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Coronavirus: What financial support is available for your business?

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Editor’s note: This article was first published on 24 March 2020 and has been updated for relevance.

With businesses around the country facing increasing levels of uncertainty due to coronavirus, the UK government has announced a series of financial support measures to help them.

But what does this mean for your business?

In this article, we provide details on the financial support that is available for your business and how you can access it. We cover the following:

Coronavirus Business Interruption Loan Scheme​ [updated]

Coronavirus Large Business Interruption Loan Scheme​ [new]

Coronavirus Job Retention Scheme​

Reimbursement of Statutory Sick Pay

VAT deferral​

Income Tax deferral for self-employed individuals

HMRC Time to Pay

£10,000 Small Business Grant Scheme

£25,000 Retail and Hospitality Grant Scheme

Business rates holiday

Ban on evictions for commercial tenants who miss rent payments

Self-Employment Income Support Scheme

Webinar: Coronavirus business financial support

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What is it?

A loan scheme that has been set up to help small and medium-sized enterprises (SMEs) that are struggling with cash flow because of revenues that have been deferred or lost due to the coronavirus outbreak. The loans are being offered on generous terms to support SMEs.

Who is eligible?

Any UK-based business that has a turnover less than £45m is eligible for the Coronavirus Business Interruption Loan Scheme. Businesses are eligible if they have been disrupted by coronavirus and need to self-certify that this is the case.

What it covers

The Coronavirus Business Interruption Loan Scheme allows SMEs to access a loan between £1,000 and £5m.

The loan scheme covers several business financing services, including term loans, overdrafts, asset finance and invoice finance.​

Finance terms are up to six years for loans and asset finance facilities. For overdrafts and invoice finance facilities, terms are up to three years.

The loans are offered through a number of finance providers and are backed by a government guarantee that covers up to 80% of the balance. This will enable lenders to turn ‘no’ financing decisions into more ‘yes’ decisions​.

Interest and fees for the loans will be paid by the government for the first 12 months.

How your business can access it

The Coronavirus Business Interruption Loan Scheme is available now and is operated by more than 40 accredited lenders, including high street banks that offer services to SMEs. Your first step should be to speak to your current banking provider.

To access the funding, you need to confirm that your turnover is less than £45m. You also have to provide a borrowing proposal that would be considered viable by the lender if the coronavirus disruption was taken out of the equation.

In addition, you need to demonstrate that the provision of finance will allow your business to trade out of any short to medium term difficulty.

Lenders won’t ask you for personal guarantees on savings or property for loans that are less than £250,000. For loans that are more than this amount, banks might ask for personal guarantees.

It’s worth remembering that the borrower always remains 100% liable for the debt.

What is it?

A loan scheme that has been set up to help large businesses that are struggling with cash flow due to revenues being deferred or lost due to coronavirus.

Who is eligible?

To be eligible, businesses need to have an annual turnover between £45m and £500m, and business activity has to be based in the UK.

The scheme is open to businesses that have been affected by coronavirus and can’t secure regular commercial funding.

Companies from all sectors can apply for the Coronavirus Large Business Interruption Loan Scheme, however the following are not eligible:

  • Banks and building societies
  • Insurers and reinsurers (but not insurance brokers)
  • Public sector organisations (this includes primary and secondary schools)
  • Employer, professional, religious and political membership organisations
  • Trade unions

What it covers

Banks can offer eligible large businesses loans of up to £25m, which are backed by an 80% guarantee from the government.

Lenders will carry out the usual credit risk checks. However, the aim of the government guarantee is to enable more ‘no’ decisions to become ‘yes’ outcomes.

Short-term loans, overdrafts, invoice finance and asset finance are the products included in the scheme, and will be offered at commercial rates of interest.

How your business can access it

If your business is eligible, you will be able to access the Coronavirus Large Business Interruption Loan Scheme by the end of April 2020. A list of approved lenders will be provided by the British Business Bank.

To access the funding, you need to confirm your business turnover is between £45m and £500m. You must provide a borrowing proposal that would be considered viable by the lender if the coronavirus disruption was taken out of the equation.

What is it?

A number of employers around the country are considering laying off staff due to reduced revenues and the closure of their business premises due to coronavirus.

The Coronavirus Job Retention Scheme has been set up to support those employers and help them continue to pay wages of staff who would otherwise have been let go.

Who is eligible?

All UK businesses, including charities, are eligible for the Coronavirus Job Retention Scheme. There isn’t a cap on the number of workers who can be selected for the scheme.

What it covers

The Coronavirus Job Retention Scheme will reimburse 80% of furloughed workers’ wages, up to £2,500 per employee per month. Your business can top up these salaries if you wish.

Your workers need to be currently working in your business – and not have been laid off or made redundant – in order for you to access the scheme.

If required, they can take on other jobs with other businesses; doing so won’t impact on this cover – but they can’t do any work for the employer who claims under the Coronavirus Job Retention Scheme.

The scheme will be available for an initial three months and will be extended if required. It means any of your employees who aren’t actively working for you due to the current disruption to the economy still receive a salary and your business can retain their services in the long term.

How your business can access it

HMRC is currently working on the creation of an online portal and reimbursement system. The scheme expected to be fully operational by the end of April​ 2020.

Your business will be able to backdate pay to 1 March 2020.

To access the Coronavirus Job Retention Scheme, you’ll need to designate affected employees as ‘furloughed workers’ and notify your employees of this change. These changes remain subject to existing employment law.​

Next, once the online portal is up and running, you’ll need to submit information about the employees that have been furloughed to HMRC, including salary details.

HMRC will then reimburse 80% of furloughed workers’ wages, as highlighted above.

If your business has cash flow issues ahead of the portal going live, it’s worth accessing the Coronavirus Business Interruption Loan Scheme (if your company is eligible) – see above for details.

Coronavirus: Government funding support tool

Use this simple tool to help you understand which government schemes your business is likely to be eligible for and guidance on accessing them.

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What is it?

Statutory Sick Pay (SSP) is paid by employers to employees who are off work because of sickness. The government has said it will reimburse employees who have to make payments in light of coronavirus.

Who is eligible?

Businesses based in the UK that employ fewer than 250 UK employees as of 28 February 2020 are eligible to have Statutory Sick Pay reimbursed.

What does it cover?

You will be able to reclaim Statutory Sick Pay for those employees who have been unable to work because of coronavirus. It’s up to two weeks of sickness absence per employee​.

Any employees who are unable to work due to coronavirus are able to claim Statutory Sick Pay from day one rather than the usual day four of sickness, following a temporary change by the government.

How your business can access it

The government is working on a repayment mechanism and it aims to have it up and running in the near future.

Make sure you keep records of absences and payments of Statutory Sick Pay to employees claiming due to coronavirus in case you need to present them in order to get your payments reimbursed.

What is it?

The chancellor has announced that businesses are able to defer VAT payments for a three month period in 2020.

Who is eligible?

All UK businesses are eligible for the deferred VAT payments.​

What does it cover?

Your business can defer VAT payments for the period from 20 March 2020 to 30 June 2020. You’re not required to make a VAT payment during this time period and have until the end of the 2020/21 tax year to pay any liabilities that are accumulated.

How your business can access it

There’s no need to apply for the deferred VAT payments as it’s an automatic offer. You don’t need to make a VAT payment by 30 June 2020 if you don’t wish to – you now have an extended deadline of the end of the 2020/21 tax year. VAT refunds and reclaims will be paid by the government as usual.​

What is it?

The chancellor has announced that all individuals who pay Income Tax on the profits from their self-employment are able to defer any payments due by 31 July 2020 until the end of January 2021.

What does it cover?

It covers Self Assessment Income Tax payments. They are usually due on 31 July. However, in this case, those payments are now deferred until 31 January 2021.

How your business can access it

There’s no need to apply for the Income Tax deferral as it’s an automatic offer. You don’t need to make an Income Tax payment by 31 July 2020 if you don’t wish to – you now have an extended deadline of 31 January 2021. Income Tax refunds will be paid by the government as usual.

What is it?

Time to Pay is an existing HMRC scheme that allows businesses in financial distress to receive more time to settle financial obligations to HMRC. However, they must show that they have a reasonable ability to make their payments in the future​.

Who is eligible?

All UK businesses are eligible for HMRC’s Time to Pay scheme.

What does it cover?

If your business (or you are self-employed) is struggling to meet outstanding tax obligations due to financial difficulties, you can contact HMRC to see if you are eligible for support via its Time to Pay scheme.

This service has been scaled up to support more businesses and self-employed individuals due to coronavirus.

How your business can access it

If your business (or as a self-employed individual) has missed a tax payment or you’re concerned about making your next tax payment due to the impact of coronavirus, you can contact HMRC.

Call the helpline number, on 0800 0159 559, to see if you are eligible for Time to Pay support. Help from HMRC is assessed on a case-by-case basis.

What is it?

A scheme offering a one-off £10,000 grant to eligible small businesses. Note that the requirements to receive the grant will depend on where your business is located in the UK.

Who is eligible?

The Small Business Grant Scheme covers 700,000 of the UK’s smallest businesses. Your business must occupy a property in order to receive the grant. There are regional requirements to be aware of:

England: Your business is eligible if you already receive small business rate relief and/or rural rate relief.

Scotland: Your business is eligible if you’re in receipt of the small business bonus scheme or rural relief.

Wales: If your business has a rateable value that’s less than £12,000, you are eligible.

Northern Ireland: If your business have a net annual value that’s up to £15,000, you’re eligible for the scheme.

What does it cover?

The grant can be used to cover ongoing business costs in light of the coronavirus and its impact on your company.

How your business can access it

Local authorities in England have been instructed to write to businesses who are eligible to receive this grant.​ It’s worth checking your local authority website for more information and guidance on when your business can expect to receive the grant.

It’s expected that local authorities will automatically pay the grant to eligible businesses.

If your company is eligible but you’re concerned your local authority doesn’t have your business bank details so it can make a grant payment, contact them for guidance.

What is it?

A scheme offering a one-off £25,000 grant to eligible retail, hospitality and leisure businesses. Note that the requirements to receive the grant will depend on where your business is located in the UK.

Who is eligible?

The Retail and Hospitality Grant Scheme covers businesses in the retail, hospitality and leisure sector. There are regional requirements to be aware of:

England: Your business needs to have a rateable value between £15,001 and £51,000​ to be eligible.

Scotland: To be eligible, your business needs to have a rateable value between £18,000 and £51,000.

Wales: Your business needs to have a rateable value between £12,001 and £51,000 to be eligible.

Northern Ireland: To be eligible, your business needs to have a rateable value up to £51,000.

What does it cover?

The grant covers businesses and properties that are wholly or mainly being used:

  • As shops, restaurants, cafes, drinking establishments, cinemas and live music venues​
  • For assembly and leisure​
  • As hotels, guest and boarding premises, and self-catering accommodation​.

If the rateable value of your business is below the figures highlighted above for your region, you won’t receive the one-off grant of £25,000. However, if eligible, you will receive the £10,000 grant from the Small Business Grant Scheme.

How your business can access it

Local authorities in England have been instructed to write to businesses who are eligible to receive this grant.​ It’s worth checking your local authority website for more information and guidance on when your business can expect to receive the grant.

It’s expected that local authorities will automatically pay the grant to eligible businesses.

If your company is eligible but you’re concerned your local authority doesn’t have your business bank details so it can make a grant payment, contact them for guidance.

What is it?

Businesses in a number of eligible sectors (highlighted below) don’t have to pay business rates for 12 months, covering the 2020/21 tax period. This will support them as they work to maintain property payments and cover ongoing costs.

Who is eligible?

The business rates holiday is applicable to companies in the retail, hospitality, leisure or early years sectors. It has been extended to estate agents, letting agencies and bingo halls that have also been impacted by coronavirus and required to close.

The requirements may differ depending on your location (such as for Northern Ireland where the business rates holiday is for three months – April, May and June 2020). Here is more information for Scotland, Wales and Northern Ireland.

What does it cover?

The grant covers businesses and properties that are wholly or mainly being used:

  • As shops, restaurants, cafes, drinking establishments, cinemas and live music venues​
  • Estate agents, letting agencies and bingo halls
  • For assembly and leisure​
  • As hotels, guest and boarding premises and self-catering accommodation​
  • Occupied by providers on Ofsted’s Early Years Register​
  • For the provision of the Early Years Foundation Stage.​

The government has confirmed that businesses who received the retail discount in the 2019/20 tax year will be rebilled by their local authority as soon as possible.

How your business can access it

No action should be required as these changes should be made automatically for your next council tax bill for April 2020.​ However, in some cases local authorities may have to reissue your bill automatically to exclude the business rate charge​.

Local authorities will be providing updated guidance for businesses​. It’s worth checking the website of your local authority for more details.

You can estimate what your business will save from this relief by using the government’s business rates calculator.

What is it?

A legal ban on landlords evicting commercial tenants solely due to missing a rent payment due to coronavirus.

Who is eligible?

All businesses renting property who are unable to pay their rent due to coronavirus.

What does it cover?

Rent will be due as normal, however this moratorium on evictions prevents landlords from enforcing the eviction of a commercial tenant for the next three months.

How your business can access it

No action should be required as the courts will not process any claims for commercial evictions during this time​.

What is it?

Self-employed people or members of a partnership in the UK can claim a grant for the lower of £2,500 or up to 80% of their average taxable profits per month across the last three financial years (or two/one years if you’ve been in business for less than three years).

This is similar but not identical to the Coronavirus Job Retention Scheme. The grant lasts for three months, as of the announcement in March 2020.

Who is eligible?

Self-employed people or members of a partnership in the UK are eligible for the Self-Employment Income Support Scheme.

More than half your taxable income must come from self-employment (including partnership income), you need to have traded (through your own business or as part of a partnership) in the 2019/20 tax year and intend to continue to trade in the 2020/21 tax year.

You also need to either still be trading or had intended to still be trading but changed your plans due to coronavirus.

Finally, your trading profit (either in 2018/19 or the average of the tax years you worked during tax years 2016/17, 2017/18 and 2018/19) must be less than £50,000.

HMRC needs to have your 2018/19 tax return to start the grant process – even if you are late, you need to ensure this is submitted before 23 April 2020 to get this grant.

You also should only claim it if you’ve genuinely lost out due to coronavirus disruption.

What it covers

The grant is capped at £2,500 per month, so theoretically could be worth £7,500, but is calculated by taking a basic average of your taxable profits as mentioned earlier.

Whatever HMRC decides you should get will be transferred to your account as a lump sum from June 2020, once the scheme is up and running.

How your business can access it

HMRC will contact you if you’re eligible and provide details of how you can apply online (and it must be done online).

Note that, unlike some of the other grants mentioned in this article, this grant is not automatically provided to you. Application is necessary.

Conclusion on financial support

With a series of financial support measures on the table, it’s worth exploring which ones your business is eligible for and taking steps (where required) to get the help you need so you can stay on top of cash flow and revenues, while also continuing to support your staff.

Coronavirus and your business

We’ve gathered information and resources to help navigate this situation, including a simple tool and webinar to help you understand what financial support is available.

Find out more