Coronavirus Business Support

Coronavirus Business Support

UPDATED: 23 March 2020 16:15

 

As we are in unprecedented times and there are no doubts that business is going to be tough over the coming weeks / months.

This is a guide to some support available to you as business owners at the moment, with links to the appropriate websites and government support mechanisms.

In the Budget (11 March 2020) the Chancellor announced a package of measures to provide support for public services, individuals and businesses to ensure the impact of COVID-19 is minimised. Further support was also announced on 17th March 2020, and 21st March and should be constantly reviewed.

The package of measures to support businesses includes:

  • Coronavirus Job Retention Scheme
  • Deferring VAT and Income Tax payments
  • A Statutory Sick Pay relief package for SMEs
  • A 12-month business rates holiday for all retail, hospitality and leisure 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
  • HMRC Time To Pay Scheme

We will keep you informed about the details of each of these packages and how to apply. Be safe and stay strong!

 

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 are eligible.

Eligibility:

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.

 

Deferring VAT and Income Tax Payments

The Government will support businesses by deferring Valued Added Tax (VAT) payments for 3 months. If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.

VAT

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

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.

 

Business Interruption Scheme

A new Coronavirus Business Interruption Loan Scheme is to be set up this is to temporarily replace the Enterprise Finance Guarantee, this to be delivered by the British Business Bank, and intended to enable businesses with a turnover of no more than £41 million to apply for a loan of up to £5 million, with the government covering up to 80% of any losses with no fees.

The government will provide lenders with a guarantee of 80% of each loan – subject to a per-lender cap on the number of bad loans it can claim for. The idea is to give lenders more confidence in approving credit decisions for small businesses that have insufficient security to meet the lender’s normal requirements. More than 40 lenders including the big four banks — Barclays, HSBC, Lloyds and RBS — provide funds under the scheme as either loans, overdrafts or asset-based lending secured on equipment or invoices. For more information as it updates please see the British Business Bank website here.

This is borrowing that does need to be repaid. You may want to contact existing lenders for repayment holidays to help with cash flow problems.

 

Advice for Employers and Employees

Acas has information on obligation of employers if you are required to lay staff off, ask people to work from home, what your responsibilities are as an employer and what you can and cannot do. Read it here.

Support for businesses who are paying sick page to employees

The Government will make legislation 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:

  • this 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
  • 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.

For employees not entitled to sick pay other benefits and support mechanisms are to be put in place and universal credits among other benefits are to be made available. Read more here. 

 

 

Support for Businesses that pay Business Rates

Business rates holiday for retail, hospitality and leisure businesses

The Government is introducing 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.

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 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.

See: https://www.gov.uk/calculate-your-business-rates where you can estimate the business rate charge you will no longer have to pay and further guidance can be found at: https://www.gov.uk/government/publications/business-rates-retail-discount-guidance

 

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. 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.

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 and boarding premises and self-catering accommodation

Accessing 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.

To find your local authority: https://www.gov.uk/find-local-council

Self Employed Individuals

We at DPC will be happy to help you as much as we can with business planning, cash flow calculations and support if necessary.

A HMRC dedicated helpline has been set up to help businesses and self-employed individuals in financial distress and with outstanding tax liabilities receive support with their tax affairs. Through this, businesses may be able to agree a bespoke Time to Pay arrangement. If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559.

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.

You are eligible if:

  • your business is based in England
  • you are a small business and already receive SBBR and/or RRR
  • you are a business that occupies property

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.

To find your local authority: https://www.gov.uk/find-local-council

In addition, the decisions announced by the Bank of England on 11 March 2020 mean that banks are in a better position to provide additional credit to smaller businesses.

Income Tax

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

If you are self-employed you 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.

 

Tenants and landlords

The government have announced a package of measures to protect both tenants and landlords affected by Coronavirus, this includes:

  • Emergency legislation to suspend new evictions from social or private rented accommodation while this national emergency is taking place
  • No new possession proceedings through applications to the court to start during the crisis
  • Landlords will also be protected as 3 month mortgage payment holiday is extended to Buy to Let mortgages

More information can be found at https://www.gov.uk/government/news/complete-ban-on-evictions-and-additional-protection-for-renters.

As you will appreciate, this is changing on a daily basis, we will try to keep you updated as further information is released.

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.

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.

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 them nearer the time.

Insurance

Businesses that have cover for both pandemics and government-ordered closure should be covered, as 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 are encouraged to check the terms and conditions of their specific policy and contact their providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics.

DPC and Coronavirus

As the position on the Coronavirus changes daily, we also need to keep reviewing guidance and support offered. Our staff and client’s health and safety are our priority; however, we intend to continue to give all our clients our usual high standard of service and support by adapting our working environment as necessary. At the moment we are trying to keep our office open and operate on a skeleton staff with some staff working from home. Although we are restricting visitors to our premises and hold meetings via telephone and video calling where possible.

During this period, calls to our office may not be answered immediately rather our reception team may need to email the person you are trying to call and ask them to call you back. Alternatively, queries can be emailed to your usual contact and emails will be picked up and answered as necessary.

Given the pressure and stress this whole situation is putting on all of the world at the moment, we would ask for your cooperation and understanding.

If we can help support you in contacting HMRC to work out time to pay arrangements, help with cashflow analysis, business plans to support applications for loans and other financial support then please don’t hesitate to contact us as we will do all we can to support you over what is going to be a tough year in business for all of us.

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