It has now been over two weeks since the government introduced ‘shutdown’ measures across the UK, and during this time the Government have announced a significant number of schemes to support businesses and individuals through these challenging times.
This has included support for business to continue to pay staff ‘furloughed’ via the Coronavirus Job retention scheme, increasing the ability for banks to provide loan funding to business via Coronavirus business interruption loan scheme (CBILS), support for self-employed workers and other grants, delayed tax payments and VAT holidays. We are now beginning to see the benefit of these schemes as they are implemented across our client base.
These schemes can be complimented by the additional practical decisions business owners can make to take advantage of opportunities to improve cash-flow for example, such as accelerating tax losses to obtain a refund of previously paid tax sooner than would normally be the case.
In addition to these schemes and opportunities, it is also important to look at other less publicised schemes announced by the government, that although being fairly ‘niche’ in scope can offer significant benefits for business if implemented. We have highlighted below two recently announced proposals worth consideration;
1. Grants for Research and development to build industry resilience to Coronavirus implications
The government announced that a £20m fund has been launched for individual grants up to £50k (with potential follow on funding) for technology and research-focused businesses to create products that develop new ways of working and build resilience in industries. This could include delivery services, food manufacturing, retail and transport, as well as supporting people at home in circumstances like those seen during this current coronavirus outbreak.
It may therefore be the case that specific skills developed in a business’s core day to day operations can be applied to look at research meeting the specific scope outlined. This may be a viable alternative to furloughing staff where their specific expertise can be used to research such schemes to build resilience for the future. An example may be for IT contractors who can create new ways to work at home more effectively, or for entertainers or teachers / training providers to create new platforms to deliver their services when certain restrictions are placed on society. More details can be found here .
Even if your business may not qualify for the research and development grant detailed above, please do remember that for any research and development carried out, there are significant tax advantages that can result in a repayment for your business or a reduction in the corporation tax liability. Further information can be found in this recent article .
2. Increased insurance protection for Exporters
As a result of the global slowdown in trade and international exports, there is an increased credit risk of export businesses not being paid. Furthermore, insurance in the commercial market may be more difficult to obtain. As a result, UK Export Finance (UKEF) has announced plans to offer export insurance in all major markets in response to Coronavirus (COVID-19). This now includes the EU and US that were previously excluded from the scheme after the European Commission relaxed rules this week regarding the provision of short-term export credit insurance.
The purpose of such a scheme is to offer a guarantee to relevant businesses that they will get paid, so they can continue to export with confidence and support the UK economy. Further details can be found here .
If you believe that you may be able to take advantage of either of the above schemes then please do not hesitate to contact your normal Rickard Luckin contact who can talk your through each scheme and check you eligibility. We remain committed to our clients to provide support and seek alternative opportunities to get you through the difficult climate we all currently find ourselves in.