The UK Government has set out a package of temporary interventions to support people and businesses during the period of disruption caused by COVID-19.
This package, which has been published in full on the gov.uk website, includes:
a Coronavirus Job Retention Scheme
deferring VAT and Income Tax payments
a Statutory Sick Pay relief package for small and medium sized businesses (SMEs)
a 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England
small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,001 and £51,000
the Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
a new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
the HMRC Time To Pay Scheme
This summary will look at some of the key features and measures, what they will do, and who can apply for them.
Coronavirus Job Retention Scheme
The scheme is being introduced to enable all UK employers to access support to continue paying part of their employees’ salaries. For those employees who would otherwise have been laid off due to the crisis, HMRC will reimburse 80% of workers’ wage costs.
Employees need to be designated as ‘furloughed workers’ and their new status plus salary details submitted to HMRC via an online portal that is in the process of being set up. Each employee’s salary reimbursement is capped at £2500 pcm.
Coronavirus Business Interruption Loan Scheme
For short term cash issues, the temporary Coronavirus Business Interruption Loan Scheme will support SMEs with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to 6 years.
The government will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees. It will be available for UK based businesses, with turnover of no more than £45 million per year and which meet the other British Business Bank eligibility criteria.
The government will provide lenders with a guarantee of 80% on each loan (subject to pre-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. There are 40 accredited lenders able to offer the scheme, including all the major banks.
Paying sick pay to employees
The government also intends to bring forward legislation to allow small-and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme can be found in the full publication. Small or medium-sized UK based businesses which employ fewer than 250 employees will be eligible for this scheme as of 28 February 2020.
Support for businesses that pay little or no business rates
There will be a one-off grant of £10,000 available to support small businesses that already pay little or no business rates because of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. This will be introduced for businesses in England who occupy property. In this instance, local authorities will contact eligible businesses.
The COVID-19 Corporate Financing Facility
For businesses affected by a short-term funding squeeze, support will be made available to finance short-term liabilities. Under the new Covid-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies. It will also support corporate finance markets overall and ease the supply of credit to all firms.
The scheme is open to all non-financial companies that meet the criteria set out on the Bank of England’s website and is now open for applications.
Time to Pay service
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.
These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
Supporting one another
These measures are outlined in greater detail on the government’s own publication, which also contains information on the cash grants and business rates holiday available for businesses in the retail, hospitality and leisure sectors.
If you would like to discuss these any of these new measures in relation to your own business or require other information or support during these unprecedented times, please do not hesitate to contact us here at email@example.com.