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
This support scheme has been extended by a further four months until 31 October 2020.
All UK businesses are eligible. Businesses furloughing staff during the coronavirus outbreak will receive further financial support – with the costs of employer national insurance and pension contributions being covered by the government.
The furlough scheme will continue in its current form without any changes until 31 July 2020. However, new flexibility will be introduced from the beginning of August 2020, with the aim of getting employees back to work and boosting the economy.
From 1 August 2020, furloughed workers will be able to return to work part-time with employers being asked to pay a percentage towards the salaries of their furloughed staff. The employer payments will substitute the contribution the government is currently making, ensuring that staff continue to receive 80% of their salary, up to £2,500 a month plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage.
The scheme covers costs of wages backdated to 1 March 2020 up to the end of June, previously May, provided the employer had created and started a PAYE payroll scheme on 28 February 2020. Grants will be given to businesses to cover this from HMRC.
The Job Retention Scheme has now opened applications need to be made through here: https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme
To get started the link is embedded in the calculation guidance, look for the green button. We think you have to go from here and not just put the web address in – presumably to make sure you have seen the guidance first. There is also a 15 minute timeout period.
Government have now offered guidance on several aspects including:
- Confirmation of what should form the basis for furlough pay for employees furloughed on return from (maternity/paternity/shared parental/adoption/sick/parental bereavement) leave;
- Confirming employees subject to TUPE transfer/business reorganisation/ payroll consolidation can be furloughed;
- Confirming position for contractors in scope of IR35 in the public sector;
- More information on what information employers need to claim the grant; and
- Clarifying circumstances where an employee shouldn’t be furloughed by multiple employers
Updates can be found at:
Those furloughed can volunteer for the NHS without risking their pay.
As of 12 May 2020 the scheme was extended by government’s until October 2020. From August to October there will be “greater flexibility”, including allowing part-time workers on the scheme with a greater employer contribution.
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
National Lottery Heritage Emergency Fund
NLHF are providing a package of support for the heritage sector as a response to the COVID-19 crisis. Including increased advice and support, longer-term skills and capacity building initiatives, and a £50 million Heritage Emergency Fund to provide emergency funding. More information and to apply.
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 scheme will launch on 4 May. Firms will be able to access funds through a network of accredited lenders. Businesses can apply online through a short and simple form.
British Business Bank (BBB) and Bank of England Loan Guarantees for Business
The Coronavirus Business Interruption Loan Scheme (CBILS) is now available through participating lenders.
If you are a smaller business or a business advisor, please visit: CBILS for Businesses and Advisors page
If you are an accredited lender or a prospective lender for the scheme, please visit: CBILS for Accredited Lenders page
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.
CBILS will be delivered through commercial lenders, backed by the Government-owned British Business Bank. The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will also make a Business Interruption Payment to cover the first 12 months of interest payment and any lender-levied fees, so businesses will benefit from no upfront costs and lower initial repayments.
In response to feedback received since launch, the Chancellor is taking further action by extending the scheme so that all viable small businesses affected by Covid-19, and not just those unable to secure regular commercial financing, will now be eligible. This change is designed to enable all long-term viable businesses experiencing difficulties as a result of the COVID-19 outbreak to access finance.
More information can be found at the British Business Bank: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/
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.
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.