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Support for business
The following opportunities have now become available in terms of government support to businesses who will inevitably be hit economically by the spread of the virus: Most of the options already exist, others have been adjusted so that they are an additional support in this crisis.
Eligibility for all support available is that the business is UK based
Businesses that need short-term cash flow support, may benefit from the VAT and Income Tax payment deferrals, time to pay arrangements and Coronavirus Business Interruption Loans, see details explained below.
Coronavirus Job Retention Scheme
Under the new Coronavirus Job Retention scheme, government grants will cover 80% of the salary of PAYE employees who would otherwise have been laid off during this crisis. The scheme, open to any employer in the country, will cover the cost of wages backdated to 1 March 2020 and will be open before the end of April. It will continue for at least three months, and can include workers who were in employment on 28 February.
To claim under the scheme employers will need to:
Designate affected employees as ‘furloughed workers’ and notify employees of this change. Changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation;
Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal. HMRC will set out further details on the information required.
HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month.
VAT payments
VAT payments may be deferred as a way of preserving your cash flow, your 31/03 to the 30/06 quarter VAT returns still need to be submitted but the payment of VAT for these quarter may be deferred until a later date. Businesses will then have until the end of the 2020-21 tax year to settle any liabilities that have accumulated during the deferral period.
The deferral applies automatically and businesses do not need to apply for it. VAT refunds and reclaims will be paid by the government as normal. If you choose to defer the payment you will need to cancel your direct debit from the bank.
Income Tax
You may defer Income Tax payments on account due in July 2020 if the impact of the coronavirus causes you difficulty in making your payments. Self-Assessment payments due on the 31 July 2020 will be deferred until the 31 January 2021. This will be automatic and no applications required. No penalties or interest for late payment will be charged in the deferral period, but if you are still able to make your payments then you should do so.
Support for businesses through the Coronavirus Business Interruption Loan Scheme
An emergency interest free loan scheme was launched on Monday the 23rd of March. This may be one of the quickest ways of obtaining money to support business who are suffering hardships.
Individual businesses will be able to apply for the loans and the government will pay the interest for 12 months and will also guarantee 80% of the loan.
Eligibility
You are eligible for the scheme if you are a UK based company with a turnover of up to £45 million per year
British Business Bank eligibility criteria see here for other eligibility conditions
The scheme is now open for applications. All major banks are offering this scheme.
To apply you should talk to your bank or any of the accredited bank or finance providers as soon as possible. Check websites for the providers online where you will see if they are currently open. Most providers will have restrictive opening hours, or ways of communicating at this current time.
If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.
Time to pay arrangements
HMRC has reintroduced time to pay arrangements. Businesses and the self-employed who are struggling financially and have tax liabilities to meet can call the HMRC dedicated helpline to discuss a time to pay arrangement on 0800 024 1222. Always calculate a realistic amount that you will know that you can pay. If you fail to make payments the arrangement will be cancelled and you will be liable for the whole amount.
Business rates holiday/Small Business Grant Scheme
There will be a one-year business rates holiday for the nurseries for the 2020/2021 tax year. Properties that will benefit from this will be occupied by providers on Ofsted Early Years register and wholly or mainly used for the provision of the Early Years Foundation Stage.. This is automatically in place and being administered by the local authority who you pay rates to.
Business that pay little or no business rates on their business premises, will be eligible for an additional Small Business Grant Scheme. This is funding for local authorities to support small businesses. You will need to be currently registered for the small business rate relief, rural rate relief, or tapered relief. This will provide a one off grant of £10,000 to eligible businesses
Cash grants for rental, hospitality and leisure businesses will be eligible for a cash grant up to £25,000 per property. Properties that have a rateable value up to £15,000 may be eligible for a grant up to £10,000.Properties with a rateable value of between £15,000 and £51,000 may be eligible for a grant of £25,000
Statutory sick pay
Legislation has been brought forward to allow small and medium size businesses to reclaim SSP paid for sickness absences due to Covid-19. Ligibility criteria is as follows
- Refund will cover up to 2 weeks SSP per eligible employee absent from work due to Covid-19
- Employers with fewer than 250 employees as of February 2020
- Reclaim expenditure for any employee absent due to covid-19
- Records of absences need to be maintained but GP notes are not necessary, isolation notes are available online from NHS 111 website
- Eligible period will begin the day after the regulations on the extension of SSP to those staying at home comes into force.
Business must be UK based and employ fewer than 250 employees as of the 28th February 2020
Insurance cover
Most commercial insurance policies are unlikely to cover pandemics or unspecified notifiable diseases, such as COVID-19. However, those businesses which have an insurance policy that covers government ordered closure and pandemics or government ordered closure and unspecified notifiable disease should be able to make a claim (subject to the terms and conditions of their policy). The government asked a number of different businesses to close from the 21st March onwards.
Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers.
Protection from eviction for commercial tenants
Commercial tenants who cannot pay their rent because of COVID-19 will be protected from eviction. These measures will mean no business will automatically forfeit their lease and be forced out of their premises if they miss a payment up until 30 June.
There is the option for the government to extend this period if needed.
This is not a rental holiday. All commercial tenants will still be liable for the rent. Commercial tenants are protected from eviction if they are unable to pay rent.
Additional information will be available from the following links: