Coronavirus business support measures explained

This guide covers all of the business support measures announced by Rishi Sunak in March and is being updated as and when new initiatives are launched or changes are made to existing ones. Please bookmark this page to keep up to date.

Last updated 1st June 2020:

Local authority discretionary grants

Contents

Coronavirus Job Retention Scheme

A generous initiative that will allow an employer to “furlough” a worker between 1 March 2020 and 31 October 2020. This is designed to help employers pay 80% of the salary of those employees that would otherwise have been made redundant during and because of this crisis. This is subject to a cap of £2,500 per month per employee.

Who is eligible?

All UK businesses are eligible as are Company Directors including Limited Company Contractors

The HMRC guidance says:

“As office holders, salaried company directors are eligible to be furloughed and receive support through this scheme….the board can decide that such directors should be furloughed. Where one or more individual directors’ furlough is so decided by the board, this should be formally adopted as a decision of the company, noted in the company records and communicated in writing to the director(s) concerned.”

Furthermore, public sector clients are encouraged to furlough their contractor staff if need be:

“If Contingent Workers are unable to work due to COVID-19, for example, due to sickness, self-isolation, or the temporary closure of offices, they should be paid at 80% of their pay rate up to a maximum of £2,500 per month.”

Those working through an umbrella company are eligible to be furloughed through the scheme and should be agreed with the umbrella agency as the deemed employer (although you’d want to discuss with the end client too)

To be eligible, the staff member has to have been employed by the business on or before March 19th 2020 (this was extended on April 15th from February 28th).

What will you need to do?

Designate employees as “furloughed workers” and notify your employees of this change.
Submit information to HMRC about the employees that have been furloughed and their earnings through an online portal.

How will the wages payment be calculated?

Wages for full or part time employees on a salary will be calculated based on 80% of the salary in their last pay period prior to 19th March 2020.

Local authority discretionary grants scheme

In an effort to plug a gap, the government announced in Late May that discretionary grant funds will be made available via local councils. Small and micro businesses with fixed property costs that are not eligible for the Small Business Grant Fund or the Retail, Hospitality and Leisure Grant Fund may be eligible for this Discretionary Grants Scheme.

Who is eligible?

You may be eligible if your business:

  • is based in England
  • has fewer than 50 employees
  • has fixed building costs such as rent
  • was trading on 11 March 2020
  • has been adversely impacted by the coronavirus

Local councils have discretion about how to prioritise the funding so you’ll have to check with your council for details of their scheme.

What will you need to do?

Visit your local council’s website to find out how to apply. You can find the website for your local council here.

Grants for the self-employed

Self-employed workers can apply for a taxable grant of the lower of 80% of average of the last 3 years monthly trading profits or £2,500 a month (whichever is lowest) to help them cope with the financial impact of coronavirus.

Who is eligible?

To be eligible you must have:

  • filed a tax return for the year ended 5 April 2019
  • Had trading profits of less than £50,000
  • Made most of your income through self employment

What will you need to do?

  • If eligible you should have been invited during May to apply by HMRC
  • You’ll be given a date when you should complete a simple online form
  • Payment is expected to be made at the beginning of June 2020 and backdated to March
  • Self employed can access a business interruption loan in the mean time

Bounce-back loan scheme

The scheme helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000.

The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year. The length of the loan is 6 years, but you can repay early without paying a fee.

Who is eligible?

You can apply for a loan if your business:

  • is based in the UK
  • was established before 1 March 2020
  • has been adversely impacted by the coronavirus

Businesses from any sector can apply, except banks, insurers and reinsurers, public-sector bodies, state-funded primary and secondary schools.

You cannot apply if you’re already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS) or COVID-19 Corporate Financing Facility. If you’ve already received a loan of up to £50,000 under one of these schemes you can transfer it into the Bounce Back Loan scheme.

What will you need to do?

There are 11 lenders participating in the scheme including many of the main retail banks. You should approach a suitable lender yourself via the lender’s website.

The lender will ask you to fill in a short online application form and self-declare that 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.

Ban on evictions for commercial tenants

Commercial tenants who cannot pay their rent because of coronavirus will be protected from eviction. These measures will mean no business will be forced out of their premises if they miss a payment in April, May and June.

Who is eligible?

All UK businesses renting commercial premises are eligible

What will you need to do?

Discuss with your landlord initially to see if a voluntary arrangement involving rent deferral

In any event, there now exists a legislative backstop to prevent evictions due to lack rent payment

3 month extension for filing business accounts

From 25 March 2020, businesses are able to apply for a 3-month extension for filing their accounts.

Who is eligible?

All UK businesses are eligible

What will you need to do?

  • Apply online here – it will take around 15 minutes
  • Those citing issues around COVID-19 will be automatically and immediately granted an extension

Deferral of VAT liability

If you’re a UK VAT registered business and have a VAT payment due between 20 March 2020 and 30 June 2020, you can defer the payment until March 2021.

HMRC will not charge interest or penalties on any amount deferred.

Who is eligible?
All UK VAT registered businesses are eligible to defer:

  • quarterly and monthly VAT returns’ payments for the periods ending in February, March and April
  • payments on account due between 20 March 2020 and 30 June 2020
  • annual accounting advance payments due between 20 March 2020 and 30 June 2020

What will you need to do?

  • This is an automatic offer with nothing for you to do in order to claim.
  • Direct Debits – Cancel your direct debit with the bank
  • You will still be required to file your VAT return
  • You will need to pay by March 2021
  • VAT refunds and reclaims will still be paid as usual

Deferral of Income Tax payment

A measure to help self employed defer a Self Assessment payment on account from July 2020 to January 2021.

Who is eligible?

All self assessment payers can defer these payments, including directors of ltd companies such as contractors.

What will you need to do?

    This is an automatic offer with nothing you need to do to take advantage of this. Just don’t make the payment if you are self employed.No penalties of interest for late payment will be charged in the deferral period.

Other Tax payments (HMRC Time to Pay)

This is a scale up of an existing scheme (Time to Pay) for businesses and individuals in financial distress. The help offered here is available on a case by case basis and tailored to individual circumstances.
Who is eligible?

Anybody who pays tax to the UK Government and has outstanding tax bills.

What will you need to do?

        • If you have missed a tax payment or are worried you will miss your next one due to Covid-19 then call HMRC’s dedicated helpline: 0800 0159 559
        • It is always better to talk to HMRC rather than ignoring a tax debt

Support for businesses who are paying sick pay to employees

In the past SSP (Statutory Sick Pay) has not been recoverable by an employer from UK Government. It was announced that temporary legislation will be put in place to allow employers to reclaim SSP (£94.25 per week) for the first 2 weeks for employees off work due to Covid-19. SSP will be paid from day 1 rather than day 4 if due to Covid-19 and applies retrospectively from 13 March 2020

Who is eligible?

UK based employers with fewer than 250 employees at 28 February 2020 can claim for the first 2 weeks of employee sickness due to Coronavirus. This includes for quarantined individuals.

Directors of ltd companies with less than 250 employees can pay themselves two weeks SSP (£94.25 per week) if they earn at least £118 per week.

The self employed are not eligible for SSP but can claim Universal Credit or Employment and Support Allowance payable from day 1 of sickness rather than day 8. The earnings floor has been removed.

What will you need to do?

The online service you’ll use to reclaim SSP is not available yet. HMRC will announce when the service is available and this guidance will be updated. Meantime, employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 Online.

Support for retail, hospitality and leisure businesses that pay business rates

A business rates holiday for all businesses in the retail, hospitality and leisure industry. So no business rates to pay for April 2020 to March 2021.

Who is eligible?

A business based in England that is in the retail, hospitality and/or leisure industry. This includes shops, restaurants, cafes, drinking establishments, cinemas and live music venues, for assembly and leisure and hotels, guest & boarding premises and self-catered accommodation.

What will you need to do?

        • This will happen automatically and eligible businesses will have their bills reduced to zero.

Cash grants for retail, hospitality and leisure businesses

The Retail and Hospitality Grant Scheme provides businesses in that sector with cash grants of up to £25,000 per property. Businesses with a rateable value of under £15,000 will receive a £10,000 grant. Businesses with a rateable value of £15,001 to £51,000 a grant of £25,000 will be received.

Who is eligible?

A business based in England that is in the retail, hospitality and/or leisure industry. This includes shops, restaurants, cafes, drinking establishments, cinemas and live music venues, for assembly and leisure and hotels, guest & boarding premises and self-catered accommodation.

What will you need to do?

You do not need to do anything. Your local authority will write to you if you are eligible.

Support for nursery businesses that pay business rates

A business rates holiday will be introduced for all nursery businesses. So no businesses rates payable for April 2020 to March 2021.

Who is eligible?

English based nurseries that are on Ofsted Early Years Register.

What will you need to do?

This will be an automatic reduction in business rates for eligible businesses and you should receive a new bill from your local authority.

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 (SBBR), 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.

Who is eligible?

A business based in England that occupies property and already receives small business rate relief or rural rate relief.

What will you need to do?

You do not need to do anything. Your local authority will write to you if you are eligible for this grant.

Coronavirus Business Interruption Loan Scheme

Support primarily for small and medium-sized businesses to access bank lending and overdrafts.

The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value. The maximum length of the facility depends on the type of finance you apply for and will be up to 3 years for overdrafts and invoice finance facilities and up to 6 years, for loans and asset finance facilities.

Who is eligible?

You are eligible for the scheme if your business:

        • is based in the UK
        • has an annual turnover of up to £45 million

You need to show that your business:

        • would be viable were it not for the pandemic
        • has been adversely impacted by the coronavirus

What will you need to do?

The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website.

There are over 50 lenders participating in the scheme including all the main retail banks. You should approach a suitable lender yourself via the lender’s website.

You’ll need to tell the lender:

        • the amount you’d like to borrow
        • what the money is for
        • how long you’d like to pay it back

Depending on the lender and the amount requested you may be asked for some or all of the following supporting documents:

        • management accounts
        • cash flow forecast
        • business plan
        • historic accounts
        • details of assets

Insurance

Most businesses are unlikely to be covered but businesses that do have cover for both pandemics and government-ordered closure should be covered, as the government and insurance industry has confirmed that advice to avoid pubs, theatres etc is sufficient to make a claim as long as all other terms and conditions are met.

Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics.