Does your financial recovery plan include repayment of loans etc?
It’s time to have another look at your business recovery plan. This time we are going to focus on repaying loans or liabilities deferred.
Let’s start by looking at the main financial provisions that have been put in place during this crisis. You need to identify which ones require to be repaid, and which are treated as taxable income of your business. We have produced the following summary table to help you with this analysis (see table at the foot of this message). NB: We have concentrated on the measures that apply within Scotland.
It is important to start now and set aside cash reserves to meet these liabilities as they become due. For many businesses cash flow will continue to be tight during the next six months, however these liabilities will become due for repayment, and it is better to address these issues now when you still have some time to plan and and accumulate the necessary cash.
Get in touch if you want to discuss any aspect of your business.
|Scheme||Plan for repayment or taxation|
|Bounce Back Loan Scheme||Repayment (and interest charge) start from 12 months after the start of the loan.|
|CBILS||Repayment (and interest charge) start from 12 months after the start of the loan.|
|COVID Working Capital Loan (Scotland)||Repayment (and interest charge) start from 3 months after the start of the loan.|
|Deferral of Self-Assessment Payment||Repayment by 31/01/2021|
|VAT Deferral||Repayment by 31/03/2021|
|Business loans deferred||Repayment as per agreement with business banker?|
|HMRC Time to Pay Service||Repayment as per agreement with HMRC|
|Deferring Payment of Non-Domestic Rates||Repayment as per agreement with Local Authority|
|Business property rent deferred||Repayment as per agreement with property owner or agent?|
|Coronavirus Job Retention Scheme – Phase 2 – Flexible Furloughing||Treated as taxable income, but contribution required from employer as of 1st August 2020. Increasing contributions required until the scheme ends 31st October 20220.|
|Coronavirus Job Retention Scheme – Phase 1||Treated as taxable income|
|Self-Employed Income Support Scheme||Treated as taxable income|
|Newly Self-Employed Hardship Fund||Treated as taxable income|
|Eat Out to Help Out Scheme||Treated as taxable income|
|Retail, Hospitality, Leisure Support Grant:||Treated as taxable income?|
|Small Business Support Grant:||Treated as taxable income?|
|Pivotal Enterprise Resilience Fund||Treated as taxable income?|
|Creative, Tourism & Hospitality Enterprises Hardship Fund||Treated as taxable income?|