Support for businesses through the Coronavirus

Under the new Coronavirus Job Retention scheme, government grants will cover up to 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.

Under the 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.

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 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.

If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan (see ‘Coronavirus Business Interruption Loan Scheme’ section).

The next quarter of VAT payments will be deferred, meaning businesses will not need to make VAT payments until the end of June 2020. 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.

Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.

Income Tax Self-Assessment payments due on the 31 July 2020 will be deferred until the 31 January 2021. This is an automatic offer with no applications required. No penalties or interest for late payment will be charged in the deferral period.

Self-employed people can now access full universal credit at a rate equivalent to statutory sick pay.

HMRC’s Time to Pay scheme can enable firms and individuals in temporary financial distress as a result of Covid-19 to delay payment of outstanding tax liabilities. HMRC’s dedicated Covid-19 helpline provides practical help and advice on 0800 0159 559.

• No rates payable for the 2020-2021 tax year for any business in the retail, hospitality or leisure sectors.
• In those sectors, if your rateable value is between £15K and £51k, you'll also receive a cash grant of up to £25,000 per property.
• Any business which gets small business rates relief, including those in the retail, hospitality or leisure sectors, will receive a cash grant of £10,000 (increased from £3,000 announced in the 11 March Budget).
• The rates holiday and cash grants will be administered by local authorities and should be delivered automatically, without businesses needing to claim.

The business interruption loans announced at last week’s Budget have been significantly extended allowing small businesses to borrow up to £5 million to pay rent, salaries, suppliers or purchase stock.

• These should be available from Monday 23 March and are delivered by lenders that partner with the British Business Bank, including all the major banks. The lender receives a guarantee of 80% of the loan amount from the government.
• They are available for UK-based businesses with turnover of no more than £45million and can provide for a facility up to £5 million. The borrower remains liable for 100% of the debt.
• No interest will be charged for the first 12 months.

The Bank of England has set up a scheme to finance working capital by purchasing commercial paper from larger business ‘making a material contribution to the UK economy’. Businesses do not need to have previously issued commercial paper in order to participate. The scheme will operate for at least 12 months.

Mortgage borrowers can apply for a three-month payment holiday from their lender. Both residential and buy-to-let mortgages are eligible for the holiday. It is important to remember that borrowers still owe the amounts that they don't pay as a result of the payment holiday. Interest will continue to be charged on the amount they owe.

Tenants can apply for a three-month payment holiday from their landlord. No one can be evicted from their home or have their home repossessed over the next three months.

Businesses that have cover for both pandemics and government-ordered closure should be covered. The government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres, etc., is sufficient to make a claim as long as all other terms and conditions are met. Insurance policies differ significantly, so businesses should check the terms and conditions of their specific policy and contact their providers.

• If you’re a director of a limited company with less than 250 employees, you can pay yourself two weeks of SSP if you need to self-isolate subject to meeting the minimum payroll requirement for SSP.
• The government will refund £94 per week, maximum £188, to your company.
• It will also refund SSP for staff of businesses with less than 250 employees for up to two weeks.

Many businesses work in a supply chain that supports much larger businesses.

To ensure these larger firms can continue to make payments to smaller firms and survive this ongoing economic situation, the Government will launch a major new scheme backed by the Bank of England to help them bridge coronavirus disruption to their cashflow through loans.

Businesses must continue to monitor the financial health of customers and suppliers to ensure that they do not experience disruption from the closure of another firm.

The Government has pledged £20 billion of business rates support and grant funding to help the businesses worst-affected by the outbreak of COVID-19.

This includes:

• Abolishing business rates for all businesses in the retail, hospitality and leisure industries in England for the next 12 months.
• Increasing the grants to small businesses eligible for Small Business Rate Relief announced in last week’s Budget from £3,000 to £10,000.
• Offering additional grants of £25,000 to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value over £15,000 and below £51,000.

This funding will be made available to local authorities to distribute in their local area.

The process for applying for grants may differ from authority to authority and most have not yet made it clear how they intend to deliver this support.

Business rates support is expected to be available from the start of next week and we will keep you updated on the process for applying for funding as the situation becomes clearer.

The food industry, including pubs and restaurants, will see a temporary relaxation in planning regulations that will allow them to start providing takeaways to customers without a planning application to help support those needing to self-isolate.