Everything you need to know about coronavirus business support

LBN’s definitive guide to all the support measures announced so far by the Government to help UK businesses get through the coronavirus crisis

coronavirus, disease, virus, flu, infection
The likely spread of the coronavirus poses significant challenges for businesses

 

Both in the Budget on March 11 and in a further statement a week later, UK Chancellor Rishi Sunak offered a package of support to help businesses across the UK survive the coronavirus crisis.

Here LBN offers a full guide to what is being offered so far by the Government. Full details  of how to access the support will be published in the coming days and we will update this guide accordingly.

There is some expectation the Government may also offer some extra support for self-employed people across the UK in the next few days and we will also include it in this guide. The information below covers the following elements of the Government’s support package:

  • Coronavirus job retention scheme
  • Statutory sick pay relief package for SMEs.
  • A12-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 to support long-term viable businesses who may need to respond to cash-flow pressures by seeking additional finance.
  • Self-Employment Income Support scheme
  • The HMRC Time To Pay Scheme to help with tax.
  • VAT
  • Insurance

Coronavirus job retention scheme

Employers will now be able to apply for a grant from HMRC to cover 80% of the salaries of retained workers up to £2,500 a month. The scheme is backdated to the beginning of March and there is no limit on the amount of funding available.

Statutory sick pay relief package for SMEs

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 two 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 February 28, 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.
  • Eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay 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.

Support for businesses that pay business rates

Government will introduce a business rates retail 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.

A £25,000 grant will be provided to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value between £15,000 and £51,000.

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

Support for businesses that pay little or no business rates

The government will provide additional funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR). This will provide a one-off grant of £10,000 to businesses currently eligible for SBRR or rural rate relief, to help meet their ongoing business costs.

If your business is eligible for SBRR or rural rate relief, you will be contacted by your local authority – you do not need to apply.

Funding for the scheme will be provided to local authorities by government in early April. Guidance for local authorities on the scheme will be provided shortly.

Support for businesses through the Coronavirus Business Interruption Loan Scheme

A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch to support primarily small and medium sized businesses to access bank lending and overdrafts.

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, and the Scheme will support loans of up to £5 million in value. Businesses can access the first six months of that finance interest free, as Government will cover the first 12 months of interest payments.

Self-Employment Income Support scheme

Self-employed people can apply for a grant worth 80% of their average monthly profits over the last three years, up to a limit of £2,500 a month. People can apply for the grant today, covering the months March, April and May, but won’t receive any money in their bank accounts until June at the earliest.

The grants, which will be payed as a lump sum, are taxable and will need to be declared on tax returns by January 2022. At least half your income needs to have come from self-employment as registered on the 2019-20 tax return filed in January, or averaged over the three previous years. Company owners who pay themselves a dividend are not covered.

 

Support for larger firms through the COVID-19 Corporate Financing Facility

To support larger firms, the Bank of England has announced a new lending facility to provide a quick and cost effective way to raise working capital via the purchase of short-term debt.

This will support companies which are fundamentally strong, but have been affected by a short-term funding squeeze, enabling them to continue financing their short-term liabilities.

It will also support corporate finance markets overall and ease the supply of credit to all firms. Further details, including on how to access this funding will follow in the coming days, and the scheme will be available from the week commencing 23 March.

Support for businesses paying tax

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.

The deadline for self-assessment of taxes will be extended to January 2021 meaning self-employed people will have longer to pay their taxes. If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559.

VAT

No business will pay VAT until June and they’ll have until the end of the financial year to pay their bills.

Insurance

Businesses that have cover for both pandemics and government-ordered closure should be covered, as the government and insurance industry confirmed on March 17, 2020 that advice to avoid pubs, theatres etc is sufficient to make a claim.

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.

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