We see it time and time again: as soon as the government opens an online service, it gets overwhelmed because everyone rushes to use it (examples include the annual opening of the tax return portal and the emergency portal set up in response to the coronavirus crisis). And it is by no means always necessary – nor is it sensible – to submit an application straight away. It is, in fact, a digital form of hoarding. In the case of this scheme, this seems particularly unwise.
Plenty of time
We describe the NOW scheme in our article The ‘now’ scheme opens on 6 April. As the title of this article suggests: the online portal will open next Monday, 6 April 2020 (subject to the technical tests being successful; in any case, it will be possible to submit applications by 14 April at the latest).
It stands to reason that on Monday morning, a large number of business owners will be raring to go to apply for this grant, which is so vital to the survival of their businesses. Consequently, there is a good chance that this application – which is, in itself, very straightforward – will take quite some time. Time that the business owner is likely to spend mainly trying to log in.
Minister Koolmees of Social Affairs and Employment, who is responsible for this area, has therefore called on business owners who are not currently facing liquidity problems to hold off for the time being on applying for the grant, so that those who need the money immediately can be processed in good time.
The application for the first tranche of the NOW scheme must by 31 May 2020 at the latest have been submitted. The scheme is open-ended, which means that you will receive the grant regardless of when you apply (the grant fund will never run out).
Waiting may lead to a better result
The amount of the grant under the NOW scheme depends on the fall in turnover. This is calculated by comparing one quarter of the turnover for 2019 with the turnover for three consecutive calendar months in 2020.
The basic principle is that this covers the months of March, April and May. However, you may also extend the period by one or two months: April, May and June, or May, June and July. This is intended for businesses that are currently not yet significantly affected by the coronavirus crisis, but expect to be affected in the future. You must make this choice at the time of application and may not change it later.
Of course, it is very difficult at the moment to estimate which period will yield the highest NOW grant. By the end of May, we will know how the coronavirus crisis has developed, and we may have a much clearer picture of how and when the economy will start up again.
It therefore seems sensible not to submit the application straight away. A major drawback, however, is that you will also receive the advance on the grant (80% of the grant amount expected on the basis of your application) correspondingly later. This must fit in with your company’s cash flow planning. After all, you must continue to pay your staff’s salaries in full (the Tax and Customs Administration grants a deferral of payment for tax purposes: Deferral of payment of payroll taxes and VAT – how does this work in practice?).
VWG would be happy to help you draw up a schedule like this: Covid-19: time for a baseline assessment?. We can also advise you on other ways to raise the liquidity your business needs.