Problems Raising Business Finance?

If your business is finding finance difficult to obtain then the Enterprise Finance Guarantee, launched by the Government, could provide a much needed source of funds. Under the scheme the Government will guarantee lending by commercial lenders to viable businesses to ensure that they can get the working capital and investment that they need.

This scheme will support bank lending of between three months and ten year maturity to UK businesses with a turnover of up to £41 million who are currently not easily able to access the finance they need. It will enable them to secure loans of between £1,000 and £1 million through the Government guarantee.

The guarantee can be used to support new loans, refinance existing loans or to convert part or all of an existing overdraft into a loan to meet working capital requirements.

The Enterprise Finance Guarantee is available through many of the high street banks. Delivery of the Enterprise Finance Guarantee, including the decision on whether or not it is appropriate to use it in connection with any specific lending transaction, is fully delegated to the participating lenders. There is no automatic entitlement to receive a guaranteed loan and nor is there any pre-qualification process for it.

The Enterprise Finance Guarantee is subject to certain sector restrictions arising from the EU de minimis State Aid rules, the Industrial Development Act (which provides the statutory basis for EFG) and also for national policy reasons.  A list of the main sector restrictions is provided in the EFG Business Sectors web page.

Problems Paying Tax, National Insurance or VAT Liabilities?

HM Revenue & Customs (HMRC) have introduced a dedicated Business Payment Support Service designed to meet the needs of businesses who may be unable to pay in full their tax liabilities before the payment deadlines. If you're worried about being able to meet tax, National Insurance or other payments owed to HMRC, or you anticipate that payments coming due will cause you problems, you can get in touch with them to discuss payment options to help you deal with temporary cashflow difficulties.

You can call the HMRC Business Payment Support Line on Tel 0300 200 3835. The helpline is open seven days a week. (Monday to Friday 8.00 to 20.00, Saturday and Sunday 8.00 – 16.00)

HMRC staff will review your circumstances and discuss temporary options tailored to your business needs, such as arranging for you to make payments over a longer period. They will not charge additional late payment surcharges on payments included in the arrangement, although interest will continue to be payable on those taxes where it applies.In most cases they should be able to give you a decision over the telephone.

If your payment is not due yet, you can ring the Business Payment Support Line nearer the time. But remember that you need to get in touch with them in advance. Don't wait until your payment is overdue.

When contacting them you will need your tax reference number along with details of the tax that you are or will have trouble paying.  If unsure of the tax reference please contact us.

Schemes of Arrangement with HM Revenue & Customs

It has been brought to our attention that whilst it may appear to be a practical solution to cash flow problems at the present time to arrange for a spreading of payments for Corporation Tax & VAT, there are other possible consequential impacts upon business owners & company Directors which may not at first seem to be obvious.

When a business seeks to obtain credit whilst technically trading from an insolvent position, the Directors may find themselves in breach of provisions of The Insolvency Act 1986. Whether that is the case is usually established during the insolvency process which follows a company ceasing to trade. Section 214 deals with Wrongful Trading & Section 239 with Preferential Treatment of Creditors.

By continuing to trade and incurring credit that may go unpaid, at a time when a company is insolvent, may constitute wrongful trading. By deferring VAT payments beyond the due date because at the relevant time a company does not have the funds to pay is actually obtaining credit & by definition, if it cannot ultimately meet its debts as they fall due, it is insolvent so may expose its directors, personally, to wrongful trading.

Of course, a company may feel that it can safely agree with HM Revenue & Customs to pay it’s VAT or Corporation Tax over an extended time period & may have scheduled cash flows to manage this. However, because cash flow has been tight, ordinary trade creditors have been deferred and in the overall scheme, the Revenue could be said to be in a ‘preferred’ status. Directors should therefore consider all creditors when entering into an arrangement with HM Revenue & Customs.

Grant and Support Funding

You may be able to obtain grant or support funding to help with your business start up or development. Some schemes offer financial assistance, while others offer free or subsidised services. Many of the schemes are available nationally, whereas others are targeted locally. Dependent upon your location, type of business and what you need the funds for you may be eligible for several grants or support funds.

To access a search facility of grants and support funds follow the link here