Government support for businesses – a summary
Last updated 5 January 2021
The Chancellor has announced further measures to support businesses as a result of Coronavirus and the announcement of a further nationwide lockdown from 5 January 2021. Here we provide a summary of the support available for businesses during this next phase of the Coronavirus crisis.
- Coronavirus Job Retention Scheme (CJRS)– This, now familiar, staff retention scheme for employers, whether businesses or charities has been extended until 30 April 2021. HMRC will cover 80% of individual furloughed workers wage costs, up to a cap of £2,500 per month until at least April 2021. The scheme was due to end on 31 October but the government announced that the scheme will now continue. You can read more here.
- Job Support Scheme (JSS)– On 31 October 2020, it was announced that the Job Support Scheme (JSS) has been postponed due to the extension of CJRS, until further notice. You can read more about what was planned here.
- Grants due to national restrictions – businesses that are required to close due to national restrictions imposed by government may be eligible for a one-off grant. Read more here or read more about other grants available here.
- Kickstart Scheme – If you are an employer looking to create 30 or more job placements for young people (16-24 year olds) you can apply for funding as part of this scheme. Read more here.
- Kickstart Scheme grant – If you are an employer looking to create 29 or less job placements for young people (16-24 year olds) you may be eligible for a grant. Read more here.
- Deferring VAT and Income Tax payments
- The VAT payments deferral scheme ended on 30 June 2020 as previously set out. If you’re a UK VAT-registered business that deferred VAT payments between 20 March 2020 and 30 June 2020, you will have the option to split the payment into smaller, interest-free payments over the course of 11 months, rather than paying a lump sum at the end of March 2021. There is some guidance available on what you need to do here.
- Income Tax payments that were due in July 2020 under Self-Assessment system will be deferred to January 2021, and no interest or penalties will be charged on the deferred amount. Self-assessment taxpayers will also be given the opportunity to spread payments over a 12-month window from January 2021. At present personal tax returns still need to be submitted by 31 January 2021. More information is available here.
- Time to Pay service – All businesses and self-employed people in financial distress, and with upcoming or outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time to Pay service. Our specialists are available to assist you in putting such measures in place. Further details can be found here.
- Government webinars for businesses – HMRC have released a number of free webinars for businesses to learn more about the support available to help you deal with the economic impacts of coronavirus.
- General support for businesses– Public bodies, organisations and charities have produced additional resources that may be useful to employers and employees. A list of sources of advice is available here.
Small-medium sized businesses
- Grants available – Our team has collated a list of grants available, read more here.
- Coronavirus Business Interruption Loan Scheme (CBILS) – the British Business Bank’s CBILS facilitates business finance to small and medium sized businesses. Businesses with turnover up to £45m can borrow a maximum of £5m under the scheme. This is aimed at businesses that are viable. SME businesses can access the first 12 months of that finance interest free. The borrower remains 100% liable for the debt. The scheme is open until 31 March 2021. See our guidance on CBILS here or read our Q&A article
- Bounce Back Loan– This loan enables smaller businesses to access finance more quickly and helps 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 scheme is open to applications until March 2021. Read more about the Bounce Back Loan here or read our Q&A here.
- Future Fund– will provide government loans to UK-based companies ranging from £125,000 to £5 million, subject to at least equal match funding from private investors. These convertible loans may be a suitable option for businesses that rely on equity investment and are unable to access the Coronavirus Business Interruption Loan Scheme. The scheme is open for applications until 31 January 2021. Read more here.
- Statutory Sick Pay (SSP) support – small and medium-sized businesses (fewer than 250 employees) are able to reclaim SSP paid for sickness due to COVID-19 for up to 2 weeks sick pay per employee – read more here. For our payroll clients, the Kreston Reeves team are set up to provide you with the information you will need to make a reclaim.
- Coronavirus Large Business Interruption Loan Scheme (CLBILS)– financially supports medium and large businesses, with an annual turnover of over £45 million. All viable businesses with a turnover of more than £45 million per year can apply for up to £25 million of finance. Firms with a turnover of more than £250 million can apply for up to £50 million of finance. The scheme is open to applications until 31 March 2021. Read more here.
- The Corporate Financing Facility– helping large businesses through the purchase of their short-term debt. The Bank of England will buy short-term debt from large companies. The scheme will operate for at least 12 months, and for as long as steps are needed to relieve cash flow pressures on firms that make a material contribution to the UK economy. Read more here.
- International traders should consider the existing support that is available from the Department for International Trade and UK Export Finance. See our guidance here.
- Business rates holiday for retail, hospitality and leisure businesses for the 2020 to 2021 tax year – businesses can estimate the business rate charge you will no longer have to pay this year here.
- Cash grants for retail, hospitality and leisure businesses – The government has announced an additional grant of up to £9000 per property depending on the rateable value of the property concerned. The grants are only available to closed businesses. You can read more here.
Working safely during Coronavirus
The Government has published guidance to help employers, employees and the self-employed understand how to work safely during the Coronavirus pandemic. It includes guides for ‘Construction and other outdoor work’, ‘Factories, plants and warehouses’, ‘Heritage locations’, ‘Hotels and other guest accommodation’, ‘Labs and research facilities’, ‘Offices and contact centres’, ‘Other people’s homes’, ‘Performing arts’, ‘Providers of grassroots sport and gym/leisure facilities’, ‘Restaurants, pubs, bars and takeaway services’, ‘Shops and branches’, ‘Vehicles’ and ‘The visitor economy’.
How can we help?
Our team is well resourced and experienced in advising companies and not-for-profit organisations, allowing you to focus on managing your business during this trying period. We are set up to work from home so you can expect the same level of service, albeit remotely rather than in-person. We have:
- A team of debt advisory and corporate finance experts used to working with banks and other lenders, and can support you with CBILS and CCFF scheme applications. We understand how lenders are currently making credit decisions, and with the majority of the government lending schemes due to close at the end of March we can help with your application.
- Our restructuring and insolvency experts can advise businesses under stress about the options available to them.
- Our tax experts will also be on hand to advise you on applications to HMRC for the Time to Pay initiative, for corporate tax advice, in particular around tax implications of debt restructuring and R&D tax claims. We also have VAT & Duty experts who can support you in revising your VAT position who have a suite of over 40 ideas where cash savings may be found.
- We are also hosting complimentary ‘Looking ahead’ webinar series to help businesses prepare throughout this period while focusing on the future. Read more here.
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