Covid-19: Support for business

30 March 2020

Information is constantly being updated in relation to the UK Government’s response to Covid-19. Our aim is to summarise the information we are currently aware of and therefore this page may not include all relevant details as there are a number of areas where further clarification is expected. We recommend that you obtain professional advice before acting or refraining from action.

The Chancellor has set out a package of temporary measures to support businesses through the period of disruption caused by COVID-19. Government initiatives are continuously changing, and whilst we will do our best to keep this summary up to date, you are strongly recommended to review the Government’s and other relevant websites (see links on this page). The measures include: 

  • A 12-month business rates holiday for all retail, hospitality, leisure businesses in England
  • Small business grant funding of £10,000 for those 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
  • A new lending facility from the Bank of England to help support liquidity among larger firms
  • Deferring VAT payments
  • The HMRC Time To Pay Scheme
  • A Coronavirus Job Retention Scheme
  • A Statutory Sick Pay relief package for SMEs 

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

Business rates relief for retail, hospitality and leisure businesses 

Business rates holiday for retail, hospitality and leisure businesses in England between 1 April 2020 and 31 March 2021 with no limit to rateable values. Properties that will benefit from the relief are wholly or mainly being used as shops, cinemas, restaurants, music venues, museums, art galleries, theatres, caravan parks, gyms, small hotels, B&Bs, guest houses, sports clubs, night clubs and clubhouses and nurseries. No action is required as this will apply to your next council tax bill in April 2020. However, local authorities may have to reissue bills automatically to exclude the business rate charge. 

Additional property types that are not listed but fall within the overall description may be eligible and advice should be sought. Applications may be necessary where for example, a gym operator may be occupying a property which is known in the rating list as a warehouse. The local authority may be unaware that this is a qualifying use and without contact being made from the occupier they may not automatically award the relief. Any enquiries on eligibility should be directed to the relevant local authority. 

https://www.gov.uk/government/publications/business-rates-retail-discount-guidance

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 in England that occupy property and 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 that already receives SBBR and/or RRR to help meet their ongoing costs. 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 with funding expected to be available from 1 April 2020. Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.

Cash grants for retail, hospitality and leisure businesses

The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors in England 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 and businesses 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. Any enquiries on eligibility should be directed to the relevant local authority. 

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/875348/small-business-grant-fund-and-retail-guidance-v2.pdf

Coronavirus business interruption loan scheme to support SME's 

A new temporary Coronavirus Business Interruption Loan Scheme (CBIL), delivered by the British Business Bank, 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. The government will not charge businesses or banks for this guarantee, and the CBIL will support loans from £1,000 up to £5 million. Businesses can access the first twelve months of that finance interest-free, as government will cover the first twelve months of interest payments. Finance terms are from three months up to 10 years for term loans and asset finance and up to three years for revolving facilities and invoice finance. The borrower remains 100% liable for the debt. 

You are eligible if your business is UK based, with turnover of no more than £45 million per annum and your business meets the other British Business Bank eligibility criteria. The full rules are available on the British Business Bank website with 40 accredited providers in all. Lenders have now started to publish their own guidance on loans being made available under the scheme. You should talk directly to your bank or finance provider as soon as possible and discuss your business plan with them. 

https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/for-businesses-and-advisors/

COVID-19 corporate financing facility for larger firms 

Under the new Covid-19 Corporate Financing Facility (CCFF), the Bank of England will buy short term debt from larger companies to allow businesses affected by a funding squeeze to finance short-term liabilities. More information is available from the Bank of England. 

https://www.bankofengland.co.uk/markets/market-notices/2020/ccff-market-notice-march-2020

Support for businesses through deferring VAT payments 

All UK Valued Added Tax (VAT) registered businesses can defer VAT payments due between 20 March 2020 and 30 June 2020 until 31 March 2021. You do not need to tell HMRC that you are deferring your VAT payment, but VAT returns still need to be submitted to HMRC on time. VAT refunds and reclaims will be paid by the government as normal. HMRC will not charge interest or penalties on any amount deferred as a result of the Chancellor’s announcement.

https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19

Support for businesses paying tax: Time to pay-services 

All businesses in financial distress with outstanding tax liabilities may be eligible to receive support with their tax affairs through HMRC’s Time To Pay (TTP) service. TTP allows a business to defer current (as opposed to prospective) tax debts (principally corporation/income tax, payroll taxes and VAT) by converting settlement to instalments over a three to 12 months period. 

HMRC have made it clear that they see themselves in this instance as lender of last resort. Therefore, the taxpayer must demonstrate that all other sources of finance have been pursued and exhausted. These arrangements are agreed on a case-by-case basis and tailored to individual circumstances and 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. 

https://www.gov.uk/difficulties-paying-hmrc

Support through the 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. HMRC will reimburse 80% of salary costs of anyone not working due to Covid-19, but whose job has been retained, up to a cap of £2,500 per month, plus employer National Insurance plus the minimum auto-enrolment pension contribution. 

Businesses need to designate affected employees as furloughed workers (employees on a leave of absence) and notify employees of this change. Changing the status of employees remains subject to existing employment law and may be subject to negotiation. An employer can also choose to top up an employee’s salary but is not obliged to under this scheme. At the end of a furlough period (minimum length of three weeks) employees return to work or maybe made redundant (subject to normal employment law obligations). 

Businesses will need to submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (expected to be available by the end of April 2020). Will be paid in the form of a grant (not a loan) for an initial period of three months, but this will be extended if necessary. Claims can be backdated until 1 March 2020 if applicable. 

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

Support for businesses who are paying sick pay to employees 

UK Government is bringing forward legislation to allow small-and-medium-sized businesses (fewer than 250 employees as of 28 February 2020) to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The refund will cover a maximum of two weeks’ SSP per eligible employee (current rate of SSP is £94.25 per week) who has been off work because of COVID-19 from 13 March 20202 and is payable from day one for those who self-isolate or are unwell. 

Businesses should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. A rebate scheme is being developed. Further details on the recovery mechanism will be provided once the legalisation has passed. 

Support for businesses in Scotland, Wales and Northern Ireland 

Because some elements of business support are devolved, the measures you can access may differ if your business is in Scotland, Wales or Northern Ireland. 

Businesses in Scotland

https://www.gov.uk/guidance/coronavirus-covid-19-information-for-individuals-and-businesses-in-scotland 

Businesses in Wales

https://gov.wales/coronavirus-covid-19-support-businesses 

Businesses in Northern Ireland

https://www.gov.uk/government/news/covid-19-guidance-information-for-ni-businesses-employers#businesses 

Information is constantly being updated in relation to the UK Government’s response to Covid-19. Our aim is to summarise the information we are currently aware of and therefore this page may not include all relevant details as there are a number of areas where further clarification is expected. We recommend that you obtain professional advice before acting or refraining from action.

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.