Coronavirus: Accessing financial and business support during the pandemic
27th April 2020
The restrictions in place to protect the UK from the worst of the COVID-19 pandemic are putting considerable pressure on businesses of all sizes.
We’ve pulled together a list of available financial resources, with information on how you can access them. While most of the government-backed support mechanisms are available to businesses across the UK, some are only available in England. Welsh businesses should refer here, and Scottish businesses should refer here.
Government support available
The Government has announced an unprecedented support package to support businesses of all sizes throughout the COVID-19 pandemic.
The aim is to secure as many jobs as possible and keep businesses from facing severe financial issues or folding, and to protect the economy from contracting too severely.
You can find the full range of support available using the government’s own support finder tool, available on the government website.
Support for SMEs
Coronavirus Business Interruption Loan Scheme
The Coronavirus Business Interruption Loan Scheme (CBILS) is designed exclusively for SME businesses, and can give eligible businesses access to funding worth up to £5m pounds. This funding can take several forms, including loans, overdrafts, and more.
This package is offered by commercial lenders - including banks such as Barclays, Natwest, Metro Bank and more - but is backed by government.
You can find out more, and apply online, here.
Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme allows eligible employers to apply for funding to pay any furloughed employees. Businesses can apply to cover up to 80% of an employee’s wages (up to £2500 per month) as well as National Insurance and pension contributions.
You’ll need to provide a fair amount of information, so make sure you have all the relevant documents and details to hand before you get started. You’ll also need to be registered for the Government’s online PAYE system to use this support mechanism.
However, it takes only six working days for the funding that you apply for to arrive in your bank account once the claim has been verified by HMRC.
You can find out more, and apply for this support mechanism, here.
Deferring Tax Payments
The government has announced the deferral of VAT payments due between 20th March and 30th June 2020. Businesses do not need to inform HMRC of payment deferral; however, VAT returns should still be submitted, and the tax deferral does not cover VAT MOSS or import VAT.
Deferred VAT payments must be made by 31st March 2021, but these payments will not be subject to late charge payments or interest. Any businesses that have a Direct Debit payment in place for VAT have been advised to contact their banks to cancel this payment.
Additionally, businesses can choose to defer the second self-assessment tax payment - usually due on 31st July - can now be deferred until 31st January 2021. There’s also the option to split this self-assessment tax payment over the year, to help with budgeting and cashflow. You can find out more about this service here.
For businesses facing any other difficulties regarding tax payments, the government has set up a Coronavirus helpline. You can find the details of the government’s Coronavirus (Covid-19) helpline and additional information, here.
Claim back SSP
Employers who have paid Statutory Sick Pay (SSP) to employees starting on or after March 13th will be able to claim back the costs, provided the employee(s) paid SSP meet the following criteria:
- Have, or have had, coronavirus
- Unable to work due to self-isolation
- Are shielding in line with public health guidance
The scheme is unavailable at the time of publishing, but you can find out more, and apply once it opens, here.
Business Rates Relief (England only)
All eligible businesses in England across the retail, hospitality and leisure sectors will not have to pay business rates for the 2020-2021 tax year.
Eligible properties for this support mechanism are as follows:
- Restaurant, café, bar or pub
- Cinema or live music venue
- Assembly or leisure property (such as sports clubs, gyms or spas)
- Hospitality property (such as hotels, guesthouses and self-catered accommodation)
Businesses need not apply for this support mechanism; local authorities will administer this discount. You can read more here.
Business support grant funds (England only)
The government has published guidance on two loan funds and the eligibility criteria for them. This guidance covers the Small Business Grant Fund (SBGF) and the Retail, Hospitality and Leisure Grand Fund (RHLGF).
The first (SBGF) of these two grants is a payment of £10,000 to all eligible businesses for Small Business Rates Relief (SBRR) or Rural Rates Relief (RRR), as appropriate. Under the second (RHLGF), eligible businesses will receive cash grants of either £10,000 or £25,000 per property.
Businesses which are eligible for these support mechanisms will be contacted by their local authorities. For more detailed information, you can read the guidance in full here.
Support for the self-employed
The government has also announced support measures for the self-employed, with workers eligible to claim for up to 80% of their trading profits up to a maximum of £2500 per month, available for three months (with the potential for extension).
The following businesses are eligible, and will be contacted throughout May 2020 by HMRC:
- Submitted a self-assessment tax return for the 2018-2019 tax year
- Have traded in the 2019-2020 tax year
- Are trading when you apply, or would be except for coronavirus
- Intend to continue to trade in the tax year 2020 to 2021
- have lost trading profits due to coronavirus
- Have trading profits not greater than £50,000 in the 2018-2019 tax year, nor average trading profits greater than £50,000 across the 2016-2017, 207-2018, and 2018-2019 tax years.
You can read the guidance in full and find out more about this support mechanism here.
Support for large business
While the government has put in place plenty of protective measures for smaller businesses, large corporations have been hit just as hard by the economic lockdown. There are two main support mechanisms in place for larger businesses. The first is the Large Business Interruption Loan Scheme (CLBILS), and the second is Covid-19 Corporate Financing Facility.
Finally, the Government’s own business support platform has more FAQs and information around Coronavirus, as well as general business support around finance, technology and more.
Other sources of support
Institutes and bodies across the country are issuing the latest advice and guidance around coronavirus. The Confederation of British Industry (CBI) has published a comprehensive FAQ for businesses to help them assess their circumstances, available here.
Similarly, the Federation of Small Businesses (FSB) has issued guidance and advice for small businesses and the self-employed. As well as a general FAQ, there’s a host of resources including free webinars and useful links to other resources (some provided by the FSB and some provided by other organisations).
The FSB has also provided a comprehensive list of resources to help business owners, employers and employees to positively manage their mental health during what is a confusing and stressful period. You can find all of the above on the FSB website.
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