September 25, 2020

What the ‘Winter Economy Plan’ might mean for your business

The deadlines to apply for the Bounce Back Loan Scheme (BBLS), Coronavirus Business Interruption Loan Scheme (CBILS) and the Coronavirus Large Business Interruption Scheme (SLBIS) have been extended to 30 November 2020.

The schemes were originally due to close in the coming months (4 November , 30 September and 20 October, respectively) and with over 1 million companies borrowing through the bounce back loan scheme already; this will be a welcome extension.

With cash flow still being so crucial, the extension of these schemes will be a lifeline to alleviate this area of risk. There is still such a level of uncertainty, with businesses suffering a reduction in revenue, that there will be many businesses looking to apply for these schemes, and also potentially to borrow more.

There is also commentary that this will be being replaced with a new successor loan scheme from January 2021 – we await details of this.

"Pay As You Grow" for CBILS, CLBILS and BBLS

No, we’re not talking about mobile phone contracts here… but an opportunity for businesses to have greater flexibility in their loan repayments.

This, again, will provide comfort for businesses to protect their cash flow enabling them to pay over an extended period (up to 10 years) and greatly reduce monthly repayments. It will also allow struggling businesses to make interest only payments on the loans, with the option to suspend their repayments for up to six months (all without affecting their credit rating).

We await the detail about the eligibility for “struggling” businesses, but these measures will undoubtedly give businesses a period of respite and allow them to take stock and re-focus for the winter.

Deferred VAT payments can be repaid over 11 months (without interest) and the reduced VAT rate of 5% will remain until March 2021 for the hospitality and tourism sectors

The Government is clearly listening to businesses’ concerns and this re-payment option (with no interest) will be well received.

As we enter a further lockdown, and with curfews in place, the Government’s commitment to the reduced VAT rate in the hospitality and tourism sectors will come as a much needed saving.

Whilst these sectors have been greatly affected, there are other sectors that have felt ‘left out’ of the Government’s support. For example, there were calls in the House of Commons yesterday for the Chancellor to engage with the live events sector (including the theatre).


There are a lot of positives here and these will make a real difference to some smaller businesses. It appears that the Chancellor is genuinely communicating with the business community in this.

That being said, the pandemic has brought so much uncertainty – exacerbated by Brexit on the horizon – that we simply cannot know what lies ahead over the coming months. The Government may need to provide further support during this time.

As always, we await further detail on the Government’s plans.

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