Financial support for businesses
The most up to date Government advice is available here: https://www.gov.uk/coronavirus/business-support
Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme (CJRS) has been extended will now operate until the end of April 2021.
The scheme, which was originally due to run for three months from last March has been further extended, with the Government continuing to contribute 80% towards people’s wages for hours not worked, up to a maximum of £2,500 per month.
Under the revised CJRS the Government will pay 80% of wages up to a cap of £2,500 with employers paying National Insurance and pension contributions only for the hours the employee does not work. Flexible furloughing will be allowed in addition to full-time furloughing.
Businesses will be paid upfront to cover wages costs. The Government is expected to confirm imminently when claims can first be made in respect of employee wage costs during November, but there will be no gap in eligibility for support between the previously announced end-date of CJRS and this extension.
Applications to the scheme need to be made through here: https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme
Those furloughed can volunteer for the NHS without risking their pay.
SME Statutory Sick Pay compensation
Government will support small and medium-sized businesses and employers to cope with the extra costs of paying COVID-19 related Statutory Sick Pay. Through the emergency legislation, employers with fewer than 250 employees will be able to reclaim 2 weeks of SSP paid for sickness absences relating to coronavirus during the period of the outbreak. More information: https://www.gov.uk/government/publications/support-for-those-affected-by-covid-19
COVID-19 Resource Hub for Charities and Social Enterprises
COVID-19 has created extra challenges for the social sector. There is support out there to help, from new technologies to guidance and funding, but it isn’t always easy to find. Charity Bank have drawn together relevant resources to assist. https://charitybank.org/news/covid-19-resource-hub
Bounce Back Loans scheme
Businesses struggling during the continuing economic disruption will also be supported through an extension to government-guaranteed COVID-19 business loan schemes. The loans scheme will now remain open until the end of March. These had been due to close at the end of January.
Small businesses can now benefit from a new fast-track finance scheme providing loans with a 100% government-backed guarantee for lenders. The Bounce Back Loans scheme, will provide loans of up to £50,000. Businesses will be able to borrow between £2,000 and £50,000 and access the cash within days loans will be interest-free for the first 12 months.
The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year.
Firms will be able to access funds through a network of accredited lenders. Businesses can apply and check eligibility through the link here: https://www.gov.uk/guidance/apply-for-a-coronavirus-bounce-back-loan
Coronavirus Business Interruption Loan Scheme
The Coronavirus Business Interruption Loan Scheme (CBILS) is now available through participating lenders.
CIBLS is designed to help small and medium-sized businesses access loans and other kinds of finance up to £5 million. The government guarantees 80% of the finance to the lender and pays interest and any fees for the first 12 months. It is open until the end of March 2021, this extension of the scheme was announced in December 2021 by Government. The extension also applies to the Coronavirus Large Business Interruption Loan Scheme.
You can check eligibility and apply here: https://www.gov.uk/guidance/apply-for-the-coronavirus-business-interruption-loan-scheme
If you are an accredited lender or a prospective lender for the scheme, please visit: CBILS for Accredited Lenders page
If you’re a larger business, you may be entitled to other government support.
All firms with a turnover of more than £45 million are able to apply for up to £25 million of finance.
Companies with a turnover of more than £250 million will be able to get a government-backed loan of up to £50 million from lenders.
Bank of England – Liquidity support for larger businesses
The Bank of England’s new lending facility for larger firms – the Covid Corporate Financing Facility – is also open to applications. By purchasing short-term corporate debt – known as commercial paper – the scheme provides a quick and cost-effective way to raise working capital for companies that are fundamentally strong but are experiencing severe disruption to cash flows, helping to pay wages and suppliers.
The scheme is open to firms that can demonstrate that they were in sound financial health prior to the impact of coronavirus. Companies wishing to use the scheme do not need to have issued commercial paper before.
British Business Bank – Future Fund
The government has announced a new £500m ‘Future Fund’ to be launched in May. The fund will provide government loans to UK-based companies ranging from £125,000 to £5 million, subject to at least equal match funding from private investors.
The fund will be managed by the British Business Bank, and see government committing £250m to be invested in the form of a convertible loan note meaning if the loan is not repaid it will be converted to equity. It will require businesses to match the government with 50% or more private investment. Businesses will need to have raised at least £250,000 equity investment in the last 5 years.
Information, eligibility checker and application form can be found here: https://www.gov.uk/guidance/future-fund
Innovation Continuity Loans
As part of governments coronavirus response package Innovate UK is offering up to £210 million in loans to small and medium enterprises (SMEs) and third sector organisations that have a challenge in continuing innovation activity as a result of the COVID-19 pandemic.
Loans are for organisations that find themselves facing a sudden shortage or even unavailability of funds resulting from the pandemic. This innovation continuity loan may be suitable if you need funding of between £250,000 and £1,600,000.
Innovation continuity loans to continue live projects with an Innovate UK award were made available from 7th May 2020. Applications for innovation continuity loans can be made until 13 January 2021.
Eligibility, and scheme detail can be found here: https://www.gov.uk/guidance/innovation-loans-what-they-are-and-how-to-apply
Support with tax payments
- Time to Pay: HMRC has set up a dedicated COVID-19 helpline to help those in need regarding their tax liabilities, and they may be able to agree a bespoke Time to Pay arrangement. HMRC will also waive late payment penalties and interest where a business experiences administrative difficulty contacting HMRC or paying taxes due to COVID-19. Hotline number: 0800 0159 559.
- VAT Deferral: No business will pay VAT from now to mid-June. Businesses will have until the end of financial year (April 2021) to repay VAT bills.
Businesses that have cover for both pandemics and government-ordered closure should be covered, as the government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres etc is sufficient to make a claim.
Insurance policies differ significantly, businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics.