Frequently asked questions – Government Grants and Loans

Since our webinar, we have had a number of questions come through from businesses asking for help with the Coronavirus Business Interruption Loan Scheme, SEISS and deferral of payments.

We have gathered together some of these interesting queries, so that hopefully our answers may offer a solution to any problems you have encountered. 

  1. What do you do if your bank won’t reply to emails or talk to you about the CBILS – can you go somewhere else?
  2. If I apply now for Small Business Rates Relief and get it retrospectively to the beginning of this year, will I be able to apply for the Small Business Grant now or later?
  3. What help will be offered to limited companies? Business has clearly suffered for the last few weeks.
  4. As a tenant of Regus, a serviced office provider, business rates are included in the rent.  Would I approach the local authorities or Regus for the Small Business Grant?
  5. SEISS is not available to self-employed company directors, and they can only look at the furlough scheme.  What is the best course of action for self-employed directors of a limited company who were not on a PAYE scheme by 28 February 2020?
  6. Can you confirm that the VAT deferral is based on when the VAT is due to be paid and not when it is incurred (i.e. if it is due to be paid between March 20 and June 30, not on transactions between March 20 and June 30)?
  7. If I run a rental portfolio and am a partner in a trading business, and have employment income, where my share of profits from the trading business is less than £50,000, but my total income is over £50,000, do I qualify for SEISS?         
  8. How about if I haven’t paid my 31 January 2020 instalment?         
  9. I have a large historical capital gains tax bill to pay by 31 January 2021.  I had put my house on the market at the beginning of January of this year in order to give myself plenty of time to raise the funds to pay this tax. I have now had to take my house off the market as all viewings were stopped.  Will the tax man give me an extension to the 31 January 2021 deadline in order re-list my property and have sufficient time to sell it for a fair, not a fire-sale price, and then pay him his tax ?
  10. What if my business is owed a repayment of VAT due to decrease in sales?  How quickly will I get my repayment?
  11. I’ve heard that CBILS is impossible to get.  What do I have to do in order to have the best chance at successfully applying for this? What interest rates can I expect if I apply for CBILS? How do I apply for CBILS?
  12. How will I receive grant funding for rates relief? When are the grants of £25k to pubs expected to get paid out?
  13. How best should employers finance their payroll costs in the interim period before CJRS claims are processed by the government? 

1. What do you do if your bank won’t reply to emails or talk to you about the CBILS – can you go somewhere else?

Yes, you can go to another lender. In the first instance, you should try your bank’s website and see whether they have a specific e-mail address for CBILS or any other way of dealing with CBILS applications.

2. If I apply now for Small Business Rates Relief and get it retrospectively to the beginning of this year, will I be able to apply for the Small Business Grant now or later?

Yes, you should be eligible. The guidance states that businesses will be eligible for a £10,000 grant under the Small Business Grant Fund if it has a property that was eligible for the Small Business Rate Relief (SBRR) Scheme on 11 March 2020.

3. What help will be offered to limited companies? Business has clearly suffered for the last few weeks.

Limited companies will be eligible for all schemes offered by the government to businesses if they meet the criteria. The main ones are the Coronavirus Job Retention Scheme, the SSP rebate scheme, Business rates holiday, Business Grants, VAT payment deferrals, and the Business Interruption loan schemes.

4. As a tenant of Regus, a serviced office provider, business rates are included in the rent.  Would I approach the local authorities or Regus for the Small Business Grant?

You should approach Regus in the first instance and then your local authority and find out how the Small Business Rates Relief would work for serviced offices and if there is any facility that your business can claim the Small Business Grant.

5. SEISS is not available to self-employed company directors, and they can only look at the furlough scheme.  What is the best course of action for self-employed directors of a limited company who were not on a PAYE scheme by 28 February 2020?

SEISS is only available to a self-employed individual or a member of a partnership. A director is not normally self-employed as they are an officer of the company and are regarded as employees. If the individual in question is self-employed and providing services in his capacity as a separate individual (and not as a director), then there may be scope of making a claim under SEISS. Of course, the individual needs to have been reporting his self-employment income within his SA tax returns. The government acknowledges that there is currently a gap in their plans for self-employed directors of limited companies.

6. Can you confirm that the VAT deferral is based on when the VAT is due to be paid and not when it is incurred (i.e. if it is due to be paid between March 20 and June 30, not on transactions between March 20 and June 30)?

Yes, the deferral is for any VAT payments that need to be made between 20 March 2020 and 30 June 2020. Therefore, if a VAT liability for the quarter ended 31 May 2020 arises on 7 July 2020, then there is no possibility to defer that payment as it becomes due after 30 June 2020.

7. If I run a rental portfolio and am a partner in a trading business, and have employment income, where my share of profits from the trading business is less than £50,000, but my total income is over £50,000, do I qualify for SEISS?

The government guidance states that if trading profits are less than £50,000 and this constitutes more than half of your taxable total income, then you qualify for SEISS.

8. How about if I haven’t paid my 31 January 2020 instalment?

This amount is still due to HMRC and they will continue to charge interest on late payment.  If that includes non-submission of tax return, there will be a tax-geared penalty on the amount of tax unpaid. However, you may be experiencing a fall in trading income such as would significantly reduce your 2019/20 tax liability, and may wish to apply to HMRC to reduce your 2019/20 payment on account, which would reduce the balance due at 31 January 2020.

9. I have a large historical capital gains tax bill to pay by 31 January 2021.  I had put my house on the market at the beginning of January of this year in order to give myself plenty of time to raise the funds to pay this tax. I have now had to take my house off the market as all viewings were stopped.  Will the tax man give me an extension to the 31 January 2021 deadline in order re-list my property and have sufficient time to sell it for a fair, not a fire-sale price, and then pay him his tax ?

HMRC will agree a “Time to Pay” facility for taxpayers who are in financial hardship. They would normally only provide the facility if the taxpayer does not have any other means of paying the tax. You should apply to HMRC’s dedicated COVID-19 helpline to arrange for Time to Pay. The key is to approach HMRC as soon as your 2019/20 tax return has been submitted and HMRC can see the tax liability due on 31 January 2021. An application for Time to Pay should normally be made before the tax liability becomes due i.e. before 31 Jan 2021.

10. What if my business is owed a repayment of VAT due to decrease in sales?  How quickly will I get my repayment?     

HMRC have said that they will process repayment claims as normal and as quickly as possible.  You should aim to submit your VAT return as early as possible to get the refund process started and also ensure that HMRC has correct bank details for your business. If a business instead has a VAT liability arising between 20 March and 30 June 2020, then the deferral should be considered to aid cash flow for the business.

11. I’ve heard that CBILS is impossible to get.  What do I have to do in order to have the best chance at successfully applying for this? What interest rates can I expect if I apply for CBILS? How do I apply for CBILS?

British Business Bank is scaling up and should be adding on alternate providers as well but they currently have over 40 providers on their list.  Current directions are to contact your existing bank first to apply for the CBILS.

In terms of what you will need to show, when it was first introduced, the applicant had to show evidence that they had tried all other avenues before applying for CBILS.  This requirement has now been removed.  Contact your bank and work with them to progress your application.  We have heard that you would need to show forecast projections for return to viability, and that the business was viable under normal trading conditions pre-COVID.  There is still a lack of provision for companies that were in a growth stage, i.e. not yet profitable, prior to COVID-19 shutdown, which the government continues to look into.

Mid-tier and larger banks have said that they will charge rates that reflect the nature of the government guarantee. Smaller finance providers may have higher rates.  Under CBILS, the government will pay 12 months’ of interest.  This could be used to help fund cash flow for the furloughed workers’ scheme.

12. How will I receive grant funding for rates relief? When are the grants of £25k to pubs expected to get paid out?

The eligibility is automatic but local authorities are responsible for running the process and issuing these grants.  It is down to each individual local authority to manage this process – some will issue automatically, and others will issue on application. Contact your local authority to find out their process.

13. How best should employers finance their payroll costs in the interim period before CJRS claims are processed by the government?

Firstly, there are the cash savings from deferral of VAT payments that the government anticipates can be put to use against CJRS payments.

If the business has any bank loans or mortgages outstanding, contact the lenders and request a capital repayment holiday – the government has agreed with finance providers that these will be approved.

Finally, they may consider obtaining a loan under the Coronavirus Business Interruption Loan Scheme (CBILS) from their bank.  However, keep in mind longer-term considerations such as whether or not the business can bear the burden of repaying the loan – bear in mind that the liability for the loan will be on the business, not the government.

If you don’t see the answer to your question here, then please don’t hesitate to call us on 020 7724 6060 or contact us here. We also provide weekly updates to our clients on the announcements made by the Government, so if you are interested in getting these sent to your inbox each Wednesday then you can also subscribe to our Newswire

Disclaimer: These frequently asked questions (FAQ) have been prepared for general guidance on matters of interest only, and do not constitute professional advice. You should not act upon the information contained in this factsheet without obtaining specific professional advice tailored for your specific needs. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information supplied and, to the maximum extent permitted by law, Wilder Coe Ltd, or its Directors, Partners, Employees and Agents do not accept or assume liability, responsibility or duty of care whatsoever, for any consequences of you or anyone else acting, or refraining to act, in reliance on information contained in this FAQ or any decision based on it.

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