coronavirus business support

Coronavirus business support summary


Martin Swain, Director

The Chancellor has set out a package of temporary, timely, and targeted measures to support public services, people, and businesses through this period of disruption caused by COVID-19.

This includes a package of measures to support businesses including:


1. Coronavirus Job Retention Scheme;
2. Deferring VAT and Income Tax payments;
3. Statutory Sick Pay relief package for SMEs;
4. A 12-month business rates holiday for all retail, hospitality, leisure, and nursery businesses in England;
5. Grant funding of up to £25,000 for retail, hospitality, and leisure businesses with property with a rateable value between £15,000 and £51,000;
6. The Coronavirus Business Interruption Loan Scheme (CBILS), offering loans of up to £5 million for SMEs through the British Business Bank;
7. The HMRC Time To Pay Scheme;
8. Mortgage help;
9. Business interruption insurance – check your cover;

Some of the announced measures to help businesses and individuals are still in the process of being made available via online portals etc. We will continue to update you as information becomes available, however you may wish to watch the daily coronavirus briefing by the Government, where we expect to see further updates about all of the above.


1. 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’ salaries for those employees that would otherwise have been laid off during this crisis.

The scheme is being administered by HMRC. Therefore employers must submit information to HMRC about workers who have been ‘furloughed’, together with their earnings. A new online portal is being set up for this. We understand it is not operational yet, so watch this space.

Eligibility

All UK businesses are eligible.

How to access the scheme

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;
  • 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 shortly on the information required).

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.


2. Deferring VAT and Income Tax payments

VAT

For VAT, the deferral will apply from 20 March 2020 until 30 June 2020.

Eligibility

All UK businesses are eligible.

How to access the scheme

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.

Although this is an automatic scheme, I do wonder if payments will continue to be taken from taxpayers with a Direct Debit enabled, and so it may be worth cancelling your Direct Debit for VAT as this can always be reinstated at a later stage.

Income Tax – Self Assessment

For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021.

Eligibility

If you are self-employed you are eligible.

How to access the scheme

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.


3. Statutory Sick Pay relief package for SMEs

Legislation will be brought in to allow small and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:

  • The refund will cover up to 2 weeks SSP per eligible employee who has been off work because of COVID-19;
  • Employers with fewer than 250 employees will be eligible (the size of an employer will be determined by the number of people they employed as of 28 February 2020);
  • 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;
  • The 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.

Eligibility You are eligible for the scheme if:

Your business is UK based;

Your business is a small or medium-sized and employs fewer than 250 employees as of 28 February 2020.

How to access the scheme

A rebate scheme is being developed. Further details will be provided in due course once the legislation has passed.


4. Business rates holiday for retail, hospitality, and leisure

There will be a business rates holiday for all 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.

Eligibility

You are eligible for the business rates holiday if:

  • Your business is based in England;
  • Your business 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.

How to access the scheme

There should be no action required from you. 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.

We will update you as soon as we can. If you require further assistance, please contact us.


5. Grant funding for retail, hospitality, and leisure

Grant funding of up to £25,000 will be available for retail, hospitality, and leisure businesses with property with a rateable value between £15,000 and £51,000.

For businesses in these sectors with a rateable value of under £15,000, they will receive a grant of £10,000.

For businesses in these sectors with a rateable value of between £15,001 and £51,000, they will receive a grant of £25,000.

Eligibility

You are eligible for the grant if:

  • Your business is based in England;
  • Your business 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.

How to access the scheme

You do not need to do anything. Your local authority will write to you if you are eligible for this grant. Guidance for local authorities on the scheme will be provided shortly.

Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority:

https://www.gov.uk/find-local-council

We will update you as soon as we can. If you require further assistance, please contact us.


6. The Coronavirus Business Interruption Loan Scheme (CBILS)

The Coronavirus Business Interruption Loan Scheme (CBILS), offering loans of up to £5 million for SMEs, is now available through participating lenders.

What types of finance are available and who offers which type?

CBILS supports a wide range of business finance facilities, including:

  • Term loans;
  • Overdrafts;
  • Asset finance;
  • Invoice finance.

Note: Not every lender can provide every type of finance listed.

Eligibility

The scheme is designed to support smaller businesses (SMEs) who don’t meet a lender’s normal lending requirements for a fully commercial loan or other facility, but who are considered viable in the longer-term.

To be eligible for a facility under CBILS, your business must:

  • Be UK based in its business activity with annual turnover or no more than £45m;
  • Have a borrowing proposal which, were it not for the COVID-19 pandemic, would be considered viable by the lender, and for which the lender believes the provision of finance will enable your business to trade out of any short-to-medium term difficulty. Smaller businesses from any sector* can apply for the full amount of the facility.

(* Exclusions: Banks; building societies; insurers and reinsurers (but not insurance brokers); the public sector, including state-funded primary and secondary schools; employer, professional, religious, or political membership organisations or trade unions.)

How to access the scheme

CBILS is available through the British Business Bank’s 40+ accredited lenders, which are listed on the British Business Bank website:

https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruptionloan-scheme-cbils/accredited-lenders/

In the first instance, businesses should approach their own provider – ideally via the lender’s website. They may also consider approaching other lenders if they are unable to access the finance they need.

Decision-making on whether you are eligible for CBILS is fully delegated to the 40+ accredited CBILS lenders. These lenders range from high-street banks, to challenger banks, asset-based lenders and smaller specialist local lenders.

Note: If the accredited lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so.

Additional application notes

Given there is likely to be a big demand for facilities once the scheme goes live, it is advised that you please:

  • Consider applying via the lender’s website in the first instance. Telephone lines are likely to be busy and branches may have limited capacity to handle enquires due to social distancing.
  • Consider the urgency of your need. It is possible that some businesses may be looking for regular longer-term finance rather than ‘emergency’ finance, and there may be other businesses with a more urgent need to speak with a lender.

Note: The CBILS guarantee is to the lender and not the business. As with any other commercial transaction, the borrower is always 100% liable for repayment of the facility supported by CBILS. CBILS decision-making is fully delegated to the accredited lenders. Any queries from a business with an active or historic EFG facility, including guarantee fee collection or alterations to their repayment profile should raise them with their lender, and not with the British Business Bank.

For more information, go to: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruptionloan-scheme-cbils/for-businesses-and-advisors/


7.The HMRC Time To Pay Scheme

What to do

Contact HM Revenue and Customs (HMRC) as soon as possible if you have missed your payment. How you contact HMRC depends on what you need to pay.

If you cannot pay because of Coronavirus

  • Call the HMRC Coronavirus Helpline:
  • Telephone: 0800 015 9559
  • Monday to Friday, 8am to 8pm
  • Saturday, 8am to 4pm

If you cannot pay your Self Assessment tax bill

If you’ve filed your return and owe less than £10,000, you might be able to arrange to pay in installments online. You do not need to contact HMRC if you have set up a payment plan online.

Call the Self Assessment Payment Helpline if you’ve missed your payment date or you cannot use the online service:

  • Telephone: 0300 200 3822
  • Monday to Friday, 8am to 4pm

If you cannot pay other taxes

If you’ve received a payment demand, like a tax bill or a letter threatening you with legal action, call the HMRC office that sent you the letter.

Call the Payment Support Service if you have not received a bill or letter:

  • Telephone: 0300 200 3835
  • Monday to Friday, 8am to 4pm

Nominated partners in partnerships can negotiate time to pay with HMRC on behalf of the partnership or individual partners.


8. Mortgage help

The Financial Conduct Authority (FCA) have published guidance for mortgage lenders and administrators, as well as small business lenders.

The news guidance makes it clear that firms should grant customers a payment holiday for an initial period of three months, where they may experience payment difficulties as a result of coronavirus (COVID-19) and where they have indicated they wish to receive one.

For more information, go to:

https://www.fca.org.uk/news/press-releases/new-guidance-mortgage-providers-lenderscoronavirus


9. Will business interruption insurance cover COVID-19?

The Government has said that if your business insurance includes both pandemics and government-ordered closure then you should be covered, as confirmed jointly by the Government and insurance industry on 17 March that advice to ‘avoid pubs, theatres etc’ is sufficient to make a claim.

It’s important you check the terms and conditions of your cover though, as insurance policies differ significantly and standard business interruption insurance policies are dependent on damage to property and often exclude pandemics.

Some business insurance policies will protect against these scenarios, but others won’t – the Association of British Insurers (ABI) recently published information that if cover does exist, it will typically not be a standard inclusion. So here’s how to determine if you have cover in place to protect against the risks the coronavirus outbreak poses to your business:

  • Step 1 – Figure out if you bought Business Interruption Cover or not.
  • Step 2 – Read the policy wording to see if you have cover against coronavirus (COVID-19).

Typically, business interruption cover can protect against virus outbreaks and diseases like coronavirus, but insurers tend to cover against known diseases rather than new viruses or diseases like COVID-19. Coronavirus (COVID-19) has been labelled by the Government as a ‘Notifiable Disease’, which means if your policy covers these diseases (without a specified list), you may have some cover in specific scenarios.

  • Step 3 – Read the wording to determine how broad your cover is, and in what scenarios it applies.

The ABI have said: “Commercial insurance policies provide cover against a wide range of risks that can be tailored to the needs of individual businesses, including extensions to cover. Businesses who are concerned about the impacts of COVID-19 should check the scope of their cover, and speak to their insurance adviser or broker. A small number of businesses may have cover in place that will specifically provide for business interruption arising from notifiable diseases. However, this type of extension is not commonly included as standard. Standard business insurance policies are designed and priced to cover standard risks and are therefore unlikely to provide cover for the effects of global pandemics like COVID-19.”

We recommend that you review your insurance policy using the above information or contact your broker. We will update you further as we find out more details.