What COVID Relief Options Are Still Available to U.S. and U.K. Businesses?|
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At a glance:
- The Main Takeaway: The U.S. and U.K. governments have started to phase out and put end dates on popular economic relief programs for businesses, due to increasing vaccination rates.
- Impact on Your Business: Though deadlines have been extended, funding for some programs is minimal, so it’s important to apply now and take advantage of the best outcomes for your business.
- Next Steps: Aprio has been at the forefront of COVID-19 economic relief since the onset of the pandemic and can help you acquire the funding your business needs and deserves.
The full story:
As the pace of COVID-19 vaccinations increases in the United States and the United Kingdom, respective governments have started to develop plans for phasing out certain pandemic relief programs.
Here is a status update on popular relief options in the U.S. and U.K., and what your business can apply for and expect moving forward.
Recap: U.S.-based relief programs
Under the Coronavirus Aid, Relief and Economic Security (CARES) Act, millions of businesses across the country have been able to keep their doors open, even during the most turbulent days of the pandemic. Below, we break down some of the CARES Act’s most popular programs and where they stand now:
- Paycheck Protection Program: Since the Paycheck Protection Program (PPP) was launched last year, the U.S. Small Business Administration (SBA) has distributed, through private lenders, nearly $800 billion in forgivable loans to small businesses affected by the pandemic. Though the recently passed American Rescue Plan (ARP) added about $7.25 billion to the program, the PPP is almost depleted of funding. The remaining amount is set to be distributed through community financial institutions, which typically loan money to businesses owned by underserved communities, such as women and minorities. The program is set to end on May 31.
- Employee Retention Credit: If you weren’t able to receive a PPP loan, don’t fret: you still could be eligible to obtain funding through the Employee Retention Credit (ERC). The ARP updated and extended the ERC under Section 2301 of the CARES Act for the first and second calendar quarters of 2021. The Act also extended the ERC for the third and fourth quarters of 2021. Businesses can receive an advance on the ERC by filing Form 7200, which you can read more about here.
- Restaurant Revitalization Fund: On May 3, the SBA opened the application portal for the Restaurant Revitalization Fund (RRF) grant, comprised of $28.6 billion geared toward helping restaurants shore up pandemic-induced losses and get back on track. As of May 12, the RRF program received more than 266,000 applications, representing over $65 billion. Funding is expected to go fast; click here to learn how to apply and get your share of the RRF.
Recap: U.K.-based relief programs
Since the beginning of the pandemic, the U.K. government has spearheaded several generous economic relief programs for businesses in need. The Coronavirus Business Interruption Loan Scheme (CBILS), which was designed to support smaller businesses, closed on March 31, as did the Bounce Back Loan Scheme (BBLS), which allowed businesses to access funding more quickly during the pandemic.
Though these larger programs are no longer available, there are still a few lucrative benefits U.K.-based businesses can take advantage of:
- Coronavirus Job Retention Scheme: The Coronavirus Job Retention Scheme (CJRS) is intended to help employers retain staff members they needed to furlough due to pandemic-induced shutdowns. The HMRC has announced a fourth phase of the program, extending the CJRS to the end of September. Under this phase, employees will continue to receive 80% of their normal wages through September 30; however, employers must fund 10% of those wages in July and 20% in August and September.
- Recovery Loan Scheme: This program is designed to help all U.K.-based businesses gain access to loans to enable their post-pandemic recovery and transition. Though up to £10 million is available per business, participating lenders have complete discretion over the actual amount and terms offered. The U.K. government will guarantee 80% of the loan financing to lenders, and borrowers are liable for 100% of the debt they incur. The Recovery Loan Scheme is open until December 31.
- Hospitality and Tourism VAT: The U.K. has extended the hospitality and tourism value-added tax (VAT) cut to 5% until September 30; thereafter, it will extend the cut to 12.5% until April 30, 2022. The extension is intended to encourage U.K. citizens to dine out at restaurants and contribute to the hospitality and tourism industry, which was hit hard by the financial impact of the pandemic.
- Here’s an Easier Way to Understand Your ERC Eligibility
- Apply for an RRF Grant in 4 Simple Steps
- Aprio International Services
The bottom line
All eligible U.S. and U.K. businesses should be proactive in applying for and participating in these programs before they are phased out for good. To help maximize the financial benefits of these programs and boost your business’s growth, contact the experts at Aprio for assistance. Together with Moore Kingston Smith, we can provide the insight and knowledge you need to effectively navigate the application processes and help your business seize what’s next.
Contact us today to schedule a free consultation.