UK’s furlough and business loan schemes go live
UK government schemes to help employers pay workers on temporary leave and provide loans for medium-size and larger businesses went live Monday.
The UK government scheme aiming to help workers on temporary leave enables employers to make claims to tax authority HMRC for 80% of their employees’ wages up to a £2,500 monthly cap. The Coronavirus Job Retention Scheme applies to organisations whose operations have been severely affected by the coronavirus and have put their workforce on temporary leave. The scheme also extends to employer National Insurance contributions on that subsidised pay and employer pension contributions up to a minimum level.
HMRC provided guidance for employers on how to use the scheme.
The scheme was first announced on 20 March by UK Chancellor of the Exchequer Rishi Sunak and has been extended to the end of June from its backdated start of 1 March.
In a tweet, Sunak said: “Exactly one month ago today I announced the unprecedented decision to step in and help pay people’s wages. We promised support would be available by the end of April.”
HMRC issued guidance for employers to check if they are eligible to claim through the scheme and a calculator to work out how much they are able to claim.
Loans for medium and larger UK companies
The Coronavirus Large Business Interruption Loan Scheme is available through lenders accredited by the British Business Bank. The scheme facilitates access to finance for medium-size and larger UK businesses that are experiencing lost revenue and disrupted cash flow as a result of the coronavirus pandemic.
Under the scheme lenders can provide up to £25 million to businesses with a turnover of between £45 million and £250 million, and up to £50 million for businesses with a turnover of more than £250 million.
The British Business Bank will also partner with the UK government on a Future Fund, which will issue convertible loans of between £125,000 and £5 million to “innovative companies which are facing financing difficulties due to the coronavirus outbreak”. The scheme will require businesses to have at least equal match funding from private investors and will launch in May.
The UK government has provided a hub for all coronavirus-related business support.
For more news and reporting on the coronavirus and how management accountants can handle challenges related to the pandemic, visit FM’s coronavirus resources page.
— Oliver Rowe (Oliver.Rowe@aicpa-cima.com) is an FM magazine senior editor.