Chris Goad: Repayment of Bounce Back Loans

Chris Goad of Stephenson Smart

6th July, 2021, Chris Goad

, partner at Stephenson Smart’s , and offices, assesses the impact that Bounce Back Loan repayments might have on businesses and what options there might be to help with making the repayments.

What is a Bounce Back Loan?

The Bounce Back Loan was one of the financial support schemes put in place by the government to support businesses, at the start of the coronavirus pandemic.

Many businesses are now starting to receive the payment schedules for Bounce Back Loans taken out, with their first repayments being due.

Although Covid restrictions are starting to be lifted, we are still seeing different sectors and businesses recovering at different rates. Some businesses are still not functioning at the same level they were before the pandemic hit, and therefore seeing a reduction in income.

Some of our clients are started to be contacted by the bank they took their Bounce Back Loan through with repayment schedules for those loans, often with a high monthly payment. For example, if a business took out a Bounce Back Loan of £50,000, they will be looking at a repayment rate of around £887 per month, to start imminently.

What if I can’t start to repay my Bounce Back Loan?

Our advice is that if your business is facing a repayment figure that is unattainable you may be able to look at a option. This allows firms to extend their loan terms, reduce repayments or take a repayment holiday.

The bank you borrowed your Bounce Back Loan from should have been in touch to highlight this option.  It is important to contact them as soon as possible, and ideally about a month before your first payment is due, to ask to defer or flexibly manage your repayments.

As Chartered Accountants and Business Advisors, Stephenson Smart are qualified and experienced in helping businesses manage their cashflow and plan financially, even in difficult times.  We are keen to support our clients, local businesses and our communities during this recovery period.

If we can support you or your business with this or any other financial help, please

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Covid-19: A notice from Stephenson Smart

Covid-19 Update

6th January, 2021, Melanie Harriss

Following the announcement to impose another lockdown, we have taken the decision to close our offices to visitors.

We are at our busiest time of year but know that we are more than able to support our clients remotely through email, telephone, and video calling. Our teams are being fully supported to work from home and our IT infrastructure is robust enough to allow this to happen securely.

Our main concern is the health and wellbeing of our staff, clients, and communities.

We encourage the dropping off/collecting of records by prior arrangement, by who usually oversees your accounts.  We can also make arrangements for the signing of important documents.

We will continually review our situation, in accordance with government guidance, and update you as and when the situation changes.

Keep safe and well – Stephenson Smart

Covid-19: A notice from Stephenson Smart

Covid-19 Update

3rd December, 2020, Melanie Harriss

As we emerge from lockdown, all our offices have been placed in Tier 2. This means that government guidance is still to work from home where possible.

To follow this guidance and keep our staff, clients, and communities safe, our offices will largely remain closed to visitors.

We are at our busiest time of year but know that we are more than able to support our clients remotely through email, telephone, and video calling. Our teams are being fully supported to work from home and our IT infrastructure is robust enough to allow this to happen securely.

We are happy to receive records, and see clients in person where no other option is possible, by prior arrangement only. Arranged by contacting the office who usually oversees your accounts.

Keep safe and well – Stephenson Smart

Response to Summer Economic Update

Dan Jastrzebski ACA CTA

8th July, 2020, Dan Jastrzebski

On Wednesday 8 July the Chancellor of the Exchequer, Rishi Sunak presented a Summer Economic Update to the House of Commons. The main theme of his announcement was a ‘Plan for Jobs’.

Stamp Duty

The Chancellor announced that, with immediate effect, there would be no stamp duty to pay when buying a property up the value of £500,000. This relief will be until 31 March 2021. The previous threshold before stamp duty was due was £125,000, or £300,000 for first time buyers.

This measure is a step towards trying to bolster confidence in the housing market and build upon the recovery that it is starting to make, which will in turn support the construction industry.

VAT

To further support the hospitality industry, VAT will be reduced from 20% to 5% on the supply of food and non-alcoholic drinks, accommodation and attractions. This will be from 15 July 2020 until 12 January 2021.

Further guidance on the scope of this relief will be published shortly.

The hospitality industry has been one of the hardest hit by the coronavirus outbreak. There have been other schemes and grants given specifically to this industry to help it maintain and recover. The reduction in VAT and the ‘Eat Out To Help Out’ discount scheme, which will run during August, are further to steps to support those in the hospitality industry and will be welcome news to many businesses in the local area.

Jobs Retention Bonus

As an extension to the the Chancellor announced news of a Jobs Retention Bonus. This will be a one-off payment of £1,000 to UK employers for every furloughed employee who remains continuously employed through to the end of January 2021.

Employees must earn above the Lower Earnings Limit (£520 per month), on average, between the end of the Coronavirus Job Retention Scheme on 31st October 2020 and the end of January 2021.

Payments will be made from February 2021. Further detail about the scheme will be announced in due course.

This measure is in response to calls for the Jobs Retention Scheme to be extended beyond 31 October 2020 and is designed to encourage employers to retain staff to prevent redundancies and higher unemployment when the scheme ends.

Kickstart Scheme

The Chancellor announced a raft of measures designed to support, create and protect jobs. The most significant one being the Kickstart Scheme that encourages UK employers to create high quality 6-month work placements for those aged 16-24, with government funding available for each job to cover 100% of the relevant National Minimum Wage for 25 hours a week, plus the associated employer National Insurance contributions and employer minimum automatic enrolment contributions.

 

These further announcements of business support by the government are designed to try and prevent the UK economy from shrinking further, and to weather the global recession caused by coronavirus.

The Chancellor plans to deliver a Budget and spending review this Autumn that should give a clearer picture of the health of the British economy.

You can find out more about all of the financial support available to businesses in our

Full details about the Government’s ‘A Plan for Jobs’ can be found on .

Coronavirus Job Retention Scheme (Furlough)

Coronavirus Job Retention Scheme (CJRS)

28th March, 2020, Stephenson Smart

The Coronavirus Job Retention Scheme, also known as the Furlough scheme, has now been extended until the end of September 2021.

Employees will continue to receive 80% of their current salary for hours not worked. There will be no employer contributions beyond National Insurance contributions (NICs) and pensions required in April, May and June. From July, the government will introduce an employer contribution towards the cost of unworked hours of 10% in July, 20% in August and 20% in September.

You can find out more about the scheme

 

Redundancy and Furlough

Employees can still be made redundant during furlough, but no part of the furlough grant can go towards paying redundancy pay itself. Previous government guidance suggested that employers could continue to claim the furlough grant for a furloughed employee who was serving statutory (or possibly contractual) notice. However, the most recent guidance on 13 November updates the position:

  • For notice days  before 1 December 2020 a furlough claim may be made towards statutory notice pay. There is no guidance on contractual notice.
  • For notice days  on or after 1 December 2020 an employer cannot make a furlough claim if  the employee was serving contractual or statutory notice. This includes people under notice of redundancy or if they have resigned.

For claim periods starting on or after 1 December 2020 employers will have to budget for redundancy payments when implementing redundancies but should budget for full notice payments too.

On 26‌‌ ‌January 2021 the Government will be publishing a list of employer names who have claimed via the Coronavirus Job Retention Scheme for periods from December 2020 onwards. From February 2021, they will publish the names, an indication of the value of claims and Company Registration Numbers (for those who have one) of employers who make Coronavirus Job Retention Scheme claims for periods starting on or after 1‌‌ ‌December 2020. They will not publish details of employers claiming through the scheme if they can show that publicising these would result in a serious risk of violence or intimidation to individuals, or those living with them. Find out more and complete the online application form click .

You will need to keep any records that support the amount of Coronavirus Job Retention Scheme grant you claim, in case HMRC needs to check them.

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