19th Ave New York, NY 95822, USA

The Latest Measures to Support SME’s in 2020

The Leader or a Chancellor, Rishi Sunak, sketched or outlined a raft of further measures last night to support the UK’s Businesses those affected by the forbidding COVID-19 outbreak and providing the small businesses accounting services in the United Kingdom.

small business accounting servicesImage by Luis Villasmil at Unsplash

The list that follows precise his statements in the order they were announced:

  • The Treasury is making available £330bn of loan guarantees. These guarantees will underpin government-backed bank loans on attractive terms. The loans can be used to support businesses through financial difficulties during the COVID-19 crisis. Note they are loans. At some point, interest will be charged and repayments will have to be made. The Leader or a Chancellor confirmed that if this level of support was insufficient, further guarantees would be forthcoming.
  • Support for liquidity to larger firms will be provided by the low-cost, easily accessible commercial paper. Support for smaller firms will be accessed via the Business Interruption Loan Scheme previously announced the initial loan ceiling of £1.2m is to be increased to £5m and no interest due for the first six months. Both of these structures are due to be up & running by the start of the next week.
  • Further measures are to be introduced to support airlines. No details as of yet.
  • Business accounting services in the hospitality, leisure & retail sectors who have made claims for business disruption from their insurers due to government involvement, may have had difficulties making a claim. The government has now intervened and the insurers have agreed to pay up in appropriate cases.
  • Businesses accounting services UK in the retail, hospitality and leisure sectors with a rateable value below £51,000, will also receive in addition to the 100% rate relief previously announced a cash allowance of up to £25,000 per business.
  • In the same sector, the 100% rate reduction will be applied to all businesses irrespective of rateable value.

accounting servicesImage by Sebastian Herrmann at Unsplash

To clarify,  all businesses in the retail, hospitality or leisure sector – shops, pubs, theatres, music venues, restaurants, etc will have no rates to pay for 2020-21, and if the rateable value of their property is below £51,000, they may also be able to claim a cash grant of up to £25,000.
  • The £3,000 grants to smaller businesses, announced last week, are to be increased to £10,000.
  • Mortgage lenders have agreed with the government that individuals disrupted by the Coronavirus can have at least a three-month holiday from making mortgage repayments.

The Leader or a Chancellor also hinted that there would be additional support for incomes & jobs. Perhaps growth in legal sick pay or increased access to State Benefits. Watch this space.

What is not clear is how we claim for the various loans and grants on offer. We offer the following suggestions although the actual processes finally agreed may differ from these:

  • Rates reductions should be made automatically and revised statements sent by local authorities in the coming weeks for 2020-21. Contact your local rating department to clarify that this is so.
  • It is not clear how qualifying businesses will claim the grants mentioned in the above list – those that range between £10,000 to £25,000 – could be applications that need to be made to local authorities or another government department. We will confirm as soon as details are released.
  • We assume that you will need to apply to your bank for the guaranteed Business Disruption Loan. It is likely that your bank will need up-to-date statistics to back up your request. Please call if you need help fixing these things.
  • At the time this update was collected, the government had still not confirmed how bosses can claim back the 14-day cost of Statutory Sick Pay paid to employees. Again, we will publish details as soon as they are released.

Although not part of the Chancellor’s presentation, Chief Secretary of the Treasury, Steve Barclay, made a further announcement to parliament last night (17 March 2020). The government is postponing the roll-out of draconian IR35 measures to the private sector that would have affected the tax status of many incorporated contractors across the UK. This a welcome change as it will defer much disruption in this sector until the worst aspects of the COVID-19 outbreak have passed. The new rules are now slated to come into effect from 6 April 2021, a year later than planned.

Our best wishes to all who are directly affected by this unprecedented outbreak & please get in touch if you need any service like Online Accounting Services, Bookkeeping Services UK, Tax and Accounting Services, Small Business Accounting Services & Outsourced Accounting Services. If you need more information or support please feel free to contact us.

Aftab Ahmed Khan
020 3327 6340

Leave a comment