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arrow_back What financial and tax assistance is available to small businesses to help with coronavirus (COVID-19) business resilience?

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What steps are the UK Government, HMRC, Bank of England and the commercial banks taking to help small businesses in these uncertain times?

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With the widespread Covid-19 coronavirus pandemic major economic disruptions have been caused to many businesses throughout the country and nationwide. The government has announced that it will provide support to businesses in order to ensure that such impact is minimised. Chancellor Rishi Sunak’s numerous announcements contain repeated promises that he would do whatever it takes to counter the impact of the virus.

Outlines of the key outtakes of such announcements regarding businesses, are summarised below. Please note that changes currently happen daily and therefore for more information visit the HMRC website.

Loan guarantees

The Government will be providing loan guarantees up to an initial £330 billion for all sizes of businesses. Specifically, the Coronavirus Business Interruption Loan Scheme (CBILS) provides financial support to small and medium sized businesses (SMEs) across the UK. The loan limit under this scheme is set at £5 million, with no interest due for the first 12 months. British Business Bank operates CBILS via its accredited lenders. There are over 40 of these lenders currently working to provide finance. They include:

  • high-street banks
  • challenger banks
  • asset-based lenders
  • smaller specialist local lenders

Businesses eligible for this scheme:

  • are UK based, with turnover of no more than £45 million per year 
  • meet the other British Business Bank eligibility criteria in the link below:

https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/for-businesses-and-advisors/

Coronavirus Job Retention Scheme (CJRS)

The purpose of the CJRS is to encourage employers to temporarily stand down employees rather than make them redundant. The scheme is to cover staff who remain under contract and on the payroll but are not working because the employer does not have work for them to do as a result of the virus.

HMRC will provide grants of up to 80% of employees’ wages and salaries to a maximum of £2,500 per worker per month, with no limit on funding. The CJRS will be backdated to 1 March 2020 and will operate for at least April and May 2020 but the Chancellor has confirmed it will be extended if required. 

HMRC deferring VAT payments

Businesses will be able to defer their VAT payments due in the quarter ended 30 June 2020, according to announcements made by the Chancellor. Businesses will be given until the end of the 2020/21 tax year to pay any VAT arising during this deferral period.

The Chancellor announced that HMRC would scale up its Time To Pay service giving businesses and the self-employed the chance to defer tax payments.

You can follow the link below to find out how to defer your VAT payment:

https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19

Statutory Sick Pay (SSP)

Small and medium-sized businesses (with fewer than 250 employees) will be entitled to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. This will be applicable to any employee off work for up to 14 days and is currently paid at the rate of £94.25 a week, rising to £95.85 from April. The government is legislating for SSP to be paid from day 1, rather than day 4, applying retrospectively from 13 March.

No doctor’s note is required but employees will be able to obtain an “isolation note” by visiting NHS 111 online and completing an online form.

Business Rates Discount

Under the Business Rate Relief Discount, no business rates will be payable for the 2020/21 tax year by retail, hospitality and leisure businesses in England.

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
  • for hospitality, as hotels, guest & boarding premises or self-catering accommodation

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 properties with a rateable value of £0 to £15,000 will receive a cash grant of £10,000 unless they have already qualified for the Small Business Grant Fund.      

Properties with a rateable value of £15,001 to £50,999 will receive a cash grant of £25,000.

Support for nursery businesses that pay business rates

In addition to the hospitality sector, no business rates will be payable for the 2020/21 tax year by nurseries based in England, provided that the properties are:

  •  occupied by providers on Ofsted’s Early Years Register
  • wholly or mainly used for the provision of the Early Years Foundation Stage

Protection from eviction for commercial tenants

All commercial tenants who are unable to 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 (with the option of extension). However, all commercial tenants will still be liable for the rent on a later date.

Insurance cover

After the mandatory closure of all leisure and hospitality businesses, the Association of British Insurers has highlighted in a statement issued on 17 March that pandemic cover is not a feature of most business disruption policies.

The Government has advised that all business owners should check the terms of their insurance policy. Those businesses which have an insurance policy that covers government ordered closure and pandemics or government ordered closure and unspecified notifiable disease should be able to make a claim (subject to the terms and conditions of their policy). COVID-19 has now been added to the notifiable disease list.

 HMRC helpline is now in operation on 0800 024 1222, as below:

https://www.gov.uk/government/news/tax-helpline-to-support-businesses-affected-by-coronavirus-covid-19

2,000 experienced HMRC staff are available on the helpline, and can assist with:

  • setting up a time to pay arrangement
  • suspending debt collection proceedings, and
  • cancelling late payment penalties and (unusually) interest

The ICAEW is reminding its members that the Ethical Standard permits the provision of a non-audit service to support a public interest entity in addressing a time critical and price sensitive issue, where that service would not undermine the auditor’s independence from the perspective of an objective, reasonable and informed third party. It is encouraging its members in supporting companies in making applications to any of the business support schemes announced by government in response to COVID-19.

HSBC Commercial Banking is urging all clients to stay in close contact and highlights their commitment and support. The bank has introduced a range of measures to help clients through these uncertain times, which include:

  • allocating £5bn to lend to help businesses that need support
  • video call technology for a personal approach between relationship managers and clients
  • launching a helpline to support customer queries (08000 121 614, open 8am – 6pm Monday to Friday).

For updates and more information visit the HMRC website.

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