Coronavirus Support Available For Businesses – latest update 26th March 2020 - John McHale

We know many local businesses are in turmoil as a result of the COVID-19 crisis and do not know what to do for the best. One thing is certain, ignoring it and hoping it will go away, is not an option. What is happening is happening to everyone and it’s what you do about it that will matter. The most adaptable and proactive are the ones that will come out the other end in a much better position. We believe it is critical to offer free advice and support to as many businesses as possible.

With the recently imposed controlled lockdowns, more and more businesses are shutting their doors. Over the past two weeks, the Chancellor has set out a package of measures to support public services, people and businesses through the period of disruption caused by COVID-19. There have been many announcements, almost daily, which can be confusing so we have put together a summary below of financial support your business may be eligible for and details on how to apply. We continue to update this page as any new information becomes available. This information is provided in detail but we have also attached a much simpler checklist you can use to see what is applicable to you.

For advice on how to protect your business and employees see COVID-19: guidance for employees, employers and businesses

Government announced measures include:

Coronavirus Job Retention Scheme
Deferring VAT and Income Tax payments
a Statutory Sick Pay relief package for small and medium sized businesses (SMEs)
a 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England
small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
the Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
a new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
the HMRC Time To Pay Scheme
Self employed
Other information

1. Support for businesses through the Coronavirus Job Retention Scheme

Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis. All UK businesses with a PAYE scheme are eligible and it applies to employees that have been asked to stop working, but who are being kept on payroll (otherwise known as ‘furloughed workers’.)

You will need to:

designate affected employees as ‘furloughed workers,’ and notify your 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
once the new on-line portal is live, submit information to HMRC about the employees that have been furloughed and their earnings (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. This is to safeguard workers from being made redundant. HMRC are working urgently to set up a system that will handle the application process and reimbursement payments. Existing systems are not set up to facilitate payments to employers. In the meantime, start to identify your ‘furloughed workers’ and notify them of this change in status. Once the system is in place, you will then be able to notify HMRC who these ‘furloughed workers’ are. The scheme will cover the cost of wages backdated to 1st March and is initially open for 3 months but will be extended if necessary.
If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.

2. Support for businesses through deferring VAT and Income Tax payments

VAT

All UK businesses are eligible. The Government will support businesses by deferring Valued Added Tax (VAT) payments for 3 months. The deferral will apply from 20 March 2020 until 30 June 2020. This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal. In effect this is free credit to help with potential cash flow issues. VAT return must be submitted as usual though and any VAT due after 30th June is payable unless the Government announce any further extensions for that period.

Income Tax

If you’re self-employed, Income Tax Self-Assessment payments due on the 31 July 2020 will be deferred until the 31 January 2021. All self-employed are eligible. This is an automatic offer with no applications required. No penalties or interest for late payment will be charged in the deferral period. HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities (see below). The simple principle here is – once you’ve paid it, you won’t get it back!

Businesses with immediate concerns are advised to contact HMRC’s Business Support Helpline https://www.gov.uk/business-support-helpline

Businesses will be given an additional 3 months to file accounts with Companies House to help companies avoid penalties as they deal with the impact of COVID-19.

3. Support for businesses who are paying sick pay to employees

The Government will bring forward legislation to allow small-and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. You are eligible for the scheme if your business is UK based and is a small or medium-sized and employs fewer than 250 employees as of 28 February 2020.

Statutory sick pay (SSP) will be extended to all of those who are eligible and asked to self-isolate, even if they are not showing symptoms. The payment will be available from day one of quarantine. Self-employed people are not usually eligible for SSP, but the Government will now be making it quicker and easier to get benefits including those on a zero hours contacts, or those earning less than £118 a week. For the self-employed not eligible for SSP, contributory Employment and Support Allowance will be payable, at a rate of £73.10 a week if you are over 25, for eligible people affected by coronavirus or self-isolating in line with advice from day one of sickness, rather than day eight. Coronavirus statutory sick pay is expected to be in the form of a refund.

The eligibility criteria for the scheme will be as follows:

this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website
eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force
the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible

A rebate scheme is being developed. Further details will be provided in due course once the legislation has passed. For more information about coronavirus government statutory sick pay, go to the Department for Work & Pensions website here. https://www.gov.uk/government/news/coronavirus-support-for-employees-benefit-claimants-and-businesses

4. Support for retail, hospitality and leisure businesses that pay business rates

The Government will introduce a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year. Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible. Those businesses wanting to find out if they are eligible for the newly expanded retail discount and/or the new pub discount or enquiring about the provision of this relief, should direct their enquiries to their local authority. You are eligible for the business rates holiday if your business is based in England and is in the retail, hospitality and/or leisure sector.

Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
for assembly and leisure
as hotels, guest & boarding premises and self-catering accommodation

There is no action to take. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge. They will do this as soon as possible. You can estimate the business rate charge you will no longer have to pay this year using the business rates calculator. If you pay rates by Direct Debit, remember to cancel the payment.

5. Support for businesses that pay little or no business rates

The government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs. This does not have to be paid back.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/874772/small-business-grant-fund-and-retail-guidance.pdf

You are eligible if your business is based in England, is a small business and already receive SBBR and/or RRR and you are a business that occupies property. You do not need to do anything. Your local authority will write to you if you are eligible for this grant. Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority however, we are being informed that if you make contact with your local authority and send a copy of yor rates bill, showing your small business rates relief, you will get your grant quicker than if you wait to be contacted. Funding for the scheme will be provided to local authorities by the government in early April. If you do not qualify for SBRR, we are being told to expect an announcement later this week.

6. Cash grants for retail, hospitality and leisure businesses

The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/874772/small-business-grant-fund-and-retail-guidance.pdf

Businesses in these sectors with a property that has a rateable value of £15,000 and under will receive a grant of £10,000. Businesses in these sectors with a property that has a rateable value of between £15,000 and £51,000 will receive a grant of £25,000. You are eligible for the grant if your business is based in England and is in the retail, hospitality and/or leisure sector. This grant does not have to be paid back.
Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
for assembly and leisure
as hotels, guest and boarding premises and self-catering accommodation

You do not need to do anything. Your local authority will write to you if you are eligible for this grant. Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority. Please note that if you do not currently pay business rates because of the terms of your lease, it is possible your landlord may be getting the benefit and therefore you should approach them as you would expect the benefit to be passed on (the cost is effectively included in your lease costs).

Support for nursery businesses that pay business rates

The Government will introduce a business rates holiday for nurseries in England for the 2020 to 2021 tax year if your business is based in England. Properties that will benefit from the relief will be hereditaments:

occupied by providers on Ofsted’s Early Years Register
wholly or mainly used for the provision of the Early Years Foundation Stage

There is no action for you. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill to exclude the business rate charge. They will do this as soon as possible. You can estimate the business rate charge you will no longer have to pay this year using the business rates calculator. Further guidance for local authorities is available in the nursery discount guidance.

7. Support for businesses through the Coronavirus Business Interruption Loan Scheme

The temporary Coronavirus Business Interruption Loan Scheme (CBILS) will launch next week to support SMEs with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to 6 years. The government will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments. The government will provide lenders with a guarantee of 80% on each loan (subject to pre-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. Be clear with the banks that this is the loan you wish to access and not one provided by that bank, which may well have higher interest payments and personal guarantees. The scheme will be delivered through commercial lenders, backed by the government-owned British Business Bank. There are 40 accredited lenders able to offer the scheme, including all the major banks. You are eligible for the scheme if:

your business is UK based, with turnover of no more than £45 million per year
your business meets the other British Business Bank eligibility criteria

CBILS temporarily replaces the Enterprise Finance Guarantee Scheme and will be provided by the British Business Bank through accredited lenders. It is now open for applications. All major banks are offering this scheme. To apply, you should talk to your bank or one of the 40 accredited finance providers (not the British Business Bank) as soon as possible, to discuss your business plan. You can find out the latest on the best ways to contact them via their websites. Please note that branches may currently be shut down to enable social distancing. The full rules of the scheme and the list of accredited lenders are available on the British Business Bank website. Firms will have to demonstrate that they are a viable business that has been trading successfully, but need extra support to deal with short term difficulties caused by the current situation. Not all businesses will be successful. Usual business loan rules will apply with businesses needing to demonstrate profits for the past two years. We can help you get the necessary cash flow forecasts and planning in place. If you need any help, please get in touch.

If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.

8. Support for larger firms through the COVID-19 Corporate Financing Facility

Under the new Covid-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies. This is a quick and cost effective to raise working capital. This will support companies which are fundamentally strong, but have been affected by a short-term funding squeeze, enabling them to continue financing their short-term liabilities. It will also support corporate finance markets overall and ease the supply of credit to all firms.

All non-financial companies that meet the criteria set out on the Bank of England’s website are eligible. The scheme is now available for applications. More information is available from the Bank of England.

9. Support for businesses paying tax: Time to Pay service

All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. This has recently been scaled up to ensure all firms and individuals have access to this. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. HMRC will discuss and explore: agreeing an instalment arrangement; suspending debt collection proceedings and cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately. You are eligible if your business pays tax to the UK government and has outstanding tax liabilities.

If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559. If you’re worried about a future payment, please call nearer the time. HMRC will be looking for a cash-flow forecast that shows the issue in order to approve payment holidays. If you need any help creating this, please get in touch.

10. Self Employed

Those who are self-employed and unable to work, will be able to apply for Universal Credit. For the duration of the outbreak, the requirements of Universal Credit minimum income floor will be temporarily relaxed for those who have COVID-19 or are self-isolating according to government advice, or who cannot work, ensuring self-employed complainants will receive support. People will be able to claim Universal Credit and access advance payments upfront without the current requirement to attend a Job Centre if they are advised to self-isolate. Payments will increase by £1000 for a year and will be in line with SSP.

The government announced it will pay self-employed people, who have been adversely affected by the Coronavirus, a taxable grant worth 80% of their average monthly profits over the last three years, up to £2,500 a month. This scheme will be open for at least three months – and will be extended for longer if necessary. Self-employed people will be able to claim these grants and continue to do business. It will be open to anyone with income up to £50,000 and will be paid only to people who make the majority of their income from self-employment. Only those who are already in self-employment, who have a tax return for 2019, will be able to apply. HMRC are working on this urgently and expect people to be able to access the scheme no later than the beginning of June. If you’re eligible, HMRC will contact you directly, ask you to fill out a simple online form, then pay the grant straight into your bank account. Anyone who missed the filing deadline in January, will have four weeks from today (26th March) to submit their tax return.

Self-employed people can also access the business interruption loans, deferred income tax payments and access Universal Credit (given eligibility criteria is met).

11. Other

Banks

Banks are said to be increasing credit lines and overdrafts and in some cases they may even offer repayment holidays on loans. If you are predicting any cash flow issues, please contact ALL of your suppliers to ask about relaxing payments. All mortgage lenders will offer a three month mortgage holiday (it is important to remember that payments would have to be made up at a later date, but it does give some breathing space.) If you are experiencing difficulties paying back personal loans or credit card bills as a result of COVID-19, the Financial Conduct Authority (FCA) has called on lenders to use flexibility to support consumers, taking into account their individual circumstances. Many major lenders have already made statements to this effect. If experiencing difficulties, you should talk to your lender and if you agree a payment holiday, they should record these in such a way that will not impact on your credit score.

The Bank of England has slashed interest rates to 0.1% to protect the economy during coronavirus outbreak.

Rent / Mortgage

If you are experiencing financial difficulties meeting your mortgage repayments because of COVID-19, you may be entitled to a mortgage or rental holiday for 3 months. This includes if you are a landlord whose tenants are experiencing financial difficulties because of COVID-19. If you are a tenant experiencing financial difficulties because of COVID-19, the government will ensure you do not face the threat of eviction for at least 3 months. At the end of this period, landlords and tenants will be expected to work together to establish an affordable repayment plan, taking into account tenants’ individual circumstances.

To receive the payment holiday, you will need to approach your lender to explain the circumstances. Please note, this is only a payment holiday and any amount not paid will be added to the outstanding mortgage resulting in an increase in future payments. The offer of a payment holiday can only be made available to customers who are up to date with payments and not already in arrears.

Suppliers

The Small Business Minister and Small Business Commissioner are calling on the UK’s big businesses to speed up payments to their small business suppliers wherever they can to ease COVID-19 related cash flow issues. It is backed by the British Chambers of Commerce, Enterprise Nation, Federation of Small Businesses, Institute of Directors, IPSE, ICAEW, and The Entrepreneurs Network.
We are also seeing some improved terms in cases of businesses renegotiating supplier payments and even improved pricing.

FaceBook

Facebook are offering small businesses free advertising. This week they announced a new $100 million program to help small businesses impacted by COVID-19 with grants available for up to 30,000 eligible small businesses in over 30 countries. Facebook will begin accepting applications in coming weeks. In the meantime, a web page has been set up where you can sign up for updates on when these grants become available https://www.facebook.com/business/boost/grant

Support for Home Working

With the recent announcement that all schools will be closed indefinitely to all children except those with parents in key working roles. HR body CIPD have stressed that those that are able to work from home should continue to do so as far as they can. However, this is an exceptional circumstance. Employers must accept that there will be disruption and that working parents will struggle to be as productive as normal.

Businesses are advised to support their staff in any way they can; find out what they need and any obstacles that may prevent them working from home around childcare issues. Currently working parents have the right to take unpaid leave to look after children in an emergency or unforeseen situation, either as emergency time off or unpaid parental leave, but this is intended to cover an employee for a couple of days. Experts have warned that employers may have to look at options such as unpaid leave or reduced hours where they can’t afford to pay working parents who are unable to work their full hours as a result of childcare responsibilities. At this stage it’s a wait and see approach and we’ll update with any further word from the government if any new developments occur.

R35 Delay

The government has also announced that it will delay the implementation of the new IR35 reforms that were due to be brought in for all freelance workers.

Local support from the Humber LEP Growth Club

ICT Grant To Help with Working From Home

Grants to cover 40% of the cost of essential hardware and software require to enable homeworking of staff, of proposals totalling £2,500 to £24,999. An application form, last set of company accounts, a bank statement and one written quote for the required goods are needed. Growth Hub Advisor support available to complete the application and collate supporting documentation. Grants will be offered within 3 working days of receipt Email Business.Investment@hullcc.gov.uk for more information or visit the ICT for Growth Website.

Contingency Planning & Crisis Management Advice and Consultancy Grant

Grants to cover 40% of the cost of working with a specialist/advisor/consultant to help mitigate the business operations impact of the Covid-19 pandemic on your business, of projects totalling £2,500 to £12,500. An application form, last set of company accounts, a bank statement and one written quote for the required goods/service are needed. Growth Hub Advisor support available to complete the application and collate supporting documentation. Grants will be offered within 3 working days of receipt of application. Email: Business.Investment@hullcc.gov.uk for more information.

Finance for Growth Grant – Supporting access to Financial Advice & Consultancy

Grants to cover 40% of the cost of working with a specialist/advisor/consultant to help mitigate the financial impact of the Covid-19 pandemic on your business, of projects totalling £2,500 to £24,999. An application form, last set of company accounts, a bank statement and one written quote for the required goods/service are needed. Growth Hub Advisor available to complete the application and collate supporting documentation. Grants will be offered within 3 working days of receipt
of application. Email: Business.Investment@hullcc.gov.uk for more information.

Insurance

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) as the government and insurance industry confirmed on 17th March 2020 that advice given to pubs, theatres etc. is sufficient to make a claim.
Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Most commercial insurance policies are unlikely to cover pandemics or unspecified notifiable diseases, such as COVID-19, as standard business interruption policies are usually dependant on damage to property.

Additional information from the Government on changes to insolvency laws:

In the wake of COVID-19, the Business Secretary has announced he will make changes to enable UK companies undergoing a rescue or restructure process to continue trading, giving them breathing space that could help them avoid insolvency. Under the plans, the UK’s Insolvency Framework will add new restructuring tools including:
• a moratorium for companies giving them breathing space for from creditors enforcing their debts for a period of time whilst they seek a rescue or restructure;
• protection of their supplies to enable them to continue trading during the moratorium; and;
• a new restructuring plan, binding creditors to that plan

To our local business community’s continued success and good health!

John McHale
ActionCOACH Business Coach