A number of government schemes are now in place
During this difficult and uncertain time for businesses and individuals various emergency schemes have been produced by government to help businesses survive the Covid-19 pandemic. We urge all of our registrants to investigate what funding is available. We have outlined the key schemes put in place by government.
This guidance provides details of support available to businesses; please refer to the government website for further details on each of the support schemes.
- a Coronavirus Job Retention Scheme
- deferring VAT and Income Tax payments
- 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
- the HMRC Time To Pay Scheme
Government has also announced support for the self-employed. Click here for our summary of support for the self-employed.
Coronavirus Job Retention Scheme
HMRC will be looking to publish details on this scheme in the near future, government intend the scheme to be up and running by the end of April. It is designed to support employers whose operations have been severely affected by coronavirus (COVID-19).
Current information on the scheme suggests all UK employers with a PAYE scheme will be able to access support to continue paying part of their employees’ salary for those that would otherwise have been laid off during this crisis.
This applies to employees who have been asked to stop working, but who are being kept on the pay roll, otherwise described as ‘furloughed workers’. HMRC will reimburse 80% of their wages, up to £2,500 per month. This is intended to safeguard workers from being made redundant.
The Coronavirus Job Retention Scheme will cover the cost of wages backdated to 1 March and is initially open for 3 months and government will extend this timeframe if necessary.
Support for businesses through deferring VAT and Income Tax payments
For VAT, the deferral will apply from 20 March 2020 until 30 June 2020.All UK businesses are eligible.
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.
Customers who normally pay by direct debit should cancel their direct debit with their bank if they are unable to pay. Please do so in sufficient time so that HMRC do not attempt to automatically collect on receipt of your VAT return.
For Income Tax Self-Assessment, payments due on the 31 July 2020 may be deferred until 31 January 2021. You are eligible if you are due to pay your second self-assessment payment on account on 31 July. You do not need to be self-employed to be eligible for the deferment.
The deferment is optional. If you are still able to pay your second payment on account on 31 July you should do so.
This is an automatic offer with no applications required. No penalties or interest for late payment will be charged if you defer payment until January 2021.
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.
Support for retail, hospitality and leisure businesses that pay business rates and Cash grants for retail businesses
In England, Government is going to 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.
This support includes retail outlets, such as shops. 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 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.
Again, in England, 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.
Businesses in these sectors with a property that has a rateable value of up to £15,000 will receive a grant of £10,000.
Businesses in these sectors with a property that has a rateable value of between £15,000 and less than £51,000 will receive a grant of £25,000.
Your Local Authority will write to you if your business is eligible.
Support for businesses that pay little or no business rates
Government has also put in place 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 (SBRR), rural rate relief (RRR) and tapered relief.
For this support you will need to be based in England, a small business and already receiving SBRR and/or RRR and occupying a property. Again, your Local Authority will contact you directly.
Coronavirus Business Interruption Loan Scheme
This scheme is intended 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. The scheme will be delivered through commercial lenders, backed by the government-owned British Business Bank.
The scheme is open to UK based businesses with turnover of no more than £45 million per year. Your business will also need to meet the British Business Bank eligibility criteria.
There are 40 accredited lenders able to offer the scheme, including all the major banks. The scheme is now open for applications and all major banks are offering the scheme. To apply you should talk to your bank as soon as possible and discuss your business plan.
For larger businesses there is a COVID-19 Corporate Financing Facility
Time to Pay service
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.
These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
If you have missed a tax payment or you might miss your next payment please contact HMRC directly. Those worried about future payments should call nearer the time so HMRC can prioritise calls.
Call HMRC’s dedicated helpline: 0800 0159 559. For more details visit https://www.gov.uk/difficulties-paying-hmrc.
Additional measures have been put in place for 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. Government has also confirmed this is not a rental holiday. All commercial tenants will still be liable for the rent. This came into force when the Coronavirus Bill receives Royal Assent on the 25th March 2020 and the Coronavirus Act 2020 was enacted.
For further details on these measure and wider business support visit the government website www.businesssupport.gov.uk.
Because some elements of business support are devolved, the measures you can access may differ if your business is in Scotland, Wales or Northern Ireland.
Businesses in Scotland
Businesses in Wales
Businesses in Northern Ireland
Please note this guidance is subject to change, please refer to to official government websites for up to date guidance and support.