On 17 March 2020, the Government introduced a new and more comprehensive package of measures. The scheme for reduced working hours was thereby suspended.
The Government has, in a room letter She has outlined the measures she intends to implement to minimise the economic impact of the coronavirus as much as possible. These include both existing and new measures.
Reduced working hours
The option to apply for reduced working hours, whilst remaining entitled to unemployment benefit, is an existing scheme. We explain this scheme in our article Reduced working hours (due to the coronavirus).
Relaxation of the guarantee scheme for SME loans
Under the SME Credit Guarantee Scheme (BMKB), the government provides guarantees for loans granted to SMEs. The government aims to introduce a temporary relaxation of this scheme by the end of March, so that SMEs with sound prospects for the future can continue to access finance.
Under the current BMKB scheme, the guarantee covers 50% of the loan provided by the lender (usually a bank). This will be increased to 75% of the loan provided. The government will then guarantee 90% of the guaranteed loan. The measure is intended for bridging loans or the increase of overdraft facilities for a maximum of one year. In addition, a number of other conditions under the BMKB scheme will be relaxed.
Taxation
To prevent liquidity problems, a special deferral of payment may be granted for income tax, corporation tax, VAT and payroll tax. This special deferral is granted by the Tax and Customs Administration if the business owner provides written evidence that their ability to pay has been affected by the coronavirus crisis. As soon as this request is received by the Tax and Customs Administration, collection will be suspended.
Requests for deferral of payment must be processed manually. Consequently, processing times are likely to increase. To further assist businesses, late payment penalties for failure to pay (on time) will be waived or reversed.
It goes without saying that business owners who expect to earn a lower income than that on which their provisional 2020 income tax or corporation tax assessment is based may submit a request for a reduction in that assessment.