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Coronavirus (COVID-19) Financial Assistance For Small Businesses

Coronavirus (COVID-19) Financial Assistance For Small Businesses

The current Novel Coronavirus (COVID-19) outbreak, which began in December 2019, presents a significant challenge for the entire world.

The UK government and the devolved administrations, including the health and social care systems, have planned extensively over the years for an event like this, and the UK is therefore well prepared to respond in a way that offers substantial protection to the public and the economy.

In terms of business help, the government has made many resources available to small/medium size businesses to help them through this prevailing crisis.

Major support from the government is:

1. The Coronavirus Business Interruption Loan Scheme

This emergency finance organised by 40+ accredited lenders through the British Business Bank is expected to go live on 23 March 2020. In the first instance, businesses should approach their own provider – ideally via the lender’s website. They may also consider approaching other lenders if they are unable to access the finance they need. Loans of up to £5 million will be made available to provide cash flow to small to medium-sized businesses. The loans will be 80% guaranteed and interest-free for the first 12 months.

2. The Coronavirus Job Retention Scheme

Available to all businesses and provides 80% of wages for any workers whom you temporarily suspend instead of laying them off. This is capped at £2,500 per employee, per month. The HMRC is setting up an online portal where you will be able to submit information about relevant employees. The reporting will be through your normal PAYE Scheme which is already operational.

This funding will be open to all employers with a PAYE payroll scheme that was created and started on or before 28 February 2020, including charities. Employers can apply for grants of 80% of furloughed employees’ (employees on a leave of absence) 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, provided they keep the worker employed. The scheme will cover the cost of wages backdated to 1 March 2020, if applicable.

HMRC have been working night and day to develop this scheme, and we can now confirm that we have been able to publish further details of the scheme on GOV.UK.

We are aiming to have the scheme up and running by the end of April 2020. More detailed guidance will be published in due course and please be assured we will advise you when the scheme is open.

3. Self–Employed Support

If they have suffered a loss in income, a taxable grant will be paid to the self-employed or partnerships, worth 80% of their profits up to a cap of £2,500 per month. Initially, this will be available for three months in one lump-sum payment, and will start to be paid from the beginning of June.

It will be called the Coronavirus Self-employment Income Support Scheme, and is open to those who were trading in the last financial year, still trading now, and planning to continue doing so this year.

Who is eligible for Self–Employed Support?:

More than half of a claimant’s income needs to come from self-employment.

The scheme will be open to those with a trading profit of less than £50,000 in 2018-19, or an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19.

GOV.UK has further details about who is eligible for the scheme and how it will work.

Self-employed people do not need to get in touch with HMRC as the scheme isn’t yet open for applications. HMRC will contact eligible customers by the beginning of June, inviting them to apply.

Unfortunately, we are aware of an increase in scam emails, calls and texts. If someone gets in touch claiming to be from HMRC, saying that financial help can be claimed or that a tax refund is owed, and asks you to click on a link or to give information such as your name, credit card or bank details, please do not respond.

4. Reclaim Statutory Sick Pay (SSP)

In response to Covid-19, the government allows employees to access SSP from day one of their absence; usually there is a 3 day waiting period which is not payable. As the employer, you are able to receive a rebate of up to 2 weeks SSP (just under £200) per eligible employee for businesses with less than 250 employees.

5. Business Rate Relief and Cash Grants for Retail, Hospitality, and Leisure Businesses

Businesses in retail, hospitality and leisure in England will enjoy a business rate holiday for 2020-2021 with no limit as to the rateable value. Businesses in these sectors across the UK are also eligible for a cash grant of up to £25,000 per property (grant size depends on the rateable value of the business). Your local authority will write to you if you are eligible for this grant.

6. VAT Deferral

Businesses big and small will have VAT payments deferred for 3 months from 20 March 2020 to 30 June 2020, at the earliest. This is an automatic offer with no applications required.

This means that all businesses with a UK VAT registration have the option to defer VAT payments due between 20 March and 30 June. Businesses have until 31 March 2021 to pay any VAT deferred as a result of this announcement.

Businesses do not need to inform HMRC if they wish to defer payment. They can opt into the deferral simply by not making VAT payments due in this period.

Businesses who normally pay by direct debit should cancel their direct debit with their bank if they are unable to pay. This can be done online if they’re registered for online banking. They should do so in sufficient time so that HMRC does not attempt to automatically collect on receipt of their VAT return.

Should they wish, businesses can continue to make payments as normal during the deferral period. HMRC will also continue to pay repayment claims as normal. Businesses must continue to submit VAT returns as normal.

7. Time to Pay Tax Service

HMRC recognises that businesses may be struggling to pay their tax obligations right now. They have setup a helpline to discuss support that a business might be eligible to receive, on a case-by-case basis. The helpline number is 0800 0159 559.

8. Three Month Mortgage Holiday

The Chancellor has also announced that mortgage lenders are also offering a three month payment holiday and urges individuals who are concerned about their ability to make payments to contact their mortgage lenders.

9. Insurance Cover For Most Coronavirus -hit Businesses

Most businesses do not have insurance cover to compensate them for Coronavirus losses. Business interruption cover is generally sold to compensate for damage to premises, following instances such as fire and flood. The Association of British Insurers said standard policies did not include forced closure by the authorities.

So, for most businesses, they would not have been entitled to compensation, even if the government had ordered them to close.

While we recognise these difficult times businesses are going through, undoubtedly there will be huge and urgent demand for our advisory, tax and accountancy services. Account Solutionbiz Limited will assist when instructed to deal with any of the issues raised above for example, dealing with Coronavirus Business Interruption Loan (CBIL), Coronavirus Job Retention Scheme (CJRS) or any other as quickly and as economically as possible. As a company we also need to cover and maintain our costs and we will assess each tasks and work that we are instructed to do and give you a guideline as what the cost of our fees will be.

10. Cash Grants For Retail, Hospitality And Leisure Businesses

The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property.

Businesses in these sectors with a property that has a rateable value of up to £15,000 may be eligible for a grant of £10,000.

Businesses in these sectors with a property that has a rateable value of over £15,000 and less than £51,000 may be eligible for a grant of £25,000.

Eligibility:

You are eligible for the grant if:

  • Your business is based in England
  • Your business is in the retail, hospitality or leisure sector
  • Your business has a rateable value of under £51,000

Properties that will benefit from the relief will be occupied 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

How To Access The Scheme:

You do not need to do anything. Your local authority will write to you if you are eligible for this grant. Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.

While we recognise these difficult times businesses are going through, undoubtedly there will be huge and urgent demand for our advisory, tax and accountancy services. Account Solutionbiz Limited will assist when instructed to deal with any of the issues raised above for example, dealing with Coronavirus Business Interruption Loan (CBIL), Coronavirus Job Retention Scheme (CJRS) or any other as quickly and as economically as possible. As a company we also need to cover and maintain our costs and we will assess each tasks and work that we  are instructed to do and give you a guideline as what the cost of our fees will be.

11. Support For Businesses That Pay Little Or No Business Rates

The government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBRR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.

Eligibility:

You are eligible for the grant if:

  • Your business is based in England
  • You are a business that occupies property
  • You are receiving small business rate relief or rural rate relief as of 11 March

How To Access The Scheme:

You do not need to do anything. Your local authority will write to you if you are eligible for this grant. Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.

12. Protection From Eviction For Commercial Tenants

Commercial tenants who cannot pay their rent because of COVID-19 will be protected from eviction. These measures will mean no business will automatically forfeit their lease and be forced out of their premises if they miss a payment up until 30 June. There is the option for the government to extend this period if needed.

This is not a rental holiday. All commercial tenants will still be liable for the rent. Commercial tenants are protected from eviction if they are unable to pay rent.

British Business Bank: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/for-businesses-and-advisors/
Gov Website: https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses

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Account Solutionbiz Limited
United Kingdom

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