Coronavirus - Government measures in key jurisdictions - Flipbook - Page 82
United Kingdom
Contributor: Farrer & Co
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Loans and
financial
support
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What financial
support is the
government
providing to
businesses and
to individuals
on employment
issues?
Lending is available under two new schemes that have been introduced in the UK:
– The COVID-19 Corporate Financing Facility (CCFF) – this scheme provides
funding to larger businesses and corporates to support their liquidity and working
capital issues by helping them to, for example, pay wages and suppliers due to the
disruption caused by Covid-19 to their cashflows.
Has the
government put
in place any new
bank funding
schemes?
Employment
Anthony Turner | anthony.turner@farrer.co.uk | +44 (0)20 3375 7460
Ian De Freitas | ian.defreitas@farrer.co.uk | +44 (0)20 3375 7471
– The Coronavirus Business Interruption Loan Scheme (CBILS) – this scheme is
designed to support lending to SMEs (businesses with a turnover of no more
than £45 million), that are experiencing lost or deferred revenues, leading to
disruptions in their cashflow. It will initially run for six months.
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These schemes ensure that businesses that were viable prior to the outbreak of
Covid-19 will have access to funding. Those businesses who were facing financial
difficulty prior to the outbreak, will find it more difficult to get access to this funding.
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COVID-19 Government help for UK businesses
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The Government has recently announced an additional scheme to help start-ups,
as the CBILS does not apply to loss making businesses. Under this scheme the
Government will match any investment given to start-ups by making loans which
will be convertible into equity if not repaid. The start-ups must have previously
raised £250,000 from private investors in the previous five years.
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A further £750 million will be available as loans and grants for small businesses
focussing on research and development.
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The UK Government has introduced The Coronavirus Job Retention Scheme
under which employers can access a grant to cover the wages for employees on
“furlough” (ie still on their employer’s payroll but not providing any work). Under
the Scheme the grant will cover 80% of an employee’s wage, up to a maximum of
£2,500 per month. To find out more: Coronavirus - Job Retention Scheme is now
open and there is yet more guidance
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A similar scheme has been put in place for the self-employed: Coronavirus - SelfEmployed Income Support Scheme – what is the government proposing?
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The UK Government has also introduced changes to Statutory Sick Pay, which can
now be paid not only to those who are displaying symptoms of Coronavirus, but
also to those who live with someone who has symptoms or to those in clinically
extremely vulnerable groups who have been notified that they should stay at
home at all times until the end of June (known as “shielding”). To find out more:
Coronavirus - An update on Statutory Sick Pay
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The UK Government has announced that changes to IR35 (also known as offpayroll working) in the private sector, which would potentially have affected the
taxation of payments to consultants and contractors, have been delayed by a
year. The intention had been to extend IR35 to medium and large companies
in the private sector from 6 April, however, the Treasury has confirmed that the
changes will be postponed until 6 April 2021 in response to the ongoing spread of
Coronavirus. To find out more: IR35 tax rules delayed by 12 months
Government measures in key jurisdictions
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