Magee Gammon Loans/Grants

Loan and Grant information

We fully understand the difficulties that you may be facing in these uncertain times and we want to assure you that our team are here to help. To find out how we can support you, please speak to one of our team today.

The information included on this page is our interpretation of what has been published at this time, this may change in the future as further information and clarity of the information already published becomes clearer. We will be updating this page regularly.

 


Updated – 20th June 2020

Dairy response fund – England

The Dairy Response Fund 2020 provides support to eligible dairy farmers in England who produce cows’ milk. They can apply for a one-off payment. A handbook was released 18 June 2020.

The Dairy Response Fund is now open for eligible farmers to apply for a single payment from the fund.

See: https://www.gov.uk/government/publications/dairy-response-fund-2020?utm_source=09cd74b9-1b6d-44f0-8092-3b9a9cf6e474&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate


Updated – 19th June 2020

Apply for the food charities grant fund

Apply for a grant of up to £100,000 for your charity helping people affected by coronavirus (COVID-19).

If you run a front-line food aid charity in England, you can apply for a grant of up to £100,000 to help you continue to provide food to the vulnerable. You can apply for funding as a group of charities to meet the criteria for applications.

The Department for Environment, Food and Rural Affairs (Defra) will assess applications to the fund in the order they are submitted.

See: https://www.gov.uk/guidance/coronavirus-covid-19-apply-for-the-food-charities-grant-fund?utm_source=f1e9a5e3-dc25-49bc-96ee-e903d92642af&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate


Updated – 10th June 2020

Apply for the coronavirus local authority discretionary grants fund – England

The Discretionary Grant Fund supports small and micro businesses that are not eligible for other grant schemes opened on the 8 June.

Small and micro businesses with fixed property costs that are not eligible for the Small Business Grant Fund or the Retail, Hospitality and Leisure Grant Fund may be eligible for the Discretionary Grants Scheme.

What you get

You can get a grant of £25,000, £10,000 or any amount under £10,000.

Eligibility

You may be eligible if your business:

You will need to show that your business has suffered a significant fall in income due to coronavirus.

The Government has asked local councils to prioritise businesses such as:

Local councils have discretion about how to prioritise this funding. Please check with your council for details of their scheme.

You cannot apply if your business is in administration, insolvent or has received a striking-off notice.

If you are already claiming funding

You cannot apply if you are already claiming under another government grant scheme, such as:

Businesses that apply for the discretionary grants scheme can still apply for coronavirus-related loans if they are eligible.

You are still eligible if you have applied for the Coronavirus Job Retention Scheme or the Self-Employed Income Support Scheme.

If you already get state aid

The discretionary grants fund counts towards state aid.

Payments of £10,000 or less count towards the total de minimis state aid you are allowed to get over a 3-year period – €200,000. If you have reached that threshold, you may still be eligible for funding under the COVID-19 Temporary Framework.

Payments of £25,000 count as state aid under the COVID-19 Temporary Framework. The limit for the framework is €800,000.

Your local council will ask you to complete a declaration confirming that:

To find your local council see: https://www.gov.uk/find-local-council

Full report see:

https://www.gov.uk/guidance/apply-for-the-coronavirus-local-authority-discretionary-grants-fund?utm_source=281bab0e-92ec-4a01-ab95-81f8181c1364&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate


Government help and support if your business is affected by coronavirus (covid-19)

Watch videos and register for the free webinars to learn more about the support available to help you deal with the economic impacts of coronavirus.

See: https://www.gov.uk/guidance/help-and-support-if-your-business-is-affected-by-coronavirus-covid-19?utm_source=cb5adab3-5b2b-401f-94b8-78e3fd6779a7&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate


Business loan scheme statistics

HM Treasury has released management information about the Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS), Bounce Back Loan Scheme (BBLS) and Future Fund Scheme.

See:

https://www.gov.uk/government/collections/hm-treasury-coronavirus-covid-19-business-loan-scheme-statistics?utm_source=40dce93e-df4b-4575-a362-fea625208398&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate


Updated – 4th May 2020

Bounce Back Loan Scheme (BBLS) – update

Chancellor Rishi Sunak has written to accredited lenders about how the Government wants BBLS to be run. He makes the point that as a 100% guaranteed loan scheme, the price of BBLS is critical to its success and that the loans need to ensure that these loans are affordable and accessible.

He has come to the decision that the interest rate should be set at 2.5%.

Interaction between BBLS and the Coronavirus Business Interruption Loan Scheme (CBILS)

Businesses will be able to borrow up to £50,000 under BBLS, capped at 25% of turnover. In order to ensure that businesses have a clear understanding of the support available to them under the loan guarantee schemes, the minimum facility size for term loans and overdrafts under CBILS will increase to £50,001 to avoid any risk of confusion or overlap. Any customer with a CBILS loan or overdraft of £50,000 or less will be able to switch that facility to a BBLS loan should they choose to do so over the next few months. This change to the minimum facility size will not apply to asset finance and invoice finance CBILS facilities.

Treasury Direction made by the Chancellor under Sections 71 and 76 of the Coronavirus Act 2020

The Government has released the Coronavirus Act 2020 Functions of Her Majesty’s Revenue and Customs (Self-Employment Income Support Scheme) Direction.

It sets out that HMRC are responsible for the payment and management of amounts to be paid under the Self-Employment Income Support Scheme, as set out in the Schedule to the Direction.

The Direction sets out the legal framework for the Scheme.

Government announcement:  https://www.gov.uk/government/publications/treasury-direction-made-by-the-chancellor-under-sections-71-and-76-of-the-coronavirus-act-2020?utm_source=40e61b90-3990-4bfb-bc04-5e6e39c928f6&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate


How to apply for a Business Bounce Back Loan (BBBL)

The Bounce Back Loan scheme helps small and medium-sized businesses to borrow between £2,000 and £50,000.

The government guarantees 100% of the loan and there will not be any fees or interest to pay for the first 12 months.

Loan terms will be up to 6 years. No repayments will be due during the first 12 months. The government will work with lenders to agree a low rate of interest for the remaining period of the loan.

The scheme will be delivered through a network of accredited lenders.

Guidance on how to apply is given on the British Business Bank Website: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-back-loans/for-businesses-and-advisors/

Actions required:

  1. Find an accredited lender – there is a link on the above page;
  2. Approach them, ideally via their website;
  3. Complete a short application form which self certifies that your business is eligible for a loan under BBLS;
  4. If eligible you will need to complete the Banks Anti-Money laundering, fraud and Know Your Client checks;
  5. The lender makes a decision

Talk to us if you need assistance in applying for a BBBL we will do our best to help.

Who is eligible:

Your business must be able to self‑declare to the lender that it:

Note: The above is not an exhaustive list – see The British Business Bank for more information.

Bounce Back Loans are available to businesses in all sectorsexcept the following:


The Coronavirus Business Interruption Loan Scheme (CBILS) Update

This week seven of the largest lenders to UK SMEs have written an open letter stating a key change to the CBILS application process:

“Following the changes to the scheme announced today lenders will only ask businesses for information and data they might reasonably be able to provide at speed and we will not require the provision of forward-looking financial information or business plans from businesses applying for CBILS-backed lending, relying instead on our own information to assess credit and business viability.

https://www.ukfinance.org.uk/press/press-releases/uk-finance-issues-joint-statement-behalf-seven-largest-sme-lenders

This means that business owners applying to these seven banks (Barclays Bank UK, Danske Bank, HSBC, Lloyds Bank, NatWest, Santander and Virgin Money) no longer need to prepare a cash flow and business plan when applying to CBILS. This dramatically reduces the efforts required to put an application together.

Despite it now being a simpler process to apply for CBILS financing, a business owner should consider if taking on debt at this time is the right thing to do.  To help make this decision preparing a forecast may be a very helpful tool to see how the cash position changes under different assumptions and scenarios.

This announcement appears to have arisen following a Prudential Regulatory Authority (PRA) announcement at the start of this week which requested lenders to consider the following in respect to CBILS:

“The performance of the business prior to the Covid-19 outbreak; a view of how the loan will be repaid in due course, relying on judgement in the absence of financial forecast information; and the general prospects for the sector in which the business operates once the effects of the pandemic have receded.”

See: https://www.bankofengland.co.uk/prudential-regulation/publication/2020/statement-on-the-regulatory-treatment-of-the-uk-cbils-and-the-uk-clbils


R&D Tax Credits and CBILS

R&D Tax Credits and CBILS are classed as state aid.  Under state aid rules a business is only able to receive one form of state aid for a project.

HMRC have issued the following wording on this:

Are new Government support schemes introduced in response to the Coronavirus, such as CBILs, State aids or subsidies? Will they affect a company’s ability to make a claim under the SME scheme?

The Government has notified CBILS as a State aid under the European Commission’s new Temporary Framework for COVID-19. The measure is a fully notified aid, so the restriction on receipt of other State aid (s1138(1)(a) CTA 2009) potentially applies, if the CBILS relates specifically to the company’s R&D expenditure [on a project] rather than being intended more generally to support the company. This will depend on the facts. We will be monitoring the application of this rule and welcome feedback.

See: https://www.tax.org.uk/sites/default/files/200402%20HMRC%20Covid-19%20R%26D%20Update.pdf

This appears to state that if a CBIL is received by a business to help finance a specific project then that project is not eligible for future R&D tax credits (or at least SME R&D tax credits). It may still be eligible for RDEC.

However, if the CBIL is used for general business purposes (which seems more likely in most cases) then a project receiving R&D tax credits should still be eligible to receive them in the future.

It should be noted that HMRC have said they will be monitoring claims as they come which shows the answer is not black and white and further guidance is likely to be produced in due course.

Please talk to us about R&D we have helped several clients with these sorts of claims.


Small Business Discretionary Grant Payments

Top-up to local business grant funds scheme 

The Government has announced a discretionary fund has been set up to accommodate certain small businesses previously outside the scope of the business grant funds scheme.

The Business Secretary Alok Sharma and Minister for Regional Growth and Local Government, Simon Clarke spoke to local authorities in England yesterday to set out that up to £617 million would be made available.

This is an additional 5% uplift to the £12.33 billion funding previously announced for the Small Business Grants Fund (SBGF) and the Retail, Hospitality and Leisure Grants Fund (RHLGF), so up to £617 million. The Government will confirm week commencing 4 May the exact amount for each local authority.

This additional fund is aimed at small businesses with ongoing fixed property-related costs. The Government are asking local authorities to:

Prioritise businesses in shared spaces, regular market traders, small charity properties that would meet the criteria for Small Business Rates Relief, and bed and breakfasts that pay council tax rather than business rates. But local authorities may choose to make payments to other businesses based on local economic need. The allocation of funding will be at the discretion of local authorities.

To be eligible:

There will be three levels of grant payments. The maximum will be £25,000. There will also be grants of £10,000. Local authorities will have discretion to make payments of any amount under £10,000. It will be for councils to adapt this approach to local circumstances.

Further guidance for local authorities will be set out shortly.

See: https://www.gov.uk/government/news/top-up-to-local-business-grant-funds-scheme?utm_source=c711a024-400a-41c6-a2b9-1a103a62ddaa&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate


Updated – 28th April 2020

BBLS Guidance – Bounce Back Loans scheme for small businesses

The Chancellor has announced a new loans measure, known as the Bounce Back Loans Scheme (BBLS), which will allow small businesses to borrow up to 25 per cent of their turnover, up to a maximum of £50,000.

The BBLS will be 100% backed by a Government guarantee, unlike the Coronavirus Business Interruption Loan scheme (CBILS) and will offer an interest-free period for 12 months.

Businesses will be able to apply online via a short and simple two-page self-certification form and because the loan is entirely Government-backed it is hoped that lenders will have the confidence to offer finance without the lengthy and complex red tape associated with CBILS and other loan schemes.

Importantly, firms applying for the new loans will only have to prove that they were viable in the past before the crisis, not that they will remain viable after the crisis. This future viability criteria been a major issue with CBILS.

There remains some concern that banks will still wish to assess the latest financials through a ‘cash available to service debt’ calculation. Where there isn’t sufficient cash to service the debt then there are fears that the loan may still not be granted despite the Government guarantee. Further clarification is expected soon.

The scheme has been designed specifically for small firms, including sole traders, that require ‘vital cash injections’ to help them operate during these challenging times. It will launch for applications from 9am on Monday 4 May and the loans will be provided through a network of accredited lenders.

The Government said that loans will be “advanced as quickly as possible” and that they will “agree a low standardised level of interest for the remaining period of the loan.”

We will keep you up to date on the application process once more is known.


Updated – 15th April 2020

Accounting for grant payments

Thousands of businesses hope to make use of the various grant payments being made available by the Government and local authorities in response to the Coronavirus pandemic.

However, those in receipt of the new funding will need to make sure it is properly accounted for, which raises the question, how do you account for grant income?

The first and most important point to consider in regards to grant income is whether the income really is a grant or whether it is instead a loan or some other form of financing.

The simple definition is that grant income is income received by you or your company for which you do not have to provide anything in return.

Although you may be required to report your use of the grant or be limited in how it is spent, you will not have to make any form for repayment or reparation, such as the provision of goods or services.

If the grant is for expenditure that you would normally record in the profit and loss account, the grant income is reflected as income in your profit and loss account.

Where a grant relates to specific equipment or another fixed asset then the grant income is deferred and should be released to the profit and loss account to match with the depreciation of the grant purchased asset.

You’re meant to account for the income when it becomes receivable, in the case of the Small Business Grants Fund and Retail, Hospitality and Leisure Grant Fund on the 20 March, not when it is received. This may mean that those with March year-end accounts may need to check how the income is reported.

Corporation Tax 

As grants are generally considered to be a taxable form of income, they can be the taxed the same as any other forms of income, such as money earned through trade, via Corporation Tax.

Where a grant is for expenditure that appears in your profit and loss account and you can defer the grant income, such as through the acquisition of a fixed asset, then you may not have a tax liability on the income as it will be matched with its intended expenditure (i.e. expenditure will cancel out income in your accounts).

In the case of the latest Government Covid-19 grants, it is most likely that you will have to pay Corporation Tax as they are not linked to the acquisition of an asset and cannot be deferred. It is therefore important that you account for this income accurately so that you pay the correct amount of tax in future.

VAT

Grant income is outside the scope of VAT, therefore no VAT is payable when you receive a grant, but you may be able to reclaim VAT from any asset paid for via a grant, as long as it is within the ‘normal’ VAT rules.

Complexity

Many businesses may not have used grant funding before and it is easy to make an error by either failing to record grants as income or misreporting the amount received or when it was received. This being the case, we recommend that businesses making use of the Government’s grant funding seek advice and support when preparing their accounts to ensure grant income is correctly reported.


Updated – 8th April 2020

Cash grants for businesses that pay little or no business rates

In our previous article we pointed out that businesses that are eligible for small business rate relief (SBBR), rural rate relief (RRR) and tapered relief are eligible to claim a cash grant of £10,000. We are now starting to see local authorities making these cash payments directly into business bank accounts. We would recommend that if you are paying rates on a small building, whether this be rented or owned, that you check to see whether the rateable value is below £15,000 and if it is make a claim to your local authority.

Cash grants for retail, hospitality and leisure premises

There is also help for businesses in certain sectors with a rateable value of less than £51,000 that can claim a cash grant of up to £25,000 per property.  In order to make this claim you need to be in the retail, hospitality or leisure sector.  Please note that the definition of retail is quite wide and it is worth checking the situation regarding your own particular business using this link 

Please note that if your rateable value is over £51,000 you will not qualify for this grant.

Please also note that the rateable value of a property is not the amount of rates that you pay, it is the amount on which the calculation is based.  Your rates bill will detail this.


Updated – 15th April 2020

Accounting for grant payments

Thousands of businesses hope to make use of the various grant payments being made available by the Government and local authorities in response to the Coronavirus pandemic.

However, those in receipt of the new funding will need to make sure it is properly accounted for, which raises the question, how do you account for grant income?

The first and most important point to consider in regards to grant income is whether the income really is a grant or whether it is instead a loan or some other form of financing.

The simple definition is that grant income is income received by you or your company for which you do not have to provide anything in return.

Although you may be required to report your use of the grant or be limited in how it is spent, you will not have to make any form for repayment or reparation, such as the provision of goods or services.

If the grant is for expenditure that you would normally record in the profit and loss account, the grant income is reflected as income in your profit and loss account.

Where a grant relates to specific equipment or another fixed asset then the grant income is deferred and should be released to the profit and loss account to match with the depreciation of the grant purchased asset.

You’re meant to account for the income when it becomes receivable, in the case of the Small Business Grants Fund and Retail, Hospitality and Leisure Grant Fund on the 20 March, not when it is received. This may mean that those with March year-end accounts may need to check how the income is reported.

Corporation Tax 

As grants are generally considered to be a taxable form of income, they can be the taxed the same as any other forms of income, such as money earned through trade, via Corporation Tax.

Where a grant is for expenditure that appears in your profit and loss account and you can defer the grant income, such as through the acquisition of a fixed asset, then you may not have a tax liability on the income as it will be matched with its intended expenditure (i.e. expenditure will cancel out income in your accounts).

In the case of the latest Government Covid-19 grants, it is most likely that you will have to pay Corporation Tax as they are not linked to the acquisition of an asset and cannot be deferred. It is therefore important that you account for this income accurately so that you pay the correct amount of tax in future.

VAT

Grant income is outside the scope of VAT, therefore no VAT is payable when you receive a grant, but you may be able to reclaim VAT from any asset paid for via a grant, as long as it is within the ‘normal’ VAT rules.

Complexity

Many businesses may not have used grant funding before and it is easy to make an error by either failing to record grants as income or misreporting the amount received or when it was received. This being the case, we recommend that businesses making use of the Government’s grant funding seek advice and support when preparing their accounts to ensure grant income is correctly reported.


Updated – 6th April 2020

Revised Coronavirus Business Interruption Loan Scheme (CBILS)

 The Government has also announced major revisions to the CBILS to come into force from today (6th April 2020).  The effect of this is to open this up to a wider range of businesses.

Previously, the scheme was only available to businesses that were not able to access a facility on normal commercial terms.  From today, any business that meets the main criteria must be considered for a CBILS facility, even if they would otherwise qualify for a commercial facility.

As a reminder, the following conditions must apply:

a)      Be based UK based in its business activity

b)      Annual turnover of less than £45million, of which more than 50% is generated via trading activities

c)       Have a borrowing proposal which the lender would consider viable, were it not for the current pandemic

d)      Be able to self certify that it has been adversely impacted by the coronavirus.

The revised note also now gives guidance on how the banks are to deal with the remaining 20% that is not underwritten by the government.

The guidance does confirm that if you have already applied and been turned down that you should approach your bank again.

To help you with this process we have prepared a helpful infographic, which can be downloaded and shared.

Should you have any questions in the meantime, please contact your normal point of contact.


Four new Coronavirus Business Interruption Loan Scheme (CBILS) lenders announced

The Government’s British Business Bank, which oversees the Coronavirus Business Interruption Loan Scheme (CBILS), has confirmed the addition of four new lenders businesses can approach to access the scheme.

The Co-operative Bank, Cynergy Bank, OakNorth Bank and Starling Bank are now able to provide CBILS loans to businesses.

The Scheme provides UK-based SMEs with turnovers of up to £45 million access to facilities of between £1,000 and £5 million interest-free for 12 months, backed by an 80 per cent guarantee from the Government.

Amendments to the scheme announced in April mean that any business with turnovers of up to £45 million that has been affected by the crisis can access CBILS loans, even if they would otherwise qualify for facilities on normal commercial terms.

The British Business Banks says that businesses that meet the following conditions must be considered for CBILS:

The latest lenders accredited to offer CBILS loans join more than 40 lenders already lending through the scheme, including the UK’s largest high-street banks.


Updated – 30th March 2020

Cash grants for retail, hospitality and leisure businesses

The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property.

Businesses in these sectors with a property that has a rateable value of up to £15,000 may be eligible for a grant of £10,000, whilst businesses in these sectors with a property that has a rateable value of between £15,000 and less than £51,000 may be eligible for a grant of £25,000.

Eligibility

You are eligible for the grant if:

Properties that will benefit from the relief will be occupied properties that are wholly or mainly being used:

How to access the scheme

Whilst it was originally announced that you would not need to do anything as the local authorities would write to those businesses eligible for the grants, the local authorities have been updating their websites to include the facility to claim the grants.

Ashford Borough Council

Folkestone & Hythe District Council


Cash grants for businesses that pay little or no business rates

The government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBRR), rural rate relief (RRR) and tapered relief.  This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.

Eligibility

You are eligible if:

How to access the scheme

Whilst it was originally announced that you would not need to do anything as the local authorities would write to those businesses eligible for the grants, the local authorities have been updating their websites to include the facility to claim the grants.

Ashford Borough Council

Folkestone & Hythe District Council