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Business Services  •  Coronavirus Advice

Who will benefit from the Bounce Back Loan Scheme?

By RJP LLP on 13 May, 2020

Although not an ideal solution, the new Bounce Back Loan Scheme (BBLS) launched by the government offers a valuable source of cash for taxpayers who are not eligible to claim other coronavirus support such as a grant through the Furlough Scheme or Self-Employed Scheme.

Whilst the BBLS is a loan and needs to be repaid, the terms are especially favourable as an emergency stop gap. Compared to other traditional business loans, they are unsecured, attract no interest in the first 12 months and have very favourable 2.5%  interest rates for the remainder of the 6-year term.

Analysis of the eligibility criteria for these loans has highlighted there are no restrictions over using them to supplement income levels and they can be repaid early with no penalties incurred.

In particular, the loans will be beneficial for:

  • Newly self-employed people who have not yet submitted a self-assessment tax return (however you must have been trading before 1 March 2020);
  • Self-employed workers with profits in excess of £50,000;
  • Self-employed workers who have business earnings that are lower than income from other sources e.g. rental property income;
  • Limited company directors who take the majority of their income as dividends; and
  • Business owners with an existing outstanding loan looking for a payment holiday and lower cost replacement in the longer term.

To find out more about BBLS and how to apply, read our earlier blog: article.

If we can help you in any way during this time then please contact partners@rjp.co.uk

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31 July 2020 - Normally an important deadline!

All taxpayers due to make self-assessment tax payments on 31 July 2020 can now delay their payment due to the disruption caused by Coronavirus. This includes self-employed taxpayers and also company directors who pay self-assessment tax on dividend income.

Read more in our coverage of Coronavirus and business support from the Government.