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Government support for businesses affected by Coronavirus (COVID 19)

The Coronavirus situation is developing rapidly with new guidance being issued on a daily basis. We have set out in the note below a summary of the assistance available from the government in the short and medium-term to assist businesses potentially adversely affected by the outbreak. We will update this article as things develop.

17/3/20

HMRC Time to Pay

All business and self-employed people may be eligible to receive support with their tax affairs via HMRC’s Time To Pay service.  HMRC will deal with each request on a case by case basis and have put additional resources into the service with an additional 2,000 call handlers.  Any business concerned about being able to pay their tax on time should contact the Time To Pay helpline on 0800 0159 559.

HMRC are generally far more understanding about issues when they are raised before any tax falls due, so if you have any concerns we would strongly recommend calling the HMRC number to see what support may be available before the due date of any tax bill you are concerned about.

 

Temporary Business Interruption Loan Scheme

This scheme will be delivered by the British Business Bank.  It has not yet been launched but is expected to be up and running in a few weeks.  The scheme will work by the Government providing a guarantee of 80% on each loan to give lenders confidence in continuing to lend to SMEs. 

The scheme will support loans of up to £1.2 million in value, with the initial total support of £1 billion.  This is on top of support currently provided by British Business Bank.

Final terms of the scheme and eligibility criteria have yet to be determined, but the scheme is aimed at businesses with turnover up to £41 million with a sound lending proposal but insufficient security to meet the lender’s normal requirements.  Up to date information can be found via the following link:

https://www.british-business-bank.co.uk/ourpartners/supporting-business-loans-enterprise-finance-guarantee/

The scheme will support other types of finance such as asset finance and overdrafts. With a panel of 40 accredited lenders, this could be a very valuable source of finance for those businesses which meet the criteria.

 

Payment of Statutory Sick Pay (“SSP”)

It was announced in the Budget that employees would temporarily be able to claim statutory sick pay from Day 1 of their absence rather than day 4 where that sickness is Coronavirus related (either by having the condition or self-isolating based on government advice).

For employers with less than 250 employees as of 28 February 2020, the government will provide for refunds of SSP claimed by employees affected by Coronavirus for a period of up to 14 days.  The system is not up and running yet – further announcements will no doubt be made in due course.

 

Business Rates Relief

The Budget extends business rates relief for smaller business in 2020/21.  The current 100% Business Rates retail discount will be extended to the hospitality and leisure sectors with properties with a rateable value of less the £51,000.  The planned rates discount for pubs will also be increased to £5,000. 

Businesses that currently receive the 2019/20 retail discount will be automatically rebilled for 2020/21 by their local authority. Those businesses in the hospitality and leisure sectors may need to apply to their local authorities to receive the discount.

Update:18/03/2020

Coronavirus Business Interruption Loan Scheme
The government have introduced a temporary Coronavirus Business Interruption Loan Scheme for loans of up to £5 million.  The first 6 months of any loan will be interest-free as the government will cover the first 6 months of interest.
 
This scheme is available to businesses which are UK based, with a turnover of less than £41 million and have a sound borrowing proposal. 

There are certain restrictions around industry and the amount of state aid received in the year (although there is some suggestion the EU may relax state aid restrictions).  It is, of course, a loan which is guaranteed (at no cost) by the government – the loans are provided by a number of accredited lenders.  More detail is at the link below:
 
https://www.british-business-bank.co.uk/ourpartners/supporting-business-loans-enterprise-finance-guarantee/
 
The scheme is expected to become available from next week.
 
Bank of England to support
A new scheme being launched by the Bank of England to support liquidity amongst larger businesses (which we currently take to be those that do not qualify for the British Business Bank scheme).  More detail is to be provided in the coming days and again the scheme will be available from next week.
 
Businesses in the retail, hospitality and leisure

All businesses in the retail, hospitality and leisure sectors to get 100% business rates holiday for the next 12 months.  Note businesses should not assume they will get this automatically and may need to get in touch with their local authority to ensure they get the support.

Further £25,000 grants to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value over £15,000 and below £51,000.  More detail is to be provided over the coming days.

Restaurants and Pubs to be allowed to offer a takeaway service without any need for extra planning permissions.

Confirmation that government advice to avoid pubs, clubs and theatres etc. is sufficient for businesses to claim on their insurance where they have appropriate business interruption cover for pandemics in place.
 
Grants
Grants of up to £10k for business qualifying for small business rates relief (broadly those businesses with one property only which has a rateable value of less than £15k)or rural rate relief.  Qualifying businesses should be contacted by their local authority and funding is due to be available from early April.
 
Mortgage holidays
Mortgage holiday of up to 3 months for customers adversely affected by the outbreak.  This is just a deferral of interest which will have to be paid at some point and it seems not all applications will be accepted (although it also seems there will be some relaxation around repossessions where customers fail to pay without getting a holiday first).  UK Finance has some commentary here:
 
https://www.ukfinance.org.uk/press/press-releases/uk-finance-responds-statement-chancellor-regarding-support-mortgage-customers
 
HMRC
All business and self-employed people may be eligible to receive support with their tax affairs via HMRC’s Time To Pay service.  HMRC will deal with each request on a case by case basis and have put additional resources into the service with an additional 2,000 call handlers.  Any business concerned about being able to pay their tax on time should contact the Time To Pay helpline on 0800 0159 559.
 
HMRC are generally far more understanding about issues when they are raised before any tax falls due, so if you have any concerns we would strongly recommend calling the HMRC number to see what support may be available before the due date of any tax bill you are concerned about.

 

Summary

 

There is some welcome support for businesses here although at the time of writing some of these are not yet fully implemented.  Businesses should certainly look into these to see what support they may qualify for as it may provide a vital bridge during the current challenging times and if we can provide any assistance please contact us.

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