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If your business has been impacted by the pandemic, you'll be pleased to know that the Recovery Loan Scheme continues to be a viable option for business finance if you're looking to secure cash for working capital or for growth and investment. As a specialist, independent finance broker, TVAF Asset Finance & Business Loans has access to a number of funders in the market now and can provide you with dedicated, personal support and an insight into the best Recovery Loan Scheme products available to you and we can typically get funds into your account much faster than a traditional lender can.
There have been a number of changes to the scheme since it launched on 6 April 2021 and it was confirmed at the Autumn Budget 2021 that the scheme will be extended to 30 June 2022. However, from 1 January 2022, there are a number of changes to the Recovery Loan Scheme, including:
The scheme is only open to small and medium sized businesses - with turnover below £45 million. A business can only borrow a maximum of £2 million (if it's part of a Group, then it is capped at £6 million for the Group). The government has reduced the guarantee coverage to 70%.
If you have received borrowing through any of the other coronavirus loan schemes (Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme or the Coronavirus Large Business Interruption Loan Scheme), then the Recovery Loan Scheme is still open for you - however the amount you can borrow may be reduced slightly.
If you'd like to find out more about the new changes to the Recovery Loan Scheme - check out this article from the British Business Bank.
Who can apply for help through the Recovery Loan Scheme?
Compared to the previous CBIL scheme, the Recovery Loan Scheme has wider inclusion criteria, which means that financial support is available for businesses who don’t have three years’ trading history. This is excellent news for start ups and very new businesses, who previously weren’t eligible for help.
The main difference is that the arrangement fees and interest will need to be paid back from the day you take out the loan. There is no 12 month period without any repayments due, as was the case with the CBIL scheme. If you apply for funding through the Recovery Loan Scheme, you will need to pay interest and arrangement fees from month one.
How does the Recovery Loan Scheme work if using a finance broker?
Once the lenders we work with are approved, we are very quickly making sure our own accreditation with each lender is approved, so that we are ready to help clients quickly who need loans and asset or equipment finance for their businesses.
It’s worth noting that each accredited lender will have their own Recovery Loan Scheme qualifying criteria, so whilst TVAF as a broker has access to a substantial panel of lenders, we won’t be working with all those that are participating in the scheme. Our focus is to work with lenders that have been individually accredited for equipment finance and business loans.
If you think your business has a requirement to borrow money to finance additional equipment or machinery purchases or you want to raise extra working capital, help could be available in the form of the Recovery Loan Scheme.
If you want more information, the British Business Bank has published some FAQs here.
How could the Recovery Loan Scheme help my business?You might want to look at using the Recovery Loan Scheme to inject some cash into your business if you are seeing opportunities to grow as we exit the lockdowns the pandemic has caused. Or, you might want some investment into your business to help you replace older plant and machinery. The Recovery Loan Scheme might be a very cost-effective way to access the money needed to purchase that new equipment.
Recovery Loan Schemes are available for Asset Finance purchases such as trucks, trailers, equipment or vans. The scheme can also be used for cashflow funding, for example to help expand your premises, hire new staff or invest in marketing services.
How can TVAF help if you need additional cash for your business?
We have already successfully helped a number of companies to secure additional funding .
The Recovery Loan Scheme isn’t just to help businesses who have struggled through the pandemic. You might see an opportunity to grow and expand your business as a result of changes brought about by this new world!
To see how we may be able to help your business grow, please contact the TVAF team on 01635 785 400 or enquiries@tvaf.co.uk.
Professional Indemnity Insurance ( PII ) is often one of the largest business critical outlays for a business, sometimes higher than rent.
But why should a business have PII cover?
A policy covers a professional or their firm for their work and any mistakes they make or might face in the future. Furthermore, a professional indemnity policy can also cover the legal costs and expenses that might be incurred as a result of a legal case being made against them.
Without this insurance, professionals are exposed to a great deal more business risk and may need to put their prices up to cover the potential threat.
As a result of a toughening of the insurance market, premiums are expected to rise significantly with the Law Society predicting an average increase of 30% or more.
This coupled with a reduction in available funding could have a significant impact.
What help is available to cover my PII renewal?
A finance solution that could spread the costs of premiums over a 6-12 month period, with payment directly to the insurance company.
Funding premiums from £10k upwards and with no deposit required, this could be attractive option especially in current times.
Solicitors and accountants are well known for requiring PII cover, but the market also caters for architects, surveyors and other professions requiring PII cover.
TVAF have access to a funding solution. If you or someone you know is looking at spreading the cost of a PII premium please get in touch for a no obligation discussion.
If your business has been impacted by the pandemic, you'll be pleased to know that the Recovery Loan Scheme continues to be a viable option for business finance if you're looking to secure cash for working capital or for growth and investment. As a specialist, independent finance broker, TVAF Asset Finance & Business Loans has access to a number of funders in the market now and can provide you with dedicated, personal support and an insight into the best Recovery Loan Scheme products available to you and we can typically get funds into your account much faster than a traditional lender can.
There have been a number of changes to the scheme since it launched on 6 April 2021 and it was confirmed at the Autumn Budget 2021 that the scheme will be extended to 30 June 2022. However, from 1 Janaury 2022, there are a number of changes to the Recovery Loan Scheme, including:
The scheme is only open to small and medium sized businesses - with turnover below £45 million. A business can only borrow a maximum of £2 million (if it's part of a Group, then it is capped at £6 million for the Group). The government has reduced the guarantee coverage to 70%.
If you have received borrowing through any of the other coronavirus loan schemes (Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme or the Coronavirus Large Business Interruption Loan Scheme), then the Recovery Loan Scheme is still open for you - however the amount you can borrow may be reduced slightly.
If you'd like to find out more about the new changes to the Recovery Loan Scheme - check out this article from the British Business Bank.
Who can apply for help through the Recovery Loan Scheme?
Compared to the previous CBIL scheme, the Recovery Loan Scheme has wider inclusion criteria, which means that financial support is available for businesses who don’t have three years’ trading history. This is excellent news for start ups and very new businesses, who previously weren’t eligible for help.
The main difference is that the arrangement fees and interest will need to be paid back from the day you take out the loan. There is no 12 month period without any repayments due, as was the case with the CBIL scheme. If you apply for funding through the Recovery Loan Scheme, you will need to pay interest and arrangement fees from month one.
How does the Recovery Loan Scheme work if using a finance broker?
Once the lenders we work with are approved, we are very quickly making sure our own accreditation with each lender is approved, so that we are ready to quickly help clients who need loans and asset or equipment finance for their businesses. We are already approved under a number of schemes for asset and equipment finance so have access to a wide range of schemes to recommend for our clients.
It’s worth noting that each accredited lender will have their own Recovery Loan Scheme qualifying criteria, so whilst TVAF as a broker has access to a substantial panel of lenders, we won’t be working with all those that are participating in the scheme. Our focus is to work with lenders that have been individually accredited for equipment finance and business loans.
If you think your business has a requirement to borrow money to finance additional equipment or machinery purchases or you want to raise extra working capital, help could be available in the form of the Recovery Loan Scheme. We would advise you to get the ball rolling as soon as possible because more lenders are signing up to the scheme on a daily and weekly basis, so get in touch with the TVAF team so that we can get things moving for you.
If you want more information, the British Business Bank has published some FAQs here.
How could the Recovery Loan Scheme help my business?You might want to look at using the Recovery Loan Scheme to inject some cash into your business if you are seeing opportunities to grow as we exit the lockdowns the pandemic has caused. Or, you might want some investment into your business to help you replace older plant and machinery. The Recovery Loan Scheme might be a very cost-effective way to access the money needed to purchase that new equipment.
Recovery Loan Schemes are available for Asset Finance purchases such as trucks, trailers, equipment or vans. The scheme also offers standard loans too, which you could use to expand your premises, hire new staff or invest in marketing services.
How can TVAF help if you need additional cash for your business?
We have already successfully helped a number of companies to secure additional funding through the CBIL Scheme.
The Recovery Loan Scheme isn’t just to help businesses who have struggled through the pandemic. You might see an opportunity to grow and expand your business as a result of changes brought about by this new world!
If that’s the case and you are looking to invest in assets to help your business grow, please contact the TVAF team on 01635 785 400 or enquiries@tvaf.co.uk.
We have had a lot of questions coming in to the TVAF team about how they can benefit from the super-deduction tax break, announced by Chancellor Rishi Sunak in his spring budget.
Investments made by businesses will be a key part of the government’s economic recovery plan and this scheme incentivises businesses to invest in new plant and machinery. In this post, we break down how your business can benefit from the super-deduction tax break.
How does the super-deduction tax break work?
Very simply, if you invest in an asset for your business which qualifies under the super-deduction tax scheme, your tax bill will reduce by 130% of the cost of the asset, not 100%.
So, for a £100,000 asset, you will receive tax relief on £130,000 for the cost of a qualifying asset, not £100,000, which would save you £24,700 in Corporation Tax*
*calculated at the current corporation tax rate of 19% (19% x £130,000 = £24,700)
When does the super-deduction tax break start?
The super-deduction tax break is available to help businesses to grow from 1 April 2021 and will run for two years. If you’ve held off from purchasing new assets for your business because of business uncertainty or unavailability of materials, delayed production, then April 2021 onwards is a great time to start to plan the purchase of your new assets.
What benefits will the super-deduction tax break bring for the UK economy?
The Office for Budget Responsibility estimate that the super-deduction will raise the level of business investment by 10% or approximately £20bn a year, so making investment attractive for businesses will be a key part of the UK economic recovery.
What assets are eligible for super-deduction tax breaks?
The following assets apply for super-deduction tax breaks, providing they are a brand new purchase (not used):
Vehicles, including coaches, light commercial vehicles and light commercial vehicles Equipment for Construction, Waste Management and Agriculture Assets for Manufacturing, Engineering and LogisticsTo find out more about which assets will qualify for super-deduction tax breaks, please visit the government’s super-deduction tax factsheet.
Do cars count as assets for super-deduction tax breaks?
Unfortunately, cars for business use are excluded from the ‘super-deduction’ scheme. The focus is on initiatives to enhance the development and growth of the business, so cars as a ‘non-essential’ business expense won’t qualify for this deduction.
Should I take advantage of the super-deduction tax break now?
There is a huge opportunity for businesses to grow and the super-deductions mean businesses can achieve scale by financing the assets they need within the next two years. The super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest.
What assets should I invest in under the super-deduction tax break?
Make sure that you’re investing in plant and machinery so that the asset qualifies under the scheme. If you’ve been busy during the pandemic and need to replace your equipment due to age or to meet increased demand, then the new tax year is definitely the time to contact the TVAF team to find out more about how asset finance can support your business.
What finance options are available so that I can benefit from the super-deduction tax break?
TVAF can provide a range of asset finance options to help you benefit from the super-deduction tax break, including:
Hire Purchase – a popular funding choice for many UK businesses to acquire plant machinery and vehicles.
Lease Purchase – ideal if you need an asset for your business and want to keep as much cash available in your business as possible.
Why use Hire Purchase to benefit from the super-deduction tax break?
A Hire Purchase loan allows you to keep cash in your business, and you’d pay the loan off in monthly instalments. Keeping the cash in your business allows you to budget for the repayments and will act as a good source of working capital.
What are the benefits of Lease Purchase to maximise the super-deduction opportunity?
Ideal if you’re looking to invest in a high value asset with low monthly repayments and defer some of the capital until the end of the loan term. As the asset will appear on your balance sheet, you can deduct tax against the asset – in this case 130% of the value of the asset. Again, this allows you to keep cash in your business for working capital, rather than tying it up in assets that have a long useful working life.
What if the assets I need don’t qualify for super-deduction tax relief?
You might need an asset for your business that doesn’t qualify for super-deduction tax relief, or the asset you need might be used, and will therefore not qualify. If that’s the case, you might want to speak to us about a range of other asset finance options, including refinancing loans which are a great way to help you to buy the assets you need whilst keeping valuable cash within your business. Obviously, you wouldn’t qualify for the super deduction tax relief, but the TVAF team can still help you to secure additional assets for your business with affordable monthly repayments. Remember that even without the benefit of the super deduction there are still taxable benefits to using Hire Purchase & Leasing.
Get in touch
The TVAF team can help you if you want to take advantage of the tax Super Deduction. We can help you with your short-term and long-term asset financing strategies, or we can help you if purchasing a brand new asset isn’t possible at the moment.
Please get in touch on 01635 785400 or email enquiries@tvaf.co.uk.The VAT Reverse Charge for contractors operating within the construction industry was introduced earlier this month, having been delayed twice due to the pandemic and Brexit.
In essence, the liability for VAT has been pushed up the supply chain in an attempt to combat missing trader fraud in the construction sector, as was previously introduced for the sale of computer chips and mobile phones. This applies only to small and medium-sized firms who pay standard and reduced-rate VAT services, registered for VAT in the UK and reported within the Construction Industry Scheme.
Many sub-contractors in the construction industry purchase supplies and materials and charge the VAT to the main contractor. They would make use of the additional 20% revenue in their business until the end of the VAT quarter, when they would be required to pay the VAT on the materials.
Here’s how it used to work:
Sub-contractor carries out building work and charges the main contractor £100,000 for materials and supplies They would invoice the main contractor for £100,000 + VAT = £120,000 The sub-contractor could make use of the additional £20,000 cash in their business for a three month periodSub-contractors cannot benefit from the VAT cash in their business
Since the VAT Reverse Charge came into effect on 1 March 2021, the main contractor is now liable to pay the VAT on the cost of the materials, so the sub-contractor will not have the benefit of this cash in their business.
If you are a sub-contractor within the construction industry, you might need to make some adjustments to your cashflow to account for the VAT Reverse charge for contractors.
TVAF has a number of options available to help you to get ‘cash-flow fit’ if the VAT Reverse Charge means you will need some additional working capital in your business:
An unsecured Business Loan could give your business a much needed cash injection Invoice Finance could help you to free up some capital that’s tied up in invoices owed to you A VAT loan could help you to spread the cost of your own VAT liability over three, equal monthly installments. Please get in touch with our team if the VAT Reverse Charge for building and construction is likely to impact your cashflow – call 01635 785 400 or contact us.If you need more detailed information about the VAT Reverse Charge for building and construction services here.