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Christmas Is Not A Date. It Is A State Of Mind.

Thinking at Christmas

“Christmas is not a date. It is a state of mind.” 

Mary Ellen Chase

Mary Ellen Chase could not have known that her words would have been so relevant in 2020; Banned from mixing with too many people this Christmas, we are all having to get ourselves into a ‘Christmas state of mind’ so that we can take something out of what has otherwise been an utterly joyless year.

Many a dining table and living room will have FaceTime or Zoom streaming families to each other so that we can share the day and experiences virtually – but accepting the restrictions and still making the best of the situation underlines that this is leaning heavily on our state of mind.

And while we are looking at our state of mind and ‘head space’ for thinking this Christmas – business owners and directors should take the opportunity while away from the coal face over the next few weeks to breathe, take stock, get their current situation straight in their mind, and set in place some plans to move forward with their business as we move in 2021.

Having those precious few hours to get our thoughts together can provide the clarity that you need – you need a clear picture of the current situation to plan properly for how you will move forward from here. 

All the way through the pandemic we have witnessed companies that are informed and planning their way forward fare better, and are ahead in receiving help, accessing funding and bottom line, starting to recover their business or move it onto a path to growth.

We wanted to look again at some of the things that owners and directors should be considering when looking at help for their businesses:

Guidance for National restrictions currently:

England: https://www.gov.uk/guidance/local-restriction-tiers-what-you-need-to-know

Scotland: https://www.gov.scot/coronavirus-covid-19/

Wales: https://gov.wales/coronavirus

Northern Ireland: https://www.nidirect.gov.uk/articles/coronavirus-covid-19-regulations-guidance-what-restrictions-mean-you

Government advice for businesses to prepare for Brexit January 1st 2021

https://www.gov.uk/transition

Local Restrictions Support Grant (LRSG) supports businesses that have been severely impacted due to temporary local restrictions.

Businesses that have not had to close but which have been severely impacted due to local Tier 2 or Tier 3 restrictions may be eligible for LRSG.

Eligible businesses may be entitled to a cash grant from their local council for each 14 day period under local restrictions.

Local councils have the discretion to provide grant funding for businesses under this scheme. They will use their discretion in identifying the right businesses to receive this funding, based on their application process.

https://www.gov.uk/guidance/check-if-youre-eligible-for-the-coronavirus-local-restrictions-support-grant-for-open-businesses

Additional Restrictions Grant

You might be able to get this grant from your local council if your business has been negatively affected by coronavirus. Your local council will decide which businesses are eligible and how much they are entitled to. Examples of what makes a business eligible could include:

  • you do not pay business rates and your business was closed by law
  • you supply an industry that had to close because of coronavirus, for example the retail, hospitality or leisure sector
  • your business is in the events sector

https://www.gov.uk/guidance/check-if-youre-eligible-for-the-coronavirus-additional-restrictions-grant

The Furlough Scheme

The CJRS (also known as the Furlough Scheme) will remain open until 31 March 2021. For claim periods running to January 2021, employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. The £2,500 cap is proportional to the hours not worked.

The government will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.

https://www.gov.uk/government/publications/extension-to-the-coronavirus-job-retention-scheme

Self-Employment Income Support Scheme (SEISS) grant extension

The extension will last for 6 months, from November 2020 to April 2021. Grants will be paid in 2 lump sum instalments each covering a 3 month period.

The third grant will cover a 3 month period from 1 November 2020 until 31 January 2021. The Government will provide a taxable grant calculated at 80% of 3 months average monthly trading profits, paid out in a single instalment and capped at £7,500 in total. This is an increase from the previously announced amount of 55%.

The Government has already announced that there will be a fourth grant covering February 2021 to April 2021. The Government will set out further details, including the level, of the fourth grant in due course.

https://www.gov.uk/government/publications/self-employment-income-support-scheme-grant-extension/self-employment-income-support-scheme-grant-extension

Statutory Sick Pay rebate

You can reclaim Statutory Sick Pay you’ve paid for employees who are off sick, self isolating or shielding because of coronavirus. This scheme will cover up to 2 weeks of SSP for every eligible employee.

https://www.gov.uk/guidance/claim-back-statutory-sick-pay-paid-to-employees-due-to-coronavirus-covid-19

KickStart Scheme for Youth Employment

Funding available for new job roles created for a 16-24 year old, and includes up to a £1,500 payment for training, support and uniform etc in creating the role.

Funding covers the relevant national minimum wage for a 25 hour week and associated employer NI contributions.

https://kickstart.campaign.gov.uk

Research & Development (R&D) Tax Relief Scheme

Eligible Limited Companies can add valuable funds back into the business by claiming a reduction in their corporation tax or a refund for ‘innovation’ in the work that they have conducted over the last two financial years – and the work does not have to have been successful or completed to qualify: https://www.essexcommercialfinance.co.uk/rd-tax-credits/

VAT deferral payment plan, by ‘opt-in’

VAT that had been deferred in agreement with HMRC to March 2021 can now be deferred into repayments over 11 months from that point through the 2021/22 tax year, with no interest accrued or paid for this period

A broadly supported move that avoids a cashflow cliff edge for many companies as they emerge from an extended period of restrictions over winter

To take advantage of this scheme you need to ‘Opt-In’: https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19

Support for businesses paying tax: Time To Pay Service

If you cannot pay your tax bill on time because of coronavirus, you may be able to delay it without penalty using HMRC’s Time to Pay service.

https://www.gov.uk/difficulties-paying-hmrc

Government backed Coronavirus loan schemes – Application deadline and loan terms

  • Application deadlines for both the Bounce Back Loan (BBL) and the Coronavirus Business Interruption Loan Scheme (CBILS) extended to midnight January 31st 2021 to support more businesses.
  • Companies that have already received a BBL but did not apply for their maximum amount (25% of 2019 turnover) can now re-apply and top up their loan.
  • BBL now available with extended term of 10 years, from previous 6 months, plus an initial interest or payment holiday up to 6 months at the point that payments should commence
  • CBILS government guarantee now extended up to 10 years – lender feedback that we have received is that 10 year loans may be limited to the High Street banks, if anyone.
  • A new government loan scheme to replace the existing ones will be announced in due course and available from early 2021.

We strongly believe that for Covid affected, eligible companies, the extended application time represents a unique opportunity to access funding that there is no guarantee will be replaced in 2021. If and when underwriting returns to a world of no Government guarantees, and companies are evaluated on 100% of the risk of the borrowing, unfortunately there could be a period of adjustment for both businesses and lenders.

CBILS provides access to a range of different products other than just business loans – worth reminding ourselves of the options, available to you through us, as we have an extended window of opportunity now to January 31st for eligible companies to apply:

CBILS Business Loans – Loans from £50,001 to £500,000, over 2 to 5 years

No Personal Guarantee or security taken up to £250,000 – No set up fee, no interest charges in the first 12 months and no early repayment charges

CBILS Invoice Finance – Differing scheme features from our lender panel:

  • Invoice Finance with no set up costs, no service fee and no interest charges for 12 months (100% cost free for 12 months) – and no ongoing contractual ties beyond that period
  • Term loan alongside an Invoice Finance facility – loan for up to 40% of the facility level for up to 5 years, CBILS Business Loan benefits apply
  • ‘Top Up Funding’ – commonly up to 30% extra added to the pre-payment limit of the Invoice Finance facility – up to a maximum of 100% of invoice amounts submitted – no interest charged on the ‘Top Up’ portion for 12 months

CBILS Asset Finance – Available up to £5m over a maximum term of 6 years

New Asset Finance deals and Asset Re-Finance, with the possibility of a term loan alongside the Asset Finance if this is necessary to support the business

CBILS Trade Finance – Revolving facility up to £5m notional

No set up or service costs and no interest charges in the first 12 (100% cost free for 12 months) – Facilities > £250,000 require a Personal Guarantee for 20% of the notional limit

CBILS Eligibility check: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/for-businesses-and-advisors/

Not every company is going to be eligible for CBILS, and CBILS finance is not going to suit every business. Away from the Coronavirus schemes we work with a large panel of lenders (both bank and non-bank) on all types of commercial finance for your business – loans or invoice/property/asset related products. With a conversation we can evaluate the suitability of all the available options to your business.

And that in a nutshell is our ethos – partner with you to get you the most suitable finance and best possible outcome for your business.

Why not get in touch and see how we can help you?

We wish everyone at your business a happy holiday with their family, and all the very best for a healthy 2021 – and for a year that moves everyone forward and out of this pandemic period.

Mark.

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