Inca COVID-19 Update 4: Latest Information
26th March 2020
As the government’s measures to deal with the economic impact of COVID-19 continue to take shape, we’re summarising below some of the latest information we’ve become aware of:
Business Interruption Loan Scheme
Some clients have told us that the experience of applying for a loan is not as welcoming as might have been anticipated. It seems that some banks are using the turnover or wage bill tests alone to determine if a business meets the minimum criteria – rather than using their discretion. It means a business would need an annual turnover of £100k or an annual wage bill of at least £12,500 in order to be eligible.
On the upside, we’re also hearing that other banks are adopting a far more flexible approach, so if you come up against this problem and a bank tries to sell you an overdraft or one of their loans., you should shop around.
The British Business Bank currently has over 40 lenders adopting the scheme. For a full list of accredited banks, see:
- Association of Chartered Certified Accountants (ACCA)
- Once an employee has been furloughed, their employer can claim a grant of 80% of their wages up to a limit of £2,500 a month. Employers can opt to top up pay levels, but will not be able to claim for more than 80 per cent of £3,125 per month.
- Along with further information about furloughing staff, The ACCA has reproduced text for pro-forma letters as recommended by The Advisory, Conciliation and Arbitration Service (ACAS). However, please note that ahead of taking any action to furlough employees, we recommend speaking to your HR advisor for guidance.
- For full information, see: https://i.emlfiles4.com/cmpdoc/2/5/6/6/2/files/660053_job-retention-scheme—furloughed-workers-update-and-suggested-proforma-letters.pdf
- The Institute of Chartered Accountants in England and Wales (ICAEW)
- Employees on a payroll as at 28th February 2020 are eligible for the Coronavirus Job Retention Scheme. As yet, there is no clarity with regards to employees who start after this date.
- Directors are eligible for the scheme.
- The ICAEW understands that the £2,500 figure includes employers NIC and pension contributions. This needs clarifying but if true, means that the amount received by employees will reduce unless the employer opts to top up their salary.
- The earnings used to determine the maximum grant are still being considered. It might be based on February payroll or an average for the previous 12-month period.
- For full information, see: https://www.icaew.com/insights/viewpoints-on-the-news/2020/mar-2020/coronavirus-job-retention-scheme-furlough-guidance
Commercial rents: Ban on evictions
Business owners with commercial premises who are unable to pay rent due to Coronavirus are advised to speak with their landlords. Many landlords and tenants are reaching voluntary agreements, but the government is currently preparing legislation to protect tenants from eviction. The emergency Coronavirus Bill currently going through Parliament will mean no business will be forced out of their premises if they miss a payment in the next three months.
We hope you find this information useful. Please feel free to share it with other business owners in your contact sphere.
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