What you need to know this week

Our round-up of the key business updates and insights

February 12, 2021

Welcome to our weekly wrap. We’ve rounded up recent headlines and business insights, including the new SME Brexit support fund, updates to the Bounce Back Loan Scheme, getting ready for new Off-Payroll Working Rules, plus a round-up of UK-wide funding.

Government unveils £20m SME Brexit support fund

The UK Government has announced a £2m SME Brexit support fund to adjust to new customs and VAT rules when trading with the EU.

SMEs which trade with the EU will be entitled to grants worth up to £2,000 for each trader to pay for support, which includes training and professional advice.

The fund will help businesses to prepare for the implementation of import controls which come into force from April and July.

The grant will be made open for applications next month and will be administered through the pre-existing customs grant scheme.

Bounce Back Loan terms extended

Bounce back loans extended

UK firms that took out Covid loans will be given some ‘breathing space’ to make their first repayment, Chancellor Rishi Sunak announced this week.

  • The Treasury announced over 1.4 million firms who have taken out the Bounce Back Loan will be able to pay it back over a 10-year period instead of six.
  • UK businesses have also been given the option to only pay the 2.5% interest on the loans or pause repayments altogether for six months, but only after six contributions have been made.
  • Borrowers can use these options individually or in combination with each other, and remain responsible for repaying their Bounce Back Loan and fully liable for the debt.

The commercial loan scheme was launched in May last year and sees the government take on 100 per cent of the risk if the borrower defaults.

Bounce Back Loan Scheme – current status

In line with the CBILS and CLBILS, the Bounce Back Scheme will run until the end of March, 2021.

Businesses can apply for a minimum of £2,000 up to a maximum of £50,000, or 25% of business turnover, and the Government will pay the interest for the first 12 months, with 100% backing.

Applicants are required to complete an online form, and most loans will be paid within 24 hours of approval. There will be no forward-looking eligibility test, while businesses will be able to access the loans through the existing network of accredited lenders.

Bounce Back ‘Top-ups’

An adjustment to the Bounce Back Loan Scheme rules late last year means those businesses who have borrowed less than their maximum (i.e. less than 25% of their turnover) can top-up their existing loan. Businesses will be able to take-up this option from next week; they can make use of this option once to ensure that they are able to benefit from the loan scheme as intended.

Top-ups are only available from a borrower’s existing BBL scheme lender. A borrower can apply for a top-up that is for the lesser of £50,000 or 25 per cent of their annual turnover, minus the value of their original loan.

For example, if a borrower had certified an annual turnover of £100,000 in their original application and taken a BBL of £20,000, equating to 20 per cent of their turnover, they can ask the borrower for an additional £5,000, taking their BBL to the maximum 25 percent of their turnover.

Getting ready for new Off-Payroll Working Rules (IR35)

The Government last year delayed extending the Off-Payroll Working rules to help businesses and individuals as they battled through the pandemic.

The new rules are scheduled to apply to private sector large and medium-sized businesses as defined by the Companies Act and will come into effect from April 6, 2021.

This means organisations in the private sector that engage ‘off-payroll’ workers will become responsible for determining their employment status and paying Income Tax and NICs for those who are deemed to be employees.

This change does not apply where the end user is a small business under the Companies Act rules, where the current IR35 rules will continue to apply.