COVID 19 Business Support

The UK Government has implemented a range of initiatives to help business through the Coronavirus pandemic.

Coronavirus Job Retention Scheme

For businesses that are unable to cover staff costs due to the impact of Coronavirus, the government has launched the Coronavirus Job Retention scheme. Businesses of any size are eligible for the scheme.

The government has urged businesses to stand by its employees and in return, it pledges to pay 80% of an employee’s wage, up to a cap of £2,500 per month, to help businesses stay afloat.

This initiative has been designed to combat huge numbers of predicted redundancies amid the economic crash following COVID-19. Instead of dismissing your employees due to growing worries about paying them, you can instead opt to furlough them – in simple terms, you are legally putting them on a leave of absence and the government will cover the majority of their wage costs.

Payments given on behalf of the government through the Coronavirus Job Retention Scheme will not need to be paid back. All money awarded to employees is considered a grant and is therefore in no way a loan.

Initially, the scheme will run for three months, but the government may choose to extend it if they feel it is a necessary measure. Businesses are also able to backdate wages payable from the first of March 2020.

How to access the scheme?

There are a few things your business needs to do. Firstly, you will need to decide which employees are to be furloughed – as a business, your goal is to do this fairly, as decisions made now could impact your company at a later point.

Employees must agree to be furloughed. This means that you will first have to notify your employees of your intention to furlough them, as changing the status of any of your employees remains subject to existing employment law. If employees refuse to be furloughed, as a business you can dismiss them by reason of redundancy providing the required redundancy definitions are met and the redundancy process is followed.

Once you have your list of designated furloughed workers, you then need to submit this information to HMRC alongside data on their earnings. Unfortunately, HMRC does not currently have a system to accommodate payments to employers, but they are developing an online portal and further details are expected to follow. Therefore, it will be necessary for employers to meet the wage cost of the furloughed employees until such time as the HMRC system is up and running.

If your business has insufficient working capital to meet these costs, suggest speaking to your bank requesting an overdraft facility which will be repaid once the HMRC system is up and running and operational. Most banks have waived set up fees for overdraft, although interest will be charged.

Coronavirus Business Interruption Loan Scheme

This new, temporary scheme has been introduced by the government to support SMEs with retaining their important workforce. This was launched on the 23rd March 2020, the Coronavirus Business Interruption Loan Scheme (CBILS) which is now available through participating lenders.

The scheme enables small and medium-sized businesses that are currently struggling due to a lack of revenue to borrow up to £5m to help address their cash flow issues. Businesses, especially those smaller in size, are naturally concerned about what lies ahead and many remain uncertain about their future. The amount the business can borrow will be limited to the greater of 25% of the business turnover for 2019 or 50% of the businesses’ wages/payroll.

To assist with the growing anxiety experienced by many businesses across the UK, CBILS will provide funding facilities via a wide range of commercial finance products, including:

• Term Loans (terms up to 6 years)
• Invoice Finance (terms up to 3 years)
• Asset Finance (terms up to 6 years)
• Overdrafts (terms up to 3 years)

The government has provided lenders with a guarantee of 80% on each loan – the aim of this is to give lenders confidence so that they continue to provide finance to SMEs at a time more crucial than ever.

The government will also make a Business Interruption Payment, meaning that for all businesses accessing CBILS, there will be no interest payments and lender fees expected for the first 12 months. This will enable SMEs to focus their time, energy and of course, money, on achieving business continuity. Some lenders are also offering Capital Repayment Holidays for up to 12-months.

It is important to note that this scheme is only available to businesses where the borrowing proposal which were it not for COVID-19 would be considered viable and for which the provision of finance will enable the business to trade out of any Short-to-Medium difficulty.

If you would like to see whether your business could benefit from the Coronavirus Business Interruption Loan Scheme, please Contact Us.

Cash Grants for Small Business

For the UK’s smallest businesses, cash grants of £10,000 will be available to help alleviate any cash flow challenges that arise due to Coronavirus. Under the Small Business Grant Fund (SBGF), small businesses that already pay little or no business rates because of rural state relief, small business rate relief and tapered relief can access this one-off grant.

Local authorities have been given guidance on which small businesses are eligible for this grant – due to this guidance, local councils will be in touch with any small business that meets the criteria to access this £10,000 grant, meaning you do not need to take any action. If you believe this applies to your business please make contact with your local authority to ascertain the position and how and when payments will be made.

Business Rates Holidays/Cash Grants for Retail, Hospitality, Gambling and Leisure

All retail, hospitality, gambling and leisure firms in the UK will be granted a 12-month business rates holiday.

• Retail, hospitality and leisure businesses with a rateable value under £15,000 are set to receive a grant of £10,000
• For those businesses within these sectors operating from premises with a rateable value of over £15,000 but below £51,000, larger grants of £25,000 will be given on behalf of the government.

The above is being administered by local authorities.

Business Rates Holiday for Nurseries

Nurseries will also receive a business rates holiday for the 2020-2021 tax year, including the nurseries that have already received bills for the following 12 months. Nurseries set to benefit from this relief are those occupied by providers on Ofsted’s Early Years Register who are wholly or mainly used for the provision of the Early Years Foundation Stage.

Nursery owners/managers do not need to take action. Local authorities will automatically apply the business rates holiday to any outstanding bills.

Statutory Sick Pay Refunds

For SMEs that employ less than 250 people as of the 28th February 2020, there is the option to reclaim Statutory Sick Pay paid for sickness absence due to Coronavirus.

• Businesses can reclaim up to 2 weeks’ statutory sick pay per employee who has taken time off work due to being ill with COVID-19.
• Businesses should keep records of staff absences and payments of Statutory Sick Pay, however, employees will not be expected to provide a GP fit note.
• The scheme will commence from the 13th of March 2020.

Extensions for Filing Accounts with Companies House

All businesses are to receive an additional three months to file accounts with Companies House.

The aim is to help companies avoid penalties as they deal with the tremendous impact of COVID-19. Businesses of all sizes will be able to focus on managing the difficult situation ahead of them due to the Coronavirus outbreak.

Businesses will have to apply for the three-month extension, however, as part of the agreed measures the government and Companies House have put together in their joint initiative, any firm citing issues around Coronavirus will be automatically and immediately granted an extension.

Applications can be made through a fast-tracked online system and the process takes just fifteen minutes to complete. Go to the Gov.uk website for more information on the three-month extension to file accounts during COVID-19.

VAT Payments Deferred for Three Months

All VAT payments have been deferred for the next quarter, meaning businesses will no longer be required to make a VAT payment during this period. The deferral will apply from the 20th of March 2020 until the 30th of June 2020.

Taxpayers will have until the end of the 2020-2021 tax year to pay any liabilities that have accumulated during the deferral period. This is an automatic offer, so your business does not need to apply.

Income Tax Deferral for the Self-Employed

Income tax payments that are due in July 2020 will now be postponed until January 2021 and this applies to any person who is self-employed. The deferral will also incur no interest or penalties either.

Self-employed workers are also able to apply for a grant worth 80% of their average monthly profits, up to a cap of £2,500 a month. The scheme is available to all self-employed individuals who earn under £50,000 a year, though the funds will not be made available until June.

Additionally, the UK has now delayed the introduction of the new IR35 reforms by 12 months.

Dedicated Tax Helpline

If your business cannot afford to pay tax bills as a direct result of Coronavirus, you should approach HM Revenue & Customs to see if they will agree to grant you a ‘time to pay’ agreement. If so, all debt collection is suspended, and your business will enter a bespoke instalment arrangement that fits the needs and circumstances of your business.

A new HMRC helpline has been launched to help support the many businesses concerned about paying their tax due to COVID-19 implications. Up to 2,000 experienced call handlers will be on hand to advise businesses and individuals on tax affairs relating to the outbreak, from Monday to Friday, 8 am to 4 pm.

If you run a business and are worried about not being able to pay you tax due to coronavirus, call HMRC’s helpline.

Please Contact Us to discuss how we may be able to raise finance for your business in these unprecedented times.

Last Updated: 01 April 2020