I am currently working with a number of Small and Medium sized Enterprise (SME) clients on the CFO consultancy side of my business services, helping them protect their businesses as far as possible during this stormy period of fear and uncertainty caused by the global COVID-19 virus pandemic. The goal focussed on coming out the other side of the storm, and, if possible, in a position to maximise the opportunity presented by a potential increase in capacity as spending taps are turned back on by clients and consumers.
This note is intended to provide thought provoking and helpful financial sign-posts, and is split into 3 sections (parts A & B are within separate posts for ease of digestion):
A) Leadership focus to build business resilience
B) HMRC opportunities for businesses
C) Top 10 financial incentives that may be available + latest government update
(C)
To help my SME client base, I have recently been researching some of the pertinent potential financial incentives available. Some people will be aware, and utilise, some of these, but here are my Top 10, not in any particular order, of those potentially available to Small and Medium sized Enterprises.
1 - Apprentice Funding - click image
- up to 95 % funded by the government, even if the business does not contribute to the levy (> £3m annual payroll) if individuals are combining study and working
2 - UK Govt grants for innovation - click image
- significant sums available on a competitive basis - current competition closes 22 April 2020. There is likely to be another competition at a later date
3 - Eurostars R&D collaboration funding - click image
- for larger, collaborative, R&D project funding
- another funding route is through the Horizons scheme - here
4 - Broadband funding - click image
- gigabit funding of circa £2,500 towards improving broadband access
5 - EIS equity fund raising - click image
- enables established businesses (up to 7 years old) to raise equity, as opposed to debt, from individuals who are encouraged through significant personal tax reliefs - for businesses up to a year old, SEIS relic is available - here
6 - R&D Tax Credits - click image
- a valuable cashflow and tax liability mitigator through retrospective claims to HMRC for internal and external R&D projects
7 - Grants towards businesses focusing on social ventures - click image
- Grow it grants up to £15k + mentoring / coaching support for business 1-5 years old focussed on UK social improvement
8 - Small business rate relief - click image
- recently increased in the Spring 20 Budget to relief on rateable values up to £51k pa. (Also see section below)
9 - Patent Box - click image
- reduce corporation tax from 19% to 10% on qualifying patent development
10 - GrantFinder - click image
- this organisation may be able to locate other potential grants available, and assist with the application process
Select Recent UK Government Initiatives
Since I compiled this list, the Chancellor of the Exchequer announced on 17th March the first stage of a new package of measures (estimated at £330Bn - 15% UK GDP) to help certain businesses and individuals in the UK. I am writing this section on 17th March (!) therefore the devil in the detail is yet to be released and understood; here are some of the headlines: - government backed loans to business of up to £5m (Last updated 19-3-20) are to be made available to SMEs, with zero interest payments for the first 6 months. Key details include:
- the banks / providers participating - term loans, overdrafts and other routes available - available from 23 March - 6m interest free period - up to £5m - sound borrowing proposal required - government backed to handle insufficient security - businesses up to £41m pa turnover - some sectors excluded (list details these
See link here.
- business rate cancellation for 12 months for all sized organisations in the hospitality, retail and leisure sectors; with £25k grants available to SMEs in these sectors (what about businesses not in these 3 sectors?)
- on an individual basis, people may be able to seek 3 month mortgage payment holidays if adversely impacted by the COVID-19 virus (again, most people). It is not clear what provisions, if any, are being made for those that rent rather than own their homes.
- announced in the Budget was the availability for businesses to reclaim SSP from the government for up to 14 days per person (approximately £94 per person, per week)
- a separate package for airlines and airports is to follow in the coming days
I hope you find this helpful. Where opinions are expressed, they are my own, along with the interpretation of where opportunity and risk may present. For a business, and an individual, to flourish they require luck. The best definition of ‘luck’ that I came across is ‘where Preparation meets Opportunity’. With opportunities likely to present themselves when this storm passes, that just leaves the preparation!
If there is anything you would like to talk through, please do let me know.
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