, or 80% of their net monthly wages. Net monthly wages will be identified based on their average monthly earnings over the last three years.
Coronavirus Business Interruption Loan (CBILS) – Key Information
- All UK businesses with an annual turnover of up to £45m will be eligible, primarily to support trading activities
- Support is available through various business finance facilities, including term loans, overdrafts, assets and invoice finance
- Up to £5m finance facility is available via government-backed (80%) partial guarantee
- No guarantee fee for businesses to access this scheme
- Access to12 months interest-free finance facilities
- Repayment terms of up to six years for loans and asset finance, and three years for overdrafts and invoice finance facilities
- Possibility of unsecured finance facility of up to £250,000 for businesses
- 100% liability for the debt remains with the borrower
- This scheme will operate initially for six months from 23rd March 2020
- Viable businesses with a sound borrowing proposal will be considered. The future trading expectations and business plans will be taken into consideration to assess the viability
- Offered through 40+ accredited lenders including high street banks
- Every lender will have their criteria. However, the following documents could provide sufficient evidence for future viability and Covid-19 disruption to the business
- Past financial accounts
- Directors/shareholders personal income and expenditure information
- Latest management accounts
- Business plan
- Cash flow forecast
If you are thinking of applying for CBILS, then it would be useful to get these documents in order before applying for the finance facility.