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Government support for your business

Last updated: 26th March 2020; 22.33pm

In these unprecedented times, the impact of the Coronavirus will inevitably cause financial uncertainty and place significant pressure on businesses and individuals.

The Government has set out a range of measures to support businesses through the period of disruption caused by COVID-19 which now includes the following:

Support for your business:

1.  Coronavirus Job Retention Scheme

In a bid to retain jobs the Government introduced a job retention scheme which enables UK employers to access support to continue paying part of their employees’ salary for those employees that would have otherwise been laid off during the crisis.

Employers can apply to HMRC to be reimbursed with 80% of each furloughed employee’s monthly wage costs up to a cap of £2,500 per month. Funding will cover wages for a period of at least three months from 1st March 2020.

In order to access the scheme, businesses are required to:

  • designate affected employees as “furloughed employees” and notify their employees of this change. The changing status of employees will remain subject to employment law and, depending on the employment contract, may be subject to negotiation; and
  • submit the information about the furloughed employees and their earnings to HMRC through a new online portal (further updated about the information required is to follow from HMRC).

Whilst a system to facilitate these payments has not yet been set up, HMRC are working to get this set up and running urgently.

Furloughed employees  remain employed by their employers but should not undertake any work for them. Employers can pay the difference between the government payment and the employees’ salary, however this is not mandatory. See further guidance on this

2. Deferring VAT and Income Tax Payments

For businesses that are VAT registered, the Government has announced that HMRC will allow you to defer VAT payments for a period of three months. The deferral will apply from 20th March 2020 until 30 June 2020, however VAT returns must still be submitted by the usual statutory deadline.

For individuals who are self-employed, Income Tax payments due in July 2020 under the self-assessment scheme will be deferred to January 2021.

Both VAT and income tax deferrals are automatic, and no applications are required. No penalties or interest for late payment will be charged in the deferral period. All VAT refunds and rebates will be paid by the Government as normal.

3. Statutory Sick Pay (SSP) for SMEs

For businesses with less than 250 employees (as of 28th February 2020), the Government will bring forward legislation which will enable employers to reclaim up to 2 weeks’ SSP for eligible employees who have been off work due to COVID-19.

In order to be eligible for this scheme, employers should maintain records of staff absences and payments of SSP. Employees will not need to provide a GP fit note, instead those employees who have COVID-19 or are advised to self-isolate can obtain an isolation note by visiting NHS 111 online and completing a form rather than visiting a doctor.

A rebate scheme is being developed to access this support and further information will be provided, once the legislation has been passed.

4.  12 Month Business Rates Holiday

For UK businesses in the retail, hospitality and/or the leisure sector no business rates are payable for the 2020-2021 tax year. This relief is automatic and will be applied to your next council tax bill in April 2020. Businesses that receive the retail discount in 2019-2020 tax year will be rebilled by the local authority as soon as possible.

Properties that will benefit from the relief will be occupied premises 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.

5. Grant funding

The Retail and Hospitality Grant Scheme

This grant provides business in the retail, hospitality and leisure sectors (with a rateable value between £15,000 and £51,000) with a cash grant of up to £25,000 per property.

For businesses with a rateable value:

  • under £15,000, they will receive a grant of £10,000;
  • between £15,000 and £51,000, they will receive a grant of £25,000.

Properties that will benefit from the grant are properties 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.

Your local authority will write to you if you are eligible for the grant.

Small Business Grant Scheme

For businesses that are based in England and pay little or no business rates because of small business rate relief or rural rate relief and tapered relief, the Government will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.

Businesses do not need to do anything to access the scheme. Funding will be provided to local authorities in early April and the relevant authority will write to all eligible businesses. Any enquiries should be directed to local authorities.

Business Rates for Nursery Businesses

The Government will introduce a business rates holiday for children’s nurseries in England for the 2020 and 2021 tax year.

Properties that will benefit from the relief will be properties:

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

This scheme will automatically be applied to the next council tax bill in April 2020. Local authorities may have to re-issue the bill to exclude the business rate charge and this will be done as soon as possible.

Self Employed Income Support Grant Scheme

The government has announced support to self employed people by means of a direct grant of 80% of their profits up to £2,500 a month. The scheme is open to people with a trading profit of less than £50,000  in 2018-19 or those with an average profit of £50,000 for the last three financial years. More than half your income in those periods must be from self employment to qualify.

The scheme will cover the three months to May and payments will start at the beginning of June. HMRC will contact individuals who qualify but whilst the scheme covers partnerships it doesn’t cover people who receive dividends and salary from their own companies. Self employed workers will also be able to make use of VAT and income tax deferrals as well as some of the other Government measures in addition to this.

Further details on the scheme will be announced in the coming days.

6. Business Interruption Loans and Bounce Back Loans

A new temporary Coronavirus Business Interruption Loan Scheme was introduced through the British Business Bank to support SMEs with access to loans, overdrafts, invoice finance and asset finance of up to £5 million in value for up to 6 years.  This scheme has been established for businesses with a turnover of up to £45 million.

The Government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The Government will not charge businesses or banks for this guarantee. The Government will cover the first 12 months of interest payments and any lender-levied fees.

You are eligible for the scheme if your business is UK based and meets other British Business Bank eligibility criteria.

This scheme is now open for applications and all major banks are offering this scheme. To apply, the business should talk to its bank or on of the 40 accredited finance providers as soon as possible. The full rules of the scheme and the list of accredited lenders can be found on the British Business Bank website.

Bounce Back Loans

The Government also recently launched Bounce Back Loans to support smaller businesses with more relaxed eligibility criteria than CBILs.

These loans worth up to £50,000 or 25% of turnover (whichever is lower) are for up to 6 year terms, include a 12 months interest free period and have a future rate of 2.5%. They are also 100% guaranteed by the Government.

Businesses with existing loans with monthly repayments can ask for a repayment holiday to help with cashflow.

7.  COVID-19 Corporate Financing Facility

Under this scheme the Bank of England will buy short term debt from larger companies. This will support companies that have been affected by a short-term funding squeeze and allow you to finance your short-term liabilities.

It will also support corporate finance markets overall and ease the supply of credit to all firms.

8. HMRC Time to Pay

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.

These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.

You are eligible if your business pays tax to the UK Government and has outstanding tax liabilities.

HMRC have a dedicated helpline (0800 0159 559) if you have missed a tax payment or you might miss your next payment due to COVID-19.

Companies House

On 25 March 2020, Companies House:

  • published a Press Release announcing that companies would have an additional 3 months to file accounts in light of the COVID-19 outbreak; and
  • updated its Coronavirus Guidance for its customers, employees and suppliers to state that its contact centre is now closed. It also indicates that HMRC has introduced an electronic service to temporarily replace their usual Stamp Duty process and provides further information about the new procedure.

If you have any questions arising from this please contact a member of the Napthens Corporate Team.