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The latest support for businesses during COVID-19

COVID-19 Comms

March 2020

The latest support for businesses during COVID-19

Business operations during the COVID-19 outbreak will require resilience which many of us have never had to call upon before.

But we are not alone; Friday’s announcement by the Chancellor of a COVID-19 support plan is beyond anything we expected. It is unprecedented in its scale, the speed at which it has been created and is beginning to roll out, and the wide-ranging types of enterprises and individuals it will support.

Businesses must make sure that they understand the help available and how to access it, as the funding on offer will go a long way to protecting the livelihoods of millions.

Here’s a breakdown of what it includes and how it may help you. Whilst we know the following financial support will be made available, many of the details – including how to apply – are still being finalised by the Treasury, meaning the information that was can advise upon is somewhat limited until more is revealed.

  • Coronavirus job retention scheme: Designed to prevent job losses, this scheme will see the Government cover a significant portion of staff salaries. By furloughing your staff and updating HMRC through a new online portal (which is yet to go live), HMRC will reimburse wage costs up to 80% of each employee’s salary, capped at £2,500 per month. Payments will be backdated to 1st March, and the scheme is currently due to run for three months, though this may be extended.
  • Coronavirus Business Interruption Loan Scheme (CBILS): This scheme launches today and could provide you with cash flow support of up to £5million if your business is UK-based and has a turnover of less than £45million. Loans will be interest free for 12 months. Whilst the CBILS is being run by the British Business Bank, businesses should apply via one of its 40 lenders, which include high street banks, challenger banks, asset-based lenders and smaller specialist lenders. The full details of its accredited lenders can be found here.
  • Deferred VAT and Income Tax payments: You don’t need to take any action here. Payment of VAT has been deferred for three months to 30 June 2020. Self-employed Income Tax Self-Assessment payments are also deferred by six months to 31 January 2021.
  • Funding for employee sick pay: If you employ fewer than 250 people, the Government will refund up to two weeks of statutory sick pay for employees off sick due to COVID-19. This includes those with symptoms themselves, those living with someone displaying symptoms, and those who have been regulated to stay at home. This scheme is currently in development with repayments expected over the coming months.
  • Business rates holiday: No action is required here either. Retail, hospitality and leisure businesses, as well as nurseries, will not pay business rates for the 2020 to 2021 tax year.
  • Cash grants: Between £10,000 and £25,000 is available as a grant for retail, leisure and hospitality businesses. Your local authority will write to you if you are eligible.
  • Small Business Grant Scheme: Your local authority will contact you to arrange a one-off grant of up to £10,000 if your business is based in England, occupies property, and you already receive SBBR and/or RRR.
  • Purchase of short-term debt from larger companies: More details are expected early this week, but under the new COVID-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies.
  • Support for tax payments for those in financial distress: HMRC’s Time to Pay service will work with businesses and self-employed people on a case by case basis to arrange support for those in financial distress who have already missed, or may soon miss, a tax payment due to COVID-19.
  • Access to Universal Credit for the self-employed: Universal Credit is available in full for the self-employed, at a rate equivalent to employee Statutory Sick Pay. The standard Universal Credit allowance will rise by £1,000 over the next 12 months.

Amidst the many uncertainties of the COVID-19 outbreak, businesses are facing the daily challenge of understanding their changing financial prospects and the Government support they may be entitled to.

For many, acting quickly will be essential to the survival of their business. We will be providing up-to-the-minute support and advice for all our clients, supporting you through the changes to come and ensuring that you have access to every scheme available.

To speak to Haworths Chartered Accountants today, call 01254 232521 or email enquiries@haworths.co.uk.

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