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The government today is introducing the new micro-loan scheme for small businesses to help small businesses who may have been unable to access other government-backed Coronavirus loan schemes.
The scheme will launch from Monday 4 May and enable businesses to:
- Access loans of between £2,000 and £50,000 for up to six years, from a network of accredited lenders
- The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months
- After this period a fixed 2.5 per cent interest kicks in – meaning the government will pay the interest for the first 12 months
- For most firms, ‘loans should arrive within 24 hours of approval’
- Apply via a ‘simple, quick, standard form’ with ‘no complex eligibility criteria’ or ‘forward-looking tests of business eligibility’
The scheme is a not a grant but a deferred repayment loan, as such not all businesses will want to take on extra debt in uncertain times.
Unlike the Coronavirus Business Interruption Loan Scheme (CBILS), the government is to guarantee 100 per cent of these loans (as opposed to 80 per cent).
Bounce Back Loan (“BBL”) – how it works
- Businesses will be able to borrow between £2,000 and £50,000 and access the cash within days
- There is no cap on turnover for a micro-business applying for a BBL
- Loans will be from £2,000 up to 25 per cent of a business’ turnover or £50,000, whichever is lower
- Loans will be interest free for the first 12 months, and businesses can apply online through a short and simple form
- Borrowers will fill in a two-page application form in which they will certify that they have a viable business, lifting obligations on lenders to carry out their own checks
- The length of the loan is for six years but early repayment is allowed, without early repayment fees
- No personal guarantees are allowed, and no recovery action can be taken over a principal private residence or principal private vehicle
- All firms trading as of March 1 will be able to get cash
- Banks will no longer require forward financials or business plans
- If you’ve already had a coronavirus business interruption loan of up to £50,000, that will be ported across to the Bounce Back Loans scheme
- Eligible companies will be subject to standard customer fraud, anti-money laundering (AML) and Know Your Customer (KYC) checks prior to any loan being made
- The borrower always remains 100% liable for the debt
Is your microbusiness eligible for a Bounce Back Loan?
Any business can apply for a microbusiness loan, however:
- You must be UK-based and established by March 1 2020
- Have been adversely impacted by the Coronavirus (Covid-19)
- Confirm you are currently not using a government-backed Coronavirus loan scheme (unless using BBLS to refinance a whole facility)
- You must not be in bankruptcy, liquidation or undergoing debt restructuring
Who cannot apply
The following businesses are not eligible to apply:
- banks, insurers and reinsurers (but not insurance brokers)
- public-sector bodies
- state-funded primary and secondary schools
Where to find your Bounce Back Loan
Accredited lenders of Bounce Back Loans are listed on the British Business Bank website.
How to apply for a Bounce Back Loan
Businesses will be required to fill in a short online application form on their lender’s website, which self-certifies whether they are eligible for a Bounce Back Loan facility. Eligible companies will be subject to standard customer fraud, Anti-Money Laundering (AML) and Know Your Customer (KYC) checks.
Some State aid restrictions may apply to applications.
If you are looking to apply for a loan and need support please call us on 0114 272 4984 or email email@example.com.
Often, the tax consequences of wills aren’t considered when they’re written and can leave an unnecessary tax bill. Read our blog to find out what a post-death variation is, when you can use it, and what generally the benefits could be.
Note: this article is intended for general guidance only and does not constitute accountancy, tax or other professional advice. We recommend you seek specific advice based on your circumstances.
With the backdrop of COVID-19 being the new norm, death is not something many wish to talk about although it surrounds us now. And as many come to terms with personal loss, they are forced to deal with issues, perhaps prematurely, surrounding the financial aspects of losing a loved one.
One area where we have been inundated is in relation to wills and whether these can be changed post death.
The short answer is, as long as certain conditions are met, it is possible to change a will after death. This is known as a post-death variation, and it can be a useful tax planning tool.
A post-death variation can be made to:
- reduce the amount of tax payable
- to change who benefits under the will
- place the assets of the deceased into trust
- to provide for someone who was left out of the will
Conditions that must be met
In order to vary a will after the deceased has died, the following conditions must be met:
- it must be made within two years of the deceased’s death
- all beneficiaries adversely affected by the variation must agree to it and be party to it
- it must be made in writing
- it must contain a statement of intent for tax purposes, specifying that the beneficiary/beneficiaries elect for the relevant statutory provisions to apply
- if the amount of tax payable as a result of the variation increases, the personal representative must be party to it and agree to it
- it must not be made in consideration for money or money’s worth
Although there is no requirement for new beneficiaries to sign the deed of variation, this is often done as good practice.
Where a deed of variation is made, the will is treated as if applied, as so varied, at the date of the deceased’s death.
There is a two-year window in which a deed of variation must be made. It is possible that in the period between the date of death and the making of the deed of variation, changes have occurred. For example, the asset that is subject to the variation may have been sold. In this situation, the proceeds, rather than the actual asset, would be redirected as a result of the deed of variation.
Once made cannot be undone
Once a deed of variation has been made, it cannot be undone. It is therefore advisable to take advice prior to varying a will.
Bill dies in October 2019 leaving an estate of £1.5 million split equally between his wife, Barbara, and his sons Simon and Philip.
The family agree to vary the will so as to leave everything to Barbara to benefit from the inter-spouse exemption. Bill’s unused nil rate band will be available on Barbara’s death. Her will provides for everything to be left equally between her sons.
Simon and Philip must be agree to be party to the deed of variation as they are adversely affected by the redirection.
The deed of variation is made in February 2020. The changes are deemed to be effective from the date of Bill’s death as if they represented his will at that time.
If you need help with the tax implications of the above please call us on 0114 272 4984 or email at firstname.lastname@example.org.
Chancellor has confirmed today that the Coronavirus Job Retention Scheme will be extended by one month to 30 June to reflect continuing social distancing measures.
The move provides some certainty and allows firms from across UK to continue to protect millions of jobs. The scheme will continue to be monitored to ensure people and businesses can get back to work as soon as it’s safe to do so to drive UK economic recovery.
The scheme, which allows firms to furlough employees with the government paying cash grants of 80% of their wages up to a maximum of £2,500, was originally open for three months and backdated from the 1 March to the end of May.
However, the Chancellor said he would keep the scheme under review and extend it if necessary.
The government has taken unprecedented action to help the economy and society bridge a period of national emergency so that as many people as possible can get back to work as the situation improves.
This week the Office for Budgetary Responsibility said the CJRS is limiting the impact on employment. Brewdog and Timpsons are among the thousands of businesses up and down the country furloughing their staff.
Future decisions on the scheme will take into account further developments on the wider measures to reduce the spread of coronavirus, as well as the responsible management of the public finances.
For help and advice on furloughing please call us on 0114 2724984 or email email@example.com.