Covid-19 Business Support Summary
Claire Snowdon MCIEx
International Trade Adviser - Department for Business and Trade ??
The most recent advice from the Department for Business, Energy and Industrial Strategy is as follows:-
For individual businesses, the first port of call for advice and support is gov.uk. However, we are also scaling up our Business Support Helpline so businesses in England, of all sizes, can pick up the phone and speak directly to an advisor (Devolved Administrations have their own equivalent services in place). The number to call is 0300 456 3565
HMRC have launched a tax helpline to help businesses concerned about paying their tax due to coronavirus (COVID-19). Find all the information here. The number is 0800 0159 559
Companies House has produced guidance if coronavirus (COVID-19) has affected your company and you need more time to file your accounts. Find all the information here.
There are a number of additional online resources for businesses and employers
- For the latest information and advice, employers and business owners should visit guidance for employees, employers and businesses. Check the page regularly for updates and subscribe to receive email alerts.
- The Department for International Trade provides guidance for UK businesses trading internationally: https://www.gov.uk/government/publications/coronavirus-covid-19-guidance-for-uk-businesses
- Information is available at support available to businesses impacted by COVID-19 including:
1. 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. 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.
2. The government has announced that people who cannot work due to COVID-19 and are eligible for Statutory Sick Pay (SSP) will get it from day one, rather than from the fourth day of their illness – and the government intends to legislate so that this measure applies retrospectively from 13 March 2020. SSP will be payable to people who are staying at home on government advice, not just those who are infected, from 13 March 2020 - employers are urged to use their discretion about what evidence, if any, they ask for. Employers with fewer than 250 employees will be able to reclaim SSP for employees unable to work because of COVID-19. This refund will be for up to 2 weeks per employee.
3. There will be a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year. The discount will automatically apply to their next council tax bill in April 2020.
4. 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, and you are a business that occupies property. 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.
5. Self-Employed Income Support Scheme - The Chancellor has now announced measures to grant payments to the Self-Employed from early June equivalent to 80% of their average monthly earnings for three months. Payments will be made by HMRC and you can find out more here: https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme
6. 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. 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.
7. The Coronavirus Business Interruption Loan Scheme (CBILS) provides financial support to smaller businesses (SMEs) across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak and you can find out more here: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/
CBILS has been significantly expanded along with changes to the scheme’s features and eligibility criteria. The changes mean even more smaller businesses across the UK, impacted by the coronavirus crisis, can access the funding they need. Importantly, access to the scheme has been opened up to those smaller businesses who would have previously met the requirements for a commercial facility, but would not have been eligible for CBILS. Insufficient security is no longer a condition to access the scheme.
This significantly increases the number of businesses eligible for the scheme. The expanded scheme will be operational with lenders from Monday 6 April 2020.
HOW IT WORKS
British Business Bank operates CBILS via its accredited lenders. There are over 40 of these lenders currently working to provide finance. They include: high-street banks, challenger banks, asset-based lenders and smaller specialist local lenders.
A lender can provide up to ￡5 million in the form of term loans, overdrafts, invoice finance, asset finance.
CBILS gives the lender a government-backed guarantee for the loan repayments to encourage more lending.
Key points (recently updated):
- The borrower remains fully liable for the debt.
- Under the scheme, personal guarantees of any form will not be taken for facilities below ￡250,000.
- For facilities above ￡250,000, personal guarantees may still be required, at a lender’s discretion, but recoveries under these are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied.
- Principal Private Residence (PPR) cannot be taken as security to support a personal guarantee or as security for a CBILS-backed facility
8. Businesses will also be supported by deferring Valued Added Tax (VAT) payments for 3 months. If you are self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021. For VAT, the deferral will apply from 20 March 2020 until 30 June 2020. All UK businesses are eligible: https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses#support-for-businesses-through-deferring-vat-and-income-tax-payments
9. There is 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: https://www.bankofengland.co.uk/news/2020/march/hmt-and-boe-launch-a-covid-corporate-financing-facility
10. 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. Time to Pay is a service offered by HMRC, to spread tax payments (PAYE, VAT, Corporation Tax) over a period of time (usually 3 - 12 months). Contact HMRC on the Coronavirus Helpline on 0800 015 9559 (lines open Monday to Friday, 8am to 8pm and Saturday, 8am to 4pm) to discuss further. See https://www.gov.uk/difficulties-paying-hmrc
11. There is new advice with regards to insurance cover: https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses#insurance
If businesses have relevant insurance they should talk to their insurance company sooner rather than later. For general updates: https://www.abi.org.uk/
12. You can find out what support is available from the Department for International Trade including supply chain support and UK Export Finance facilities here: https://www.gov.uk/government/publications/coronavirus-covid-19-guidance-for-uk-businesses/coronavirus-covid-19-guidance-for-uk-businesses
13. ACAS has published information for employees and employers, including information on simple steps to help protect the health and safety of staff, sick pay and absence from work
14. IR35 has been postponed for a year: https://www.gov.uk/government/news/off-payroll-working-rules-reforms-postponed-until-2021
15. There is also advice from the Export Control Joint Unit on export licence handling: https://www.gov.uk/government/publications/notice-to-exporters-202008-coronavirus-covid-19-export-licence-handling/notice-to-exporters-202008-coronavirus-covid-19-export-licence-handling
- In addition, Lloyds and NatWest have announced funding packages on delayed repayment terms for businesses:
Alongside the above, there is also the option of exploring more mainstream sources of finance, such as:
- Bank Overdrafts
- Business Credit Cards
- Invoice Finance
- Merchant Cash Advance
Finally, businesses should be aware of the government business finance website that helps you to establish what basic (non-Corona related) finance and support is available in your area: https://www.gov.uk/business-finance-support
Where possible, businesses have opted to switch to homeworking and you might be interested in this article: https://mailchi.mp/fb2cc93d8f31/the-new-normal-innovating-from-home?e=ff0d424b22
If businesses would like to register any offers to supply products to the NHS, there are no other call outs for products active at this time, but there may be in future weeks. In the meantime, companies can register their offer here https://www.gov.uk/coronavirus-support-from-business They will be contacted if there is a need.