The Chancellor, Rishi Sunak, has unveiled a set of financial measures to support businesses through this period of disruption caused by COVID-19, which includes the latest rescue packages for employed and self-employed workers.
You can use the government’s business support finder toolkit
, to see what support is available for you and your business.
A summary of the measures to support business include:Coronavirus Job Retention Scheme
On 20 March 2020, the Chancellor announced a rescue package for businesses and workers, by introducing a Coronavirus Job Retention Scheme (CJRS).
Under the new scheme, employers can contact HM Revenue & Customs (HMRC) to apply for a grant (not a loan) to cover up to 80% of furloughed workers’ salaries, up to £2,500 per month. Employers can choose to top up the salary of retained workers if they so choose.
Furloughed workers are workers that are to be retained but have been asked to take a temporary leave of absence. The employee should not undertake work whilst they are furloughed.
If you are to treat employees as furloughed workers, you will need to notify them of the change. Changing the employment status remains subject to existing employment law, depending on the employment contract, and may be subject to negotiation.
The grant will be backdated to 1 March 2020 and is available up to the end of October 2020 for all regions and sectors.
There are no changes to the scheme up to 31 July 2020, however, from the start of August 2020 greater flexibility will be introduced to allow furlough workers to return to work part-time, with employers being asked to pay a percentage towards the salaries of their furlough staff. The employer payments will substitute the contribution the government is currently making, ensuring that employees continue to receive 80% of their salary, up to the cap of £2,500 a month.
Further details of the flexibility will be published by the government later in May 2020.
HMRC’s online portal went live on 20 April 2020, allowing eligible employers to apply for the first distribution of grants.Eligibility criteria:
- All UK businesses are eligible
- Available for furloughed employees on the payroll on or before 19 March 2020 and which were notified to HMRC on a Real Time Information (RTI) submission on or before 19 March 2020.Application process:
- Designate affected employees as ‘furloughed workers’ and notify your employees of this change
- The employer will pay the employee through payroll, using the RTI system as usual
- Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal that went live on 20 April 2020
Further information on how the scheme operates, calculating the grant amount and what you need to do to make a claim can be found here
The government have also released a step-by-step guide for employers
, which explains what information is required in order to make a claim and the processes involved.Self-Employment Income Support Scheme
On 26 March 2020, the Chancellor announced the new Self-Employment Income Support Scheme (SEISS). The scheme supports self-employed individuals, including members of partnerships, who have lost income due to COVID-19.
Eligible recipients are able to claim a taxable grant worth 80% of their trading profits, up to a maximum of £2,500 per month, available for 3 months in one lump-sum payment.
Further information on the scheme eligibility and application process can be found here
It was also announced that VAT liabilities due for the period 20 March 2020 to 30 June 2020 will be deferred until the end of the 2020/21 tax year.
VAT refunds and reclaims will be paid by the government as normal.
More information can be found here Eligibility criteria:
- All UK businesses are eligibleApplication process:
- This is automatic with no applications required.
- Customers who normally pay by direct debit may need to cancel their direct debit with their bank, if they are unable to pay. Please do so in sufficient time so that HMRC do not attempt to automatically collect on receipt of your VAT return.Self-Assessment Income Tax Deferral
Self-assessment payments, normally due 31 July 2020, will be deferred until 31 January 2021.
The deferment is optional, therefore, you still want to pay your second payment on account on 31 July you can do so.
No penalties or interest for late payment will be charged if you defer payment until January 2021.Eligibility criteria:
- You are eligible if you are due to pay your second self-assessment payment on account on 31 July. You do not need to be self-employed to be eligible for the deferment.Application process:
- This is automatic with no applications required.Self-Employed – Universal Credit and Rental Costs
Self-employed individuals will also be able to access, in full, Universal Credit at a rate equivalent to Statutory Sick Pay (SSP) for employees and a further £1bn to cover 30% of house rental costs.Government Backed Loans
From 23 March 2020, the government’s Coronavirus Business Interruption Loan Scheme (CBILS) went live, making available loans for small and medium sized businesses up to £5 million in value. The government will cover interest charges for the first twelve months, as well as any lender-levied fees.
The scheme provides the lender with a government backed guarantee of 80% against the outstanding facility balance, however, the borrower remains liable for the debt.
We have been in contact with our local bank contacts and can assist in an application where appropriate.
The CBILS will be provided by the British Business Bank through participating providers
, and will offer attractive terms for both businesses applying for new facilities and lenders.
Finance terms are available up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.
For further information, the British Business Bank have put together the following FAQ
Further details regarding the CBILS, can be found here
- Be UK based, with turnover of no more than £45 million per annum
- Have a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender, and for which the lender believes the provision of finance will enable the business to trade out of any short-to-medium term difficulty.
- Are not an excluded trade or organisation (eg banks, building societies, insurers and reinsurers - but not insurance brokers)Application process:
- The scheme is now open for applications. All major banks are offering this scheme. To apply, you should talk to your bank or one of the other participating providers. We can assist in an application where appropriate.
The CBILS is extended to large businesses with turnover in excess of £45 million, with finance available up to £50 million dependent on turnover levels. For more information, please get in touch with our Corporate Finance team
. Bounce Back Loan Scheme
On 27 April 2020, the Chancellor announced a new 100% government back loan scheme for small and medium sized businesses.
Under the new scheme, small businesses will be able to borrow between £2,000 and £50,000 and access the cash within days.
The government will cover interest charges for the first twelve months, as well as any lender-levied fees, and no repayments will be due during the first 12 months. The government are looking to agree a low standardised level of interest for the remaining period of the loan.
Businesses will be able to apply online through a short and simple form from 4 May 2020, through a network of accredited lenders.Eligibility criteria:
- Small and medium sized businesses, based in the UK, where;
- Your business has been negatively affected by coronavirus, and
- Your business was not an ‘undertaking in difficulty’ on 31 December 2019
- Are not an excluded trade or organisation (eg banks, building societies, insurers and reinsurers, public-sector bodies, grant funded further education bodies an state-funded primary/secondary schools)
- Have not made a claim under the CBILSApplication process:
- From 4 May 2020, applicants are able to apply for the scheme via an online application, through an accredited lender.
If you have already received a loan of up to £50,000 under CBILS and would like to transfer it to the Bounce Back Loan scheme, you have until 4 November 2020 to arrange this with your lender.Business Rate Holiday
For the 2020/21 tax year, business rates will be abolished for all retailers, leisure outlets and those in the hospitality sector. It was also announced that estate agents, lettings agencies and bingo halls will receive the business rate relief for 2020/21, along with qualifying nursery businesses.Eligibility criteria:
- Your business is based in England
- Your business is in the retail, hospitality and/or leisure sector
- Your business is an estates agent, lettings agency or bingo hall
- Your business is a qualifying nursery
Properties that will benefit from the relief will be occupied hereditaments 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 & boarding premises and self-catering accommodation
- as an estate agent, lettings agency or bingo hall
- as a qualifying nursery Application process:
- Your local authority should apply the relief automatically to your 2020/21 business rates bill. This may have to be rebilled if you have already received it.Grants
For businesses in retail, leisure and hospitality sector operating from smaller premises, with a rateable value of between £15,000 and £51,000, you will be eligible for a grant of £25,000.
A grant of £10,000 is available for businesses with rateable value up to £15,000.
You can check your rateable value here
Eligible recipients will receive one grant per property (hereditament).
If you are eligible for Small Business Rate Relief (SBRR) or Rural Rate Relief (RRR) then there is a one off grant of £10,000 available.Eligibility criteria:
- your business is based in England
- your business is in the retail, hospitality and/or leisure sector with a rateable value less than £51,000; or
- your business is eligible for Small Business Rate Relief (SBRR) or Rural Rate Relief (RRR)Application process:
- The grants will be available through your local authority, who will write to you if you are eligible for this grant. Details of the grant publication can be found here
Businesses with a rateable value of £51,000 or over, or are not ratepayers in the business rate system, are not eligible for the grants.
On 2 May 2020, the government announced
further funding will be provided to local authorities to enable them to distribute additional grants to small businesses, with fewer than 50 employees, which did not meet the above conditions. The allocation of funding will be at the discretion of local authorities, however, the government has asked them to prioritise businesses in shared spaces, regular market traders, small charity properties that would meet the criteria for SBRR, along with bed and breakfasts that pay council tax rather than business rates.Statutory Sick Pay (SSP)
Small and medium sized businesses will be able to reclaim SSP up to two weeks per employee where their sickness has been because of COVID-19.
SSP is due to be paid from the first day of sickness absence, rather than the fourth day, up to a maximum of 2 weeks for people who have coronavirus symptoms or cannot work as they have had to self-isolate, in line with official government guidance. From 16 April 2020, SSP can also be claimed for employees who are shielding provided they have a letter from the NHS or a GP telling them to stay at home for at least 12 weeks.
Further details on the scheme and how to make a claim can be found here
. Eligibility criteria:
- You businesses is UK based
- Your business is a small or medium-sized, employing fewer than 250 employees as of 28 February 2020
- You have a PAYE payroll scheme that was created and started on or before 28 February 2020
- You are claiming for an employee who is eligible for sick pay due to coronavirusApplication process:
- HMRC will launch the Coronavirus Statutory Sick Pay Rebate Scheme on 26 May 2020 and claims can be made by employers from this date through HMRC PAYE Online service.HM Revenue & Customs -Time to Pay Arrangements
HMRC have set up a telephone helpline to support businesses and self-employed people concerned about not being able to pay their tax due to coronavirus (COVID-19).
On a case by case basis, HMRC have always looked at agreeing time to pay arrangements for Self-Assessment, Corporation Tax, PAYE and VAT liabilities. We have found them to be very amenable in the past and HMRC have increased the staff availability to meet demand.
For those who are unable to pay due to coronavirus, HMRC will discuss your specific circumstances to explore:
- agreeing an instalment arrangement
- suspending debt collection proceedings
- cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediatelyEligibility criteria:
- Pays tax to the UK government
- Have outstanding tax liabilitiesApplication process:
- Call the HMRC dedicated helpline number: 0800 0159 559
The above measures being implemented by the government are correct as at 20 May 2020, however, we understand more measures could be implemented dependant on the progress of the pandemic and the economic impact this has in the UK.
The following government website is a useful source of information and is being updated daily click here for updates
Our HR team have also put together some COVID-19 FAQs for employers here
If you would like further information, please do contact us