25 June
By Victoria Wainwright
Categories: Government/Business/HMRC/Industry News/COVID-19

The clock is ticking … do you still need to apply for business loans?

The clock is ticking … do you still need to apply for business loans?

What are the potential consequences of some of the Government backed initiatives? How might these affect businesses over the next few months? What are the possibilities of applying for loans if required?

As time moves on and businesses are gradually starting to understand how they might be affected by the financial impact of COVID-19, we thought it was worth sending out a reminder of the potential consequences of some of the Government backed initiatives that have been introduced recently, how these might affect businesses over the next few months and the possibility of applying for loans if required.

Coronavirus Job Retention Scheme (CJRS)

As everyone knows, the Coronavirus Job Retention Scheme (CJRS) – or the “Furlough Scheme”- has allowed many businesses to receive grants from the Government to cover all or some of the costs of employees’ wages.  This Scheme is gradually changing and from 1 August employers will have to pay NIC and pension contributions on wages, rather than these being covered by the Scheme.  Subsequently, from 1 September, employers will have to contribute towards the wages of staff who are still furloughed.
This will mean additional costs for employers – and may even mean that some employers will reluctantly have to let people go, with the resulting redundancy costs.

Income Tax and VAT Payment Deferrals

The Government have also allowed businesses to defer payments of Income Tax, due on 31 July, and VAT, due up to 30 June, until January 31 and March 31 respectively, and in addition have entered into Time to Pay arrangements with businesses for other taxes such as PAYE and Corporation Tax.

 All these initiatives have been welcomed by businesses – but eventually, the tax will have to be paid. Businesses now need to plan ahead and consider their cash flows over the next few months.

Coronavirus Business Interruption Loan Scheme (“CBILS”) or the Bounce Back Loan Scheme (“BBLS”)

If businesses are likely to be struggling to meet their future costs, it is still possible to apply for Government backed loans under the Coronavirus Business Interruption Loan Scheme (“CBILS”) or the Bounce Back Loan Scheme (“BBLS”).

 CBILS was initially announced in the Budget on 11 March 2020 and updated in a separate announcement on 3 April 2020.  It was mentioned then that CBILS would initially run for six months and it is therefore possible that any business that has not already applied for such a loan will need to do so by the end of September.

With regard to BBLS, this will run until 4 November 2020, with the Government retaining the right to extend this.

 It is important for businesses to realise that it takes time for these loans to be finalised (CBILS can take 4 to 6 weeks) when considering future cash flow requirements so action should be taken sooner than later to apply for such loans.

We can help clients apply for such loans and if you require any assistance please do not hesitate to contact us.

We're here to help

The Naylor Wintersgill team are here to proactively support all of our clients during this difficult time. If you have any concerns, need assistance or would like further clarification on any of the above, please do not hesitate to get in touch with our team on 01274 733184 or email hello@naylorwintersgill.co.uk who will be more than happy to help