Wosskow Brown is here to assist clients with business support through this pandemic as much as ever. We really don’t want to see a return to a deep recession, although latest forecasting shows that we are heading for the deepest recession on record. If this turns out to be true, we are still here in the tough times to help you through it.
While very few businesses are making decisions right now, it is inevitable this will quickly change and business owners will have serious decisions to make as business support measures are phased out as lockdown is gradually lifted.
The government introduced schemes will provide some assistance to some businesses, but as we’ve already seen, with as much as the government has provided, some businesses and individuals have still fallen down the cracks and found this support difficult to access.
There is no escaping the fact that we are in very unusual times, and as much as the government has stepped up to introduce the measures they have, it is inevitable that there will be widespread consequences for businesses and the economy. Many businesses will suffer hardship that they would not have suffered had it not been for the coronavirus crisis.
We want to help business owners avoid formal insolvency as much as possible. We have a great history in helping to rescue businesses. In fact business rescue was the very foundation that Wosskow Brown was built on over 30 years ago.
Our founding partners joined forces after identifying that traditionally, solicitors didn’t provide quality business advice for businesses in difficulty.
Having run businesses outside the legal sector before qualifying as solicitors, the founders of Wosskow Brown recognised the benefit of offering sound business restructuring advice as an alternative to insolvency. A mantra that very much lives on in the work ethic of Wosskow Brown to this day.
Can we avoid formal insolvency?
There are many things to look at to help rescue an ailing businesses. Especially when the government has made additional measures available that are not available under normal circumstances.
Our most important advice is don’t wait. Don’t wait until it is too late. There are many schemes available from the government right now that may be of help to you. Even after these schemes have been phased out, there are many ways that businesses can help themselves navigate through temporary cash flow problems. Wosskow Brown can help you with this.
The government has introduced a number of temporary measures to aid businesses that have been impacted by the COVID-19 outbreak.
Coronavirus Job Retention Scheme
This allows employers to furlough staff who have no work. The government will pay 80% of their salary up to a maximum of £2,500. See https://www.wosskowbrown.co.uk/what-is-furlough-leave/ for more details.
VAT liability has been deferred until 31 March 2021. This has been done automatically, but it is recommended that you temporarily cancel any Direct Debits to stop automatic payments.
Corporation Tax holiday
HMRC will allow you to take a payment holiday from your Corporation Tax liability. We’re told that HMRC have a light touch approach to this. Interest will be charged while you take a payment holiday, but it could help your cash flow.
Business Rates relief, holidays & grants
Eligible businesses from the retail, hospitality and leisure sectors will receive a holiday from business rates for the 2020-21 tax year.
Cash grants of up to £25,000 will be given to businesses in these sectors too. Businesses with a rateable value under £15,000 will receive £10,000 and those between £15,000 and £51,000 will receive £25,000.
These grants will be provided by your local authority, and will be paid automatically. If you have any questions about these grants, we recommend that you contact your local authority.
Business rates holidays will also be provided to nurseries for the tax year 2020-21.
Self Employed Income Support Scheme (SEISS)
Similar to the Coronavirus Job Retention Scheme, individuals who are self-employed who have been adversely affected by coronavirus can claim a grant for 80% of their profits, capped at £2,500 per month.
The scheme will provide support in way of a grant covering 80% of monthly profits, averaged over three years – 2016-17, 2017-18 and 2018-19. It will be capped at £2,500 per month, and paid in one lump sum in June 2020 and will be back dated three months to the 1 March 2020.
SEISS is only available for those whose average annual taxable earnings are less than £50,000.
This scheme is only available to those who were self-employed prior to 5 April 2019 and whose majority of income comes from self-employment.
Unlike the Coronavirus Job Retention Scheme, individuals can continue to work and run their business.
Coronavirus Business Interruption Loan Scheme (CBILS)
Introduced in conjunction with the British Business Bank, the Coronavirus Business Interruption Loan Scheme is intended to provide financial support for SMEs across the UK that are suffering from the impacts of the COVID-19 outbreak.
The scheme is operated through a network of over 40 British Business Bank accredited lenders.
Businesses can borrow up to £5,000,000 in the form of term loans, overdrafts, invoice finance or asset finance. Whilst the borrower remains fully liable for the debt, the scheme is backed by the government to provide security to the lenders.
Take a look at the British Business Bank website for more details of the scheme: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/
Bounce Back Loan Scheme (BBL Scheme)
Similar to the CBILS, the BBL Scheme aims to help businesses secure finance on preferential terms. The BBL Scheme is targeting small and micro businesses with up to £50,000.
The loans from £2,000, up to 25% of a business’ turnover or £50,000, whichever is lowest will be fixed at a government set 2.5% APR. The government will also provide 100% security on the loan as well as paying the interest for the first year.
For more information on the Bounce Back Loan Scheme, visit the British Business Bank website: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-back-loans/
Universal credit is the option left for those that fall down the cracks of all the government introduced schemes. Although it has received a bundle of bad press, for those with no other help, it could make a difference to you.
You can find details of all the Government’s measures to support businesses and individuals through the coronavirus disruption on the Government’s Business Support website: https://www.gov.uk/coronavirus/business-support
Business Support – Here to Help You
We’re here to help you. Call us today for a no obligation chat. We have a long history of helping businesses and business owners, it’s the very foundation that Wosskow Brown was founded on over 30 years ago.
We have helped rescue many businesses and launched the Wosskow Brown Foundation in 2014 to strengthen and continue our work with helping businesses grow.
In the past 6 years the Foundation has helped over 900 businesses and in the past 3 years alone has made over 460 B2B introductions.