With the current pandemic of COVID-19 having an impact across the globe, the UK government has responded with a package primarily aimed at SMEs, totalling £330bn in the first instance, with further announcements due. The government recognises that this group will be hardest hit, with issues in cashflow and knock-on effects from suppliers. While the measures do lean towards aiding the retail, hospitality and leisure industries more than others, they are also delivering support that will bolster other sectors, including manufacturing.
Highlights for SMEs include refunds available for statutory staff sick pay that will cover up to two weeks for staff effected by COVID-19, without the need to present a GP note. It will relieve companies of some financial burden while ensuring the NHS is not inundated with requests for fit notes.
The Coronavirus Business Interruption Loan Scheme will be available before the end of the month to support SMEs access to loans and overdrafts. It will support a loan value up to £5m, with the government covering the first six months of interest for credit taken under this scheme to help SMEs further. For larger companies, the Bank of England will be facilitating the new COVID-19 Corporate Financing Facility that will ensure firms can continue to finance short term liabilities and continue to trade through this difficult time. However, being chiefly loan-based, this support system may deter many companies facing difficulty who are reluctant to increase their debt burden.
The Coronavirus Job Retention Scheme is the most recent addition to the government measures, by which the government has committed to paying 80% of staff salaries up to a cap of £2500 for members of staff who would be laid off during this crisis. This will help a great many small businesses, although the framework for this scheme is yet to be put in place.
In looking at all avenues to protect manufacturing businesses, tax relief is a viable option to get a cash injection into your business without getting further in debt. Research & Development tax relief was a major highlight of the recent budget announcements, on March 11th 2020, with the Chancellor releasing plans to increase public R&D investment to £22bn per year in by 2024-25.
For qualifying companies, Research & Development tax relief is money claimed back for work you have already done, providing a much-needed cash injection. Catax, Made in the Midlands R&D Patron, can help you uncover hidden value during these trying times, working together with you to get ahead of the upcoming financial strain. We have claimed over a quarter of a billion pounds to date for our clients, and are working with our community and partners to ensure all businesses affected have the tools and cash flow they need to sustain their business. We find our clients receive an average claim of £59k, which could be a lifeline in the coming months.
The team at Catax have been able to respond to this crisis quickly, working remotely with a robust infrastructure that is allowing us to support our clients through their claims. There remains a high percentage of manufacturing companies that don’t realise they qualify for this valuable tax relief; we can set up a video or conference meeting to discuss your circumstances and see if we can uncover your hidden value.