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COVID-19 Business Support

Mon 23 March 2020

COVID-19 is causing disruption both in our personal lives and to businesses around the world. Whilst the government has produced guidance for businesses regarding employees, many are struggling to stay afloat amidst the issues surrounding cash flow as the public are told to stay at home.

Last week, the Chancellor, Rishi Sunak, announced a £330bn financial package for businesses in order to relieve them of the COVID-19 pressures on cash flow during ‘an economic emergency’. Whilst we will outline the allocated budget for this package below, it is important to note that Mr Sunak promised that he knows the package isn’t enough and he would go further in order to protect the nation’s health and economy.

During the announcement, Mr Sunak said: "This is not a time for ideology and orthodoxy, this is a time to be bold, a time for courage. I want to reassure every British citizen this government will give you all the tools you need to get through this.

That means any business who needs access to cash to pay their rent, their salaries, suppliers or purchase stock will be able to access a government-backed loan or credit on attractive terms.

And if demand is greater than the initial £330bn I'm making available today, I will go further and provide as much capacity as required. I said whatever it takes, and I meant it."

12-month business rates holiday for all retail, hospitality and leisure businesses in England

In response to the initial announcement of a 12-month business rates holiday in the budget last week, Michael Blake, Director, said: “It is a well-known fact that the high street and the retail sector in general has been underperforming for a long while.  A crisis such as this has the potential to cripple many smaller retail businesses. Mr Sunak announced that business rates would be abolished for one year for those businesses with a rateable value of under £51,000. This is a welcome relief to many, however, we must look at those larger retailers, such as Debenhams and House of Fraser; which have faced either pre-pack or full administration and have had to close multiple stores across the UK in the last year or so. Not only do these businesses employ thousands of UK citizens, they also help to fund small business rates relief.  With rising wages and running costs, how are they expected to survive?”

Mr Sunak has now announced that this policy has now been extended to cover all businesses, including larger retailers and with no reference to the rateable value.

Small business grant funding of £10,000 for all business in receipt of small business rate relief (SBRR) or rural rate relief

Whilst a business rates holiday may help some business owners, many SME’s pay little to no business rates, therefore, do not benefit. Businesses in this situation will be able to claim a one-off grant of £10,000. If businesses are currently eligible for SBRR or rural rate relief, their local authority will be in touch in April to help meet their ongoing business costs.

Grant funding of £25,000 for retail, hospitality and leisure businesses

If a retail, hospitality or leisure business does not have business interruption insurance, they can apply for £25,000 cash grant. Grants will be available for business with property that has a rateable value between £15,000 and £51,000 and have been brought in for the disruption caused to the industry due to social distancing.

Covering 80% of staff wages for those that are not able to work due to coronavirus

On Friday 20th March, Rishi Sunak announced that the government would cover 80% of PAYE eligible workers wages in the case that they couldn’t work due to the coronavirus. It is understood that this also covers employees that have been made redundant since the beginning of March. Any employer in the country will be able to apply to HMRC for payments of up to £2,500 per worker per month as long as they keep them on payroll rather than laying them off. The scheme will last for three months but will be extended if required.

The Coronavirus Business Interruption Loan Scheme

The Coronavirus Business Interruption Loan Scheme is due to launch next week and aims to support businesses to access bank lending and overdrafts.

Mr Sunak said: “To support lending to small and medium-sized businesses, I am extending the new Business Interruption Loan Scheme I announced at the Budget last week, so that rather than loans of £1.2 million, it will now provide loans of up to £5 million, with no interest due for the first six months.”

More information is expected upon launch next week.

Statutory sick pay relief package for SMEs

Legislation for Statutory sick pay has been brought forward for small to medium sized businesses to cover absence due to COVID-19. Information sourced from gov.uk states:

  • this refund will cover up to 2 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 28 February 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

HMRC Time To Pay Scheme

HMRC have set up a dedicated helpline for those affected by Covid-19 to discuss a bespoke time to pay package which may allow for discretion for businesses that are facing difficulties in meeting tax, NI and VAT payments. Arrangements will be made on a case by case basis.

Update as of Friday 20th March: all VAT payments for businesses will be deferred until the end of June 2020 as well as self-assessment income tax payments for July 2020 are to be deferred for six months.