DWF logo

Search

DWF logo

            Coronavirus (COVID-19): Government Support for Growth Capital Companies

            Confirmation that the Coronavirus Business Interruption Loan Scheme is available to SEIS/EIS investee companies and a summary of the grants and reliefs made available by the Government as a result of COVID-19 that could be utilised by such companies.

            Date: 24/03/2020

            The Government has introduced a number of measures and packages to support and assist businesses through this difficult period as a result of the COVID-19. 

            We have set out below details of the packages that may be relevant to SEIS/EIS investee companies.   

            One concern that was raised was whether the Coronavirus Business Interruption Loan Scheme ("CBILS") would be available to SEIS/EIS investee companies given an initial requirement that the business must not have received de minimis State aid beyond €200,000 equivalent over the current and previous two fiscal years.  The British Business Bank has confirmed to the Enterprise Investment Scheme Association ("EISA") that this is not the case and EIS and/or SEIS investee companies can qualify for CBILS if they meet the other requirements.

            In addition to ensuring that CBIL is available to SEIS/EIS investee companies the EISA has also written to the Government to request that the legislative restrictions on EIS and SEIS investments be lifted and additional income tax relief be made available for a limited period of time to encourage private investments in to essential SME's required to assist the fight against COVID-19 and relieve the pressure on the NHS.  We await the Government's response.

            The details of the packages available are:

            Coronavirus Business Interruption Loan Scheme ("CBILS"). 

            The CBILS provides loans up to £5million for small and medium sized businesses ("SME's") through the British Business Bank.  The Government will cover the interest for the first 12 months and will guarantee 80% of the loan.  

            To be eligible for a facility under CBILS, the business must:

            1. be UK based in its business activity with an annual turnover of no more than £45million; and
            2. Have a borrowing proposal which, were it not for the COVID-19 pandemic, would be considered viable by the lender. 

            Business Rates

            1. If the business does not currently pay business rates it can apply to its Local Authority for a grant of £10,000.
            2. If the business operates in retail, hospitality or leisure there are two specific business rate packages available:

            a. If the business is operated within a property with a rateable value between £15,000 and £51,000 they can apply to their Local Authority for grant funding of £25,000; and
            b. There will be business rates holiday in England and Scotland for the 2020 to 2021 tax year with no limit on rateable values.

            3. If the business is a nursery and is on Ofsted’s Early Years Register or wholly or mainly used for the provision of the Early Years Foundation Stage in England there will be a business rates holiday for the 2020 to 2021 tax year.
            4. If the business operates in Scotland all non-domestic properties in Scotland will get a 1.6% rates relief. This relief effectively reverses the change in poundage for 2020-21.

            Value Added Tax

            5. If the business is VAT registered it can defer any VAT payments due between 20 March 2020 and 30 June 2020 until the end of the tax year, which we assume means the VAT tax year for the business. This may run from 31 March, 30 April or 31 May depending upon the businesses VAT returns period. 
            Job Retention Scheme 
            6. The Government will pay to employers up to 80% of salary costs of anyone not working due to Coronavirus but whose job has been retained (up to a maximum of £2,500 per month). Please see our blog Coronavirus (COVID-19): Support for businesses announced through Job Retention Scheme for more detail click here >

            Time To Pay Arrangements

            7. If the business is not able to pay its tax liability it can approach HMRC to agree an instalment payment plan. HMRC has a dedicated helpline: 0800 0159 559 who will be able to agree a payment schedule. HMRC will base each decision on a case by case basis.

            The position is changing on a regular basis and further announcements or updates may be released.  We will wait to hear if the EISA has been successful in lobbying the Government to make amendments to the current restrictions to encourage further investments to EIS and/or SEIS investee companies.

            If you would like further details about this please do not hesitate to contact our Tax team. 

            Related people

            Caroline Colliston

            • Partner // Member of Diversity & Inclusion Leadership Group

            Jon Stevens

            • Partner // Executive Partner (Birmingham)

            John Toon

            • Partner // UK Head of Tax

            Paul Rimmer

            • Partner // Head of Corporate (Liverpool)

            We use cookies to give you the best user experience on our website. Please let us know if you accept our use of cookies.

            Learn More

            Your Privacy

            When you visit any web site, it may store or retrieve information on your browser, mostly in the form of cookies. We mainly use this information to ensure the site works as you expect it to, and to learn how we can improve the experience in the future. The information does not usually directly identify you, but it can give you a more personalised web experience.
            Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change permissions. However, blocking some types of cookies may prevent certain site functionality from working as expected

            Functional cookies

            (Required)

            These cookies let you use the website and are required for the website to function as expected.

            These cookies are required

            Tracking cookies

            Anonymous cookies that help us understand the performance of our website and how we can improve the website experience for our users. Some of these may be set by third parties we trust, such as Google Analytics.

            They may also be used to personalise your experience on our website by remembering your preferences and settings.

            Marketing cookies

            These cookies are used to improve and personalise your experience with our brands. We may use these cookies to show adverts for our products, or measure the performance of our adverts.