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COVID-19: How To Apply for a Bounce Back Loan and Open a Gateway Account

Our latest TurnerWarran Coronavirus business support blog shows you how to apply for the newly announced “Bounce Back” loans if you are eligible, and how to open a Government Gateway account if you are self-employed.

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Apply For A Business Bounce Back Loan (BBBL)

The Bounce Back Loan scheme helps small and medium-sized businesses to borrow between £2,000 and £50,000.

The government guarantees 100% of the loan and there will not be any fees or interest to pay for the first 12 months.

Loan terms will be up to 6 years. No repayments will be due during the first 12 months. The government will work with lenders to agree a low rate of interest for the remaining period of the loan.

The scheme will be delivered through a network of accredited lenders.

Guidance on how to apply is given on the British Business Bank Website

Actions required:

  1. Find an accredited lender 
  2. Approach them, ideally via their website;
  3. Complete a short application form which self certifies that your business is eligible for a loan under BBLS;
  4. If eligible you will need to complete the Banks Anti-Money laundering, fraud and Know Your Client checks;
  5. The lender makes a decision.

Talk to us if you need assistance in applying for a BBBL we will do our best to help.

Your business must be able to self‑declare to the lender that it:

  • has been impacted by the coronavirus (COVID-19) pandemic
  • was not a business in difficulty at 31 December 2019 (if it was, you must confirm your business complies with additional state aid restrictions under de minimis state aid rules)
  • is engaged in trading or commercial activity in the UK and was established by 1 March 2020
  • is not using the Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS) or the Bank of England’s Covid Corporate Financing Facility Scheme (CCFF), unless the Bounce Back Loan will refinance the whole of the CBILS, CLBILS or CCFF facility
  • is not in bankruptcy or liquidation or undergoing debt restructuring at the time it submits its application for finance
  • derives more than 50% of its income from its trading activity (this requirement does not apply to charities or further-education colleges)
  • is not in a restricted sector (see below)

Note: The above is not an exhaustive list – see The British Business Bank for more information.

Bounce Back Loans are available to businesses in all sectors, except the following:

  • Credit institutions (falling within the remit of the Bank Recovery and Resolution Directive)
  • Insurance companies
  • Public-sector organisations
  • State-funded primary and secondary schools    

Opening A Government Gateway Account – Self Employment Income Support (SEIS) Under The Coronavirus Scheme

HMRC have issued some more details relating to the claims for the Self-Employed Income Support. The latest guidance was issued on 1 May. Details are in the link here

As with many HMRC “guidance notes” issued recently, these tend to be quite basic, and, unfortunately, leave many questions unanswered. 

It is hoped that HMRC may rethink the method of claim, but at this moment, the latest guidance clearly states: “Your tax agent cannot make the claim for you”, meaning we cannot apply on your behalf.

The guidance goes on to indicate that you will require: 

  1. Your Self-assessment Unique Taxpayer Reference Number
  2. Your National Insurance Number
  3. Your Government Gateway ID and Password
  4. Bank account number and sort code for payment

Please contact us if you are unable to locate 1 or 2 above. However, the biggest issue is likely to be item 3. 

If you know your government gateway ID and password you do not need to take action at this time. 

If you do not know or don’t have a government gateway ID and password, we recommend you apply as soon as possible to avoid delays in receiving payment. You may be able to submit a paper claim (full details are not yet published) but this will also lead to delays in payment.

Details on the application process are set out below. This will take a few days before it is ready. If you need any assistance please contact us as soon as possible.

HMRC Release Details Of SEISS Scheme

HMRC have updated their Guidance on the SEISS scheme, which can be viewed here. The following text is extracted from HMRC website:

You can claim if you are a self-employed individual or a member of a partnership and:

  • you carry on a trade which has been adversely affected by coronavirus
  • you traded in the tax year 2018 to 2019 and submitted your Self-Assessment tax return on or before 23 April 2020 for that year
  • you traded in the tax year 2019 to 2020
  • you intend to continue to trade in the tax year 2020 to 2021

Your business could be adversely affected by coronavirus, for example if you are unable to work because you: 

  • are shielding 
  • are self-isolating
  • are on sick leave because of coronavirus
  • have caring responsibilities because of coronavirus
  • you have had to scale down or temporarily stop trading because: 
  • your supply chain has been interrupted
  • you have fewer or no customers or clients
  • your staff are unable to come in to work

You should not claim the grant if you are above the state aid limits or operating a trade through a trust.

To work out your eligibility we will first look at your 2018 to 2019 Self-Assessment tax return. Your trading profits must be no more than £50,000 and at least equal to your non-trading income.

If you are not eligible based on the 2018 to 2019 Self-Assessment tax return, HMRC will then look at the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019.

Find out how HMRC will work out your eligibility including if they have to use other years here.

How different circumstances affect the scheme

  • if your return is late, amended or under enquiry
  • if you are a member of a partnership
  • if you are on or took parental leave
  • if you have loans covered by the loan charge
  • if you claim averaging relief
  • if you are non-resident or chose the remittance basis
  • if you are above the state aid limits

Check these circumstances here.

You will get a taxable grant based on your average trading profit over the 3 tax years:

  • 2016 to 2017
  • 2017 to 2018
  • 2018 to 2019

HMRC will work out your average trading profit by adding together your total trading profits or losses for the 3 tax years, then we will divide by 3.

The grant will be 80% of your average trading profit, divided by 12 to give a monthly amount. HMRC will then multiply this by 3. We will pay this amount up to a maximum of 7,500.

The grant amount they work out for you will be paid directly into your bank account, in one instalment.

Find out how HMRC will work out your average trading profits including if you have not traded for all 3 years here. 

The online service you will use to claim is not available yet. HMRC will aim to contact you by mid May 2020 if you are eligible, to invite you to claim using the GOV.UK online service. Payment will be made by early June 2020 if your claim is approved.

If you are unable to claim online an alternative way to claim will be available. HMRC will update the overview with more information soon. We will update you as soon as we know more, but keep your eye on the government website for more information. 

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