Covid-19: Government Support for Businesses
The Chancellor has set out a package of temporary, timely and targeted measures to support public services, people and businesses through this period of disruption caused by COVID-19. The following web-site links for England, Scotland, Wales and Northern Ireland sets out everything available to date, but has been summarised below based on the Chancellors general statements.
Because some elements of business support are devolved, the measures you can access may differ depending on where you are located, as set out below.
This is an evolving support and we will keep you updated as things progress.
- Under the Coronavirus Job Retention Scheme, if you cannot maintain your current workforce because your operations have been severely affected by coronavirus (COVID-19), you can furlough employees and apply for a grant that covers 80% of their usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage.
- This is a temporary scheme in place for 3 months starting from 1 March 2020, but it may be extended if necessary and employers can use this scheme anytime during this period.
- It is designed to help employers whose operations have been severely affected by coronavirus (COVID-19) to retain their employees and protect the UK economy.
- However, all employers are eligible to claim under the scheme and the government recognises different businesses will face different impacts from coronavirus.
- You must have created and started a PAYE payroll scheme on or before 28 February 2020, enrolled for PAYE online (this can take up to 10 days) and have a UK bank account.
- You will need to designate affected employees as ‘furloughed workers,’ and notify your employees of this change in writing. A record of this communication must be kept for five years.
- Changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.
- Any employees you place on furlough must be furloughed for a minimum period of 3 consecutive weeks. When they return to work, they must be taken off furlough.
- Employees can be furloughed multiple times, but each separate instance must be for a minimum period of 3 consecutive weeks.
- Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal.
- The online service you’ll use to claim is not available yet. It’s expected it to be available by the end of April 2020.
- The Coronavirus Statutory Sick Pay Rebate Scheme will repay employers the current rate of SSP that they pay to current or former employees for periods of sickness starting on or after 13 March 2020.
- 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 at 28 February 2020 will be eligible.
- Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit not.
- The online service you’ll use to reclaim SSP is not available yet. HMRC will announce when the service is available, and this guidance will be updated.
- The government will support businesses by deferring Valued Added Tax (VAT) payments due between 20 March 2020 and 30 June 2020.
- This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period.
- You will still need to submit your VAT returns to HMRC on time.
- If you normally pay by Direct Debit you should contact your bank to cancel your Direct Debit as soon as you can, or you can cancel online if you’re registered for online banking.
- VAT payments due following the end of the deferral period will have to be paid as normal. Further information about how to repay the VAT you’ve deferred will be available soon.
- VAT refunds and reclaims will be paid by the government as normal.
4. Business Rate Relief for small businesses
- A business rates retail holiday will be introduced for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.
- Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.
- You do not need to take any action. Your local council will apply the discount automatically.
- Contact your local council if you’re not getting a relief you think you’re entitled to.
5. Small business grant funding (SBGF) of £3,000 for all business in receipt of Small Business Rates Relief (SBRR) and Rural Rates Relief:
- The government will provide an additional £2.2 billion funding for local authorities to support small businesses that already pay little or no business rates because of Small Business Rate Relief (SBBR)
- This will provide a one-off grant of £3,000 to business currently eligible for SBRR or Rural Rate Relief, to help meet their ongoing business costs.
- If your business is eligible for SBRR or Rural Business Rate Relief, you will be contacted by their local authority – you do not need to apply.
6. A new temporary Coronavirus Business Interruption Loan Scheme (CBILS) that supports small and medium-sized businesses, with an annual turnover of up to £45 million, to access loans, overdrafts, invoice finance and asset finance of up to £5 million for up to 6 years.
- The government will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees. This means smaller businesses will benefit from no upfront costs and lower initial repayments.
- 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 to SMEs.
- The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website. https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/for-businesses-and-advisors/
- All the major banks will offer the Scheme once it has launched. There are 40 accredited providers in all
- The scheme is delivered through commercial lenders, backed by the government-owned British Business Bank.
7. The HMRC Time To Pay Scheme
- All businesses in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.
- These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
- There is also support for paying self-assessment payments by deferring yout second payment on account. https://www.gov.uk/pay-self-assessment-tax-bill
- If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559