Originally written by Anna Jordan on Small Business
Progress on a state guarantee scheme to replace CBILS is being hampered by pricing and personal guarantee issues.
According to the Times, provisional details of the scheme were intended to be laid out by the end of last month, helping lenders prepare for a planned launch in April. However, said lenders are concerned that they won’t be prepared in time because of these complications.
It’s hoped that the new scheme can help businesses who aren’t eligible for normal commercial lending to get back on track post-pandemic.
The scheme would also help non-bank lenders to raise wholesale funds to continue to provide credit to small businesses. The state guarantee provides confidence over recoveries should a borrower default.
That said, the Treasury is torn between striking a balance between rules that will provide a broad range of lenders and conditions that will be attractive to borrowers, with bank and non-bank lenders having different needs in key areas.
CBILS loans over £250,000 were changed to state-backed rather than personal guarantees following an outcry last year. But despite the taxpayer guarantee, alternative funders are likely to need personal guarantees to meet the needs of their wholesale funders.
As for pricing, non-bank lenders are
Tag Archive for Outlook
Hot Business News Today
Kevin Hollinrake calls for abolition of business rates
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Conservative MP Kevin Hollinrake has reiterated his call for the abolition of business rates ahead of next month’s Budget on March 3.
Business rates, he said, are “anachronistic” and should be replaced instead by a 3 per cent increase in VAT that all businesses would pay.
This 3 per cent increase in VAT to 23 per cent would affect all businesses, not just retailers, and the £30bn raised each year would cancel out the scrapping of business rates.
>See also: Just when you thought it couldn’t get worse, business rates return in April
Currently, the Treasury appears to be leaning towards a 2 per cent online sales tax to be announced in the autumn statement.
But Mr Hollinrake points out that most businesses now have a mixed model of physical and online sales, and calculating which sales were digital would be complex.
Mr Hollinrake presented his bill calling for the abolition of business rates last month in the House of Commons. So far, there has been no Treasury response. But his conversations with retailers such as Tesco, B&Q and Screwfix have been positive, as has the response from the ACS, which represents convenience stores.
>See also: Chancellor Rishi Sunak may
Hot Business News Today
Kevin Hollinrake calls for abolition of business rates
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Conservative MP Kevin Hollinrake has reiterated his call for the abolition of business rates ahead of next month’s Budget on March 3.
Business rates, he said, are “anachronistic” and should be replaced instead by a 3 per cent increase in VAT that all businesses would pay.
This 3 per cent increase in VAT to 23 per cent would affect all businesses, not just retailers, and the £30bn raised each year would cancel out the scrapping of business rates.
>See also: Just when you thought it couldn’t get worse, business rates return in April
Currently, the Treasury appears to be leaning towards a 2 per cent online sales tax to be announced in the autumn statement.
But Mr Hollinrake points out that most businesses now have a mixed model of physical and online sales, and calculating which sales were digital would be complex.
Mr Hollinrake presented his bill calling for the abolition of business rates last month in the House of Commons. So far, there has been no Treasury response. But his conversations with retailers such as Tesco, B&Q and Screwfix have been positive, as has the response from the ACS, which represents convenience stores.
>See also: Chancellor Rishi Sunak may
Hot Business News Today
Budget 2021 and what it means for small business
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Rishi Sunak is set to extend furlough and other Covid support for small business in next month’s Budget 2021 on March 3.
The chancellor is almost certain to also extend the current business rates suspension for many small businesses, while setting the scene for an online sales tax all retailers may have to pay later in the year.
In July it was revealed that the Treasury was considering a 2 per cent online sales tax to raise £2bn a year, giving physical shops an advantage when it comes to purchases made instore.
>See also: SME owners hold £1.2bn of personal liabilities linked to Covid-19 loans
Recent polling by Kekst CNC found that an online sales tax would be the most popular way of recouping some of the costs of the Covid crisis: 56 per cent of voters want online retailers to pay more tax.
One idea is that small businesses that sell online could offset their business rates against the online sales tax, giving high street shops a boost.
Meanwhile, 18 companies and organisations including Waterstones have urged Sunak to introduce a digital sales tax while reducing business rates.
Business rates are assessed every few years and based on rent
Hot Business News Today
Budget 2021 and what it means for small business
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Rishi Sunak is set to extend furlough and other Covid support for small business in next month’s Budget 2021 on March 3.
The chancellor is almost certain to also extend the current business rates suspension for many small businesses, while setting the scene for an online sales tax all retailers may have to pay later in the year.
In July it was revealed that the Treasury was considering a 2 per cent online sales tax to raise £2bn a year, giving physical shops an advantage when it comes to purchases made instore.
>See also: SME owners hold £1.2bn of personal liabilities linked to Covid-19 loans
Recent polling by Kekst CNC found that an online sales tax would be the most popular way of recouping some of the costs of the Covid crisis: 56 per cent of voters want online retailers to pay more tax.
One idea is that small businesses that sell online could offset their business rates against the online sales tax, giving high street shops a boost.
Meanwhile, 18 companies and organisations including Waterstones have urged Sunak to introduce a digital sales tax while reducing business rates.
Business rates are assessed every few years and based on rent
Hot Business News Today
SME owners hold £1.2bn of personal liabilities linked to Covid-19 loans
by Anna Jordan • • 0 Comments
Originally written by Anna Jordan on Small Business
Figures show that small and medium-sized business owners hold £1.2bn of personal liabilities linked to emergency Covid-19 loans, according to The Times.
This puts their personal assets on the line if their company doesn’t make it through the pandemic.
Personal guarantees were used earlier on in the pandemic and then restricted due to backlash. That said, figures from a Freedom of Information request show that 1,587 directors agreed to them when taking out credit through the Coronavirus Business Interruption Loan Scheme (CBILS).
These personal guarantees make directors liable when taking on debt for the company. Banks originally sought them on CBILS loans of all sizes and taxpayers were underwriting 80 per cent of the debt. They were changed so that guarantees are only sought on loans over £250,000.
The average size of a coronavirus business interruption loan backed by a personal guarantee is £766,000. Such liabilities will become a ‘significant issue’ for some directors once loans start to become repayable in April, said Todd Davison, managing director of Purbeck Insurance Services.
Borrowers’ main property can’t be taken as security, but second homes could be. Recovery of the loans under guarantee is capped at 20 per cent of the
Hot Business News Today
SME owners hold £1.2bn of personal liabilities linked to Covid-19 loans
by Anna Jordan • • 0 Comments
Originally written by Anna Jordan on Small Business
Figures show that small and medium-sized business owners hold £1.2bn of personal liabilities linked to emergency Covid-19 loans, according to The Times.
This puts their personal assets on the line if their company doesn’t make it through the pandemic.
Personal guarantees were used earlier on in the pandemic and then restricted due to backlash. That said, figures from a Freedom of Information request show that 1,587 directors agreed to them when taking out credit through the Coronavirus Business Interruption Loan Scheme (CBILS).
These personal guarantees make directors liable when taking on debt for the company. Banks originally sought them on CBILS loans of all sizes and taxpayers were underwriting 80 per cent of the debt. They were changed so that guarantees are only sought on loans over £250,000.
The average size of a coronavirus business interruption loan backed by a personal guarantee is £766,000. Such liabilities will become a ‘significant issue’ for some directors once loans start to become repayable in April, said Todd Davison, managing director of Purbeck Insurance Services.
Borrowers’ main property can’t be taken as security, but second homes could be. Recovery of the loans under guarantee is capped at 20 per cent of the
Hot Business News Today
Fashion industry struggles for survival due to post-Brexit red tape
by Anna Jordan • • 0 Comments
Originally written by Anna Jordan on Small Business
More than 400 leading figures in the fashion industry are calling on the government for help following post-Brexit red tape and travel restrictions.
The open letter to the Prime Minister comes from respected icons, including model Twiggy and Patrick Grant, judge on the Great British Sewing Bee.
Complex international supply chains and relationships have been ‘strangled’ under the new restrictions.
“Everyone working across the EU, our largest trading partner for imports and exports, will now need
costly work permits for each of the member states they visit and a mountain of paperwork for their
products and equipment. This is a step backwards and out of touch with the realities of how the sector
works,” they wrote in the letter fronted by Fashion Roundtable, an industry forum.
“From travelling to the EU for trade shows to large value shoots and shows happening here in
the UK, red tape delays and costs are impacting our industry already, with work relocating to the EU,
all impacting our opportunities to trade and travel.”
Fashion Roundtable wants the government to add garment workers to the list of ‘shortage occupations’ for UK visas to help fill thousands of vacancies in UK clothing factories. It’s also calling for UK tax
Hot Business News Today
Thousands of self-employed mothers miss out on COVID-19 SEISS payments
by Anna Jordan • • 0 Comments
Originally written by Anna Jordan on Small Business
Tens of thousands of self-employed mothers who have recently had children have lost out on Self-Employed Income Support Scheme (SEISS) payments.
The payments come in instalments based on a self-employed person‘s average profits between 2016 and 2019.
An estimated 75,000 self-employed women took maternity leave during that period, meaning that they may not have been paid what they would have otherwise.
On Thursday (January 21), charity Pregnant Then Screwed will be bringing a judicial review for indirect discrimination. They want the chancellor, Rishi Sunak, to take maternity leave into account when making SEISS payments.
When asked why pay-outs for self-employed mothers was lower, the chancellor said ‘for all sorts of reasons people have ups and down and variations in their earnings, whether through maternity, ill health or others’. Pregnant Then Screwed wrote a pre-action protocol letter to the chancellor and his legal team ‘correlated maternity leave with a sabbatical’, according to the charity.
Joeli Brearley, CEO and founder of Pregnant Then Screwed explains: “The government has had nine months to amend this scheme so that it doesn’t discriminate against women; but they have chosen not to.
“We’ve had heart-breaking messages from so many women. For some this drop in
Hot Business News Today
Thousands of self-employed mothers miss out on COVID-19 SEISS payments
by Anna Jordan • • 0 Comments
Originally written by Anna Jordan on Small Business
Tens of thousands of self-employed mothers who have recently had children have lost out on Self-Employed Income Support Scheme (SEISS) payments.
The payments come in instalments based on a self-employed person‘s average profits between 2016 and 2019.
An estimated 75,000 self-employed women took maternity leave during that period, meaning that they may not have been paid what they would have otherwise.
On Thursday (January 21), charity Pregnant Then Screwed will be bringing a judicial review for indirect discrimination. They want the chancellor, Rishi Sunak, to take maternity leave into account when making SEISS payments.
When asked why pay-outs for self-employed mothers was lower, the chancellor said ‘for all sorts of reasons people have ups and down and variations in their earnings, whether through maternity, ill health or others’. Pregnant Then Screwed wrote a pre-action protocol letter to the chancellor and his legal team ‘correlated maternity leave with a sabbatical’, according to the charity.
Joeli Brearley, CEO and founder of Pregnant Then Screwed explains: “The government has had nine months to amend this scheme so that it doesn’t discriminate against women; but they have chosen not to.
“We’ve had heart-breaking messages from so many women. For some this drop in