Chancellor Rishi Sunak has outlined a series of financial measures to help businesses during the current Coronavirus pandemic.
Below is an outline of the practical support currently available.
Coronavirus Job Retention Scheme (CJRS)
- The CJRS now runs from 1 March 2020 until 31 October 2020;
- From 1 July 2020, the scheme changed to enable more flexibility for both employers and employees – employees who were previously furloughed can now return to work on a flexible part-time basis;
- From 1 August 2020, the level of government support was gradually reduced, with a corresponding increase in the employer contribution;
- Employers should be reminded that, unless they are making a new claim for an employee who is a military reservist or is returning from statutory parental leave, you can only continue to claim through the scheme if:
- The employee was previously furloughed for 3 consecutive weeks between March 1 and 30 June; and
- The claim was submitted before 31 July.
Download our Coronavirus Job Retention Scheme Factsheet: From 1 July 2020 here, covering the details of the new flexible scheme and the employer contributions required from 1 August 2020.
Download our Coronavirus Job Retention Scheme Factsheet: 12 June 2020 updates here, covering details on how to determine furloughed employees’ pay and calculating a claim.
The government have updated some of the guidance and rules for the Coronavirus Job Retention Scheme (CJRS). Click here for an overview of some of the additional information not already covered in our CJRS Factsheets.
Coronavirus Self-Employment Income Support Scheme (SEISS)
The Coronavirus Self-Employment Income Support Scheme (SEISS) delivers financial support to those that are self-employed or a member of a partnership in the UK and have lost income due to Coronavirus (COVID-19).
The second and final Self-Employment Income Support Scheme (SEISS) grant is now open for applications.
Key facts on the second SEISS grant
- Applications close on 19 October 2020;
- A taxable grant based on your average trading profit over the 3 tax years – 2016/17, 2017/18 and 2018/19;
- The grant is worth up to 70% of trading profits, capped at £2,190 a month;
- Paid out in a single instalment covering 3 months’ worth of profits;
- Capped at £6,570 in total; and
- The grant does not need to be repaid but it is subject to Income Tax and Self-Employed National Insurance.
How to apply
- HMRC will contact you with a date to claim from if you are eligible;
- Claims can now be made through the online government portal; and
- If you do not receive a date from HMRC and think you may be eligible, you can use the government online service to check.
- To make your claim you will need your Government Gateway ID and password. If you do not have a user ID, follow this link to sign in or create your Government Gateway account.; and
- The grant will be paid six working days after the claim is submitted.
Coronavirus Business Interruption Loan Scheme (CBILS)
- Offers financial support to smaller businesses across the UK that are losing revenue as a direct result of the Coronavirus (COVID-19) pandemic;
- From 6 April 2020, the government expanded CBILS to enable more viable businesses negatively affected by COVID-19 to apply for a loan or overdraft facility;
- Being unable to provide sufficient security for the loan financing required is no longer a condition to access the scheme;
- Will be delivered by lenders that partner with the British Business Bank, the full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website;
- The lender receives a guarantee of 80% of the loan amount from the government;
- UK-based businesses with a turnover of no more than £45million are eligible for a loan of up to £5 million;
- The borrower remains liable for 100% of the debt; and
- The Government will cover the first 12 months of interest payments and arrangement fees of the facility, in most cases.
How to apply
- Contact your bank or finance provider (not the British Business Bank) as soon as possible and discuss your business plan with them.
The Coronavirus Large Business Interruption Loan Scheme (CLBILS)
- The Coronavirus Large Business Interruption Loan Scheme is delivered through British Business Bank accredited lenders and partners;
- It is designed to support the continued provision of finance to UK mid-sized and larger UK businesses, with a group turnover of more than £45 million, who are suffering disruption to their cashflow due to lost or deferred revenues as a result of the Covid-19 outbreak;
- Facility to borrow up to 25% of turnover, up to a maximum of £200 million, for term loans and revolving credit facilities;
- The maximum size for invoice finance and asset finance facilities is £50m;
- Companies borrowing more than £50 million will be subject to restrictions on dividend payments, senior pay and share buy-backs during the period of the loan;
- No personal guarantees are permitted for facilities under £250,000. For facilities of £250,000 and over, claims on personal guarantees cannot exceed 20% of losses after all other recoveries have been applied;
- Finance terms are from three months to three years; and
- The borrower always remains 100% liable for the debt.
How to apply
- Businesses should approach an accredited lender at their earliest opportunity – details of lenders can be found here; and
- If one lender is unable to offer your business a loan through the scheme, you are still able to approach other lenders.
Coronavirus Bounce Back Loan scheme
The Bounce Back Loan scheme provides support of up to £50,000 for small and medium sized- enterprises (SMEs) located in the UK and negatively affected by the coronavirus pandemic.
- Loans range from £2,000 up to a maximum amount of £50,000;
- Businesses will be able to access loans worth up to 25% of turnover;
- Loan terms can be a maximum period of 6 years;
- Loans will be interest free and fee free for the first 12 months;
- The interest rate for the loan is set at 2.5% per annum;
- No repayments will be due within the first 12 months;
- Lenders are not permitted to take personal guarantees; and
- The borrower remains 100% liable for the debt.
How to apply
- BBLS is available through a range of British Business Bank accredited lenders and partners, listed on their website;
- Application to the scheme is via a short online form; and
- No forward looking test of business viability or complex eligibility criteria.
If you have already received a loan of up to £50,000 under the Coronavirus Business Interruption Loan Scheme (CBILS) and would like to transfer it into the Bounce Back Loan scheme, this can be arranged with your lender until 4 November 2020.
- This is a scheme developed by the Government and the British Business Bank to support innovative UK companies that have previously been unable to access other business support programmes because they are either pre-revenue or pre-profit and typically rely on equity investment;
- The scheme will issue Convertible Loans between £125,000 to £5 million,
- Businesses should be able to attract the equivalent match funding from third-party private investors and institutions; and
- Business should have previously raised at least £250,000 in equity investment from third-party investors in the last 5 years.
How to apply
- The Future Fund is open for applications from Wednesday 20 May until the end of September 2020;
- The Future Fund uses an online platform for applications;
- The programme is investor led and does not match companies seeking funding with investors;
- An application is initiated by a lead investor who will provide information about itself, other investors in the round and the company;
- If an application is successful, the platform generates documentation for the company and all investors to sign; and
- Companies will be responsible for confirming company information and reviewing the application before submission.
Business Rates holiday
- All businesses within the retail, hospitality and leisure sectors in England will be given a 100% business rates holiday for the next 12 months;
- Also applies to estate agents, lettings agencies and bingo halls.
How to apply
- There is no action required as this will be administered by your local authority.
- You can estimate the business rate charge you will no longer have to pay this year using the business rates calculator.
Retail, Hospitality and Leisure Grant Fund (RHLGF)
- Businesses in these sectors with a rateable value of under £15,000 will receive a cash grant of £10,000; and
- Grants of £25,000 will be provided for businesses operating from smaller premises, with a rateable value over £15,000 and below £51,000.
How to apply
- Local authorities will contact you to confirm if your business is eligible for this grant.
Small Business Grant Fund (SBGF)
- One-off grants of £10,000 to small businesses that already receive small business rate relief (SBRR) and/or rural rate relief (RRR) and occupy property.
How to apply
- Local authorities will contact you to confirm if your business is eligible for this grant; and
- Online forms are also available to ensure that your local authority has all of the correct details to swiftly administer your payment.
The Local Authority Discretionary Grants Fund
National guidelines state that these grants are primarily and predominately aimed at:
- Small or micro businesses;
- Businesses based in England;
- Businesses that have high ongoing fixed property-related costs;
- Businesses that occupy property (or part of a property) with a rateable value or annual mortgage/rent payments below £51,000;
- Businesses that were trading on 11 March 2020; and
- Businesses that are not eligible for other support schemes including:-
– The Small Business Grant Fund;
– The Retail, Hospitality and Leisure Grant Fund;
– The Fisheries Response Fund;
– Domestic Seafood Supply Scheme;
– The Zoos Support Fund and
– The Dairy Hardship Fund.
- Any grant award will be limited to one per business;
- The grant is classed as taxable income for those receiving it;
- Only businesses which make an overall profit once grant income is included will be subject to tax; and
- Grants are £25,000, £10,000 or any amount under £10,000.
How to apply
- Visit your local authority website to find out how to apply, the relevant links for our region can be found here.
- VAT payments for the period 20 March 2020 – 30 June 2020 will be deferred;
- Businesses will have until the end of the 2020-21 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; and
- 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.
Income Tax payments
- All taxpayers with a second self-assessment payment on account due on 31 July 2020 can defer payment until 31 January 2021;
- This is automatic with no applications required; and
- No penalties or interest for late payment will be charged in the deferral period
HMRC Time to Pay service
- A tax helpline for businesses and individuals concerned about paying their tax, arrangements can be put in place, on a case by case basis.
- The number is 0800 0159 559.
The Coronavirus Statutory Sick Pay Rebate Scheme
- The scheme enables employers to claim the applicable rate of Statutory Sick Pay (SSP) for periods of sickness starting on or after 13 March 2020; and
- The repayment will cover up to two weeks of SSP, starting from the first qualifying day of sickness.
Mortgage and rent holiday
- Mortgage borrowers can apply for a three month payment holiday from their lender;
- Tenants can apply for a three month payment holiday from their landlord;
- The application period for a mortgage holiday has been extended until 31 October 2020; and
- The current lender ban on repossessions of homes will be continued to the same date.
- Businesses that have cover for both pandemics and government-ordered closure should be covered; however
- Please contact your insurance provider to check the specific terms and conditions of your policy.
Universal Credit (UC)
Extension for filing accounts
In addition to the financial support measures detailed above, if your accounts will be late because your company is affected by COVID-19, you can apply for an automatic and immediate 3 month extension to file your accounts with Companies House.
At M+A Partners we are closely monitoring the developing situation and support available for businesses and will keep this page updated with the latest guidance.
Please be aware of fraudulent schemes
You will access Government support schemes only through GOV.UK. If someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, and asks you to click on a link or to give information such as your name, credit card or bank details, it is a scam.