Saffery Champness is advising its clients on the latest position regarding the various support schemes in place for those businesses and the self-employed adversely affected by the coronavirus outbreak, including impending closure of certain schemes.
The second round of support under the Self-Employed Income Support Scheme (SEISS) was launched this week, the Coronavirus Business Interruption Loan Scheme (CBILS) will close to new applications in September, and the Bounce Back Loan Scheme (BBLS) will close to new applications in November.
With the scheme having reopened on Monday 17 August, applications for the second round of SEISS funding can now be submitted. The scheme is open to the self-employed (including partners in a partnership) whose business has been adversely impacted by COVID-19, since 14 July. A one-off government grant of 70 per cent of average monthly trading profits, for 3 months, will be paid to those who are eligible for the scheme. The total payment will be capped at £6,570 and applications must be made by 19 October.
David Chismon, Partner, Saffery Champness, and a member of the firm’s Private Wealth and Estate Group, says: “The second round of the scheme, announced at the end of May, will be a lifeline for many self-employed individuals. The eligibility criteria are the same as for the first round, but the payment is reduced, and those eligible should be contacted by HMRC to notify them of the availability of the funding. Any claims suspected of having been claimed under false pretences will be investigated by HMRC.”
The CBILS scheme provides loan funding of between £50,000 and £5,000,000 for UK businesses with an annual turnover of up to £45m. The first 12 months’ interest and fees are covered by the government and a 12-month repayment holiday is available. The loan term is up to 6 years. It is expected that the scheme will close to new applications at the end of September. Similarly, the BBLS provides loan funding of between £2,000 and £50,000, up to a maximum of 25% of annual turnover. Again, the first 12 months’ interest and fees are covered by the government, a 12-month repayment holiday is available and the loan term is up to 6 years. This scheme is expected to close to new applications on 4 November.
David Chismon says: “With the full impact of COVID-19 yet to be felt by many businesses, these loan application deadlines may come too soon.“Unlike funding under the Coronavirus Job Retention Scheme (CJRS) or SEISS, the loan funding will need to be repaid, and therefore many will have attempted to negotiate this phase by using their own resources without resorting to emergency debt finance, however appealing it may have seemed. However, as the crisis continues and the impact takes hold, it’s likely that many will realise that they will need to access this additional funding to stay afloat after all.“Budgeting and cash flow forecasting has never been more important and will help to determine whether there is a need to access funding through these loan schemes, which could be crucial for many businesses as the full impact of the crisis comes through. There will certainly be many businesses needing to take advantage of every possible measure of support available.“Whilst it remains possible that both these loan schemes could be extended, in the absence of any announcements to that effect, anyone wishing to benefit from this funding should ensure that they take advantage within the previously advertised life of the schemes, and that applications are made in good time.”
About Saffery Champness LLP
Saffery Champness LLP is a firm of chartered accountants that advises individuals and families, not-for-profit organisations and businesses across a range of sectors. As a member of Nexia International, it is part of a worldwide network of independent accounting and consulting firms.
For over 160 years, the firm’s success has been founded upon providing clients with a genuinely partner-led service and working with them to create bespoke solutions that help them to achieve their personal and business objectives. For more information visit www.saffery.com or see Twitter @Safferys