The coronavirus lockdown has created unprecedented circumstances along with incredible challenges for a great many businesses. In response to this, the UK government has implemented a range of support designed to support struggling businesses through the lockdown period. With packages ranging from grants to easy access finance, most bases have been considered. But what options could work for your business?
Coronavirus Business Interruption Loan Scheme (CBILS)
For SME businesses which were operating smoothly before the lockdown, the temporary Coronavirus Business Interruption Loan Scheme
can offer access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to 6 years.
The government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.
Lenders will also receive a guarantee of 80% on each loan from the government to give lenders further confidence in continuing to provide finance to SMEs. The scheme will be delivered through commercial lenders, backed by the government-owned British Business Bank.
There are 40 accredited lenders able to offer the scheme, including all the major banks.
Coronavirus Job Retention Scheme (Furloughed Employees)
The Coronavirus Job Retention Scheme is a temporary scheme open to all UK employers for at least 3 months starting from 1 March 2020. It is designed to support employers whose operations have been severely affected by coronavirus (COVID-19).
Employers can claim for 80% of furloughed employees’ (employees on a leave of absence) usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage. Employers can use this scheme anytime during this period.
The scheme is open to all UK employers that had created and started a PAYE
payroll scheme on 28 February 2020.
Rates reductions and Grants
In order to support several key business types a host of rates reductions and grants will be made available for the 2020 to 2021 tax year.
Retail, hospitality and leisure businesses:
A business rates holiday will be introduced for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.
The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property.
Businesses in these sectors with a property that has a rateable value of up to £15,000 may be eligible for a grant of £10,000.
Businesses in these sectors with a property that has a rateable value of over £15,000 and less than £51,000 may be eligible for a grant of £25,000.
Support for nursery businesses:
Properties that will benefit from the relief will be hereditaments occupied by providers on Ofsted’s Early Years Register wholly or mainly used for the provision of the Early Years Foundation Stage
Businesses that pay little or no business rates:
The government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBRR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.
You are eligible if your business is based in England, you are a business that occupies property, and you are receiving small business rate relief or rural rate relief as of 11 March.
Deferred Tax Payments
will support businesses by deferring Valued Added Tax (VAT) payments for 3 months.
If you’re a UK VAT registered business and have a VAT payment due between 20 March 2020 and 30 June 2020, you have the option to defer the payment until a later date.
Support For Businesses Who Are Paying Sick Pay to Employees
Legislation will be brought forward to allow small-and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19.
This refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19.
Employers with fewer than 250 employees will be eligible - the size of an employer will be determined by the number of people they employed as of 28 February 2020.
Employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19.