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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 for a month as part of the Government’s plan for the next phase of its response to the coronavirus outbreak.

The CJRS, also known as the Furlough scheme, will remain open until December 2020, with employees receiving 80% of their current salary for hours not worked. Under the extended scheme, the cost for employers of retaining workers will be reduced compared to the current scheme, which ended on 31 October.

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.

Job Retention Bonus

From 15 February 2021 employers may be able to claim the Job Retention Bonus of a £1,000 one-off taxable payment to you (the employer), for each eligible employee furloughed and kept continuously employed until 31 January 2021.

You cannot claim the Job Retention Bonus until February 2021 all applications need to be made before March 2021. Further information can be found here: https://www.gov.uk/guidance/check-if-you-can-claim-the-job-retention-bonus-from-15-february-2021

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

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.

The scheme is open to applications until 31 January 2021.

Firms will be able to access funds through a network of accredited lendersBusinesses 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 31 January 2021.

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. 

Innovate UK grant and loan commitments

The government has committed to £750m worth of grants and loans to small and medium-sized businesses focusing on research and development via Innovate UK. 

The support, focussed on SME’s, will accelerate up to £200m of grant and loan payments for its 2,500 existing Innovate UK customers on an opt-in basis. An extra £550m will also be made available to increase support for existing customers and £175,000 of support will be offered to around 1,200 firms not currently in receipt of Innovate UK funding. The scheme will open from mid-May. 

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.

Insurance

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.

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