Coronavirus - Update

This week has seen some significant updates on Coronavirus schemes - see below for details:

Coronavirus Job Retention Scheme 

This week the Coronavirus Job Retention Scheme went live – we continue to advise clients on it. See below for some questions we have been asked this week.

When will payment be received?

Payment will be received 6 working days after sending through the application to HMRC

Change in cut-off date for eligible employees

The cut-off date for eligible employees is now the 19th March 2020, rather than 28th February. This means an RTI submission notifying payment for this employee must have been made on or before 19th March for the employee to qualify for the scheme.

Can my accountant make the claim for me?

Either you or an agent who has authorisation to act on PAYE matters can make a claim

If an agent is making the claim, they will need the following information:

·         The number of employees being furloughed

·         The dates employees have been furloughed to and from

·         Details of employees – the name and National Insurance Number of each furloughed employee

·         Your employer PAYE scheme reference number

·         Your Corporation Tax Unique Taxpayer Reference, Self-Assessment Unique Taxpayer Reference or Company Registration Number as appropriate for your entity

·         Your UK bank account details

·         Your organisation’s registered name

·         Your organisation’s address

Can I still claim if I am unsure if the employee will still have a role at the end of the scheme?

When the government ends the scheme, you must make a decision, depending on your circumstances, as to whether employees can return to their duties. If not, it may be necessary to consider termination of employment (redundancy).

Other information of note:

There is no notification of submission for a claim given – we recommend printing each claim before you submit.

You cannot make more than one claim during a claim period - you should make your claim shortly before or during running payroll.

You must claim for all employees in each period at one time – you cannot make changes to your claim.

You can make your claim in anticipation of an imminent payroll run, at the point you run your payroll or after you have run your payroll.

Claims can be backdated from 1 March 2020 where employees have already been furloughed from that date. A claim cannot start any earlier than the date the employee was first furloughed.

The Future Fund

The UK Government has announced a new scheme to issue convertible loans to innovative companies that face financing difficulties. This fund will provide convertible loans ranging from £125,000 to £5 million to UK-based, privately funded companies.

This scheme will be delivered with the British Business Bank, and will launch for applications in May 2020 until at least the end of September.

Based on the information presently available, companies must meet the following requirements to access the Future Fund:

·         be an unlisted UK registered company

·         have previously raised at least £250,000 in equity investment from private third party investors in the last 5 years

·         be able to attract at least matching funding from private third party investors and/or institutions.

If a firm is a member of a corporate group, only the ultimate parent company (if UK-registered) is eligible to receive the loan.

Key headline terms

Use of proceeds

The bridge funding shall be used solely for working capital.

It cannot be used by the company to repay loans, dividends or bonus payments, or pay any external advisers.

Interest rate

The interest rate will be at minimum 8% per annum, or higher if agreed between the company and the matched investor.

Maturity

 The loan shall mature after a maximum of 36 months.

Innovate – Research and Development

The convertible loans are one of two measures introduced to protect SME’s and start-ups, the other scheme focuses on SME’s in research and development and will target them through offering £750million of grants and loans.

The £750 million of targeted support for the most R&D intensive small and medium size firms will be available through Innovate UK’s grants and loan scheme.

Innovate UK, the national innovation agency, will accelerate up to £200 million of grant and loan payments for its 2,500 existing Innovate UK customers on an opt-in basis.

An extra £550 million will also be made available to increase support for existing customers and £175,000 of support will be offered to around 1,200 firms not currently in receipt of Innovate UK funding. The first payments will be made by mid-May.

Potential changes to CBILs

The treasury has confirmed it is considering offering a 100% guarantee on Coronavirus Business Interruption Loans to small firms. This would improve the likelihood of success when applying for the scheme.

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