Government support for businesses – a summary
Last updated 22 March 2020
The Chancellor announced further measures to increase the support package available to businesses on 20 March 2020 as a result of the Coronavirus. Here we provide a summary (as of 22 March 2020) of the support available for businesses during this period of disruption.
Small-medium sized businesses
- Small Business Grant Scheme – A local authority cash grant of £10,000 for businesses that are currently eligible for Small Business Rate Relief or Rural Rate Relief, to help meet their ongoing business costs. Further information expected in early April.
- Coronavirus Business Interruption Loan Scheme (CBILS) – the British Business Bank’s CBILS facilitates business finance to smaller businesses (turnover less than £45m) that are viable but unable to obtain finance due to having insufficient security to meet the lender’s normal requirements. Businesses will now be able to access the first 12 months of that finance interest free. The borrower remains 100% liable for the debt. See our guidance on CBILS here.
- Statutory Sick Pay (SSP) support – small and medium sized businesses (fewer than 250 employees) will be 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 KR team are set up to provide you with the information you will need to make a reclaim.
- Loans (backed by an 80% government guarantee) – Further details can be found here. Your bank should have a dedicated coronavirus helpline to discuss your options. Although we are expecting them to ask for projections to back up any requests. We have a team on hand to offer support with this work if you need it.
- The Corporate Financing Facility – 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.
- International traders should consider the existing support that is available from the Department for International Trade and UK Export Finance. See our guidance here.
- Coronavirus Job Retention Scheme – A staff retention scheme for employers, whether businesses or charities. HMRC will cover 80% of furloughed workers wage costs, up to a cap of £2,500 per month. This is initially for a three-month period (i.e. until May). Businesses will have to designate which employees they wish to furlough (if not done already) and advise the employees before they can apply via the HMRC for the grants. HMRC has yet to clarify how the grant process will work. You can read more here.
- Coronavirus hotline – HMRC is offering additional support via a coronavirus hotline (0800 015 9559) to assist businesses or the self-employed concerned about meeting their tax liabilities.
- Deferring VAT and Income Tax payments – automatic support
- Deferring Value Added Tax (VAT) payments due to be made between 20 March 2020 to 30 June 2020. Any deferred amount will not have to be paid until the end of the current tax year
- Income Tax payments 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
- Time to Pay service – All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time to Pay service. For example is certain situations such as suspending debt collection proceedings and cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately. Our specialists are available to assist you in putting such measures in place. Further details can be found here.
- Business rates holiday for retail, hospitality and leisure businesses for the 2020 to 2021 tax year – you can estimate the business rate charge you will no longer have to pay this year here; https://www.gov.uk/calculate-your-business-rates
- Cash grants for retail, hospitality and leisure businesses
- The Retail and Hospitality Grant Scheme provides businesses with a cash grant of up to £25,000 per property.
- For businesses in these sectors with a rateable value of under £15,000, they will receive a grant of £10,000.
- Pubs and restaurants are now allowed to trade as takeaways. The relaxed rules will be introduced as soon as possible and will last for up to 12 months. The relaxation will apply to hot food and drinks only. Serving or supplying alcoholic drinks will continue to be subject to licensing laws.
- Charities that are hit financially by coronavirus will be able to apply for government loans if less than half their income comes from trading activity. https://www.civilsociety.co.uk/news/not-all-charities-will-be-able-to-access-coronavirus-loan-scheme.html
How we can help
We have teams of business advisory, tax, restructuring and transformation experts on hand to help you throughout this period. If you have any queries or concerns, please get in touch with your usual Kreston Reeves contact or complete our enquiry form here and one of our experts will be in touch.
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