COVID-19 Update – The main changes you need to know

As part of our obligation to keep you up to date with developments from the Government relating to the support for businesses, we will continue to issue updates to you as and when there is new information available.

HMRC and the Government have clarified a number of points on the Job Retention scheme

  • employees can start a new job when on furlough. The guidance does say it has to be allowed under the old employment contract but you can waive this requirement;
  • you can reclaim 80% of compulsory commission from HMRC plus basic salary. This only refers to commission from past sales as furloughed employees cannot be completing new sales when on furlough, i.e. that cannot be working for you;
  • the 80% does not include non-monetary benefits;
  • company directors can be furloughed but only perform statutory duties for the company, not normal work;
  • employees can be furloughed multiple times, i.e. they can be furloughed, brought back to work, then re-furloughed;
  • You must notify employees of their furlough status in writing and keep a record of that written notification for five years.

The Government expands the CBILS Loan scheme to help small businesses

CBILS has been significantly expanded along with changes to the scheme’s features and eligibility criteria. The changes mean even more smaller businesses across the UK impacted by the coronavirus crisis can access the funding they need.  Importantly, access to the scheme has been opened up to those smaller businesses who would have previously met the requirements for a commercial facility but would not have been eligible for CBILS. Insufficient security is no longer a condition to access the scheme.  This significantly increases the number of businesses eligible for the scheme. The expanded scheme will be operational with lenders from Monday 6 April 2020.

The main changes are:-

  • Under the scheme, lenders will not take personal guarantees of any form for facilities below £250,000;
  • For loans over £250,000, personal guarantees will be limited to 20% of any amount outstanding after any other recoveries from business assets;
  • Banks cannot ask business owners to use their house as collateral;
  • Banks are to make operational changes to the scheme to speed up lending.

If you have any questions with any of the above points above please call us via the button below and a member of our expert team will be happy to assist.