Summary of Government support for business

From 11 March 2020 the Government announced a series of measures designed to counter the threat posed to the UK economy by the outbreak of the coronavirus that causes the respiratory disease COVID-19. This document summarises all measures so far announced and provides up-to-date information based on the guidance provided by Government.

 

Updated for 4 May 2020

 

On Saturday 2 May, the Government announced an additional grant scheme designed to plug a gap in provision of support for businesses operating from shared working spaces and not paying business rates.

https://www.gov.uk/government/news/top-up-to-local-business-grant-funds-scheme

 

The local authority discretionary grant fund is worth £617 million in total – a 5% increase on the £12.33 billion already pledged – and is expected to help market traders and those in co-working office spaces. Councils have been told to use their discretion in deciding which types of business might be eligible, based on local knowledge and need.

 

Grants are capped at £25,000 and apply only to firms with fewer than 50 employees trading on or before 11 March 2020.

 

Businesses claiming the new grant will be expected to demonstrate that they have ongoing fixed building-related costs and have suffered a fall in income due to COVID-19. Those already claiming via existing grant schemes or through the self-employment income support scheme will not be able to access this additional funding.

 

Updated for 27 April 2020

 

Chancellor Rishi Sunak announced a new micro-loan scheme called Bounce Back Loans, which offers loans of 25% of a business’s turnover, up to a maximum of £50,000, with the Government paying 100% of the interest for the first twelve months.

https://twitter.com/RishiSunak/status/1254782809157169157

Sunak promised there will be “no forward-looking tests of business viability; no complex eligibility criteria; just a simple, quick, standard form for businesses to fill in”, and said the loans should arrive within 24 hours of approval for most firms.

 

The scheme is due to open from 9am on 4 May 2020.

 

Measures have also been put in place to protect high street businesses against aggressive debt recovery actions. These include a temporary ban on the use of statutory demands made between 1 March 2020 and 30 June 2020, and on winding-up petitions presented from 27 April 2020 to 30 June 2020.

https://www.gov.uk/government/news/new-measures-to-protect-uk-high-street-from-aggressive-rent-collection-and-closure

 

 

 

Updated for 20 April 2020

new scheme to support start-upscalled the Future Fund, was announced by Chancellor Rishi Sunak yesterday, 19 April. The £1.25 billion fund is designed to help firms not eligible for funding through existing coronavirus support schemes. It will provide loans to UK-based companies, from £125,000 to £5 million, as long as they’ve found at least equal funding from private investors. Further detail is expected soon but applications are expected to open in May. Your business may be eligible if:

  • it is based in the UK
  • has appropriate funding from private investors and institutions
  • has previously raised at least £250,000 in equity investment in the past 5 years.

https://www.gov.uk/guidance/future-fund

 

On 20 April 2020, the coronavirus job retention scheme portal opened, receiving 67,000 applications for furlough payments in the first ten minutes. It can be accessed via the gov.uk website.

https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme

 

CJRS was extended last week, up to the end of June. The cut-off date was also changed so it covers people on payroll on or before 19 March, instead of 28 February as originally announced.

https://www.gov.uk/government/news/chancellor-extends-furlough-scheme-to-end-of-june

https://www.gov.uk/government/news/furlough-scheme-cut-off-date-extended-to-19-march

 

Finally, in the past week councils have urged businesses notified of their eligibility for business support grants to complete their applications. Although at the time the grant schemes were announced businesses were told they would need to take no action, it is necessary to complete an application to receive this funding.

 

 

Updated for 3 April 2020

The coronavirus business interruption loan scheme for struggling businesses has been revamped.

In addition to the previous offering, it will offer state-backed loans of up to £25 million for larger firms with turnover of between £45m and £500m.

UK Finance said more than 130,000 loan enquiries had been made since the scheme opened, but less than 1,000 had been approved by banks.

In response, the Government will underwrite 80% of these loans to nudge banks into speeding up the provision of these emergency funds.

Banks will also be banned from asking company owners to underwrite loans of up to £250,000 with their own assets, such as property or savings.

https://www.gov.uk/government/news/chancellor-strengthens-support-on-offer-for-business-as-first-government-backed-loans-reach-firms-in-need

  

Updated for 2 April 2020

 The coronavirus job retention scheme now applies to off-payroll contractors working for public-sector organisations.

Furlough can be offered to all public-sector workers, including those paid under PAYE, through an umbrella or their own personal service company.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/877221/PPN02_20-Contingent-Workers-Impacted-by-Covid-19-2.pdf

  

Updated for 1 April 2020

The second phase of Making Tax Digital for VAT, which introduces more complex technology and stringent rules, has been deferred for 12 months.

New rules around the way digital firms link their MTD software and how they upload their VAT returns will now kick in on 1 April 2021.

 https://www.charitytaxgroup.org.uk/news-post/2020/digital-links-requirements-making-tax-digital-vat-postponed/

 

Updated for 27 March 2020

 Full guidance has now been published setting out how businesses can claim through the coronavirus job retention scheme. Some key details are as follows:

  • Only employers that created and started a PAYE payroll scheme on or before 28 February 2020 are eligible.
  • The scheme covers full-time employees, part-time employees, employees on agency contracts and employees on flexible or zero-hour contracts.
  • Employees made redundant after 28 February 2020 but rehired by their employer can be furloughed.
  • Employees hired after 28 February cannot be furloughed.

To make a claim, employers will need to provide:

  • ePAYE reference number
  • number of employees being furloughed
  • the claim period
  • amount claimed
  • bank account number and sort code
  • contact name and number

Full details can be found on gov.uk link below;

https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

Updated for 26 March 2020

SUPPORT FOR SELF EMPLOYED PEOPLE

 Having been under pressure for the past week, Chancellor Rishi Sunak has announced measures to support self-employed people whose earnings have been affected by the coronavirus outbreak.

 https://www.businesssupport.gov.uk/self-employment-income-support-scheme/

Self-employed income support scheme (SEISS)

 Those who are already self-employed and facing financial difficulties are asked to apply.

  • The scheme will cover up to 80% of average profits over the past three years, up to £2,500 per month, for at least three months.
  • Those with trading profits of more than £50,000 are not eligible.
  • Eligibility is determined with reference to earnings in 2018/19 as reported on tax returns filed this year.
  • What next?Application will be to HMRC via an online platform, yet to launch. The grants probably won’t be available until June 2020, backdated to 1 March. In the meantime, self-employed people who can’t work are expected to claim universal credit, access to which was broadened in the Spring Budget.

 A frequently asked question has been “What about the directors of single-person limited companies?” The guidance says: “If you’re a director of your own company and paid through PAYE you may be able to get support using the Job Retention Scheme.” That suggests anyone drawing the majority of money from their business in the form of dividends will miss out on support.

 

Updated for 25 March 2020

 Further to the news below that Companies House would automatically be giving those who need it a two-month extension on filing their accounts, the Government has now confirmed an automatic three-month extension for businesses that need it:

 https://www.gov.uk/government/news/companies-to-receive-3-month-extension-period-to-file-accounts-during-covid-19

  • As part of the agreed measures, while companies will still have to apply for the 3-month extension to be granted, those citing issues around COVID-19 will be automatically and immediately granted an extension. Applications can be made through a fast-tracked online system which will take just 15 minutes to complete.

 

Note, though, that the application must be made before the original filing date has passed.

 

A new note has been added to the guidance on deferral of VAT payments reminding businesses that pay by direct debit to cancel if they want to defer payment:

 

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

 

  • 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

 

The Scottish Government has published guidance on its support for businesses in Scotland, with some specific differences:

  • The threshold for £25,000 grants for small business is £18,000 rather than £15k, as in England.
  • All non-domestic properties in Scotland will get 1.6% rates relief, applied automatically.
  • Retail, hospitality and leisure businesses will get 100% rates relief, as in England, also applied automatically.

 

https://findbusinesssupport.gov.scot/coronavirus-advice

 

Guidance from the Welsh Government is also now available. One notable difference is that the threshold for the £25,000 grant payment for retail, leisure and hospitality businesses is £12,001 – lower than in England or Scotland.

 

https://businesswales.gov.wales/coronavirus-advice

 

Businesses in Wales can also access loan and equity funding via the Development Bank of Wales.

 

https://developmentbank.wales/

 

 

Updated for 24 March 2020

 

Fuller detail of the retail, hospitality and leisure grant (RHLG) fund has been published by the Department of Business, Energy and Industrial Strategy (BEIS). The guidance document, intended to help local authorities administer the scheme, is available on the Government website.

 

https://www.gov.uk/government/publications/coronavirus-covid-19-guidance-on-business-support-grant-funding

 

  • Payments will be made to the person listed in local authority’s records as the ratepayer for the business premises on 11 March 2020.
  • There is a strong warning against fraudulent claims with a promise of prosecution and clawback for any such payments.
  • Certain premises are excluded on the grounds of private use, such as private stables and beach huts. Car parks and parking spaces are also ineligible.
  • Businesses in liquidation or dissolved as of 11 March aren’t eligible either.

 

The Coronavirus Bill currently before Parliament now includes an amendment calling for support for the self-employed and freelancers in line with that being provided for employees under PAYE via the coronavirus job protection scheme. It was passed by the House of Commons last night and will now go to the House of Lords for scrutiny. The Chancellor is expected to announce provision for the self-employed tomorrow, 25 March.

 

https://publications.parliament.uk/pa/bills/cbill/58-01/0122/amend/coronavirus_daily_cwh_0320rev.14-18.html

 

https://hansard.parliament.uk/Commons/2020-03-23/debates/1BF3C655-EAD2-45DF-BAE2-30052908F7E6/CoronavirusBill#contribution-59BEFF45-4A00-4282-A1EA-EC07580B6097

 

 

Updated for 23 March 2020

The scheduled 5pm press conference was cancelled and the Prime Minister instead addressed the nation at 8:30pm announcing, to all intents and purposes, a total lockdown of the UK. Movements are to be restricted and non-essential shops are to close. This means expected clarifications on how businesses can access support are likely to be delayed until later in the week. As scheduled, however, the British Business Bank has published comprehensive details of how the coronavirus business interruption loan scheme (CBILS) can be accessed:

  • Eligibility: an SME must be UK-based with annual turnover of less than £45m and have a proposal which would be considered viable by the lender under normal circumstances.
  • Types of finance available: Term loans, overdrafts, asset finance, invoice finance.
  • How to apply: via one of the accredited lenders on the list below;

https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/accredited-lenders/ In the first instance, the British Business Bank is urging businesses to apply online and asking those who don’t need emergency finance to ‘consider the urgency of your need’. Companies House has confirmed that, in line with it’s existing rules, firms that were unable to file accounts on time can apply for a deadline extension, with an automatic two-month extension for those in isolation.

Measures announced on 20 March 2020

On the evening of 20 March 2020 the Prime Minister announced further restrictions on the compulsory closure of bars, cafes, pubs and restaurants. Alongside these new measures, the Chancellor announced a further package of support for businesses facing the prospect of having to reduce staff numbers.

Coronavirus job retention scheme

  • Grants of up to £2,500 per employee where those employees are unable to work (are ‘furloughed’) because of coronavirus, covering 80% of salary costs.
  • Intended to run for three months in the first instance with the first payments expected in early April and the scheme fully up and running by the end of that month.
  • The grants will be paid via HMRC.
  • All UK employers will be eligible.
  • What next? At present, no information has been provided on how to apply. Though it is generally understood to mean ‘stood down but still employed’, there is as yet no official definition of ‘furloughed’. It is unclear whether employers will be expected to make up the remaining 20% of salary.

Extension of the coronavirus business interruption loan scheme (CBIL)

  • Maximum turnover for eligible businesses was previously set at £41 million per year; it has now been increased to £45m.
  • The interest-free period has been increased from six months to twelve.
  • The scheme is being managed by the British Business Bank but businesses will access them via one of 40 accredited lending providers, including most major banks.
  • The maximum value of a facility provided under the scheme will be £5 million – higher than the £1.2m announced initially.
  • What next? Discuss business plans with existing lending providers. Loans will be available from Monday 23 March 2020.

Deferral of tax and VAT payments currently due

  • VAT payments from UK-based VAT registered businesses due between 20 March and 30 June 2020 won’t need to be paid to the usual deadlines, with payment deferred until the end of the tax year.
  • Self-assessment income tax payments for the self-employed which were due on 31 July 2020 can now be deferred until 31 January 2021.
  • What next? Both deferral schemes apply automatically with no application required.

Access to welfare for the self-employed

  • The minimum income floor for access to universal credit has been suspended for self-employed people affected by the economic impact of coronavirus.

Measures announced on 17 March 2020 At a press conference on 17 March, the Chancellor announced a package of support worth £350 billion – around 15% of the value of the entire UK economy. It came upon the heels of a statement from the Prime Minister on 16 March which urged people to stop visiting cafes, pubs and restaurants. It was intended to send a strong signal to British businesses not to act hastily in downsizing because support would be forthcoming.

Extension of business rate discount

  • All hospitality, leisure and retail venues in England, regardless of rateable value, can now claim a 100% discount on business rates for 12 months from 1 April 2020 to 31 March 2021.
  • Unoccupied properties that become vacant in the next 12 months will be charged 100% full rates from three months after they become empty.
  • What next? The discount will be applied automatically to the next council tax bill, due in April 2020.

Cash grants for very small businesses

  • Hospitality, leisure and retail businesses operating from units with rateable values between £15,000 and £51,000 will receive a grant of £25,000.
  • Businesses in these sectors with a rateable value of less than £15,000 will receive a grant of £10,000.
  • Those with a rateable value of more than £15,000 will receive £25,000.
  • Your local authority will contact you if you are eligible for this grant.
  • What next? Await notification from local authorities.

Measures announced in Spring Budget 2020

In what the Office for Budget Responsibility called the “largest Budget giveaway since 1992”, Rishi Sunak announced business support measures 5 worth billions. Events have moved quickly, though, and many of the specific measures announced have now been superceded or further extended.

Grants for businesses receiving SBRR or RRR

  • Businesses in England eligible for small business rate relief (SBRR) or rural rate relief (RRR) will receive a one-off cash grant of £10,000.
  • What next? This will be processed automatically by local authorities.

Statutory sick pay reclaim scheme for SMEs

  • Small-and medium-sized businesses and employers will be able to reclaim statutory sick pay (SSP) paid for sickness absence due to COVID-19.
  • The refund will cover up to two weeks’ SSP for each member of staff off work because of COVID-19.
  • It applies to all UK businesses that employed fewer than 250 employees as of 28 February 2020.
  • What next? Legislation needs to pass before details of how to apply can be published.

Interest rates

  • On 19 March 2020 the Bank of England cut interest rates to a historic low of 0.1%, having previously reduced them to 0.25% on the day of the Spring Budget.

Further information

  • COVID-19: support for businesses | HM Government

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses

  • Coronavirus Business Interruption Loan Scheme (CBILS) | British Business Bank

https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/

  • Supporting your workforce during the coronvarius | HRZone

https://www.hrzone.com/hub/supporting-your-workforce-during-the-coronavirus

  • Coronavirus hub | AccountingWEB

https://www.accountingweb.co.uk/tags/coronavirus