On Friday 20 March, the Chancellor of the Exchequer Rishi Sunak announced additional measures to help smaller businesses and the self-employed affected by COVID-19. The Government also has said it will announce further measures to support self-employed people over the coming days.
These new measures are:-
Suspension of the minimum income floor for the self-employed: self-employed people can now access, in full, Universal Credit at a rate equivalent to Statutory Sick Pay for employees.
– Taxes – next self-assessment payments deferred to Jan 2021 for the self employed
– The introduction of a new job retention scheme will cover up to 80 per cent of wage costs (details to be confirmed) backdated to 1 March for a period of three months or longer, if needed, for small businesses, charities and not for profit organisations.
– Grants due to be available to business within weeks.
– The business loans that were previously announced will be available from Monday 23 March and will now be interest free for 12 months (was 6 months)
– Deferring the next quarter of VAT through to the end of June (those payments can now be paid at the end of the financial year)
– Universal Credit – standard allowance to rise over the next 12 months by £1,000
The Coronavirus Business Interruption Loan Scheme (CBILS) is a new scheme that can provide facilities of up to £5m for smaller UK businesses who are experiencing lost or deferred revenues, leading to disruptions to their cashflow. CBILS supports a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance facilities.
The scheme went live 23/3/20 and will initially run for six months. CBILS guarantees facilities up to a maximum of £5m available on repayment terms up to six years for term loans and asset finance. For overdrafts and invoice finance facilities, terms will be up to three years. The scheme provides the lender with a government- backed partial (80%) guarantee against the outstanding facility balance.
There is no guarantee fee for SMEs to access the scheme. Lenders will pay a fee to access the scheme. The Government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees.1 You (the SME) will therefore benefit from no upfront costs and lower initial repayments.2
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