COVID-19 government support
Business support flowchart
Time to Pay Scheme
TTP has been available to businesses for over a decade, but HM Treasury has announced a stepping up of resource and a specific COVID-19 helpline that businesses can call. TTP allows a business to defer current (as opposed to prospective) tax debts (principally corporation / income tax, payroll taxes and VAT –but theoretically any other tax or duty) by converting settlement to instalments over a 3-12 month period. As part of the process, directors are expected to provide written confirmation that the instalment will be made on time.
Businesses with a Customer Compliance Manager should discuss this with them in the first instance. All others are encouraged to contact HMRC’s helpline on 0800 0159 559. The process can take less than an hour in a simple situation where the amount to be deferred is less than £750K. Agreement for deferral of larger sums will take longer.
Salaries (Coronavirus Job Retention Scheme)
The Coronavirus job retention scheme covers any employees in any business, charity, or not-for-profit organisation. This scheme covers any employees who are now unable to work due to COVID-19 (but have been retained), this scheme covers up to 80% of your monthly salary of up to £2,500 per month.
You will be able to backdate and claim from 1 March 2020. The government has said that there will be no limit on funding for this scheme which will be open for an initial period of 3 months but will be extended if needed. Read here for more information
How to apply for a furlough grant
The application webpage for the government job retention scheme is expected to go live on 20 April with grants being subsequently paid from 30 April. Authorised agents who act for PAYE purposes should be able to make claims on behalf of clients. However, the Tax faculty has recently sought further information regarding the type of authorisation required: 64-8, FBI2, and online agent authorisation. But any unauthorised or file only agents will not be able to claim on behalf of clients.
How do I submit my claim?
The government will require the employer’s “ePAYE” reference. You can then use the “PAYE Online for Employers” portal to make your claim. These login details should have been sent to you when you first started using PAYE.
To check that you can access this portal please click here
It does not take long to apply for this service, but you will need authorisation codes which often take around 10 days to arrive. You will not be able to access the scheme without these details.
This information may change as the scheme is developed and we will let you know as soon as we know any new information.
Furlough scheme cut-off extended to 19 March
The government’s decision to extend the date of eligibility to 19 March 2020 means that thousands more employers will be able to receive financial support through this scheme. You can now claim on this scheme for furloughed employees who were on your PAYE payroll on or before 19 March 2020 and which were notified to HMRC via an RTI submission on or before that date.
On 26 March the Chancellor Rishi Sunak announced his plans to support the self-employed during the COVID-19 pandemic. In some ways it is very similar to the previously announced Job Retention Scheme. The Self-Employment Income Support Scheme allows self-employed workers to claim a taxable grant worth 80% of their trading profits up to a maximum of £2,500 per month for the next three months. Read here for more information
Statutory Sick Pay (SSP)
The government has announced that SMEs (fewer than 250 employees) will be able to reclaim their Statutory Sick Pay (SSP) paid for employees that have been off work due to COVID-19 (or are self-isolating). This reimbursement will cover up to 2 weeks SSP for each eligible employee who has not attended work due to COVID-19. The current rate of SSP is £94.25.
Small Business Grant Scheme
The government will support small businesses through the Small Business Grant Scheme for businesses that already pay either very small or no business rates. The government will provide a one-off grant of £10,000 to eligible small businesses across the country to help with on-going business costs.
Small Business Relief
To qualify for Small Business relief the rateable value of your property needs be £15,000 or less. For Businesses in leisure, hospitality, and retail whose rateable value is between £15,000 and £51,000 your business is entitled to a £25,000 grant.
Business Loans (Coronavirus Business Interruption Loan Scheme)
The Coronavirus Business Interruption Loan Scheme was launched on 23 March and is aimed at supporting small and medium-sized businesses with turnover up to £45 million. Lenders will receive an 80% backed guarantee from the government on each loan. This should provide confidence to lenders providing loans to SMEs. The scheme will support loans of up to £5 million in value. The government will also cover the interest payments for the first 12 months.
Under the revisions to the scheme we now understand that smaller businesses that have previously met the requirements for a commercial facility (i.e. non CBILS), will now have the opportunity to apply for Coronavirus Business Interruption Loan Scheme as insufficient security is not a requirement anymore. Therefore, lenders no longer have to assess the possibility of other forms of finance ahead of CBILS which should increase both response times and access to the government backed scheme.
In addition, Personal Guarantees will not be required for applications of less than £250k and for applications above £250k, PG’s will be restricted to 20% of the funding sought.
Coronavirus Large Business Interruption Loan Scheme
Concerns had been raised that there are a significant number of businesses, contributing a great deal to the UK economy, that fell between the support of CBILS (which is only available to businesses with a turnover of less than £45m) and the support available to large scale businesses with an investment-grade credit rating (typically large plc’s).
To address these issues the Coronavirus Large Business Interruption Loan Scheme (CLBILS) has been launched which will enable businesses with an annual turnover of £45m-£500m to apply for an 80% government-backed loan of up to £25m.
A key difference to note in comparison to the smaller business equivalent scheme is the business interruption payments that cover interest and fees for the first 12 months will not apply to CLBILS.
Whilst it is inevitable that there will still be businesses that can’t access these schemes, these revisions are very welcome enhancements to the package of measures the government has introduced to support business.
Bounce Back Loan Scheme
Chancellor Rishi Sunak has announced that small businesses will be able to access loans of up to £50,000 through the Bounce Back Loan Scheme which will be 100% government-backed. This announcement comes after many small businesses said they were either being rejected for the Coronavirus Business Interruption Loan Scheme or that credit checks by banks were taking too long. Therefore, the government has decided to back the loan with a 100% guarantee.
How to apply?
The “Bounce Back Loan” scheme is aimed at small and micro businesses which many believe are the backbone of the British economy. This scheme has been designed so businesses can access money quickly. Businesses will be able to apply for this scheme online through a short application form which will launch on Monday 4 May. If your application is successful, the money will be in your business account within a few days. No credit check is needed as this is a 100% government-backed loan.
Mortgage lenders will offer a three-month mortgage holiday for individuals who are having difficulty paying their mortgage due to coronavirus.
Legislation has been brought in to stop landlords evicting tenants who are unable to pay rent for at least three months. Landlords have been given the same protection with a 3-month mortgage payment holiday, which has been extended to Buy to Let mortgages.
Commercial tenants will also be protected from eviction if they are unable to pay their rent due to coronavirus. If a business misses its payment within the next three months they will not be forced out.
Business Rates holiday for businesses in hospitality, leisure, and retail for 12 months.
Self-Assessment payments due 31 July 2020 will be deferred until 31 January 2021 – interest and penalty-free.
The Chancellor has announced that VAT payments can be deferred for the next 3 months. All VAT-registered UK businesses are eligible for the deferral.
If your business normally pays VAT by direct debit, you will need to cancel your direct debit in order to benefit from the VAT deferral. The Treasury has confirmed that it can not cancel direct debits unilaterally, so unless you cancel it, the money will be deducted automatically following the submission of your VAT return. Please do this well in advance of your normal VAT payment date so HMRC does not attempt to collect the payment.
Businesses will not need to make a VAT payment during the deferral period of 20 March 2020 to 30 June 2020. This will generally mean the deferral of the VAT quarter due for payment on 7 April, 7 May, or 7 June 2020, or the monthly payments due on each of these dates. Any outstanding VAT payments accumulated during the deferral period will need to be paid to HMRC by the end of the 2020/21 tax year.
It is important that you remember to set up the direct debit again in due course.
Businesses should continue to file their VAT returns as normal by the due dates. The Government will pay VAT refunds and reclaims as usual during this period.
If you would like any advice on any of this please contact us.
The Local Discretionary Grants Fund
The Department for Business, Energy & Industrial Strategy has set up a discretionary fund to accommodate small businesses outside the requirements for the business grant funds scheme.
To be eligible for this scheme your business must qualify as a small business (or micro business). These requirements are as follows:
- Under 50 employees
- Turnover of no more than £10.2 million
- Balance sheet total not more than £5.1 million
You must also show that your business has seen a significant decrease in income due to Coronavirus lockdown measures.
Find out more information about this scheme here
Local Council websites
If you are looking for business support in your local area, please visit your local council website for more information on how to apply for grants and schemes.
Sheffield City Council: https://www.sheffield.gov.uk/home/your-city-council/coronavirus-support-for-business#grants
Northampton Borough Council: https://www.northampton.gov.uk/coronavirus
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