08-06-2020

Emergency package 2.0 for businesses: government extends measures and expands schemes

Emergency package 2 0 for businesses government extends measures and expands schemes

The government continues to provide financial support to entrepreneurs who are severely affected by the corona measures. Existing measures will be prolonged or extended, but there will also be new arrangements in the Emergency package 2.0. For example, a tax-free allowance of up to € 50,000 will be granted to SMEs in severely affected sectors, such as the hospitality, leisure and events sector, to enable them to pay fixed charges. Existing schemes, such as the wage cost allowance (NOW), are prolonged under certain conditions.

New scheme: Compensation of fixed costs for SMEs
The latest scheme announced on 20th May is the compensation of fixed costs for SMEs. This scheme is specifically intended for SME entrepreneurs in sectors that have been hit particularly hard by the coronation measures and, in addition to personnel costs, find it difficult to continue their payment of fixed costs. This includes catering, recreation, events, fairs, stages and theatres. SME-entrepreneurs in these sectors can apply for a Compensation for Fixed Costs for SMEs at the Ministry of Economic Affairs and Climate Change (EZK). Companies with a loss of turnover of at least 30% can receive a compensation of up to € 50,000 for a period of three months. This compensation is tax-free.

Wage cost allowance (NOW) prolonged and adjusted
For personnel costs, entrepreneurs can continue to appeal to the NOW: Noodmaatregel Overbrugging Werkbehoud. The NOW is being extended so that entrepreneurs who expect a loss of turnover of more than 20% can also apply for an allowance for labour costs via the NOW for the coming months (June, July and August). The government, however, imposes conditions on the compensation:

  • Entrepreneurs who benefit from the NOW are not allowed to distribute profits to shareholders, pay bonuses or repurchase their own shares this year.
  • Another new condition is that companies applying for the NOW are obligated to encourage their employees to undergo further training or retraining. This will give employees the opportunity and freedom to prepare themselves for the changing labour market.

Under the first NOW-scheme (which ran until the end of May), the condition was that, in principle, companies using the NOW may not dismiss staff for business economic reasons. Should this be the case, the entrepreneur would have to refund part of the subsidised labour costs including a 50% fine. In the NOW 2.0 scheme, the adjustment to the subsidy in the event of dismissal is retained, but the subsidy is not further reduced by a fine. As an entrepreneur or company, you must state when applying for the new NOW that you will enter into consultation with trade unions if you wish to apply for commercial dismissal for more than 20 employees. This is in line with the regulations concerning collective redundancies. The legal protection in the event of dismissal also remains in force.

Fiscal measures extended until 1st September 2020
Entrepreneurs and employers can continue to take advantage of various fiscal measures until 1st September 2020. This applies, for example, to requests for tax deferrals and to the payment of any default fines.

Credits and guarantees will continue
For entrepreneurs with liquidity problems, the government previously expanded various credit and guarantee options. All these additional credit options and guarantees from the first emergency package will continue to be in effect. This concerns the following financing possibilities:

  • Guarantee SME: Guarantee Small and Medium Business Scheme
  • Guarantee Enterprise Finance Scheme (GO)
  • Micro Credit Corona Guarantee Scheme (KKC)
  • Increased budget SEED Capital scheme

Concerning the Corona Transition Loan (COL), which supports innovative companies, start-ups and scale-ups, additional funding (€ 150 million) is available.

How may we help you?
It is logical that you, as an entrepreneur, currently have a lot of unanswered issues. KroeseWevers employs various specialists who can support and advise you about ways and possibilities to keep your company as financially healthy as possible in the coming period. Please do not hesitate to contact us. We are happy to help you.

Related issues
See here which measures the government previously implemented for entrepreneurs.

Emergency package 2.0 for businesses: government extends measures and expands schemes
Would you like more information? Please feel free to contact us.
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mr. Hans Eppink
Director of Tax Advice
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