From this morning, small business owners are able to apply for a Government backed loan of up to £50,000, with an interest rate of 2.5% being charged. Business owners can access this new loan by filling out a simple online form, that is only seven questions long! Furthemore, any business that has already taken out a Coronavirus Business Interruption Loan (CBILS) of £50,000 or less, can apply to have these switched over to a Bounce Back Loan.
Under the new Bounce Back Loan scheme, SMEs can borrow between £2,000 and £50,000, of which Government will provide the lenders with a 100% guarantee, along with covering the cost of any fees and interest for the borrower during the first 12 months. During this time, no repayments will be due, to enable firms to get back on their feet. The loans are available through the UK’s five largest banks, as well as a network of other lenders.
Along with the raft of new support schemes for businesses during this challenging time, HMRC have strengthened their teams within the R&D Tax Credit offices, resulting in R&D Tax Credit claims being approved sooner.
Like the Coronavirus Business Interruption Loan Scheme (CBILS), the new Bounce Back Loan is considered a form of Notified State Aid. As a result, this will therefore potentially impact your next R&D Tax Credits claim. This is because there are restrictions on the amount of state aid that companies can receive.
As R&D Tax Credits are also considered a form of State Aid, it’s important to understand your rights along with how to maximise the benefit to your business.
If a business self-declares as not being a “business in difficulty” on 31 December 2019, then any previous State aid does not impact a business’ eligibility for the Scheme. However, any aid received under the Retail, Hospitality and Leisure Grant and any payment received under the Coronavirus Business Interruption Loan Scheme (CBILS) will count towards their total State aid allowance.
Businesses are required to self-declare that, since 19 March 2019, they have not received more than £711,200 in State aid under the State Aid Temporary Framework. This is £106,680 in the case of fisheries and aquaculture businesses, or £88,900 for agriculture businesses.
If the business self-declares as being a “business in difficulty” on 31 December 2019, then additional de minimis State aid restrictions applications apply.
You can read more about this and the wider forms of relief being offered by UK Government here.
|Firm Size||Turnover < £45m||Turnover > £45m||Investment Grade|
|Bounce Back Loans (upto £50k)||X||X||X|
|Coronavirus Business Interruption Loan Scheme (CBILS)||X|
|Coronavirus Large Business Interruption Loan Scheme (CLBILS)||X||X|
|Job Retention Scheme||X||X||X|
|Covering the cost of Statutory Sick Pay||X||X||X|
As with all decisions that are being made, it’s vital to have all of the facts, to enable you to make the best decision. We’re more than happy to help at this time.