Covid-19 Business Support
Posted on 24th March 2020 at 23:26
The Chancellor Rishi Sunak announced on 20th March a package of temporary and targeted measures to support people, jobs and businesses through this period of disruption caused by COVID-19.
The Chancellor’s statement can be found at GOV.UK:
Updated guidance for employers, businesses and employees is available at:
This includes a package of measures to support businesses including:
• a Coronavirus Job Retention Scheme
• deferring VAT and Income Tax payments
• a Statutory Sick Pay relief package for small and medium sized businesses (SMEs)
• a 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England
• small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
• grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,001 and £51,000
• the Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
• a new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
• the HMRC Time To Pay Scheme
Coronavirus Job Retention Scheme
All employers will be able to claim a grant to cover 80% of their employees’ wages, capped at £2,500 per worker per month, under the new Coronavirus Job Retention Scheme. Employers can choose to make up the remaining 20% of their employees’ wages but are not obliged to do so.
The scheme will cover staff who were employed at the end of February, as long as both the following conditions apply:
• They are still on their employer’s payroll or were re-employed if their employer had already let them go.
• They are not carrying out any work as a result of the Covid-19 crisis (e.g. their employer’s business has been ordered to close).
While the scheme is in place, employees in this position will be deemed to be “furlough workers”. They will remain employed but must not do any work for their employers. Grants provided through the Coronavirus Job Retention Scheme will be backdated to 1st March 2020 and will initially be available for three months.
To access the scheme, you will need to:
• designate affected employees as ‘furloughed workers,’ and notify your 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
• 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 are working urgently to set up a system for reimbursement as existing systems are not set up to facilitate payments to employers.
Upcoming VAT payments to be deferred
If you were due to make a VAT payment between 20th March 2020 and 30th June 2020, that payment won’t be collected. You must still file your VAT returns on time so that HMRC can see how much it can expect to collect once the deferral period ends, but you won’t have to pay any VAT.
This is an automatic extension, so you don’t need to apply for it. However, if you pay VAT by direct debit, you should cancel the direct debit if you wish to take advantage of the deferral. HMRC will not cancel your direct debit if you wish to continue making payments.
HMRC’s guidance currently says that taxpayers will be given until the end of the 2020-2021 tax year (i.e. 5th April 2021) to “pay any liabilities that have accumulated during the deferral period”. However, the Chancellor’s statement on Friday referred to the deferral of payments until the end of the financial year (i.e. 31st March 2021), so the exact date still needs to be clarified.
If you were due to receive a VAT refund during the payment deferral period then don’t worry, you will still receive it within the normal timeframe.
Self Assessment payments to be deferred for the self-employed
If you are self-employed and were due to make a 2019/20 payment on account on 31st July 2020, you won’t have to make that payment until 31st January 2021 and HMRC won’t charge penalties or interest for late payment. This is another automatic extension so you don’t have to apply for it.
Eligibility is limited to the self-employed i.e. the deferral does not apply to those that are in self-assessment but are not self-employed.
HMRC Tax Helpline – 0800 0159 559
HMRC has set up a phone helpline to support businesses and self-employed people concerned about not being able to pay their tax due to coronavirus (COVID-19). Full information can be found here.
Statutory Sick Pay (SSP)
If you’re a director of a limited company with less than 250 employees, you can pay yourself two weeks of SSP if you need to self-isolate subject to meeting the minimum payroll requirement for SSP. The government will refund £94 per week, maximum £188, to your company.
If you are not eligible for SSP – for example if you are self-employed or earning below the Lower Earnings Limit of £118 per week – and you have COVID-19 or are advised to stay at home, you can now more easily make a claim for Universal Credit or new style Employment and Support Allowance. If you are eligible for new style Employment and Support Allowance, it will now be payable from day 1 of sickness, rather than day 8, if you have COVID-19 or are advised to stay at home.
Self-employment and Universal Credit
Everyone claiming Universal Credit needs to report their self-employed earnings at the end of each monthly assessment period. This includes company directors, even those paying themselves by PAYE.
You are able to claim Universal Credit, providing you meet the usual eligibility criteria.
To support you with the economic impact of the outbreak, and allow you to follow government guidance on self-isolation and social distancing, from 6 April the requirements of the Minimum Income Floor will be temporarily relaxed. This change will apply to all Universal Credit claimants and will last for the duration of the outbreak.
New claimants will not need to attend the jobcentre to demonstrate gainful self-employment.
Support for rent costs
You should check your eligibility for Universal Credit, which is available for people in and out of work. Support for rental costs will be paid through Universal Credit.
The Coronavirus Business Interruption Loan Scheme (CBILS)
CBILS is administered by the British Business Bank and made available to businesses via more than 40 accredited lenders, including the major high street banks. Whilst details on the scheme are available on the British Business Bank web site, that organisation is a wholesale funder and businesses should apply via their existing bank or a lender accredited via the scheme. A full list of accredited suppliers can be found here
Eligibility and additional features
The scheme has been designed with the intention of offering considerable flexibility to SMEs. However, businesses would be wise to seek advice when applying for funds.
An SME must submit a borrowing proposal to a bank or approved alternative lender which, “were it not for the current pandemic, would be considered viable by the lender”. In effect this means that the lender must believe that the provision of finance will enable the business to trade out of any short-to-medium term difficulty.
The borrower always remains 100% liable for the debt.
Cash grants for businesses receiving small business rate relief
• Cash grants of £10,000 will be paid to businesses receiving Small Business Rate Relief or Rural Rate Relief.
• Businesses have to occupy property to qualify.
• Grants will be paid automatically by local authorities. Businesses will not need to apply for them.
We will continue to share the most up to date information directly with you as it becomes available.
Tagged as: Covid-19 Business Support
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