**Last updated: 14 October 2020**
The government has now launched a Coronavirus financial support finder for business. This is a useful tool as you can enter in your specific details to find out which support you can apply for and read up on the detailed background information for each scheme.
It is worth looking at this as there may be additional support available which you had not considered.
Below you will find our summary of what help is available for businesses affected by the Coronavirus.
Please be vigilant for possible fraud. Scammers will use uncertainty in these areas to obtain bank details. If in doubt ask us.
Support for Businesses Forced to Close in Tier 3 Areas
Announced 9 October 2020
Expansion of the JSS
The Government has announced an expansion of the Job Support Scheme for businesses whose premises are forced to close by law. This will commence on 1 November and will see 67% of employee wages funded by the Government up to a maximum of £2,100 per month.
You can find more information here.
Local Restrictions Support Grant Scheme
The Government, through local authorities, will also provide grant funding for affected businesses. The amount of the grant will be dependant on the rateable value of the premises being forced to close:
- £15,000 or under – £1,334 per month
- Over £15,000 but less than £51,000 – £2,000 per month
- £51,000 or over – £3,000 per month
Coronavirus Job Support Scheme
Announced 24 September 2020
The scheme is designed to protect “viable” employees jobs after the furlough scheme ends on 31 October. The scheme will open on 1st November 2020 and will run for 6 months.
The latest Government guidance is here.
To qualify for the scheme the employee must work at least a third of their normal hours.
The employer pays the employee for the time worked.
For the hours the employees doesn’t work the cost is split three ways: HMRC pays a third, the employer pays a third and the employee loses a third.
The contribution paid by HMRC is capped at £697.92 per month.
The scheme is UK-wide. All small and medium-sized businesses are eligible, but larger businesses will be required to prove they’ve been adversely affected by coronavirus. Employers can take part regardless of whether they used the furlough scheme. Those retaining furloughed staff on shorter hours can be part of the scheme and still get the job retention bonus announced earlier this summer. Employees cannot be on a redundancy notice while taking part.
Coronavirus Job Retention Scheme
The latest Government guidance is here.
The JRS will be withdrawn on 31 October and replaced with the less generous Job Support Scheme.
Under the new Coronavirus Job Retention scheme, government grants will cover 80% of the salary of PAYE employees who would otherwise have been laid off during this crisis. The scheme, open to any employer in the country, will cover the cost of wages backdated to 1 March 2020 and will be open before the end of April. It will continue for at least three months, and can include workers who were on your PAYE payroll on or before 19 March 2020 and which were notified to HMRC on an RTI submission on or before 19 March 2020.
To claim under the scheme employers will need to:
- designate affected employees as ‘furloughed workers’, and notify employees of this change. Changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation; and
- submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal. HMRC will set out further details on the information required.
HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month.
Update 1 July 2020: Phase 2 of the JRS began on 1 July and introduced the ability to make claims for employees returning to work on fewer hours than they would normally have worked (flexible furlough). From 1 August, the JRS grant will no longer cover the employer NICs or pension contribution. The government contribution will also be dropping from 80% to 70% in September and then 60% in October, with the employer expected to top up employee salaries back to 80%.
The Job Retention Bonus
A one-off £1,000 incentive will be paid to employers for each one of their furloughed staff members they still employ at the end of January 2021. This is designed to encourage businesses not to make redundancies once the job retention scheme ends at the end of October 2020.
Employers can claim the bonus in respect of employees:
- Who have been furloughed at some point between April – October 2020; and
- Who are still employed by them on 31 January 2021; and
- Whose average earnings for the period 1 November 2020 – 31 January 2021 is above £520 month
The payments will be made in February 2021.
Paying Sick Pay to Staff Absent Due to COVID-19
To support employers experiencing increases in costs or financial disruptions the government will bring forward legislation to allow small and medium-sized employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19.
The government will refund up to two weeks’ SSP per eligible employee who has been off work because of COVID-19. The SSP rate is currently £95.85 per week.
The eligibility criteria for the scheme will be as follows:
- Employers with fewer than 250 employees will be eligible
- Employers must maintain records of staff absences, but employees will not need to provide a GP fit note
- The eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to self-isolators comes into force
Self Employed Income Support Scheme
Details on this scheme can be found from the following sources:
- The latest Government guidance is listed here
- Our detailed guidance can be found here
- We’ve produced some FAQs here
Update 24 September 2020: The scheme is extended for a further 6 months beginning 1 November 2020, albeit at a much less generous rate.
For qualifying sole traders, this will be paid in the form of two grants. The first grant will cover 20% of trading profits between 1 November and 31 January, capped at £1,875 and will be paid in a single instalment. The level of the second grant has yet to be set – the Government says this will happen “in due course”
Only those eligible for the current SEISS scheme can apply and you need to have been adversely affected by coronavirus to claim.
Coronavirus Bounce Back Loan
This scheme has been devised to help small and medium-sized businesses affected by coronavirus to apply for loans of up to £50,000. You cannot apply for this loan if you are already claiming funding under the Coronavirus Business Interruption Scheme, however, if you have received a loan of up to £50,000, you can arrange to transfer it to a Bounce back Loan with your lender until 4th November 2020.
Borrowing can be between £2,000 to £50,000, the government will guarantee 100% of the loan and there will not be any fees or interest to pay for the first 12 months.
There is specific eligibility criteria, we suggest that if you are thinking of applying for these loans you will need to have your accounts up to date.
You can apply through Gov.uk how to apply. There are 11 lenders participating in the scheme, you should approach a suitable lender yourself via the lender’s website. You will be required tO fill in an application form and self declare you are eligible. The lender will decide whether to offer you a loan or another type of finance and you’ll be responsible for repaying 100% of the amount borrowed.
You have until 30 November 2020 to apply for a Business Bounce Loan
Update 24 September 2020: these loans can now be repaid over 10 years (previously six) and you can also take payment holidays and interest- only repayment periods.
For loan amounts greater than £50,000 you will need to apply under the Coronavirus Business Interruption Loan Scheme. You can find details of the CBILS and eligibility criteria here.
The Government has also promised a preferential loan scheme to support business through the difficulties. More details can be found here.
Support for Businesses That Pay Business Rates
Government will introduce a business rates retail holiday 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.
A £25,000 grant will be provided to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value between £15,000 and £51,000.
Any enquiries on eligibility for, or provision of, the reliefs should be directed to the relevant local authority. Guidance for local authorities on the business rates holiday will be published by 20 March.
Update 2 May 2020: A discretionary fund has been set up to accommodate certain small businesses previously outside the scope of the business grant funds scheme.
Support for businesses that pay little or no business rates
The government will provide additional 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 £10,000 to businesses currently eligible for SBRR or rural rate relief, to help meet their ongoing business costs.
If your business is eligible for SBRR or rural rate relief, you will be contacted by your local authority – you do not need to apply.
Funding for the scheme will be provided to local authorities by government in early April. Guidance for local authorities on the scheme will be provided shortly.
Professional Service Grants
The government has allocated £20m of funding which will be made available as grants to small businesses recovering from the impact of Coronavirus. The grants can be for between £1,000 and £5,000 and can be used to fund new equipment and technology along with specialist professional advice
Support Package for Innovative Firms
The chancellor announced on 20April a £1.25 billion government support package for UK businesses driving innovation and development.
This is described as Coronavirus Future Fund.
Deferral of VAT Liabilities
VAT payments due between 23 March 2020 and 30 June 2020 could be deferred. This means businesses do not need to pay over these VAT liabilities until the end of March 2021.
The deferral applies automatically and businesses do not need to apply for it. VAT refunds and reclaims will be paid by the government as normal. You do still need to complete your VAT return on time.
Update 24 September 2020: Businesses are now able to spread the deferred VAT payment due by 31 March 2021 across the 2021-22 financial year.
Deferral of July Income Tax Payments on Account
Income Tax Self-Assessment payments due by 31 July 2020 can be deferred until 31 January 2021. This is an automatic offer with no applications required. No penalties or interest for late payment will be charged in the deferral period.
Update 24 September 2020: This originally covered only the self employed only but now covers all tax payers. HMRC has now stated those who have to pay up to £30,000 in tax by 31 January 2021 will be able to use their ‘Time to Pay’ service to pay over an additional 12 months running to 31 January 2022. Further updates are due on this.
Difficulty Paying Taxes
The Government has set up a helpline for businesses and the self employed who are concerned about not being able to pay their tax.
There are more details here.
Official Guidance for Businesses and Employers
The Government’s guidance for employers can be found by here.
Extension to the Company Accounts Filing Deadline
Companies House will consider extending the deadline on a case by case basis. It’s important to agree an extension before the accounts deadline.
More information here.
Usually asking for a holiday from mortgage payments has a detrimental effect on your credit rating. Banks are confirming this will not be the case for COVID-19. You should contact your own bank to request a payment holiday if one is required.
We’ve been given the guide below which details what lenders are offering by way of mortgage holidays. We’ve not checked its accuracy but you may find it useful.
Delay to IR35
The changes to IR35 for contractors working in the private sector have been delayed by a year.
Resources We Have Prepared for You
Can company directors furlough themselves?
HMRC have recently updated their guidance regarding company directors, here is the recording of our webinar from 8 April detailing the much needed updated information from HMRC for sole directors and the Job Retention Scheme
A copy of the slides are available here.
Director Furlough Board Minute
You can access this here
Cash Flow Spreadsheet
We strongly advise preparing cashflow projections to cover at least the next 12 weeks.
We have created a cash flow forecast spreadsheet, which you can download here
Make sure you save a copy locally (Use File/Save As) and don’t just edit this version or we’ll all see your business!!
Our fee protection insurers provide an HR Support line which is available to our clients. If you require this then please contact us for the details.